the follow - aalborg...

Semester: 4th Semester Title: Using Internet of Things Platforms to Create Value in

Copenhagen

Project Period: 21/9/2017 – 4/1/2018 Semester Theme: Master Thesis

Supervisor(s): Morten Falch

Project group no.: 4BUS 4.25

Members (do not write CPR.nr.): Mikkel Sønderkær Mikkelsen

Pages: 98

Finished: 4/1/2018

Abstract: The Internet of Things (IoT) brings with it many

opportunities, especially in relation to the area of

smart cities. But due to the increasing complexity of

technological solutions, the city of Copenhagen has

many challenges to solve, to achieve sufficient value

from IoT. An increasing trend to ease the

implementation of IoT solutions is to adopt an IoT

platform. Many highly capable IT vendors offer IoT

platforms, but despite the seemingly optimal match

between IoT platforms, and cities’ needs, the

adoption of such solutions is lacking. The research

presented in this report is therefore aimed at

understanding how an IoT platform provider’s

business model can be adjusted, to match the needs

of Copenhagen.

To address this question, an analysis consisting of

the following three elements is presented; a set of

requirement specifications to clarify the needs of the

city, a hype cycle and maturity model to forecast the

potential of the IoT platforms, and finally the STOF-

business model framework to understand how the

IoT platforms can match the city’s needs.

Key findings include a medium level of maturity,

and guidelines for platform providers to match

Copenhagen’s needs through establishing an

ecosystem around the IoT services, proving

flexibility in both pricing, technologies and services,

and attaining sector specific capabilities.

Implementing a single IoT platform throughout the

city of Copenhagen will not happen in the nearest

future, but could be beneficial in many relations,

if realized.

Aalborg University Copenhagen A.C. Meyers Vænge 15 2450 København SV Semester Coordinator: Henning Olesen Secretary: Maiken Keller

When uploading this document to Digital Exam each group member confirms that all have participated equally in the project work and that they collectively are responsible for the content of the project report. Furthermore each group member is liable for that there is no plagiarism in the report.

Innovative Communication Technologies and EntrepreneurshipAalborg University Copenhagen

January 4th 2018

Image: Copenhagen Solutions Lab

Mikkel Sønderkær MikkelsenMaster Thesis

Using Internet of Things Platforms to Create Value in Copenhagen

Chapter1.Introduction 1

1.1Problemdefinition

Tableofcontents1. Introduction........................................................................................................................4

1.1Problemdefinition..........................................................................................................................51.1.1Delimitation.....................................................................................................................................5

1.2Readingguide.................................................................................................................................6

2. Methodology.......................................................................................................................82.1Researchscope...............................................................................................................................82.2Researchapproach.........................................................................................................................92.3Datacollection...............................................................................................................................92.4Researchdesign............................................................................................................................10

3. Stateoftheart..................................................................................................................123.1Internetofthings..........................................................................................................................12

3.1.1DefinitionandoriginofInternetofthings.....................................................................................123.1.2Networkarchitecture....................................................................................................................143.1.3Localareacommunicationprotocols.............................................................................................163.1.4Wideareacommunicationprotocols............................................................................................173.1.5DevelopingIoTsolutions...............................................................................................................18

3.2IoTPlatforms................................................................................................................................193.2.1MicrosoftAzureIoTSuite..............................................................................................................223.2.2AmazonWebServicesIoTPlatform...............................................................................................243.2.3CiscoJasperandKineticforCities..................................................................................................26

3.3Smartcities...................................................................................................................................283.3.1Challengesforsmartcities.............................................................................................................293.3.2Becomingasmartercity................................................................................................................30

3.4Chapterconclusion.......................................................................................................................33

4. Theoreticalframework......................................................................................................344.1Requirementspecifications..........................................................................................................34

4.1.1Theprocessofspecifyingrequirements........................................................................................344.1.2Scenariosanduse-cases................................................................................................................364.1.3Functionalrequirements...............................................................................................................364.1.4Non-functionalrequirements........................................................................................................37

4.2Technologyforecasting.................................................................................................................384.2.1Overviewofforecastingtheories..................................................................................................384.2.2GrowthCurves...............................................................................................................................404.2.3Maturitymodels............................................................................................................................42

4.3Businessmodels...........................................................................................................................434.3.1Servicedomain..............................................................................................................................454.3.2Technologydomain.......................................................................................................................464.3.3Organisationaldomain..................................................................................................................474.3.4FinanceDomain.............................................................................................................................49

2 Chapter1.Introduction



5. Marketoverview...............................................................................................................505.1Marketconditions........................................................................................................................50

5.1.1Marketactors................................................................................................................................515.1.2Markettrends................................................................................................................................525.1.3Marketbarriers..............................................................................................................................535.1.4Marketopportunities....................................................................................................................54

5.2Interviewedcompanies................................................................................................................545.2.1InterviewwithSuneFredskildfromCPHSolutionsLab.................................................................555.2.2InterviewwithMortenKjeldgaardfromNetplan..........................................................................565.2.3InterviewwithBoFinnemannfromCiscoSystems.......................................................................58


6. Analysis.............................................................................................................................606.1Requirementspecification............................................................................................................60

6.1.1Requirementdiscovery..................................................................................................................606.1.2Classificationandorganization......................................................................................................63

6.2ForecastingIoTplatforms.............................................................................................................646.2.1Hypecurveanalysis.......................................................................................................................646.2.2Maturitymodelanalysis................................................................................................................67

6.3Businessmodelanalysis................................................................................................................716.3.1ServiceDomain..............................................................................................................................716.3.2Technologicaldomain....................................................................................................................746.3.3Organizationaldomain..................................................................................................................766.3.4Financialdomain............................................................................................................................78


7. Evaluationanddiscussion..................................................................................................837.1Relevanceoftheresearch.............................................................................................................837.2Theresearchapproach.................................................................................................................837.3Thetheoreticalframework...........................................................................................................847.4Futurework..................................................................................................................................85

8. Conclusion.........................................................................................................................86

9. References.........................................................................................................................88

10. Appendix...........................................................................................................................94AppendixA-Interviews.....................................................................................................................94

AppendixA1...........................................................................................................................................94AppendixA2...........................................................................................................................................94AppendixA3...........................................................................................................................................94

AppendixB–STOFdomainfigures.....................................................................................................95AppendixB1............................................................................................................................................95AppendixB2............................................................................................................................................96



AppendixB3............................................................................................................................................97AppendixB4............................................................................................................................................98



1. IntroductionAsthecapabilitiesofinformationandcommunicationtechnologiesdevelop,newpossibilitiesandapplicationareasemerge,andtechnologybecomesincreasinglyubiquitousinoursocieties.Whenthesecapabilitiesarecombinedwithdecreasinghardwarepricesfordevicessuchassensorsandactuators,thepotentialfordevelopinginnovativeandconnectedsolutionsincrease.Byconnectingsuchsolutionsinnetworkswithothersolutions,valuabledataandinformationiscreated,makingitpossible to move from making opinion-based decisions to evidence-based decisions (Bosch &Olsson,2017).ThisdevelopmentisattheessenceoftheInternetofThings(IoT).TheIoTtermcoverstheactionofconnectingsuchsensornetworkstotheInternet,makingitpossibletointeractwithmassiveamountsofdevicesandthedatacreatedbythem.Withapplicationareasrangingfromconnectedcoffeemachinestocityinfrastructuremanagement,thepossibilitiesofIoTisnotlimitedtoaspecificsector.Andasthenumberofconnecteddevicesonaglobal scale isexpected to reach20billionby2020, theconditions for IoT solutions improves(Gartner,2017c).ThisalsoaffectstheglobalmarketforIoTsolutions,whichisexpectedtorisefrom$800billionin2017,to$1.4trillionin2021(IDC,2017).However,withtheincreaseincapabilities,thesystemsbecomemorecomplex,whichpresentschallengesforbothdevelopersandusersoftheIoT solutions. Companies with experience in dealing with complex technologies, are thereforeincreasingly providing services, where the development and control of IoT solutions is madepossibleinasimpleway.TheseservicesarecombinedonIoTplatforms,andwithtechnologygiantssuchasMicrosoft, Cisco,Amazon, IBM, andGoogleproviding their ownversions, theplatformscouldplayamajorroleinthefutureofIoT.Anareaofsocietythatalsofacesradicalevolutionisthecities,wherepopulationsizes,density,anduseofresourcesisincreasingatafastpace.Thistrendisestimatedtocontinueinthefuture,andby2050,70%oftheworld’spopulationisexpectedtoliveincities(Aoun,2013).Theseconditionscreate exceptional demands for the services and capabilities in all aspects of the city, and thetechnological evolution could be a key factor for meeting these demands. When applyingtechnologicalsolutionstocity-relatedactivities,andfocusingonbothefficiencyandsustainability,the cities become better equipped for meeting future demands, or in other words, smarter(Giffinger, 2007). There are many application areas for smart city initiatives, including wastemanagement,trafficcongestion,energy,parkingandlighting,butthecommontrendinallofthem,isthattheyfocusonprovidingvalueforthepublicsociety(Jinetal.,2014).IoTisacentralelementforcreatingsmarterandbettercities,andgovernmentsoftenplayamajorroleintheadoptionofIoTonbothnationalandlocallevels(COWI,2016)(WorldBankGroup,2017).The city of Copenhagen is no exception when it comes to the increasing demands caused byurbanization, and innovative solutions are needed to achieve ambitious goals of efficiency,



environmentalsustainability,andhighlivingstandards(KøbenhavnsKommune,2015).Somesmartcity initiativesarebeing implemented inCopenhagen,butmainlyonanexperimentalstage.Thevaluepotentialforadoptingthetechnologiesonalargerscaleissubstantial,makingitrelevanttoimprovethepossibilitiesforrealizingthevaluecreation(ARUP&CEDI,2016).The trend in cities, basedonurbanization, is that functions andoperations arebecomingmoreconnected,creatinganetworkofsystems,whereIoTcanplayanimportantrole(UN,Ericsson&ITU,2015).AndwiththeincreasingtrendofIoTplatformsprovidedbyhighlycapabletechnologyvendors, these twoelements seem likeaperfectmatch.but theadoptionofan IoTplatform inrelationtocitymanagementinCopenhagenhasyettohappen.Theaimofthisresearchisthereforetounderstandwhatthesituationis,andwhatthepossibilitiesareinthefuture,forcreatingvaluein Copenhagen through IoT platforms. The research will take the perspective of the platformproviders,inordertoassessthenecessarybusinessmodelaspects,whichneedtobeadjusted.Theresearchwillbeguidedbyaresearchquestion,whichisdefinedinthefollowingsection.

1.1ProblemdefinitionTherearemanyinterestingelementsofthetechnologicaldevelopmentforbothIoTandsmartcities,and based on the initial research presented in the introduction above, the following researchquestionhasbeenformed:HowcananInternetofThingsPlatformprovider’sbusinessmodelbeadjustedtomatchtheneeds

ofthecityofCopenhagen?

1.1.1DelimitationOne of the main delimitations of this research comes naturally from the scope of focus; thetechnologicalelementswillhaveananalyticalandstrategicalapproach,whichmakesverydetailedtechnicalconsiderationsunnecessaryforansweringtheresearchquestion.However,knowledgeoftheunderlyingtechnologiesisessentialforunderstandingtheoperationsoftheIoTPlatforms,aswell asanalysing thepotentialsof the IoT solutions.A reviewof the stateof theartwithin thetechnologyisthereforeincluded.SomeofthecentralchallengesforIoTsolutionsarerelatedtothelackofsecurity,compromisedprivacy, and problems related to interoperability, based on the heterogeneity of standards anddevices(Hussain,2017).Suchelementscouldalsobehighlyrelevanttoresearch,withthepurposeofclarifyingbestpracticesfore.g.IoTsolutionsinCopenhagen.Butincludingtheseinthisreportcouldmakethefocuslessclear,andwouldrequireadditionalresources.Theywillbementionedbriefly,butwillnothaveacentralroleintheresearch.


1.2Readingguide

FocusingontheIoTplatformproviderintheresearchquestiontosomeextendlimitsouttheotherstakeholders,includedintheecosystemsurroundingthevaluecreationinCopenhagen.Thiswasdoneduetothelargepotentialtheplatformsshow,andtolimitthescopetoamanageablelevel.Lastly, the focus on Copenhagenwasmade to create a specific case, instead of looking at theplatformsandtheIoTpotentialforsmartcitiesonaglobalscale.Copenhagenisawell-developedcity,thatshowsgoodconditionsforIoTadoption,makingitinterestingtofocusoninrelationtothisresearch.Thefollowingsectionwillbrieflydescribethecontentsofeachchapterinthisreport,andmentionsomeofthechoicesmaderegardingformatting.

1.2ReadingguideAfter this introduction, which provides an overview of the research scope and the researchquestion, themethodschapterwillbepresented.Here, thefocuswillbeonthemethodologicalapproachandthedesignoftheresearch.Thethirdchapterwillprovidethebackgroundinformationfortheanalysistobebasedon,andwillincludeafocusonthestateoftheartwithinthefieldsofIoT,IoTplatforms,andsmartcities.Afterthefoundationofknowledgehasbeenestablished,theappropriatetheoreticalframeworkforaddressingtheresearchquestioncanbedeveloped.Thiswillbepresentedinchapterfour,andwillincludethreeoverallapproaches;requirementspecifications,technologyforecastingandbusinessmodels.Chapterfiveconsistsofamarketoverview,withthepurposeofunderstandingthecurrentsituationregardingIoTplatformsinCopenhagen.Themarketoverviewwillalsoincludetheempiricaldataofthisreport,consistingofthreeexpertinterviews.Themainanalysis,wherethetheoreticalframeworkisappliedtothegathereddata,ispresentedinchapter six. Theconclusionof thisanalysiswill contain themain findings,whichwillbeused toaddresstheresearchquestion.Chaptersevencontainsanevaluationofthefindings,andadiscussionoftheresearchoutcome,aswellassomethoughtsonpotentialnextstepsfortheresearch.Thepurposewillbetoassessthemethodologicalandtheoreticalchoices,andseehowtheyhaveinfluencedtheresearch.Theconcludingpartoftheresearchispresentedinchaptereight.Thisincludesthemainfindingsandtheanswertotheresearchquestion.


1.2Readingguide

Chaptersnineandtencontainsalistofreferencesandtheappendix.Throughoutthereport,theAmericanPsychologicalAssociation(APA)styleofreferencingwillbeused.Theinterviewswillbeattachedtothefinaldeliveryofthereportindigitalaudiofiles,andhasbeen labelled in the appendix, tomake referencingof specific statementspossible. Figures andothermaterials referred toas “author”, implies theyare theoriginalworkof theauthorof thisreport.

8 Chapter2.Methodology

2.1Researchscope

2. MethodologyThepurposeofthischapteristoclarifythetheoryofhowtheresearchwasundertaken(Saunders,2011).Thedesignoftheresearchwillbedescribedandillustrated, inordertoargumentfortheselecteddesignchoices,andtoclarifyhowtheresearchwasconducted.Thefollowingsectionwillelaborateonthechoicesofcontentsintheindividualchapterspresentedinthereadingguide.

2.1ResearchscopeThestartingpointofthereportisfoundintheresearchquestion,whichwasformedinthepreviouschapter.Thisnotonlysetthefocusiftheentireresearch,butalsonarrowedthescope,inordertokeepthereportonamanageablelevel.Buttounderstandthefundamentalsofthedomaininfocus,thesubjectsofsmartcities, Internetofthings,andIoTplatformshastobeclarified.Thesethreeareasaredevelopingfast,and it istherefore interestingtoreviewthecuttingedgetechnologiesused in the fields.By focusingon IoTplatforms in relation toacity, the research takesameso-perspective,asopposedtoamicroormacroperspective.Thisalsomeansthatthelevelofdetailinthetechnologicalresearchwaskeptatalevelwherethefundamentalswereclear,andsomeofthemostimportanttechnicalitieswereaccountedfor,butaverydetailedviewwasnotnecessary,asmentionedinthedelimitationoftheintroduction.Theoreticaltoolsareneededtoperformtheanalysis,andultimatelyanswertheresearchquestion.The combination of technology-related elements with a service development approach, andbusinessrelated-elementswithmoreofananalyticalapproach,wasintendedtobereflectedinthetheoretical framework. Therefore, requirement specifications, which are commonly found inrelation tosoftwaredevelopment,wereused topinpoint theneedsof thecity.This theorywasfollowedbyatechnologyforecast,whichincludedareviewofthematuritylevel,inordertoattainanunderstandingof the technologicaldevelopment inastrategicperspective.Lastly,abusinessmodel theory was used to research the possibilities an IoT platform has for creating value, byfulfillingtheneedsoftherequirementspecification,andatthesametimeconsideringthenatureofthemarketandthetechnologiesinvolved.Beforethesetoolswereapplied,itwasnecessarytounderstandthecurrentmarketsituation.Thiswasaformofcase-description,wherethetechnologiesandtermsresearchedintheearlystagesofthereport,wereanchoredtothespecificfocusareasoftheresearchquestion.Here,theempiricaldatawaspresented,tohavevalidandoriginalmaterialfortheanalysistobebasedon.Intheanalysis,thetheoreticaltoolswereapplied,andthehybridapproachofbothtechnology-andbusiness related elements was used to combine the view of the city in relation to smart cityinitiatives,with thebusinessmodelecosystemof the IoTplatforms,aswellas thetechnologicalpossibilitiesandlimitationsofIoTingeneral.Theoutcomewasthereforeasetofrecommendations

Chapter2.Methodology 9

2.2Researchapproach

fortheplatformproviders,toattainaroleinthesmartcityecosystem,whichgeneratesvalueforthecity.Thisoutcomeevaluatedanddiscussed,beforeafinalconclusionoftheentireresearch,andananswertotheresearchquestionwaspresented.

2.2ResearchapproachTheapproachoftheresearchinthisreportrevolvesaroundtheresearchquestion,whichtheentirecontentsareaimedataddressing.Thepurposeof the researchwas to identifya theory,which,basedontheanalysisofthedata,wasproposedasananswertotheresearchquestion.Formingtheresearch this way, was based on a realization that company business models, city needs andtechnologicaldevelopmentarehighlydynamicfields,thatdoesnotnecessarilyfollowastrictandpredictablewayofrespondingtotheircontexts.Thecombinationofthefieldscanbedoneinvariousways,whichmakesthesolutionsadaptableandallowsformultipleexplanationsoftheoutcomes.Thesecharacteristicsoftheresearchfitverywellwithaninductiveresearchapproach,whichstartswitharesearchstage,thenanalysesdata,andendswithatheory(Saunders,2011).Incontrast,adeductiveresearchapproachstartswithahypothesisbasedonatheory,whichisthentestedandevaluated, inorder toconfirmor reject the initialhypothesis. If this researchcanberepeatedwiththesameresults,thefindingsareconsideredvalid,andtheanswercanbegeneralizedforsituationswith thegivencircumstances (Saunders,2011).Thehighlystructuredandtestablenatureofthedeductiveapproachmakesitusefulinscientificresearch,andespeciallyinthefieldsofnaturalscience.Itcanbeafasterwayofresearching,astheexperimentcanbeconductedonce,and produce results that satisfy the hypothesis. But in relation to the research in this report,qualitative data was highly relevant, to understand the complex and dynamic contexts of thetechnologiesandstakeholders.Afaster,morecontrolledtestwouldnotfitthesecharacteristicsverywell. The inductive research approach was therefore chosen, in order to answer the researchquestion.Thefollowingsectionwilladdressthedatacollectionmethodsusedintheresearch.

2.3DatacollectionPrimary data, whichwas gathered by the author, consists of three interviews. Semi-structuredinterviewguideswereused,makingtheprogressionofquestionsflexible,andallowingtheflowoftheconversationtosetthepaceoftheinterview,ratherthanfollowingastrictplan(Bjørner,2015).Furthermore, the structure allowed follow-up questions to be added. Thiswas done to let theintervieweesexpandontheirstatements,sinceitwasconsideredthattheintervieweeshadmoreknowledgeofthesubjectsdiscussedthantheinterviewer,andastrictplanthereforemighthavelimitedtheinformationattained.Havingthistypeofopen-mindedapproachisacharacteristicofeffective interviews in general, as it avoids limiting the interview to a pre-conceived outcome(Sommerville,2010).

10 Chapter2.Methodology

2.4Researchdesign

Theintervieweeswererecruitedbasedontheirrolesintheirfieldofwork.ItwasdesiredtoaddressthetopicofIoTplatformsforsmartcityactivitiesfromboththecity’s-andtheplatformprovider’sperspective,aswellashavinganinputfromaneutralthirdparty,whohasexperienceworkingasamediatorbetweenthetwo.Thequalitativedataattainedthroughtheinterviewswillbepresentedinthreeways:

1. Asummary,ormeaningcondensation,inthemarketoverviewchapter(Bjørner,2015).2. Citationsofstatementsrelevanttothevarioustopicsintheanalysis.3. Fulllengthrecordingsinaudiofilesattachedasdigitalappendicestothereport.

Key-informant interviews, also known as in-depth interviews,were used as these are better atdiscussingcomplexsituations,suchasbusinessmodels,asopposedtoahighernumberofshortinterviews(Bjørner,2015).Usingmethodssuchasquestionnairesorsurveyswasnotchosen,asthequalitativeapproachfittedbetterwiththepurposeofthedata,andassufficientquantitativedatawasattainablethroughsecondaryresearch.The secondary data,which constituted themajority of the data in this research,was based onliteraturereviews,aswellasmarketresearch.Researchproducedbyconsultancycompaniesandmarketanalyticsorganizations,playedanimportantroleinthedatausedfortheanalysis.However,someofthemostrelevantdatainthisfieldcostsasubstantialamountofmoney,soarequirementfor the secondary data was that it either allowed public access, or was available through theresourcesofAalborgUniversity.Thisalsoappliedtoacademicresearchpapers.

2.4ResearchdesignFigure1illustratesthedesignoftheresearchforthisreport.Thecloudsexplainthepurposeoftheindividual segments, and the squares define the contents. The vertical red arrow refers to theprogressionoftheresearch,startingfromtheresearchquestionandmotivation,andendingwithananswertothisresearchquestionbasedonthefindings.

Chapter2.Methodology 11

2.4Researchdesign

Figure1–Theresearchdesign(Author)

Nowthattheresearchdesignhasbeenclarified,thebackgroundinformationandstateoftheartoverview,willbepresented.

12 Chapter3.Stateoftheart

3.1Internetofthings

3. StateoftheartThischapterfocusesonthelatestdevelopmentsinthethreemaintopicsrelatedtotheresearchquestion,beingIoT,smartcities,andIoTplatforms.Duetothisfocus,thechapterisreferredtoasthestateoftheart.Asmentioned,theaimistocreateasolidfoundationofknowledge,forthefollowingresearchtobebasedon.

3.1InternetofthingsIntheveryfirststepoftheresearch,thetechnicalcontentsandworkingsofIoTwillbereviewed.Asthereviewprogresses,focuswillbeonthetermitself,thetechnologicalarchitecture,themainprotocolsandthecommonconsiderationsfordevelopingIoTsolutions.

3.1.1DefinitionandoriginofInternetofthingsTheinternetofthings(IoT)isnotanewterm,butthemeaninghasevolvedoverthelastdecade.Itcanbelookedatasanevolutionofmultiplemachine-to-machine(M2M)-systems.Thetwotermsarethereforenotfarfromeachother,butvaryslightlyintheirscope.ThephilosophybehindM2Mregardinginsightsfrommachinesorthingsremainsthesame,butwhatcouldbeconsideredisolatedsilosorhorizontalsof individualM2M-systems,arenowinterconnectedandavailabletoa largeramountofpossibilitiesthroughtheinternet(Alam,Nielsen,&Prasad,2013).Thepurposeofbothsystemsistoactbasedonclearinsights,ratherthanroutinesorinstincts.Andthisisachievedbynotonlyconnectingthethingstotheinternet,butalsobyanalysingthesedata,combiningthemwithotherdatasets,andbyusingtheseinsightsinthedecision-makingprocesses.In its essence, internet of things deals with connected devices and sensors, which transmitsinformation over the network of networks, which is the internet. A more factually correctformulation of the term could therefore be “the internet relating to information of things” aspresentedbyHuang&Li(Huang&Li,2010,P.483).However,thesearemerelymattersofwording,andwhatisessentialistheactualelementsofthetechnologiesinvolved,andhowtheyareusedinpractice.Oneofthekeytechnologicaladvancements,whichstartedmuchofthedevelopmentaroundIoTwasradiofrequencyidentification(RFID).Thistechnologyprovidedtheopportunitytoimplementanelectronicalcircuitora“tag”onthingsinaverycost-effectiveway,andtherebymakingitpossibleto receive information form things thatwould otherwise be hard to connect to an informationsystem.TheseRFIDtagsconsistsofanantennaandamicro-chipcontainingtheID.SomeRFIDsalsohaveabattery,makingitpossibletotransmitsignalsovergreaterdistances(upto30meters).ThesearecalledactiveRFIDs,whereastheoneswithoutabattery,onlytransmittingwhenaffectedbythesignalfromthereceiverdevice,arecalledpassiveRFIDs(Yanetal,2008).Figure2illustratesasimple

Chapter3.Stateoftheart 13

3.1Internetofthings

IoTsystemusingRFIDtags.Inthisexample,andwiththeuseofRFIDingeneral,thetagsarenotlimitedtoincludeonlyanIDnumber.Sensorscanbeincludedinthephysicalobjects,andcombinedwiththeRFIDtechnology,totransmitbothanIDande.g.atemperaturemeasurement.Withthedevelopment of new technologies regarding both communication, sensors and actuators, thepossibilitiesofIoTsolutionsareincreasingdrastically.

Figure2–AsimpleIoTsystemwithtwoservicesbasedonRFIDtags(Kahnetal,2012)

Cloud-basedtechnologieswithcapabilitiessuchasaccessingcomputingpower,datastorage,dataanalytics, scalability andmuchmore,makes the IoT systems increasingly advanced, and furtherimprovesthepossibilitiesofIoTnetworks.Inasense,thesepossibilitiesalsoplayedapartincreatingoftheideabehindIoT.However,accessingthecloudrequiresacertainamountofbandwidthandhastorelyonastableconnectiontofunction.SomeIoTsystemsthatareeitherverytimesensitive,locatedinareaswithpoorinternetcoverage,orarelimitedinotherway,canhaveproblemswithreaching the full potential of the cloud. Therefore, it can be necessary to move some of thecapabilitiesofthesystemclosertotheconnectedthings,alsoreferredtoasendnodes.ThissolutioniswhatFogComputingconsistsof.Theaccesspointstothenetworkrequiresmorecapabilitiesinsuch networks, but makes advanced IoT solutions possible, when cloud solutions fall short. Invehicle-to-vehiclecommunicationforexample,whichcanbeconsideredapartofanIoTnetwork,thelatencyforconnectingtoacloudservermightbetoogreat.Ifthevehiclesinsteadonlyhadtoconnecttoanetworkedgedevicecapableofprocessingtheconnectionandrespondingaccordingly,thequalityofthesystemcouldimprove(Chiang&Zhang,2016).


3.1Internetofthings

3.1.2NetworkarchitectureIoTreliesonanarchitecturestackwithquitealotofcapabilitiesinthelowestlayer,whichisusuallyreferredtoasthephysicallayer.BasedonareviewofliteraturerelatedtoIoTarchitecturestacks,alsoknownasreferencemodels,thefigure3wascreated,andwillbeelaboratedoninthefollowingsection.

Figure3–theIoTarchitecturestack.Adoptedfrom(Yaqoobetal,2017)(Minolietal,2017)(Tisljareo,2016)(Vermesanetal,2015)(Khanetal,2012)(Wangetal,2011).

Themainaspectofthestackisillustratedinthenumberedlayers,withexamplesofcontentsandfunctionalityintheaccompanyingwhiteboxesontheright.Theindividuallayersofthearchitecturestackwillnowbepresented.

1. DevicelayerSome architecture stacks refer to this layer as the physical-, sensor-, or perception layer, butregardlessofthename,thelayercoverstheendnodesinchargeofthedataacquisition,orinotherwords;thethings.ManyofthechallengesrelatedtoIoTarearesultoftheheterogeneityofthethings,astheinterconnectionbetweentheupperlayersandamultitudeofsensors,actuators,somewiredandotherwireless,isverychallenging.

2. NetworklayerCommunicationprotocolsandtheircharacteristicsarethemaincontentsofthislayerinthestack.Somemodelsrefertothislayerasthegatewaylayer,thefoglayerorthedataaggregationlayer.Whatiscommonforall, isthethatit includestheconnectivitytothelastedgeofthestack.Thecapabilities andpurposeof the things connected in thedevice layer, has a large impact on the


3.1Internetofthings

networklayer.Ifforexamplethethingshaveverylimiteddatahandlingcapabilities,thegatewaysmighthavetodosomeoftheprocessing,orthecommunicationprotocolwillhavetobelightweightandconstrained.Theseprotocolswillbeelaboratedlaterinthischapter.

3. PlatformlayerAlso frequently referred to as themiddleware layer, this iswhere the processing, storage, andabstractionofdataisperformed.Thesystemmanagementofthesolution“backend”willalsobeperformedinthislayer,asthisiswherethedataarrivesbeforeitistransmittedtowardstherelevantapplications.InrelationtoIoTplatformscurrentlyofferedonthemarket,bigdataanalytics,machinelearning and other data related serviceswill be implemented in this layer aswell. Often theseservicesarepartsoftheplatformprovider’sportfolioofservices,butthiswillbedescribedindetaillaterinthereport.Havingaplatformhubthroughwhichaccesstoanalyticscapabilitiesispossible,isconsideredacentralisedplatformarchitecture,whereassystemsinwhichthesecapabilitiesaremoredistributed,usesadecentralisedplatformarchitecture(Yaqoobetal,2017).

4. ApplicationlayerAsdescribed,theoutcomeofthedatahandlingwillbepresented inapplicationsforthevariouspurposesoftheindividualIoTsolutions.Here,theinformationtransmittedtotheplatformscanbeused to report on the state of the things involved in the solutions, and the front end of theapplicationscanhavefeaturesmakingitpossibletocontrolthethingsaswell.Fortheendusers,whoaregrantedadministrativecontrols,thiswillalsobewherethemoreoperationalmanagementofthesolutionscanbeperformed,however,thedeveloperswillneedaccesstolowerlayersaswell.

5. ServiceandbusinesslayerIntheintroductiontothischapter,itwasstatedthattheinformationcapturedbytheIoTsolutionsdoesnotprovidemuchvalue,withoutbeingimplementedinbusinessdecisions.Therefore,thislastlayerisfocusedonhowthedataandinformationtransmitted,analysedandevaluatedbyallotherlayers,canbeusedtocreatenewvalueandbusinessmodels.Somearchitecturestacksalsorefertothislayerasthecollaborationlayer,sincetheinterconnectionbetweenmultipleIoTsystemscanbeusedtocreateadditionalinsightsandvalue.Anexamplehereofcouldbeasmartcitysystem,whichinterconnectswiththesystemsusedinothercities,toshareinsights,andcollaborateonbecomingsmartercities.Thesecurityandprivacyneedstobeanintegralpartthroughoutthearchitecturestack,andmanyoftheIoTsolutionsonthemarket,andIoTplatformsinparticular,focusgreatlyontheseelements.However,manyIoTsolutionssufferfromvulnerabilitiesinthisarea,makingitanimportantareaofdevelopment.


3.1Internetofthings

Thecontentofthearchitecturestackisuptothesolutiondeveloperstodecide,andshouldreflecttheattributesofthesolution.Thearchitecturecanalsousedifferentnetworktopologies,basedontheseattributes. If forexampleavehicle-to-vehiclesolution isbeingdeveloped,apoint-to-pointtopologycouldberelevant.Hadthesolutionbeenawastemanagementsystem,wheretheneedforcommunicationbetweentheconnecteddevicesdidnotexist,astartopologymightbemoreoptimal(Yaqoobetal,2017).Onaveryfundamentalscale,connectingthethingstotheinternetstarts with choosing technologies that support the adequate communication protocols. Thefollowingsegmentswillexpandonsomeoftheseprotocols.

3.1.3LocalareacommunicationprotocolsManydifferentcommunicationtechnologiesexist,andservedifferentpurposes.Onceagain,theheterogeneitychallengeofIoTsolutionsisobvious,astheinteroperabilitybetweenthesediverseprotocols is challenging.Many of the protocols for device connectivity has been a part of theevolution of IoT, as mentioned earlier with RFID. Other examples hereof are the Near FieldCommunication(NFC),BluetoothandBluetoothLowEnergy(BLE),ZigbeeandofcourseWiFi.Table1expandsonthesecommunicationprotocols,andspecifiestheirfrequency,datarate,latencyandrange.Thesecharacteristicsarechosen,astheyprovideanoverviewofthedifferencebetweentheprotocols,andbecausetheycanbecrucialfortheselectionofoneprotocoloveranother.Othercharacteristics(e.g.powerrequirements,scalabilityetc.)areleftouttokeepthecomplexityofthetableatanappropriatelevel.Thesamereasonappliestothenumberofprotocolscovered.ThesehavebeenchosenbasedontheirlargeroleinrelationtoIoTforsmartcities.

LocalareanetworksProtocol Frequency Datarate Latency Range

RFID

136KHz13.56MHz

865-868MHz2.4GHz

424kbps N/A1

50cm50cm30m1.5m

NFC 13.56MHz 100-420kbps N/A1 10cm

ZigBee2.4GHz900MHz

250kbps20kbps

5ms 10-100m

WiFi 2.4and5GHz 600Mbps(max) 28ms 100m

BLE 2.4GHz 1Mbps 6ms >100m

Table1–Commonlocalareanetworkprotocols(Dhillonetal,2017)(Lietal,2015)(Designspark,2015)(Stoltze,2016)(Sigfox,2017)(Dueholm,2017)

1LatencyforbothRFIDandNFCissosmallthatitisnotafactor(Kitsos&Zhang,2008).


3.1Internetofthings

3.1.4WideareacommunicationprotocolsWhenthedatatransmissionneedstocoveralongerrange,orconnectivitybeyondthelocalareaisneeded,eithertheprotocolsusedinthedevicesneedstobesubstituted,oranetworkaccesspointneedstotranslatethetransmissionintoamoresuitableprotocol,andpassitalonginthenetwork.Muchlikelocalareanetworks,wideareanetworkshaveseenalotofevolutioninrelationtobothnumber of new technologies and their capabilities. And these protocols truly advance thecapabilitiesofIoTsolutions,astheypotentiallycoverentirecitiesorcountries,makingitpossiblefor vast amounts of devices to become part of the IoT networks. On this scale, the financialrequirementsforimplementationofatechnologyisfargreaterthanonthelocalscale.Theadoptionof protocols can thereforebe subject of political debates andmarket conditions.However, lowpower wide area networks, also referred to as IoT- or sensor networks, are evolving in manycountries. In Denmark, the incumbent on the Danish telecom market, TDC, is developing aproprietary narrow band (NB) IoT protocol in order to provide a wide area network for IoT(Dueholm,2016).Butothertechnologiesarealsobeingimplemented,likeSigfoxbyIoTDenmark(Sigfox,2017).Table2illustratessomeofthecommonwideareanetworkprotocolsusedinIoTsystems,usingthesameparametersasintable1.

WideareanetworksProtocol Frequency Datarate Latency Range

LoRa Various 0.3-50Kbps low2.5Km(cities)15Km(Suburbs)

NB-IoT InLTEspectrum <1Mbps 100ms <11Km

2G3G4G/LTE

900&1800MHz2100MHz

800,1800&2600MHz

100-400Kbps0.5-5Mbps1-50Mbps

300-1000ms100-500ms<100ms

<35Km5Km5Km

Sigfox 868MHz <100bps 6s 40Km

Table2–Commonwideareanetworkprotocols(Dhillonetal,2017)(Lietal,2015)(Designspark,2015)(Stoltze,2016)(Sigfox,2017)(Dueholm,2016)

Similartotheprotocolchoicefornetworkcommunication,thedevelopmentoftherestoftheIoTsolutionisfullofalternativeprotocolstoselectbetween,dependingontherequirementsofthespecificsolution.


3.1Internetofthings

3.1.5DevelopingIoTsolutionsThebasicphilosophybehindtheInternetalsoappliestoIoTsolutions,meaningwebobjectsneedtoberepresented,identifiedandtransported.ThesefunctionsarecommonlyachievedusingHTML,URI,andHTTP,however,when itcomesto IoTnetworks, thecapabilities in termsofprocessingpower,powerconsumption,andmore,resultsinlimitationsfortheseprotocols.AnexamplehereofistheXMLprotocol.XMLisusedtoputstructureonwebcontent,byorganizingdataintextbasedcategories.Thismakesiteasilyaccessiblefordevelopers,aswellaswidelyacceptedinwebservicesduetothesimplenatureoftheprotocol.However,thetextbasednaturetakesupquitealotmorespacecomparedtobinaryformatsofcommunication.TheEfficientXMLInterchange(EXI)protocolisaddressingthisissue,byencodingXMLmessagesintoacompact,binaryform.ThestandardisdevelopedinaW3Cworkinggroup(W3C,2014).Figure 4 illustrates some of the common protocols, which are not constrained by the limitedcapabilitiesofsimpleenddevicesinanIoTsystem,aswellasalternativesthataredevelopedwiththecapabilitiesofIoTdevicesinmind.

Figure4-Unconstrainedandconstrainedprotocols(Zanellaetal,2014p.26)

COAPusesmuchsmallerpacketsthanHTTP,butisotherwiseverysimilarinrelationtofunctionality.Another very popular alternative to HTTP is the lightweight messaging protocol MQTT. ThedifferencebetweenCoAPandMQTTisthatMQTTusesapublish/subscribesystem,makingiteasierformanydevicestoconnecttomultipledifferentservices,ratherthanhavingtocommunicateone-to-one,asisthecasewithHTTPandCoAP(MQTT,2014).TheIPv6dealswiththescarcityofaddressesinIPv4,byaddingtothenumberofavailableaddresses.However,notallconnecteddeviceshasthecapabilitiesofunderstandingandcommunicatingwiththenewerprotocol,andsoaformoftranslationhastobeimplementedinthesystemifthisisthecase.


3.2IoTPlatforms

Another noteworthy protocol related to IoT solutions is WebSocket. Here, instead ofcommunicationbackandforthbetweenaclientandaserverusinge.g.HTTP,withalargemeta-dataheader,aWebSocketsconnection isestablished,andmaintained.Thismakes itpossible tocommunicate continuously with a very small header around the actual data in the message,improvingspeedanddatausage(Websocket,2017).Now that someof the fundamental technologiesbehind IoThasbeen researched, anumberofchallengescanbeidentified.First,thematterofheterogeneity,whichhasbeenmentionedacoupleoftimespreviously,isverysignificant.Manyemergingprotocolswithlimitedconsensusaboutwhichone to use, creates problems when systems scale up, and has to connect with other networkelementsthatspeaksanunknownlanguage.ThisleadstotheproblemofinteroperabilitybetweenIoTsystems,butalsointernallybetweenelementsofthesamesystem.Furthermore,muchofthevalueregardingIoTcomesfromthelargenumberofconnecteddevices,andtheinsightsfromthedataprovidedbythese.Thesystemsthereforeoftenrelyonscale,whichsetsstrictrequirementsfore.g.theamountofdataeachmessagecaninclude,thepowerconsumption,andofcoursethefinancial scaling as well. Lastly, IoT poses many obvious threats of personal privacy related toelements such as surveillance and data which potentially could be personal. Furthermore, theinsightsgatheredformthedistributedthingscreatethepotentialformisuseandaddedpowertothewrongpeopleifthedataisnotsecuredproperly.Asmentionedintheintroduction,atrendinrelationtothedevelopmentof IoTsolutionsisthatlargecompaniesandsoftwarevendorsprovideplatforms,onwhichthesolutionscanfunction.Thesecondsectionofthestateoftheartchapterwillreviewthecontentsoftheseservices,andfocusonthreeexistingplatforms.

3.2IoTPlatformsTheneedforintegratedsolutionstooperateacrossmultiplefunctionality-andserviceareasisrising,astheadoptionofIoTincreases(Vermesanetal,2015).Alargenumberofplatformsareemerging,manyofwhichaspiretobecomethe“platformofplatforms”,orwhatGooglewastothesearchengine.Platformsvary in technological focusandcapabilities, aswell as theamountof servicesincluded inthesolutions.Somearecompletelyopensource,others intendedtobeusedonly inspecificsectors.Whatbindsthemalltogetheristheircorefunctionalities.Theplatformsarelinkingthesensorstoanalyticalendpoints,andtherebyimprovingthebusinessoutcomes.Inotherwords,theylargelyrelyonmiddlewarefunctionality,makingitpossibleforthesensingdevicestofocustheirenergyonsensingandtransmittingthedata, leavingthemoredemandingelementstotheplatform.ThephilosophybehindthemiddlewareservicesistouseaServiceOrientedArchitecture(SOA),where thecapabilitiesof thedifferentwebelementsareprovidedas services,attainablethoughthehigherlayersofthenetworkstack.TheSOAiscombinedwithcyberinfrastructure(datamanagement,miningetc.),making it possible toutilize vast amountsof functionalities,without


3.2IoTPlatforms

having to deal with the complex elements of their inner workings (Tweneboah-Koduah, 2015).Furthermore,theplatformsalsocaterformany,heterogeneoussensorstoconnecttotheplatformwithoutknowledgeoforcompatibilitywiththelanguageoftheunderlyingservices.Inascenariowhereatemperaturesensorisusedtodeterminetheamountofwateraplantneedstobegiven,thewateringsystemcouldbecodedinJavaorC++.Insteadofhavingtoprogramthesensorinthesamelanguage,asimpleXMLmessage(ortheconstrainedequivalent)couldbetransmittedtotheIoTplatform,whichthenactivatesthewateringsystem.Figure5illustratesthepositioningofIoTplatforms,inrelationtotheIoTsolutions,andsomeofthemainobjectivesfortheservices.

Figure5–ThepositionofIoTplatformsinrelationtoIoTsolutions(Forrester,2016)

Thetargetgroupofeachplatformvaries.Somearefocusedonspecificindustries,basedontheiradditionalserviceportfolios,whichcanbeusedtoenhancetheIoTservices.Theplatformsareoftenaimedatsolutiondevelopers, in thesensethat theplatformsprovidethetoolsandcapabilities,whichadeveloperneedsforstructuringtogetherasolution.Thehighlevelofplatforms,andtheirvaryingcharacteristics,canmakeithardtoattainanoverviewofthefunctionalitiesincludedontheplatforms.IDCdescribessomeofthekeyfeatures,whichIoTplatformsarefocusedat,asfollows(MacGillivray,2016):

• DevicemanagementAttheheartoftheIoTservicesarethedevicesattheedgeofthenetwork.Thedataprovidedfromthese,andthecontrolof themneedstobeconfigured,certified,provisionedandmaintained inorderforthesystemtofunction.


3.2IoTPlatforms

• ConnectivitymanagementIoTplatformshasquiteachallengetodealwithintermsofconnectivitymanaging,andneedstobepreparedtoconnectwithamultitudeofdifferentprotocols,devicesandservices.Thischallengealsomeansthatthereisaneedinthemarketforsolvingproblemsrelatedtoconnectivity,whichiswhyIoTplatformprovidersseeamarketfordoingthisinanefficientway.ThelevelofcomplexityrelatedtoconnectivityincreaseswhentheIoTservicesspanoveralargergeographicalarea,andevencrossingcountryboarders.AcommonproblemrelatedtothisisthemanagementoftheSIM-cards in theendpoints. IoT solutionsproviders should therefore cater for these challenges, andprovideasimpleone-pointsolutionforconnectivitymanagement.

• ApplicationmanagementSimilar to the challenges regarding connectivity, the application development aspects of IoTsolutionsdealswiththehighlevelofheterogeneity,butalsoneedstomakesenseoftheinformationcontainedinthedatamessages,ratherthansimplyreceivingthemcorrectly.Themanagementoftheapplications inboththedevelopmentandfunctionalstagesthereforeneedstofocusonthecollection,managementandinterpretationofdata.

• DashboardandreportingWhenIoTsolutionshasbeenimplementedusingaplatform,theuserswillmostlikelyaccessthesolutionthoughaformofdashboard.Thisdashboardneedstoincludeallrelevantinformationforthegivensolution,aswellasthepossibilitytoexportdataformanagement-orientedsummaries.Akeyfeatureofthisinformationpresentationistonormalizethedata,creatinganoverviewofthecomplexandcomprehensiveinformation.

• AnalyticsTheanalyticalcapabilitiesoftheIoTplatformsneedstobeatareasonablelevel,inorderforvaluableinsightstobecreatedfromthesolutionsontheplatform.However,alargepotentialispresentinthecognitiveandcomplexanalytics,whichareincreasinglyaccessible.Therefore,theIoTplatformsneedstobecapableofconnectingtotheseservices,andincorporatetheiranalyticsintothesystem.ToseehowthesefunctionalityfeaturesareincludedinIoTplatformsonthemarket,areviewofthreeIoTplatformswillbepresentednext.ManyIoTplatformsarerelevanttofocuson,butthreehavebeen selected to limit the scopeof the review to amanageable level. Basedon amarketanalysisproducedbyForresterResearch,theIoTplatformsofMicrosoft,AmazonWebServicesandCisco have the largest market presence on a global scale (Forrester, 2016). Since informationregardingmarketsharesinDenmarkandCopenhagenarenotavailable,theglobalmarketshareisusedtoselectthethreeplatformsinfocus.


3.2IoTPlatforms

3.2.1MicrosoftAzureIoTSuiteMicrosoft provides a range of cloud-based solutions under the Azure name, and one of thesesolutions is the IoTSuite.Thesuitehasmanypurposes,withpreconfiguredremotemonitoring-,predictive maintenance- and connected factory solutions being a few. The combination ofcomponentsinthesuitedependsontheneedsofthespecificIoTsolutions,butamainaspectofthe suite is the Azure IoT Hub (Microsoft, 2017a). In this hub, the focus is on bidirectionalcommunicationbetweenthedevicesconnectedandthecloud(Microsoft,2017b).The hub relies on Service Assisted Communication, which focuses on creating a securecommunicationbetweenthecontrolsystemandthedevices,byestablishingstrictrequirementsforwhichmessagesandrequeststosend,andwheretosendthem.ThefoundationofserviceassistedcommunicationistoviewIoTdevicesashavingafundamentallydifferentpurposesontheinternetthancommondevicessuchasserves,PCs,tabletsorphones.TheIoTdevicesneedsstricterrules,which to some extend limits the capabilities of the communication, compared to the commondevices,butbenefitsthesecurity(Vasters,2014).Thehubalso includesdevice twins,whichmakes it possible to storemetadataabout individualdevices,andsendmessagestothesewhiletheyareoffline,andpresentingthemwhenthedeviceappearsonlineagain.Thehubalsocontainsper-deviceauthentication,arulessystemforroutingdevice-to-cloudmessages,operationlogsfordeviceconnectivity,devicelibrariesandsupportsIoTprotocolssuchasMQTT,AMQPandofcourseHTTP.Inadditiontothehub,theIoTSuiteseparatesthefunctionalityinthreecategories,whichwillbedescribednext(Microsoft,2017a).Figure6illustratesthesolutionarchitectureoftheIoTSuite.

Figure6-MicrosoftAzureIoTsolutionarchitecture(Microsoft,2016).


3.2IoTPlatforms

1. DeviceconnectivityAs mentioned, the communication is bidirectional, making it possible to not only retrieveinformationfrome.g.asensor,butalsotosendmessagesfromthecloudback-endtothedevices.This makes it possible to interact with the connected devices, and opens a vast amount ofopportunitiesforcontrolandagilityofthesolutions.Asoftwaredevelopmentkit(SDK)isprovidedfromMicrosoftforbothdevicesandtheIoTHub,makingitpossibletotakefulladvantageofthecapabilitiesoftheplatform.

2. DataprocessingandanalyticsThis iswherethevalueofthedatatransmittedfromthedevices isestablished,astheback-endsolutioninthecloudanalysesthedatamessagesbasedonthechosensetofrules.Microsoftalsoprovidesanumberofservices,whichcanbeapplied inthebackendformachine learning,dataprocessingandanalytics.

3. PresentationandbusinessconnectivityWhen the IoT platform is used for the IoT solutions, the information can be accessed throughdashboardsorreports,statingthecurrentsituationaswellashistoricdata.Furthermore,theIoTsuite also allows for business connectivity and supports integration of the data into existingapplications.Theplatform invitesapplicationdevelopers topartnerwithMicrosoft,and therebyprovidefunctionalitiesontheplatformfromexternaldevelopers.It can be concluded that theMicrosoft Azure IoT Suite is awide-ranging IoT platform,with allnecessary elements for solution development, from SDKs to data analytics. One issuewith theplatformisthatcould-basedservicesonlyaresupportedinpublic-clouds,whichcouldleadtosomeregulatory issues, regarding the storage of potentially personal data within smart city relatedsolutions(Forrester,2016).Furthermore,Microsofthasahistoryofpursuingtheirownstandards,whichcouldbeproblematicinatechnologicalfieldthatishighlydependentoninteroperability.


3.2IoTPlatforms

3.2.2AmazonWebServicesIoTPlatformTheAmazonWebServices(AWS)IoTPlatformisoneofthelatestadditionstoAWS’simpressivewebserviceofferings.AccordingtoresearchconductedbySynergyGroup,AWSisbyfartheleaderon the global cloudmarket, with 34% of themarket share inmid 2017, compared to 11% forMicrosoft’s Azure services (Synergy Research, 2017). Figure 7 below illustrates the maincomponentsoftheAWSIoTplatformsolution.

Figure7-AWSIoTplatformsolutionoverview(AWS,2017a)ThefunctionalityoftheIoTplatformincludesmanyofthesameelementsastheMicrosoftAzureIoTSuite(AWS,2017a):

1. DeviceconnectivityASDKisprovidedbyAWStosupportdevelopersinrealizingtheirIoTapplications.TheSDKsupportsmultiplecommunicationprotocols(MQTT,HTTPandWebSocket)andprogramminglanguages(C,JavaScriptandArduino),butisonlymeantasahelpfulservice.AlternativeSDKscanalsobeusedtodevelopthedevices,whicharegoingtobeconnectedtotheIoTplatform.


3.2IoTPlatforms

TheDeviceGatewayiswheretheIoTdevicesconnecttotheplatform,andallowstocommunicateviaapublication/subscriptionmodel,meaningthesender(calledpublisher)pushesamessagetoadefinedtopicinsteadofaddressingforaspecificrecipient.Acomponentinthenetworkwhoneedsto receive the message from the IoT device simply need to subscribe to the given topic (e.g.temperaturemeasurements),andwillthenautomaticallyreceiveallmessagespushedtothattopic,improvingtheperformanceandscalabilityofthenetwork(AWS,2017b).Onceagain,thenetworkprotocols MQTT, HTTP and WebSocket are supported. It is possible to use multiple types ofauthenticationbasedontheprotocolusedfortheconnection.AWShastheirownauthenticationmethodcalledSigV4,butothermethodsandcertificatesarealsosupported,andcanbecreated,deployedandmanagedfromtheconsoleortheAPI.Intheregistry,devicesaredescribedbygivingthemanidentityandaddingmetadataaboutthecapabilitiesofthedevice.

2. Dataprocessing,analytics,presentation,andbusinessconnectivityLike the device shadows of theMicrosoft Azure IoT Suite, the AWS IoT platform can create apersistentvirtualversionoftheconnecteddevices,whichremembersthelastreportedstateofthedevice.Thismakesitpossibletoretrievethelastreportedinformationformadevicethatisoffline,andsetadesiredfuturestate,whichthedeviceistotakewhenonlineagain.ThedeviceSDKmakesiteasytoprovidethedeviceswiththefunctionalityoftakingupdatesaccordingtotheirshadow.Furthermore,RESTAPIsareavailableintheplatform,makingitpossibleforapplicationstointeractwiththedevicesandtheirshadows.The content of themessages sent to theAWS IoTplatform canbe evaluated, transformedanddeliveredtodevices,cloudservicesorexternalapplicationbasedonrulessetintherulesengine.Intherulesengine,whichiscontrolledthroughamanagementconsoleorthroughaSQL-likesyntax,theIoTapplicationcantakeactionbasedonmessagesfromonedevice,ortheresultofcombinedinformationfrommanydevices.ThisiswhereabigpartofthefunctionalityintheIoTapplicationlies,andwhencombiningtherulesenginewithexternalservicesorapplications,thepossibilitiesandpotentialsoftheIoTsolutionsareverybig.TheAWSIoTplatformhasbeengivencreditforthehighscalabilityandtheextensivefunctionalitiesavailable through additional service offerings (Gerber, 2017). But the platform has been rathercomplexfordeveloperstoworkwithinthepast(Forrester,2016).However,theSDKsandinterfaceshavebeenimproved,toallowsimplerIoTsolutionstobedevelopedwithmoreease(AWS,2017a).


3.2IoTPlatforms

3.2.3CiscoJasperandKineticforCitiesCiscoacquiredtheconnectivitymanagementplatformJasperinMarchof2016,andhasprovidedIoT-relatedservicesonthisplatformsincethen(Forrester,2016).TheCiscoJasperplatformconsistsofacontrolcentre,whichmakesitpossibletomanagetheconnecteddevices,andattainreal-timeinsightsinthedataprovidedbythem(Jasper,2017).InadditiontotheJasperplatform,Ciscoalsooffersaplatformaimedentirelyatcities,calledCiscoKineticforCities.Formerlyknownasthe“Smart+ConnectedDigitalplatform”,CiscoKineticforCitiesisdescribedbytheVP/GMofIoTatCiscoasa“cloud-basedplatformthathelpscustomersextract,computeandmovedatafromconnectedthingstoIoTapplications”(Menon,2017).Theplatformfocusesoncrossdomaincontextualcontrol,orinotherwords,combiningdataandknowledgefromdifferent sensors related to different city departments (Cisco, 2017a). This has the potential offulfillingtheneedsofthecitiestoalargerextend,byfocusingontheirwayofworkingfromthestart,insteadofprovidingthetechnology,andleavingtheorganizationalanduseoftheplatformtothecities.However,theplatformalsoprovidesopenAPIs,asmanyoftheotherplatformproviders,makingitpossibleforindependentsoftwarevendorsandexistingcitysystemstoconnectwiththeCiscoKineticforCitiesplatform(Cisco,2017b).ThesolutionarchitectureofCiscoKineticforCitiesisillustratedinfigure8.

Figure8-CiscoKineticforCitiessolutionarchitecture(Cisco,2017c)


3.2IoTPlatforms

Theplatformcoversawiderangeoffunctionality,andincludesothermodulesfromCiscodevelopedspecificallyforcities,suchasadisasterdashboardmodule.InordertocomparetheCiscoKineticforCitiesplatformwiththeotherplatforms,thethree-partdivisionpreviouslyusedwillbeapplied:

1. DeviceconnectivityIn this category, the Cisco Kinetic for Cities provides both a real-time device engine, whichaggregatesandnormalizessensordata,andalocationengine,focusedonmappingtheconnecteddevices for calculatingdistancesandproviding location-based tracking (Cisco,2017a).Ciscoalsoprovidesanextensiveamountofhardwaresolutionsinrelationtoinformationandcommunicationtechnologies,whichmakesitpossibleforthemtoofferfognoteswithadvancedcapabilities,andtoperformanalyticsinthenetworkedgeifneeded(Cisco,2017c).SDKsandadevelopercommunityisalsoavailableforsolutionsdevelopers(Cisco,2017a)

2. DataprocessingandanalyticsThedataprocessingisperformedbyatimeseriesdataengineandananalyticalengine.Thetimeseriesdataengineusesthestoreddatafromthereal-timedeviceenginetoidentifypatternsandtrends,whichtheanalyticalenginecanfindfurtherinsightsfrom.Aservicemanagementsystemmakesitpossibletodistributethecorrectdataamongtheservicesconnectedtotheplatform(Cisco2017a).Ingeneral,theplatformusesaXML-basedlanguage,whichhasbeenmodifiedtotheneedsofsmartcityserviceapplications.XMLisusedforsimplicityandcompatibilitywithothersystems(Cisco2017a).

3. PresentationandbusinessconnectivityTheplatformishighlyfocusedoncreatinganopenecosystemaroundtheIoTsolutions,andmuchofthiscomesfromthecapabilitiesofgrantingaccessthroughAPIsandinterconnectingwithservicessuch as city databases, systems and even other city platforms. A City API is among the keyfunctionalitiesoftheplatform,asthismakesitpossibleforthemultitudeofdepartmentsanduserstointeractwiththeplatform.LikeMicrosoft’sAzureIoTSuite,theKineticforCitiesplatformhasalso established partnerships with solutions providers, to create an ecosystem around the IoTsolutions(Cisco,2017c).Accesscontroltotheplatformisconfigurableinmultipleways,throughmultitenancyfunctionality,whichmakesitpossibletosegregateusertypes,anddefinedifferentaccesslevels(Cisco,2017a).Lastly,theplatformprovidesacitydashboard,whichmakesitpossibletoviewandinteractwithallIoTsolutionsconnectedtotheplatformononesingledashboard.Thisdashboardisalsoavailableinamobileapplication,suitableforcitypersonnelusingthesolutionswhilemovingaroundthecity(Cisco,2017c).


3.3Smartcities

ExamplesofsolutionusecasesontheKineticforCitiesplatformarelighting,parking,urbanmobility,environment,safetyandsecurity,andwastemanagement(Cisco,2017a)The researchof the three IoT platformsmakes it clear that a complex rangeof capabilities areneededfortheplatformstofunction.EventhoughthethreeplatformshavecapabilitiesthatareneededinallIoTsolutions,theyvaryslightlyfromeachother,makingitpossibletochoosethebestplatform,basedon the requirementsof the individual solutions. In relation to creating value inCopenhagen,theKineticforCitiesplatformbyCiscoisbyfarthemostdevelopedandadvantageous,asthecapabilitiesarespecificallyaimedatcities.Thefollowingchapterwilllookintotheelementsofsmartcities,toclarifywhatthespecificopportunitiesandbarriersareformakingcitiesbetter,andtounderstandhowIoTcanbeusefulinthisregard.

3.3SmartcitiesThedefinitionofaSmartCitycanvarytoalargeextend.Aresearcher,whohasbeenfrequentlycitedinrelationtocoiningthephrase“SmartCity”,RudolphGiffinger,arguesasmartcityreliesonthefollowingsixcharacteristics(Giffinger,2007):

• SmartEconomy• Smartpeople• Smartgovernance• Smartmobility• Smartenvironment• Smartliving

Inhissmartcitystudyof2007,Giffingerestablishesamethodcontaining31factors,derivedfromthese six characteristics (e.g. productivity under smart economy, and pollution under smartenvironment),andaddsspecificindicators,usedtoquantifythescoresofindividualcities.He defines a smart city as “a city well performing in a forward-looking way in these sixcharacteristics, built on the ‘smart’ combination of endowments and activities of self-decisive,independentandawarecitizens”(Giffinger,2007,p.11).Yet,10yearslater,thedefinitionisstillnotconciseamongstdifferentpublications.Acomprehensivesmartcity literaturereviewfrom2014,whichalsofocusesonGiffinger’sresearch,presentsamismatchbetweenthesmartcitydefinitionswithinthefieldofacademiaandtheindustry.Inacademia,theargumentstandsthatintellectualcapital(e.g.citizens’-,companies’-,andcities’culture)isthemaincomponentofasmartcity,whereastheindustryappointstechnologyasbeingthemaincomponent(Dameri&Rosenthal-Sabroux,2014).ThisstatementalsoseemstoapplywhenlookingatDanishpublicationsonsmartcities,suchastheoneproducedbytheMinistryofForeignAffairsincollaborationwiththeconsultancyfirmsArupandCEDI,whicharguesthatthesmartcity


3.3Smartcities

concept represents“technology-drivenurbanbenefitsandtheproductsandservices thatdeliverthem”(ARUP&CEDI,2016,p.6).Thefocusonsustainabledevelopmentalsoseemstobeamajorfactorinmanydefinitionsofsmartcities.Schneiderelectric,whodealswithawidevarietyofelectronicalsolutionsrelatedtosmartcities,definesasmartcityasonethatis“efficient,liveable,andsustainable”(Aoun,2013,p.4).TheUNandtheInternationalTelecommunicationsUnion(ITU)incollaborationwithEricssontakesthisapproach further, and combines the smart and sustainable aspects into one overall focus area,which includes many subdivisions of the society, much like the definition of Giffinger’scharacteristics.ButtheUN,ITUandEricssonarguesthat“Infact,whatmakessomething“smart”istheintegrationofICTbasedconceptssuchasbigdata,opendata,Internetofthings,aswellasdataaccessibilityandmanagement,datasecurity,mobilebroadband,andubiquitoussensornetworks”(UN,Ericsson&ITU,2015,p.4).Furthermore,theystatethatcitiesfocusingontheincorporationofICThasagreaterchanceofmeetingtheSustainableDevelopmentGoalssetbytheUN,whichcouldexplainthereasoningforcombiningthefocusonbeingsmartandbeingsustainable.Duetothetechnology-focusednatureoftheresearchinthisreport,theapproachtothesmartcitysubjectwillleanclosesttothatoftheindustryandICT-baseddefinitions,asawidersocietalsmartcity focuscovers toowideanarea.Acompleteavoidanceofcity-aspects,whicharenotdirectlylinked to technology, is of course not ideal, as a city that breaks down individual silos of itsinfrastructuralelementssuchaselectricityandtraffic,andcreatesamorecollaborativeecosystem,canbecomemoreefficientandtherebyalsosmarter(Aoun,2013).Theobjectiveof including a focuson smart cities in this research is tounderstand the valueofcreatingasmartercity,andtoillustratehowwellanIoTsolutioncorrespondswiththesevalues.Therefore,thechallengesofcities,andqualifiedguidelinesforovercomingthem,isimportanttounderstand.

3.3.1ChallengesforsmartcitiesIngeneral,citiesarefacingmanychallenges,includingincreasedpopulations,polarisedeconomicgrowth, increased greenhouse-gas emissions anddecreased budgets (Cisco, 2012). At the sametime, technology is evolving dramatically, which creates a lot of possibilities, but also createscomplications in relation to interoperabilityanduncertaintyof investments.The technologycanbothopenopthesociety,butalsoisolatecertainareasbyleavingthemoutofthedigitalloop,andbringswithitlargecomplicationsrelatedtoprivacyandsecurity.Butthepotentialforsmartcitiesis large in both developed and developing countries, however, the challenges can vary. Fordeveloping countries, who are focusing on establishing the fundamental elements of aninfrastructure,thesmartcityelementscanbethoughtintotheprocessformtheverybeginning,creating a better foundation for future smart city initiatives. In more developed countries like


3.3Smartcities

Denmark,thechallengeslieinbreakingdownoutdatedandinefficientsolutionsandorganisations,whichrequiresthecitiestochallengethestatus-quo.Butwithlimitedbudgetsandhesitationformaking substantial financial investments, making drastic changes can be hard. Therefore, solidbusinesscases,forecasting,andinnovativebusinessmodels,whichindicatesthepositivepotentialof thesmartcity investmentsand the technology it isbasedon, isneeded toconvincedecisionmakers.Ifthesmartcityinvestmentsareapproved,thesolutionsstillneedalotofworktoprovideoptimalvalueforthecity.

3.3.2BecomingasmartercityAtendencyinreportsonsmartcitiesistoestablishanumberofrecommendations,guidelinesorsuccess criteria for how to reach a higher level of smartness in a given city. When reviewingliteratureonsmartcities,somefocusedonDenmarkandotherswithaninternationalperspective,thefollowingtopicsfrequentlyappears(ARUP&CEDI,2016)(Cisco,2012)(Aoun,2013):

1. Establishinganinitialsmartcityvisionandcommunicatingthisclearlytostakeholders2. Identifyingthetechnologicalrequirements3. Developingthesmartcityinitiatives4. Focusingoncollaborationthroughouttheprocess

The following section will expand on how the literature publications argue for each of theabovementionedtopics,inordertoestablishanoverviewofthechoicestomakeforcities,inordertobecomesmarter.

1. Establishingasmartcityvisionandcommunicatingthisclearlytostakeholders.Thisvisionshouldbelongtermandavoidviewingcityelementsasindividualsilos,butratherfocusonaninclusiveandcollaborationbasedstructure.Whenchoosingthemainobjectivesofthevision,it is also recommended to combine a top-down approach focusing on city values from agovernmental perspective,with a bottom-upperspective including the values andneeds of thecitizens (Aoun, 2013). This combined focus can possibly lead to complications with conflictingvalues,suchasaneconomicbenefitontheindustry’sside,anddataprivacyonthecitizen’sside,whichiswhyestablishingcollaborationsandcommunicationbetweenstakeholdersfromtheverystartisimportant(ARUP&CEDI,2016).Whenthevisionisestablished,thebenefitsandunderlyingreasoningshouldbecommunicated,notonlytoimprovethetransparencyoftheplan,butalsotospurthedevelopmentofsmartsolutions,andto includeas largeapartofthestakeholdersaspossible inthevision(ARUP&CEDI,2016).Many cities have financial goals to reach,where environmental goals do not seem optimal formeasuringtheprogress(Cisco,2012).However,thiscombinationisnecessaryinordertofulfilmorethanjustthefinancialgoals.IntheCityofCopenhagen,thisisdonebyforcingenvironmental-andclimate requirements in the requirements for public investments such as in public tenders.


3.3Smartcities

Especiallybyincorporatingtheusageofenergyoveraproductorservice’slifetimeintothebusinesscasesandfinancialplanningofinitiatives,makesitpossibleforthemostsustainablesolutionstobecome attractive competitors to otherwise cheap but unsustainable alternatives (KøbenhavnsKommune,2016a).

2. IdentifyingthetechnologicalrequirementsTremendousamountsoftechnologicalsolutionsareavailableforawidevarietyofcities’problems.Manytechnologicalsolutionsrelatedtosmartcityinitiativesheavilydependonthedatawhichisbeing gathered, and much potential is seen in sharing data between different stakeholders.Therefore,anincreasingfocusonprovidingopendataisawayofavoidinglimitedscalingofsmartcityprojects(ARUP&CEDI,2016).Here,theessentialelementsaretocollecttherawdata,andthenuseitincombinationwithdatacollectedfromotherareasofthecity,toattainmoreinformationandknowledgeacrossmultipleareasthroughintegration.Thisiswheretheunderlyingideasofthetechnologiescomestoplay,asmanagementbecomesmuchmoreadvancedandefficientthroughthe access to relevant data (Aoun, 2013). This should of course be done while adhering torequirementsforsecurityandprivacy.Thetaskofconnectingallthesolutionsandsystemsinordertoachieveahigheramountofvalue,whileat thesametimeadheringto therequirements, isacomplex challenge. Experts are therefore needed to establish and clarify the technologicalrequirements(Cisco,2012).Additionally,nomatterthespecifictechnologicalsolutions,workingontheclarityofregulationsandcommonstandardsused,needstobeapriority,asthisisanareawherecomplicationscanarise,limitingtheprogresstowardsbecomingasmartercity(ARUP&CEDI,2016).ManyoftheseelementsfitverywellwiththepotentialfromIoTsolutions,andtheIoTplatformsinparticular.

3. DevelopingthesmartcityinitiativesAsacontinuationofthetechnologicalchoicesdescribedabove, the integrationofthe individualsmartcitysolutionsisanimportanttask.Theabove-mentionedcitydataisanessentialaspectofthisintegration(Aoun,2013).InCopenhagen,anOpenDataplatformhasbeendevelopedbythecityofCopenhagen,toreachthesebenefits(CPHSolutionsLab,2017).Howtoscalethesmartcityinitiatives,shouldalsobeconsideredduringthedevelopmentphase,asmany solutions suffer from “pilot-sickness”, where a lack of funding for the expansion of thesolution, limits the progress after the initial test phase (ARUP & CEDI, 2016). However, theresponsibility of the large-scale development does not solely rely on the willingness of thegovernmentstoinvest,sincethefundsoftenarelimited.Therefore,thesolutiondevelopershavetobeinnovative.Newbusinessmodelscanbeanalternativetoalargeinvestment,butthisrequiresthewillingnesstochangeupthestatusquo,asmentionedearlier.Examplesofalternativefundingsources such as energy saving loans, canbeused to start the smart solutions, andparts of thesavingscanthenpaybacktheloans(Aoun,2013).


3.3Smartcities

Thedevelopmentphaseshouldofcoursebeguidedbythecontentsofthecity’svision,andonceagainincludetheperspectivesfromallstakeholders.Onewayofworkingtowardsthis,istoutilizetheuser-centreddesignapproach,therebycateringforactualneedsandproblemsofthecity(ARUP&CEDI,2016).

4. FocusingoncollaborationthroughouttheprocessCollaborationfrequentlyappears inrelationtosmartcitytopics,andthismakessensegiventhecomplexnatureofbothchallenges,stakeholdersandsolutions.Theeffectsofdigitalizationhaveledtotheconvergenceofindustriesandtechnologies,increasingtheneedforcollaborationbetweendifferent entities, as tremendous potentials are seen in the sharing of skills and resources.Therefore, it is important toovercomebarrierssuchascompetition in the industryandpoliticaldifferences,andfocusonacommoncityvision(Aoun,2013).Thecollaborationisnotlimitedtostakeholderswithintheindustry,orbetweenlocalgovernmentsof a country. Collaboration between all entities is important in the development of smart cityinitiatives.AsanexamplehereofistheDanish“fourstrandhelix”,whichcoversthepublic,private,academiaandcivilsociety(ARUP&CEDI,2016).InDenmarkthereisaproblemrelatedtoaccessingthe skills and research related to smart city solutions, andwithout the access, the value is notutilized.Itisthereforethoughcollaborationandsharingofknowledge,thatthebenefitsofsmartcitydevelopmentisreached(ARUP&CEDI,2016).Atrendinrelationtocreatingbetterconditionsforcollaborationonsmartcitydevelopmentistoestablishacommunitywherefocusisontheprocessofcollaborativeinnovation,ratherthantheactualsmartcitysolutions(Cisco,2012)(Aoun,2013).Insuchscenarios,thelocalgovernmentsandcityadministratorscanbethefacilitatorsofthecommunities,creatingameetingplaceforsolutionprovidersanddevelopers,whilemaintainingafocusonthestrategyandoverallsmartcityvision(ARUP&CEDI,2016).Anadditionalbenefitfromjoiningforcesinsuchcommunities, istocreateawareness about the smart city agenda, and provide a more tangible way of stimulating thedevelopment,whichcouldmakethecityaleaderinsmartdevelopment,andattractrecognitionaswellastalentglobally(ARUP&CEDI,2016).In Copenhagen, a smart city hub called Copenhagen Solutions Lab has been created with thepurposeofestablishingsuchacommunityaroundthedevelopmentoftechnologicalsolutionstotheproblemsfacedbythecity(CPHSolutionsLab,2017).Thishubwillbedescribedinmoredetaillaterinthereport.Copenhagenalsohasasetofguidelines,formingtheirvisionformeetingthedemandsforthecityinthefuture.Thisvisionwillalsobedescribedlater.Thechallengesforsmartcities,andthefourstagesinvolvedinbecomingsmart,fitverywellwithboththetechnologicalpossibilitiesof IoTplatforms,aswellastheneedsformCopenhagen.The


3.4Chapterconclusion

stateoftheartresearchonsmartcitiescanthereforebeusedtoguidetheanalysistowardsfindingsthat can be beneficial for the city of Copenhagen. The following section will present a briefconclusionofthethreeelementsresearchinthischapter.

3.4ChapterconclusionTheresearchofthetechnologicalaspectsbehindtheInternetofThingsrevealedalargepotentialfor the value created by the solutions, but also a large amount of barriers related to theirimplementation. This is due to the early stage of development, which the technologies are in,creating insecurity in relation to technology choices, security measurements and the financialinvestments.AtrendforimprovingthedevelopmentofIoTsolutionswasfoundintheIoTplatforms.Theseplatformsarecomplexandcontainextensivecapabilities.Thecontentsofplatformsincludeafundamentalsetofcapabilities,buttheindividualplatformsvaryinrelationtotargetusersandsectors.Thefocusoncity’sneedsintheKineticforCitiesplatformbyCiscomakesitthemostidealplatformoutof the tree reached. In the reviewof smartcitycharacteristics, thechallengesandguidelinesprovidesarelevantinputforthedevelopmentoftechnologicalsolutionsinCopenhagen.Thechapterhascreatedafoundationofknowledgeinrelationtothetreemainelementsoftheresearchfocus.Thiswillbeusedtomaketheanalysisanditsfindingsasqualifiedandrelevantaspossible.Inthefollowingchapter,thetheoreticalapproachfortheanalysiswillbecreated.

34 Chapter4.Theoreticalframework

4.1Requirementspecifications

4. TheoreticalframeworkAsmentionedinthemethodologicalchapter,thefundamentalideaforthetheoreticalframeworkis tocombineelements related to technologicaldevelopment,withanalyticalelements forbothtechnologyandthebusinessecosystemstheyareinvolvedin.Inthisrelation,therecanbeapitfallin creating a theoretical framework, which is too extensive, and creates more confusion thanrelevant findings. It is therefore important to select theories that areable to complementeachother,andworktowardsthesamegoalofansweringtheresearchquestion.Thefirsttwotheoriesselected deals with understanding the needs of the city in relation to the IoT platforms, andjustifying the focus on the platforms as potential solution providers. Thiswill be done throughrequirementspecificationsandtechnologyforecasting.Thelastpartofthetheoreticalframeworkwill thenusetherequirementspecificationandtheforecasttounderstandhowan IoTplatformprovidercanadjustitsbusinessmodelinthespecificcontextofthecityofCopenhagen.

4.1RequirementspecificationsThepurposeofthistheoryistoanalysetherequirementsoftheIoTplatformsfromatechnologicalpointofview.Butitshouldstayonthemeso-level,meaningthegoaloftherequirementsisnottopave theway for a system design in particular, but rather a set of guidelines for the platformproviderstoincreasethevaluecreationforthecityofCopenhagen.Theoutcomeoftheanalysisinwhichthetheoryisimplemented,shouldnotbelargeandcomplex,butratheraconciseoverviewofthespecifiedrequirements.

4.1.1TheprocessofspecifyingrequirementsTheprocessofspecifyingrequirementsforatechnologicalsolutionisofteninvolvedintheearlystages of development, when the user or customer of a desired solution, in dialoguewith thedevelopers,specifywhatthesolutionshouldbecapableofdoing.Therefore,manytheoriesrelatedtorequirementspecificationsincludeadetailedfocusonfunctionality.Buttheyshouldalsoincludesomefundamentalclarificationsoftheuserneeds,whichisrelevantinrelationtothisresearch.ArathergeneraltheoreticalmethodforspecifyingrequirementsispresentedbySommervilleI.,andcanbeseeninfigure9.

Chapter4.Theoreticalframework 35


Figure9-Requirementspecificationprocess(Sommerville,2010)

Thecontentsofthefourrequirementspecificationprocesselementsareasfollows:

1. RequirementsdiscoveryInformation about the stakeholders and the processes involved in the platform should beresearched. In relation to this report, an interviewwith the smart city incubator in the City ofCopenhagen will form the foundation for themain stakeholder input on how value should becreatedinCopenhageninrelationtoIoT.Therefore,thisinterviewshouldformthefoundationfortherequirementdiscovery.Here,usecasesandscenarioscanbeusedtorelatetotherequirementsinamoretangibleway.

2. RequirementsclassificationandorganizationThispartiscloselyrelatedtothesystemarchitecture,whereelementsoftheplatformisdividedintosub-systems,andtherequirementsrelatedtothesesub-systemsarespecified.Theresearchofthe IoT platforms performed in this previous chapter, functions as the foundation for theserequirements.

3. Requirementsprioritizationandnegotiation.Thestakeholdersinvolvedintheprocessofdevelopingthesystemwilloftenhavedifferentvisionsforwhatfunctionalityandwhichfeaturesarethemostimportantelementsfortheplatform.Thisshouldbediscussed, and theoutcome shouldbe aprioritisationof the requirements,which allstakeholderscanagreeon.Sincethedevelopmentofrequirementsisbasedoninterviews,andnotacommondiscussionwiththeinvolvedstakeholders,theprioritizationwillnotbeemphasizedintheanalysis.



4. RequirementsspecificationThefinalrequirementlistcanbebothformalandinformal,dependingonthestageofthesystemorthepurposeoftherequirements.Inthisreport,theoutcomeoftheclassificationinthesecondstagewillprovideanoverviewoftherequirements,andcanthereforealsoservethefinalpurposeofpresentingthespecifications.The following segments will describe the theories needed for going through the requirementspecificationprocess.

4.1.2Scenariosanduse-casesScenarios and use cases can be hard to distinguish, and often serves the same purpose(Sommerville,2010).Theydealwithreal-lifeexamplesofhowinteractionwiththeplatformwouldplayout,andspecifytheactionsofbothuserandplatform,inordertomaptherequiredprocesses.Thescenariosshouldoutlinetheinteraction,andincludewhattheexpectationsarefortheoutcomefrom both the user and platform perspective, what could go wrong, what is happeningsimultaneouslyandthestateoftheplatformwhentheinteractionends(Sommerville,2010).Ausecasediagramcanbeproducedtoillustratetheinteractionwiththeplatform,therebyproducinganunderstandingof therequirements for the functionality.Thesecanbemade invarying levelsofdetail, spanning from a simple use case diagram, tomore advancedUML-based class diagrams(Astestiano&Reggio,2002).

4.1.3FunctionalrequirementsTheserequirementsfocusonwhattheplatformshouldbecapableofdoing,anddoesnotincludehowtheserequirementsaremet(Boyle&MacArthur,2013).Theyarelookingattheplatformatagenerallevel,andspecifytheveryfundamentalcapabilitiesitshouldcover.AnexampleoffunctionalrequirementsforaspecificIoTsolution,suchasanetworkofairqualitysensors,couldbe:

• Thesystemmust:o Provideaninterfaceforcitymanagementofficialso Providecategorizeddataforcitizenstoaccesso Storehistoricaldatao Emitalertswhenairqualityispoor.

Functionalrequirementsshouldstriveforcompleteness,meaningalluserorcustomergoalsfortheplatform shouldbe covered. There should alsobe as little ambiguity in the formulationsof therequirementsaspossible.However,thesegoalscanbeveryhardtoreachwhendealingwithlarge,complexsystemsorsolutions(Sommerville,2010).Afterthefunctionalrequirementshavebeenestablished,amoregeneralapproachcanbeusedtospecifytherequirements,whichthefollowingsectionwillclarify.



4.1.4Non-functionalrequirementsOftenalsoreferredtoasqualityrequirementsorqualityofservice(QoS)requirements,thenon-functionalrequirementsdealwiththeelementsthatarenotdirectlyrelatedtotheservicesoftheplatform(Sommerville,2010).They usually considermore than one function or even the system or solution as awhole, andthereforecanbehardertomeasureandanalyse(Nuseibeh&Easterbrook,2000).Thegeneralfocusintherequirementsmeanstheycanbepartiallyfulfilled,incontrasttothefunctionalrequirements,where there is a definitive answer to their ability of livingup to the requirements (Berander&Andrews,2005).Thenon-functionalrequirementscanspawnfrommanyareas,butthethreemostcommonareasareasfollows(Sommerville,2010):

1. ProductrequirementsIn relation to software development, the product requirements consider the behaviour of thesoftware. for IoTsolutionsandplatforms, softwarewillplayamajor role,however, theproductrequirementscouldalsocoverelementssuchashardwareandnetworkarchitecture.Examplesofproductrequirementsareefficiency(performanceandspace),scalability,availability,usability,dependabilityandsecurity.

2. OrganizationalrequirementsTheplatformdevelopers,aswellasusers,willhaveasetofpoliciesinplaceforhowtheyconducttheirbusiness.Thesepolicieswillrequirecertainelementsofthedevelopedsystem,whichiswhatthe organizational requirements consists of. Organizational requirements are often related toenvironmental-,operational-anddevelopmentalpolicies.

3. ExternalrequirementsAs the name implies, these requirements deal with elements that are not included in thedevelopment through the customers, users or developers. Many external requirements arepotentiallyaffectingtheplatforms,butnotallhastobeincluded.Examplesofexternalrequirementsareregulatory,ethicalandlegislative(accountingandsafety/security).Basedonthetheoreticalframeworkspresented,therequirementspecificationintheanalysiswillusescenariosandusecasestoformrequirementsthatarebothfunctionalandnon-functional.Thefollowingpartofthechapterwillpresentthetheoreticalconsiderationsrelatedtothetechnologyforecast.


4.2Technologyforecasting

4.2TechnologyforecastingInvestmentsinnewtechnologieshasalotofrisks,especiallyifthetechnologydoesnotliveuptotheexpectations,andthereturnoninvestmentfails.Therefore,thetechnologyoftenhastohaveenough proven value to offer, before decisions and investments are made. Especially in largeorganisations,whereinvestmentsinthewrongsolutionsortechnologieshasseriouseffectsonalargeamountofpeople,thereneedstobeaformofsecurityintheinvestments.Itcanbehardtocorrectlyestimatehowthefuturewilllook,butmanytheoreticalapproachesareavailablefordoingthistypeofforecasting.Inrelationtotheresearchinthisreport,aforecastingtheoryisneededtoverifythebasisforIoTinCopenhagen,andtheneedforIoTplatforms.Thefollowingchapterwillpresentareviewofthemostcommonforecastingtheories,andthetwomostrelevantoneswillbeselected,tobeusedintheanalysis.

4.2.1OverviewofforecastingtheoriesThereareanumberofwaystoapproachforecasting,dependingontheinformationavailable,andthetechnologyinfocus.Theresourcesavailablealsolargelydeterminesthetypeoftheorychosen,asatechnologyforecastperformedbyalargestandardisationorganizationoraglobalconsultancyfirm,willbemuchmoreextensivethanthatofasmallercompany,ortheonemadeinthisreport.Butthelessextensiveforecastsalsohaveimportance,astheindicationsshowninthesemightprovea need for another and more thorough round of forecasting, thereby paving the way for asubstantialamountofinsightsonthetechnology(Firatetal,2008).Thefieldoftechnologyforecastingisnotnew.Themethodsandtheorieshavebeendevelopedforover60years,andhadtheiroriginintheareaofmilitaryintelligence,wheretheobjectivewastogaininsightsinthecapabilitiesofenemies’technologyandmilitaryequipment(Cho,2013).Ithassincethenevolvedtofocusingmoreonmarketcompetitivenessandcannowbeseparatedintwocategories;quantitativeandqualitativetheories.Quantitative forecasting theories are heavily based on precise numerical measurements, andrequiressolidhistoricaldataforeithertheexacttechnologyinfocus,orifthetechnologyisnew,historicaldataofasimilartechnology.Whenthisdataisnotavailable,qualitativealternativeshavetobeused.Thesetheoriesrelyonhumanexperienceandjudgement,andwilloftenincludeinputfromexperts,andresearchofthepotentialusersofthetechnology(Windekilde,2015).Anotherwayofcategorizingforecastingtheoriesistoseparatethembetweentheonesthatareexploratoryandthosethatarenormative.Exploratoryforecastingtheoriesarefocusingonwhatmightbeinthefuture.Thepointofdepartureisthereforewhatthesituationhasbeenupuntilcurrenttimes,andhow the future could potentially look. In contrast, normative forecasting theories will start byfocusingonasetofneededrequirementsinthefuture,andworktowardsthepresent,toseehowthese requirements will be met (Cho, 2013). Exploratory theories might be more useful forsituations where a technology is assessed on a general level, and can be a bit naïve, whereas



normativetheoriesapplieswellforsituationswherespecificgoalsneedstobefulfilled(e.g.foraninvestment),butmightbetoocomplexforgeneraluse.Theoptimalsolutionwouldthereforebetoforecast a technology with a combination of both normative, explorative, quantitative andqualitativetheories,butthisrequiresalotofresources.Inliteraturerelatedtoforecasting,thefollowingtheoriesfrequentlyappear(Cho,2013)(Firatetal,2008)(Slocum&Lundberg,2001):

• DelphimethodTheDelphimethodiswidelyused,andcontainsanumberofiterations,whereexpertswithinthefieldofstudyisincludedinboththeassumptionsatthebasisoftheforecast,andthereviewofthepossiblefuturescenarios(Firatetal,2008).Thistheoreticalapproachisusefulforforecasting20-30yearsahead,whenhistoricaldataisnotavailable(Cho,2013).Thetheoryincludesbothnormativeandexplorativeelements,butmainlyhasaqualitativeapproach.

• BackcastingThe elements of backcasting are very similar to those of normative theories in general; futurescenarios are established, and possible routes towards these scenarios are then analysed (Cho,2013).

• DataminingDataminingiscommonlynumerical,buttextminingalsoexists(Firatetal,2008).Especiallywiththe developments in cognitive computing and extensive analytical capabilities, data mining isincreasingly capable, but relies on the availability of data. The outcome of data mining is ageneralizationwhichindicatesafuturescenario,basedonhistoricaltrends.

• GrowthcurvesGrowthcurvesareawayofvisualizing the lifecycleofa technology,and identifyinghow itwillperforminthefuture,basedonthecurrentstageofgrowth.Itisthereforeexploratoryandcanbebasedondatafromsimilartechnologytrends(Cho,2013).

• MaturitymodelsNottypicallyreferredtoasaforecastingtheoryonitsown,maturitymodelsexpandonthedifferentlevelsofadoptionandwhereontheforecastingscaleatechnology,business,marketorusergroupissituated(Windekilde,2016).Itcanthereforebeconsideredanextensionofthegrowthcurve,orlifecycleassessment(Slocum&Lundberg,2001).It isclearthatsometheoriesaremorerelevant inrelationtothisresearch,bothintermsoftheresources available, and the purpose of performing the forecast. The theories chosen needs to



combineexplorativeandnormativeapproaches, inordertoseehowthefuturepotentiallylooksand how to get there. But they also need to rely on information available through literatureresearch.Basedonthesecriteria,acombinationofgrowthcurvesandmaturitymodelsischosen.Thefollowingsegmentswilldescribetheircontentsinmoredetail,andproposehowtheycanbeappliedintheanalysis.

4.2.2GrowthCurvesThe S-shaped curve is a common form of growth theory for forecasting. This is a curve,whichoriginatedinrelationtobiologicalorganisms,andhasbeenfoundwell-fittingfortheevolutionoftechnologiesaswell(Cho,2013).Anothercommonaspectofgrowthcurves,canbefoundinthehypecycle,typicallyusedtoillustratethemarketpotentialsofnewtechnologies.Itdealswiththeover-estimation of technological capabilities, which is a failure in many forecasts, leading todamagedcredibilityofthetechnology(VanLenteetal,2013)(Windekilde,2016).Thismeans,thatwhenatechnologyisatthehighpointofahypecycle,investmentsanddevelopmenthasahigherchanceof failingtomatchexpectations,ratherthan if theseeffortsaremadewhenhype isatalowerstage.Butthehypeattractsattentionandmakesdevelopmentpossible,soitisnotallbad.TheanalyticsandconsultancycompanyGartnerpublishesanannualhypecycleofthemostdominanttechnologiesinthemediaandonthemarket.Thepurposeofthishypecycleistomakeitclearthatthechoicebetweeninvestmentandignoringatechnologyshouldnotbebasedonthehypeitreceives(Linden&Fenn,2003).Figure10illustratesthehypecycleanditsfivestages,whichwillbedescribedinthenextsection(Linden&Fenn,2003).

Figur10–ThehypecurveasusedbyGartner(Linden&Fenn,2003)



1. TechnologytriggerInthebeginning,thetechnologyisunsubstantial,andnoactualsolutionsusingthetechnologyexistonthemarket.Thismoves intotheriseoftheearlyproductsandservices,whichareoftenhighpricedandnotadoptedbythemarketyet.

2. PeakofinflatedexpectationsMorevendorsenterthemarket,andtheusefulnessofthetechnologyistestedinlargercompanies.Theexperimentalphasesmightleadtosomeunwantedfindings,andtheserealizationscancausenegativemediaattention,asthevaluecreateddoesnotliveuptothehypedexpectations.

3. TroughofdisillusionmentAs thenegative attention increases, the feedback from this is used to improve andmature thetechnology,andsynchronizetheexpectationsforthetechnologywithitsactualcapabilities.

4. SlopeofenlightenmentWhenthecapabilitiesaremoreintunewiththehype,adoptionincreases.Inthisstage,adoptionwill often be at 5% in the beginning, and reach around 30% when entering the plateau ofproductivity.

5. PlateauofproductivityReachingtheplateauofproductivityincludesmainstreamadoptionofthetechnology.Whenthishappens, the hype will eventually disappear, as the technology and its capabilities are widelyrecognised.The speed at which a technology moves along the hype cycle is different, depending on thedisruptionitcausesforcurrentbusinessprocessed,andtheusefulnessitprovides.Amongtheweaknessesofthistheoryisthesimplicityofitsdesign,generalizingthehypetrendofalltechnologiesplacedonthegraph.Notalltechnologieswillgothroughthementionedstagesandfollowthesametrend,sothevalidityoftheforecast isnotcompletelyoptimal(VanLenteetal,2013). Furthermore, the emergenceof new technologies canhave a big impact on thehypeofothers, indicatingthatthere isanamountofuncertainty inexpectingtechnologiestofollowtheestablishedtrend.Inconclusion,thehypecycleisnottotallyvalidandbasesalotofthestatementsonassumptions.Butitiswidelyusedandoffersanintuitivevisualrepresentation,whichissufficientinrelationtoforecastingforthisreport.Especiallywhenusedincombinationwithanoverviewofthematurity.



4.2.3MaturitymodelsMaturitymodelsarenormativeinthesensethatasetofend-goalsarelistedinthemostmaturelevel.Italsohasmorefocusontheroutetowardstheendgoal,thanithasontheendgoalitself.Itcouldthereforebearguedthatitisaformofbenchmarking,morethanitisaforecastingtheory,butincombinationwithconsiderationsforthepotentialofthetechnology,theoutcomeisamorenuancedinsightinthetechnologyanditsfuturepotentials.Maturity models consist of a combination of focus areas and maturity levels in a table form,illustratingtheadvancementofeachfocusareasinrelationtothematuritylevels.Anexampleofasimplematuritymodelcanbeseenintable3(Windekilde,2016).Maturitylevel 1 2 3 4 5Focusarea1 X Focusarea2 X Focusarea3 X

Table3–Exampleofasimplefixed-levelmaturitymodel(Author)

Themostcommonvariationsofmaturitymodeltheoriesare(Windekilde,2016):

• Fixed-levelmaturitymodelsThistypeofmaturitymodelhasasetnumberofmaturitylevels,eachdescribingthesituationorcapabilitiesrelevantforthatmaturity level (VanSteenbergenetal.,2010).Themodelhasfixed-levels,meaningafocusareacannotbeinmorethanonematuritylevel.Asanexample,afocusareaforasmartcitymaturitymodelcouldbethecitymanagementstatus.Underthisfocusarea,thematuritylevelscouldrangefrom“isolatedinsilos”onthelowestlevel,to“asustainableandopensystemofsystems”onthehighestlevel(TheScottishGovernment,2014).Theexampleintable3alsorepresentsafixed-levelmaturitymodel.Anadvantageofthesimplicityinthismodelisthatitcanbeusedforbenchmarkingtechnologies(Windekilde,2016).

• Continuousfixed-levelmaturitymodelsA limitation of the fixed-level maturity model is that focus areas cannot overlap two or morematurity levels. This means, that in the example mentioned above, even though the citymanagementwouldbein-betweentwomaturitylevels,themodelwouldnotallowtoillustratethis.The continuous fixed-level maturity model on the other hand, allows for this exact capability,creatingamoredynamicmodel.Thismakesitpossibletousethemodelmoreasaplanningandguidancetool,ratherthanabenchmarkingtool.


4.3Businessmodels

• FocusareamaturitymodelsInthis lastmaturitymodel, thematurity levelsarenotconfinedtoaspecificnumber.Thefocusareaseachhavetheirowndefinitionoflowest,middleandhighestamountofmaturityreachable,andtheoutcomeisamodelwithabetterunderstandingofthedifferentcapabilitiesofeachfocusarea(VanSteenbergenetal.,2010).Asanexample,thematurityofpublicadaptionofatechnologymightrequiremoretimeandincrementaldevelopmentthanthematurityofthebusinessadaptionof the technology. The first focus area could thereforehave awider scaleofmaturity than thesecond.The three maturity model variations each have their strengths and weaknesses. In relation toforecastingIoTplatformsinCopenhagen,anuancedoverviewliketheoneachievedinafocusareamaturitymodelmightbetooextensive.Theoptimaltheoreticalmodelshouldthereforebeeitherafixed-levelorcontinuousfixed-level,dependingontherequirementsofthefocusareas.Thefinalchoiceofmaturitymodelwillthereforebemadeintheanalysis,whenthefocusareashavebeendetermined.The concludingpartof the theoretical framework is thebusinessmodel. The considerations forwhich specific businessmodels theory to use in the analysiswill be presented in the followingsection.

4.3BusinessmodelsTheIoTtechnologies,andthetechnologicalevolution ingeneral,bringswith itavastamountofpossibilitiesforcreatingnewservices,productsandsolvingproblemsinnovelways.Thebusinessmodelsinmanysectors,whicharenotdirectlyrelatedtothetechnologysector,areseeingalargeamountofinnovation,andarebeingdisruptedinmanyways.Therefore,businessmodelsasatoolforanalysingnewapproachestovaluecreation,aresubjecttomuchresearch,andtechnologyisplaying an integral role inmany of the theoretical approaches.Oneway of looking at businessmodels is that they dealwith a company’smission, the structure of the value chain, a processoverviewandrevenues(Bouwmanetal,2008).A very popular theory for innovative business models, and particularly used in relation toentrepreneurial businesses, is the Business Model Canvas (BMC) by Osterwalder and Pigneur(Osterwalder& Pigneur, 2010). One of the strengths of this theory is the graphical overview itestablishesofnotonlythedifferentelementsofthebusinessmodel,butalsothedependenciesbetweenthem.TheBMCconsistsofninebuildingblocks,whichillustratethefundamentalelementsofthebusiness.Theseareasfollows(Osterwalder&Pigneur,2010):


4.3Businessmodels

• Customersegments

Thisincludesthetargetgroupsandcustomers,whichthebusinessistryingtoreach.Furthermore,itcanincludeanoverviewofthemarketsegmentation,andthecircumstancesrelatedtothemarketpositionthecompanyaspirestotake(e.g.anichemarketormulti-sidedmarket).

• ValuepropositionsTheproductorservice,whichthecompanyoffersinordertocreatevalueforthecustomersegment.

• ChannelsThewayofreachingthecustomersegments,notonlywiththeendproductorservice,butalsowithcommunication.

• CustomerrelationsIncontrasttotheChannelsbuildingblock,thisbuildingblockdealsmorewiththetypesofrelationshipsthecompanywantstocreatewithitscustomers.

• RevenuestreamsThetypesofrevenue-makingacompanymonetisesfromthroughthecustomersegments.Thisblockalsodealswiththepricingstructuresusedbythecompany.

• KeyresourcesThemostimportantelementsofthecompany,inorderforittorealizethevalueproposition.Thesecanbothbeintellectual,physical,humanandfinancial.

• KeyactivitiesMuchsimilartokeyresources,butthesearethemostimportantprocessesofthecompany,suchasplatformprovisionforanIoTplatform,orproductionforahardwareprovider.

• KeypartnershipsThesearethesuppliersandpartners,whichthecompanydealswith.

• CoststructureThecostsinvolvedinthebusinessoperations.Thecostshouldbecomparedtotherevenuestreamstoanalysetheprofitabilityofthebusiness.

ThesimplicityandoverviewoftheBMCarestrongadvantagesoverother,morecomplextheories,but the lackof a specific focuson the technology involved in thebusinessmodel is a problem.Furthermore,muchoftheemphasisintheBMCisonthecompanyitself,ratherthantheecosystemofactors involved in thevaluecreation.Analternativebusinessmodel theory,which includesatechnology-focus, aswell as amore detailed analysis of the stakeholders included in the valuecreation, is the STOF-model by Bouwman et al. Here, the business model is divided into fourdomains,eachwitharathercomplexsetofsubdomains,butallwiththepurposeofprovidingvalueforthecustomers(Bouwmanetal,2008).


4.3Businessmodels

Asillustratedinfigure11,thefourdomainsoftheSTOFmodelareservice,technology,organizationandfinance.

Figure11-ThefourdomainsoftheSTOF-model(Bouwmanetal.,2008)

The following segments will present each domain according to the theoretical framework byBouwmanetal.AdetailedfigureforeachofthefourdomainscanbefoundinappendicesB1-B4intheendofthereport.

4.3.1ServicedomainIntheSTOFmodel,theservicedomainismainlyfocusedonthevalueproposition,butapproachesthistermwithamoredetailedviewthanotherbusinessmodels.Itisarguedthatthereoftenisadifference in the value,which the company intends to deliver, and the value perceived by thecustomer.Theseparationinthetheoryisillustratedinfigure12.

Figure12–Valuecreationintheservicedomain.(Author),Adoptedfrom(Bouwmanetal.,2008).

Intendedvalue

Deliveredvalue

Perceivedvalue

Expectedvalue

Previousexperience


4.3Businessmodels

The contentsofeachvalueelement, according toBouwmanetal. ispresented in the followingsection(Bouwmanetal.,2008).

• IntendedanddeliveredvalueTheintendedvalueiswhatisoftendescribedasthevalueproposition,andclarifieswhattheinitialideabehindtheserviceorproductconsistsof.Here,thedescriptionmightbeambitioustoadegreewhich is hard to achieve in reality. But the intended value is also what creates the basis andrequirements for the design of the solution. When these requirements have to be met, thetechnologicalfunctionalitiesmightlimitwhatcanbeachieved,resultinginamismatchbetweentheintended and delivered value. Furthermore, the delivered value also consists ofmore than thesolutionitself,sinceactivitiesregardingcustomerrelationsalsoaffectthewaysinwhichvalueisdelivered. Lastly, the capabilities of the value network also have something to say in the valuedelivery.

• PreviousexperienceandexpectedvalueTheexpectedvalueofthesolutionisaffectedbyaspectssuchaspricingstructure,companyimage,andthepreviousexperiences,whichcustomershavehadwithsimilarsolutionsorpreviousversionsofthesamesolution.

• PerceivedvalueThe perceived value is described by themethod developers to be the difference between theexpectedvalueandthedeliveredvalue.Thereisagiveandtakebetweenthetwo,meaningalowerexpectations combined with higher delivered value, will heighten the perceived value. Thecharacteristicsofthemarketsegment,ofwhichthecustomersorend-userscomefrom,alsoaffectsthe delivered value. If for example the segment is amarket niche, the value expectations andcustomersmightbeverydifferentfromamassmarketsegment.Lastly,thecontextinwhichthesolutions isprovidedandconsumed in, thepriceandeffort invested in the consumptionof theservice,aswellasthepossiblebundleofservices inwhichthesolution isoffered,allaffectstheperceivedvalue.

4.3.2TechnologydomainThe technology domain describes the technical functionality provided through the solutionarchitecture. The complexity of this domain is heavily dependent on the size and scope of thecompany,aswellastherelianceonexternalproviders.WhendealingwithIoTplatformproviders,who often also provide a number of other IT services, this complexity is rather high, and thetechnologycanbechallengingtoanalyse.Thiswillbefurtherelaboratedintheanalysischapter.Themainelementsofthetechnologyarchitecture,aredescribedinthefollowingsections.


4.3Businessmodels

• Applications,devicesanddataAsthenameimplies, thesearetheapplicationsprovidedforthecustomers,andrunningonthetechnicalarchitecture.Thecharacteristicsoftheapplicationscanalsobediscussedinthisrelation.Examplesofthesearesecurity,personalizationandtheinteractionwiththeapplications.Accesstothe applicationswill be through a form of device, and this has to be clarified in order to bothunderstandanddesignthesolution.Lastly,thedatatravellingthroughthearchitecturealsoneedstobedetermined,inrelationtothevolumeandthepaceinwhichitneedstobetransmitted.

• ServiceplatformsInmanybusinesses,somefunctionalityiscreatedthroughtheuseofmiddlewaresolutions.Thiscanbothberelatedtotheinternalbusinessoperationsandsomeofthefunctionalityofthesolutionprovidedtothecostumers.Thecharacteristicsoftheplatformscanhaveahighimpactontherestof the technological architecture, as they have to be compatible and reliable in order to befunctional.

• AccessnetworkandbackboneinfrastructureTheaccessnetworkandbackboneinfrastructuremainlydealswiththebandwidthrequirementsofthetechnicalarchitecture,aswellasthetypesofconnectivityandthestateoftheconnections.4.3.3OrganisationaldomainTheorganizationaldomaindealswiththecapabilitiesinternallyinthebusiness,butalsotheexternalactors,whichcollaborationandpartnershipsaremadewith,inordertoimprovethevaluecreation.The authors pf the STOFmodel uses the “value”web term, as the collaborations can bemadebetweenmanydifferentactors,andacrossmultiplebusinessdomains.Theorganizationofthevaluenetworkisdividedintothreecategoriesdependingontheclosenessofthecollaborationandtheeffortinvestedfromthepartners.Thefirstlevelisthestructurallevel,where the collaboration is essential for the value creation. Second is the contributing partners,where theeffortprovided fitswith thebusinesspurpose,butdoesnototherwiseprovideextravalue. Lastly is the support category, where the collaboration is useful, but the partner is notessentialandcanbesubstitutedwithease.Figure13illustratesthiscategorisation.


4.3Businessmodels

Figure13–thethreelayersofpartnershipsintheorganisationaldomain.

(Author),Adoptedfrom(Bouwmanetal.,2008).Thedivisionofelementsintheorganisationaldomainaccordingtothetheoryismadeasfollows:

• ActorsandvaluenetworkTheactors from thedifferentpartnership layers in the abovementioneddivision, andhow theycontrol the value network, affects the organisational structure. This depends on the layer theyoccupyandtheimportanceoftheircontributiontothenetwork.

• Interactions,resourcesandcapabilitiesTheamountofinteractionbetweenthepartnersdeterminesthestrengthofthepartnerships.Thenatureoftheresourcesandcapabilitiesofthepartnersalsoneedstobeclearlystated,inordertodeterminetheirpositioninthevaluenetwork.

• Strategies,GoalsandagreementsMappingthestrategiesandgoalsofthepartnershipsinthevaluenetworkisimportant,butcanbehard,assomepartnersmighthavehiddenagendas.Protectionagainstpartnerswhomightnotactaccordingtotheinitialagreementscanbedonebyforminglegaldocuments,whichstatetherulesandlimitationsforthepartnership.

Supportingpartners

Contributingpartners

Structuralpartners

internalorganisation



4.3.4FinanceDomainThefinancialdomaindealswithhowrevenuesandcostsarecreated,howtheyaredividedamongstthevaluenetwork,andultimatelyhowthepricingstructureoftheprovidedsolutionwillbeforthecustomer.Thereneeds tobeasustainabledivisionbetweencostsandrevenues,andtheactorsneeds to be rewarded based on the amount of costs they are responsible for, in order for thenetworktofunctionoptimally.Thedomaincanbeseparatedinthefollowingelements:

• InvestmentcapitalandrevenuesourcesTheactivities,andespeciallythetechnicalarchitecture,needscapital inordertoberealizedandcreatevalueforthecustomers.Whentheseinvestmentsareplacedandthebusinessisactive,thepaymentsfromcustomersformrevenuesources,butrevenuecanalsobeattainedthroughothersources(e.g.subsidies).

• CostsandPerformanceindicatorsTheperformanceindicatorsareusefulforoverseeingtheprogressionofthebusiness,andtospotareas that are problematic. If costs for example prove too high, and revenue streams are notmeetingthewantedlevels,returnoninvestmentforinvestorsdoesnotsucceed.Asmentionedintheintroductiontothedomain,costshighlyaffectthefinancialbalanceofthebusinessmodel.

• RisksourcesTherewillalwaysbeanamountofriskanduncertaintyinvolvedinrunningabusiness,buttheplansandapproachesfordealingwiththese,candeterminewhetherthebusinesssurvivestherisksornot.Allelementsofthebusinessmodelmightpotentiallyraiseafinancialrisk,whichmakestheriskassessmentanimportantelementtofocuson.

• PricingThepricingstrategycantakemanyforms,especiallywhendealingwithITservicesthathasvaryingdemands from costumers. Some examples are competitive pricing, value-based pricing andpersonalizedpricing.

4.4ChapterconclusionThereviewofcommonpracticesinrelationtothethreefocusareasofthetheoreticalapproachhasrevealedasetofspecifictools,whichcanbeappliedintheanalysis.Thiswillmakeitpossibletoincludetheneedsofthecity,withthepotentialsofthetechnologicalsolutions,andbasedonthesefindings, evaluate the business model of the value network related to the IoT platforms inCopenhagen.Thefollowingchapterwillpresentamarketoverview,includingtheempiricaldatagatheredforthisreport

50 Chapter5.Marketoverview

5.1Marketconditions

5. MarketoverviewThemarketreviewisbasedonresearchpapersintheareasofsmartcitiesandIoTsolutions.Manyoftheprovidersofservicesintheseareas,aremultinationalcompanies,sothereviewwillincludeaglobal,nationalandlocalcityperspective.TwopapersrelatedtosmartcityactivatesarebyARUP& CEDI (2016) and COWI (2016). ARUP& CEDI looks at the national level, by focusing on fourdifferent cities, including Copenhagen, ending with a set of recommendations for Denmark inrelationtoachievingvaluefromsmartcitysolutions.Thisresearchpaperwasalsousedinthestateof theartchapterrelatedtosmartcitiesearlier in this report.COWIpresentsananalysisof theinfrastructure for smart city solutions in Copenhagen. Here, the focus is on the technologicalrequirementsforthesesolutions, includingtheuseofIoT.IRISGroup(2016)andEricsson(2015)focusspecificallyontheuse-andadoptionofIoTsolutionsamongDanishcompanies,andTelia&ArthurD.Little(2017)looksatthegrowthpotentialofIoTintheNordiccountries.Thesepapers,incombinationwithglobalmarket statistics for smart city, IoTand IoT-platforms from IDC (2017),Gartner(2017),Forrester(2017)andNavigant(2017),arecombinedwiththepurposeofidentifyingthemarketconditionsforIoTplatformsinrelationtosmartcityinitiativesinCopenhagen.ThechapterwillfirstlyfocusonthecharacteristicsofthesmartcityinitiativesinCopenhagen.Themaintypesofmarketactorsandstakeholderswillthenbepresented,followedbymarkettrendsonbothglobal-,national-,andcitylevels.Intheendofthemarketoverview,barriers,opportunitiesandkeyresourceswillbereviewed.Inthesecondpartofthischapter,Interviewsconductedforteresearchinthisreportwillbepresented.

5.1MarketconditionsThecityofCopenhagen inhabitsaround600.000people,and in thegreatermetropolitanareas,around2million,makingitthelargestcityinDenmark(COWI,2016).Thecityisgovernedbyapublicrepresentation(Borgerrepræsentationen),whichdividestheresponsibilitiesofmanagingthecitybetween seven committees, each with a mayor as the leader. The seven focus areas of thecommittees are finance, technology and environment, culture and leisure, children and youth,healthandcare,socialservices,andemploymentandintegration(KøbenhavnsKommune,2016b).ThemajorityoftheworktowardsuseofIoTandsmartcityinitiativesfallunderthecommitteefortechnologyandenvironment, and in2014 theCPHSolutions Lab, aspreviouslymentioned,wasformedwiththepurposeoftestinganddevelopingtechnologicalsolutionsforthecity’schallenges.Thevisionoftheunitwastocreateapubliclymanagedhub,whereprivatepartners,academiaandthepubliccollaborateontheuseoftechnologyinthecity.Thisisrelevant,sincesmartcityprojectsbenefitfromsuch“fourstrandhelix”collaboration,wherebothmunicipalities,theprivatesector,academiaandcivilsocietyjoinforces,tocreatevaluefortheentirecity(ARUP&CEDI,2016).TheideaforCPHSolutionsLaboriginatedinthe“CopenhagenConnecting”-concept,whichwasasmartcity strategy developedby the city of Copenhagen, resulting in Copenhagenwinning theWorld

Chapter5.Marketoverview 51

5.1Marketconditions

Smart Cities Award in 2014 (ARUP & CEDI, 2016). The activities of CPH Solution Lab will beelaboratedintheinterviewdescriptionintheendofthischapter.InCopenhagen,becomingasmartcityisnotagoal,butratherawayofachievinggoalsrelatedtoqualityoflifeandeconomicgrowth(COWI,2016).Theclimateandenvironmentinparticularisafocusareausedtoimprovethecity.Inthisrelation,theClimateVisionfor2025isproducedbythecity.Inthisvision,thecityisfocusingonthedevelopmentthroughthreeoverallgoals(KøbenhavnsKommune,2015):

1. BeingavibrantcityWork towards this goal is focused on creating good circumstances for everyday life, aiming atbecomingthemostbike-ablecityintheWorld,andbybringingmorenatureintothecity.

2. BeingacitywithanedgeThediversityofbothinhabitants,buildings,environmentalelementsandmuchmoreiswhatcreatesthe cultureof the city. Thecontrasts should thereforebeaccommodated foranddeveloped, inordertocreateamoreinterestingandvibrantcity.Thiscanbeachievedbyfocusingonflexibilityandcreativeuseofthecity,whereshort-termprojectsalsoarewelcome,andentrepreneurialspiritsaretestingnewthingsinthecity.Furthermore,thecontrastsexistinginthecitymustnotdividethesociety,andallareasshouldbeattractiveintheirownway.

3. BeingaresponsiblecityBecomingCO2-neutralisagoal,whichalsocreatesjobs,lessnoise,cleanerairandhealthiercitizens.Thetoppriorityisthereforetoworktowardsthisgoal,butresponsibilityalsoinvolveslesswasteofresourcesthroughmorere-useandsharing,aswellasresponsibilityinrelationtocreatingacitythatcanwithstandtheelementsoftheclimateinthefuture.Thesegoalsarecoveringawidevarietyofcityactivitiesduetotheirgeneralfocus,whichalsomakesit possible for IoT and smart city solutions to be used in many relations. This can both be anadvantage,asthepotentialvaluecreationislarge,butitalsohassomelimitationsinrelationtothedifficultyofutilizingsolutionsona largerscale,acrossall thevariouselementsthatneedstobeimproved.Thefollowingsectionwillfocusonthemaintypesofactorsonthemarket.

5.1.1MarketactorsThere are both device developers, service providers, platform operators, software developers,networkoperators,andserviceusersonthemarket(Kimetal,2014).Anotherwayoflookingatthemarketactorsistodividetheminenablers,creatorsandoperators(IRISGroup,2016).Here,theenablersaretheinfrastructureproviders,aswellasthemanylocalbranchesofglobalITcompanies,that are providing IoT services. The creators are the developers and providers of specific IoT


5.1Marketconditions

productsandsolutions.Theoperatorsare theactorswhousethe IoTsolutions to improveownproductsorprocesses.InanexamplewhereCopenhagenusesawastemanagementsystembasedonIoTsensorsintrashcans,thecityistheoperatorofthesolution,andtheserviceuser.ThecompanyprovidingtheIoTsolution,includesbothdevice-andsoftwaredevelopers,andfallsunderthecreatorcategory.IfthissolutionwastousecapabilitiesofanIoTplatformforelementsuchasdataanalyticsordashboards,theplatformproviderwouldbetheenabler.Butthedataalsoneedstobetransmittedoverthetelecommunicationinfrastructure,soatelecomsuchasTDCwouldalsobeinvolvedasanenabler(Mikkelsen,2016).Thelargeamountofmarketactortypes,combinedwiththemultitudeofcompetitorsinboththecreator and enabler categories, makes for a fragmented market. However, consolidation andpartnershipsonthemarketisincreasing,astheIoTplatformprovidersinparticulararestrivingforlargermarketsharesbyprovidingcompletesuitesofIoTcomponents(IRISGroup,2016).Fromthecity’s perspective, the market competition makes it unlikely that the city government canimplement,manageandmaintainnetworkinfrastructureascheapastheprivateenablers,makingpartnerships themost relevantoption (COWI,2016). The cityhaspotentialofbeingapowerfulmarketplayerduetoitssize.Thepublicsectorislargebothonanationallevelandinrelationtomunicipal governments. Ingeneral, themunicipalities receivearoundhalfof thenationalpublicbudget,andtherebyaccountfor57%oftheGDP(ARUP&CEDI,2016).The IoT solution operators are often businesses, or in case of smart city initiatives, the citymanagement.Thisresultsinaround70%ofthepotentialforIoTinDenmarktobewithintheB2Bsector(IRIS,2016).

5.1.2MarkettrendsTheglobalmarkedforbothIoTandsmartcitiesisgrowing.Forsmartcitysolutionsandservices,theglobalmarket isestimatedtobe$40.1billion in2017,withan increaseto$94.2billionby2026(Navigant,2017).InCopenhagen,theamountofjobsinsmartcitycompaniesalonewasestimatedtobe19.500peoplein2016,indicatingasubstantialmarketinCopenhagenaswell(ARUP&CEDI,2016).Inrelationtosuppliersofsmartcitysolutions,NavigantResearchrankCiscoandSiemensasglobal market leaders in 2017, withMicrosoft, IBM, Hitachi, Huawei and GE among others, ascontenders(Navigant,2017).IDCestimatestheglobalmarketforIoTtobearound$800billionin2017,andtonearlyreach$1.4trillionin2021(IDC,2017).Furthermore,theDanishGDPhaspotentialtogrowwith$13.7billionin2030,ifIoTisusedmore(IRIS,2016).GlobalmarketleadersofIoTsoftwareplatformsinQ4of2016wasfoundtobeIBM,PTC,GEandMicrosoft,followedbyAmazonWebServices,CiscoJasperand


5.1Marketconditions

SAP as strong performers (Forrester, 2016). Themarket position is based on current offerings,strategyandmarketpresence.However,lookingexclusivelyonmarketshares,Microsoft,Amazonwebservices,andCiscoJasperarethemostdominant,asfoundinthestateoftheartresearchinthisreport.Thisiscombinedwithanincreaseindevicesconnectedtotheinternet,whichisexpectedtoreach20billiondevicesby2020(Gartner,2017c).Furthermore,theaveragenumberofconnectedthingsisthreeperpersonintheNordicregion,whichisveryhighonaglobalscale.Additionally,thereisastrongbusinessrelationshipacrosstheNordicregion,benefittingtheindividualmarkets(ArthurD.Little&Telia,2017).Inrelationtocloudservices,whichmuchofthefunctionalityintheIoTplatformsisbasedon,themarketsharesforinfrastructureasaservice(IaaS),andsoftwareasaservice(SaaS)accountsforlarge parts of the cloudmarket on a global scale (Gartner, 2017d).Where IaaS provides largesolutionsincludingservers,storageandnetworkinghardware,theoperatorsprovidingSaaSoperatetheirown infrastructureandapplications,providing the finished software solutions in thecloud(Rouse, 2017). In between these two models is the platform as a service (PaaS), where theinfrastructureisprovided,alongwithanumberofadditionalfunctionalities,asfoundinthestateofthe art chapter. PaaS covers a smallerpart of the global cloudmarket, but is increasing, and isexpectedtoreachamarketsizeof$14.8billionin2021(Gartner,2017d).Theactorson the cloudmarket, including IoTplatformproviders, are increasinglyoffering theirservices in new subscription categories, tomeet the varying demands related to flexibility. Anexample hereof is the Cisco Kinetic for Cities platform,where the services on the platform areprovided in three categories; the base offering includes things as a service (TaaS), the secondcategoryisdomainasaservice(DaaS),andthelastisthebusinessasaservice(BaaS)(Cisco,2017a).TaaScoversonetypeofsensorsfromonevendor,whereasDaaSallowsmultipletypesofsensorsinonedomain(e.g.wastemanagement)tobecombinedandintegrated,andBaaScombinessensordatafrommultiplevendors,inmultipledomains(Cisco,2017a).

5.1.3MarketbarriersThereareanumberofbarriersonthemarkedfor IoTandsmartcitytechnologies.Thefirstonedealswith theuncertainty in relationto thetechnologies.LowmaturityandstandardisationareamongthemainreasonsforthisuncertaintyinDenmark.However,thesecurityissuessurroundingIoT solutions, also play an important role in the uncertainty (IRIS, 2016). In addition to thetechnological uncertainty, the costs of investment in the solutions creates a financial barrier(Ericsson,2015).Furthermore,theknowledgegapandlackofcompetenciesrelatedtotheuseIoT,isprevalentinorganizationswhocouldpotentiallyachievesubstantialamountsofvaluethroughtheuseofIoT(IRIS,2016)(Ericsson,2015).


5.2Interviewedcompanies

Oneof themainbarriers forsmartcityrelated IoTsolutions is thedifficulties inadvancing frominitialtestingphasetoafullscaleimplementation.Thisisespeciallyduetotheuncertaintyinreturnofinvestmentonimmaturetechnologysolutions,asmentionedabove(ARUP&CEDI,2016).

5.1.4MarketopportunitiesInDenmark,IoTisoftenusedinindustrieswithahighdegreeofdigitalization,traditionsofworkingwithtechnologicalsolutions,andpracticalexperiencewithdatasharing,bothinternallyandwithcustomersorpartners(IRISGroup,2016).TheseelementsarethereforerelevanttoimproveuponinordertocreatemoreopportunitieswithIoT.ThecommontrendinthemarketisthatanecosystemaroundtheIoTsolutionsisneeded,inorderto createvaluewith IoT,especiallywith theuncertaintyand immature technologies.Thedigitalecosystems, where actors collaborate across horizontals, are the keys to ensuring futurecompetitiveness(ArthurD.Little&Telia,2017).InrelationtotheIoTplatforms,twomaintypesofcollaborations or ecosystems are suggested for improved market competitiveness. Firstly, theplatformscaneitherfocusonanaggregatorecosystem,wheretheplatformproviderincludesIoTsolutionsbuiltbyexternaldevelopersusingtheplatform. Inahypotheticalexample,CiscocouldprovideanumberofsmartcityorIoTsolutionsundertheCiscobrandname,eventhoughaseparatedeveloperhadmadethesolution,basedonfunctionalityoftheCiscoplatform.Here,theadvantageistocreatemorebrandvalueandsecurityinseeminglyusingoneprovider,butpotentialsforlock-incanbeproblematic,andtheecosystemcanbelimitedtosolutiondeveloperswhowillallowtheirservicetobeprovidedunderanotherbrandname.Analternativesolutionisthesecondecosystemapproach; themarketplace ecosystem. Here, the platform is used to gather solutions, but theplatformcustomersinteractwiththeseparatesolutionproviders,nottheplatformitself(ArthurD.Little & Telia, 2017). This type of ecosystem is more open, and provides more agility for thecustomers to select and opt out of individual solutions,without having to find a new platformprovideraswell.Thesecondpartofthischapterwillpresentthethreeinterviews,includinganoverviewofthecompanies,thebackgroundoftheinterviewee’s,thepurposeoftheinterviewsandthemainfindings.

5.2InterviewedcompaniesAsmentionedinthemethodologychapter,theinterviewsshouldcoverboththecity’sperspective,the platform provider’s perspective, and a neutral third party,with experience in technologicalprojectscombiningthetwoperspectives.Theinterviewswillbepresentedinchronologicalorder,as they were conducted.When referring to the interviews, the specific appendix in which theinterviewislocated,andthetimestampofthequote,willbestated.



5.2.1InterviewwithSuneFredskildfromCPHSolutionsLabAspreviouslymentioned,CPHsolutionsLabisaunitunderthemunicipalityofCopenhagen,dealingwith development of technological solutions for the city’s operations. CPH Solutions Lab ispositionedasadivisionofthetechnicalandenvironmentalcommittee,andhasfivekeyareasoffocus.Theseareasfollows(AppendixA1–21:30):

• Environmentandclimate• Lightingandcitylife• Humansandflows• Datadrivenoperations(bigdataandsensoruse)• Digitalservices(e.g.communicationwithcitizensonbusstopmonitors)

Theiractivitiesinthesefiveareasareseparatedintotwodomains;onebeingso-calledlivinglabs,whicharetestareasinthecity,andanotherbeingdataplatforms.Inthelivinglabdepartment,theyhavetheStreetLab,whichisanareainthecentreofCopenhagen,theEnergyBlock,whichdealswithdecentralizedenergyandblockchainsolutions,andaworkshopforurbanproductioncalledUnderbroen. In thedataplatformdepartment, theyhave theCopenhagenOpenDataplatform,whichisadataportal,adatamarketplacedevelopedincollaborationwithHitachicalledCityDataExchange,andlastly,theyareapartofaninternationalinnovationchallengefordevelopinganIoTplatformformultipleCities(CPHSolutionsLab,2017).TheIoTplatformforcitiesseemslikeanidealfocusarefortheresearchinthisreport,butthedevelopmentisataveryearlystage,soverylimitedinformationisvaluable.SuneFredskildisadevelopmentconsultantwhohasabackgroundincityplanning,andhasbeenwithCPHSolutionsLabfortwoyears.purposeofinterviewThemainpurposeofconductingtheinterviewwastounderstandtheneedsofthecityandhowtheyworkwithtechnologicalsolutionsinrelationtosmartcityandIoTinitiatives.Theinterviewwassemi-structured,wherea list ofquestionswasused to guide the conversation. ThesequestionsfirstlyconcernedtheproblemsthatCPHSolutionsLabworkwithcurrently,andtheexperiencesgainedfromworkingwiththem,withafocusonthetechnologicalaspects.Secondly,questionswereaskedregardingthepartnershipsandrelationsbetweenCopenhagenSolutionsLabandtheprivatemarket,andlastly,questionsabouttherequirementsforvaluecreationinCopenhagen.InterviewresumeCopenhagendoesnothaveasmartcityvision.Theyfocusonanumberofchallengeswithinthecitymanagement,andseehowtechnologycanbeusedtoimprovethesesituations.Furthermore,theytestandinnovatewiththetechnologiestoidentifytheirpotential,andtobecomealeaderinthe



fieldoftechnologyusage.Inthesetests,collaborationsaremadebetweentheprivatemarketandthe city government, where dialogues and developments are in focus. There are a lot ofcomplicationsinrelationtofindingtechnologiesthatcanbeappliedtoheterogeneousproblems,andtheideaofgoingall-inononetechnicalstandardsuchasWi-Fiisnotrealisticatall.Furthermore,thecityismovingmoretowardsservice-baseddeals,ratherthaninvestingintechnicalhardwarethemselves.Internallyinthecitymanagement,systemsareinsilos,andtheredoesnotseemtobeaneedforjoiningdatafromcompletelydifferentdepartments,suchaseldercareandtrafficlights.ButCPHSolutionsLabrecognisesthatsomecitiesaretestingtheseplatforms,andtheyseempromisinginsomeregards.Havingaplatformtocontrol thecitywill require thecity tochangea lotof theirprocesses,andthiscreatesabarrierforadoptingsuchaplatform.However,theCopenhagenOpenData-platformissometimesusedbythecitygovernmenttofinddatasets,whichwouldotherwisebehard to locate and retrieve fromoneof themanydepartments, indicating a potential valuepresentedbyplatformsolutions.ArecordingoftheinterviewisavailableinappendixA1.

5.2.2InterviewwithMortenKjeldgaardfromNetplanNetplan isaconsultancyfirmwithfocusontechnicalsolutions.Thecompanywasestablished in1994andworkswithprojectmanagement,procurement,securityandtechnicalreviews,inrelationtofivefocusareaslistedbelow.Theychargekr.1.500perhourofconsultation,whichmeanstheircommonclientsareratherlarge.

1. TelecommunicationProcurementofsubscriptionplansforlargeorganisationsandhelpingcompaniesnavigateintheTelecommarket.

2. TeleservicesCallcentrefunctionalityinvariousscales.

3. ITinfrastructureNetworksolutionsforlargeorganizations.E.g.ifacompanyneedstolinktwophysicaldepartmentsseparatedoverlongdistances.

4. TelehealthTelemedicinesolutionsandsolutioninnovation.Examplesoffocusareasarelungcapacitytestingequipmentforhomeusage,andanationalwoundjournal,whichmakesitpossibleforhealthcare



workerstouploadphotosofwoundstoaplatformwherewoundexpertsevaluatethenecessarytreatmentinanefficientway.

5. Smartsociety/IoTStandardisationeffortsanduniversalaccessandservice.Recentprojectsalsodealwithmappingnetwork coverage in various geographical locations and an IoT network for utilities in themunicipalityofFrederiksberg.Morten Kjeldgaard is a partner in Netplan and works as a consultant with main focus on ITinfrastructurecurrently,butisalsoapartofprojectsrelatedtotelehealthandsmartsociety.Hehasabackgroundineconomyandpublicsciences,andhasbeenapartofNetplanfor21years.PurposeofinterviewandmainquestionsThepurposeofinterviewingaconsultancyfirmwastoreachapersonwhohadexperiencewithnotonlythetechnicaldevelopmentinrelationtoIoT,butalsothebusinessaspectsandpracticalissuesregarding investment in new technologies. The interview had the approach of understandingNetplanandtheirfocusareas,andalongthisfocus,understandhowIoTplatformsmeetobstaclesandopportunities.LiketheinterviewwithCPHSolutionsLab,ithadasemi-structuredform,withquestionsguidingtheconversation.Ingeneral,therewerefourtopicareasforthequestions:IoT,Smart cities, IoT platforms andmore specific questions regarding the procurement andmarketanalyticalelementsofthedealsbeingmade.MainfindingsItwasfoundthatalotofIoTprojectsareapartoftheconsultancyworkNetplanisinvolvedin,andthatthereareobviousbenefitsinsomeofthecases.Butthereisalsoalotofhesitationinrelationtobothsecurityandthematurityofthetechnology,makingithardtoproducebusinesscasesthatareinfavouroftheIoTsolutionsinordertogetfunding.Butthepublicsectorisaveryrelevantareatobothtestandimplementthesetypesofsolutions,duetothesizeithasinDenmarkandduetothepolitical efforts that canbemade to focus the value creationonmore than solely financialbenefits. The public sector, however, does not have technological development as a keycompetence,makingitidealtocollaboratewithITcompanies,inordertosolvetheproblemsofthecities.Thesecollaborationscanbemadeinmanyways,andthereisnosingleanswertothemostoptimal solution, so it requires substantial needs andmotivation from both sides to utilize thetechnologiestothefullest.ThesamegoesforimplementinganIoTplatformforcitymanagement.Insuchacase,therewillbothbenegativeandpositiveelements,butalotofvaluecanbecreated,iftheplatformsupportstheneedsofthecity,andthecityisopentodisruptandreorganizethecurrentwayofmanagement.ArecordingoftheinterviewisavailableinappendixA2.



5.2.3InterviewwithBoFinnemannfromCiscoSystemsCisco is among the largest IT providers in the world, with more than 380 offices and 71.000employeespositionedin169countries.Theyhadatotalrevenueofover$49billionin2015,andanannualgrowthof4%.InDenmark,theirofficeemploys125people,andtherevenueis$300million.(Høeg,2017)Ciscoprovidesan IoTplatform,whichhasbeendescribed in thestateof theart chapterof thisreport.Thisplatformisspecificallyfocusedonsmartcitysolutionsandcitymanagementoperations,whichmakesitadditionallyinterestingtogettheirinputinrelationtoIoTplatformsinCopenhagen.TheyarealsoinapartnershipwiththecityofCopenhagenandTDC,inregardstodevelopmentofIoT solutions. A proof-of-concept of their platform, previously known as the Connected DigitalPlatform,whichcanbeseeninfigure14,hasbeenimplementedintheDanishOutdoorLightingLab(DOLL)inthemunicipalityofAlbertslund.

Figure14–InterfaceoftheConnectedDigitalPlatforminDOLL(Høeg,2017)

BoFinnemannisacustomersolutionarchitectatCiscoSystemsinCopenhagen.Hehasmorethan17yearsofexperienceinvariousrolesatCisco,andhasworkedwithtechnologicaldevelopmentatEricssonpriortohistimeinCisco.PurposeoftheinterviewTheinterviewwasaimedatattainingtheplatformprovider’sperspectiveonthedevelopmentofIoTplatformsinCopenhagen.TheexperiencesfromimplementingtheConnectedDigitalPlatforminDoll,includingchallengesandpotentials,wereinfocus,inordertoseecorrelationswiththeproofofconceptandthesituationinCopenhagen.Furthermore,theIoTplatformmarketwasdiscussed,



inordertounderstandhowthebusinessmodelscanbedeveloped,andwhichareasCiscoseeasoptimalforthefutureoftheirIoTplatform.Theinterviewwassemi-structuredinform,astheotherinterviews.InterviewresumeCiscofindsthedevelopmentofIoTinscalesofcities,hasreachedasituationofdeadlock, inthesense that network infrastructure investments are needed to develop solutions that providesufficientvalue,butatthesametime,thesolutionsareneededtojustifytheinvestmentinnetworkinfrastructure.Theyseethesolutiontothis,asaresearcheffortinthepropersolutionsandtheiruse cases. This researchneeds tobedone inmultipledomains and integrate valuehorizontallyacrossverticalsofthecity.Ciscobelievesalotofvalueinsuchintegrationscanbefoundbyfocusingonthecitizens’needs.Theythinkthatthisprocesswilltakeacoupleofyears,andhaveastrategyof staying competitive amongst other IoT platforms, by focus onmaintaining an open platformthrough APIs, and not become locked-in to specific suppliers of either sensor solutions orapplications.ArecordingoftheinterviewisavailableinappendixA3.

5.3ChapterconclusionThemarketoverview indicatedthatthepotentialmarketsizes forboth IoT,smartcitiesand IoTplatformsisincreasingglobally.Themarketsarecharacterizedbyahighnumberofsuppliers,andisaffectedbytheuncertaintiespresentinrelationtotechnologicalcapabilities,aswellasthereturnofinvestments.TheadoptionofIoTinCopenhagenandDenmarkisincreasing,butthebarriersinrelationtocomprehendingthevaluepotentialsofthetechnologies,aswellastheuncertaintyoftheimmaturetechnologyisalsopresenthere.FormingecosystemsaroundtheIoTandsmartcitysolutions,allowingforagilityintheservices,andfocusingonadditionalgoalsbesidesfinancialgainsintheinvestmentswasidentifiedaskeyelementsforasuccessfulevolutionofthetechnologyinthemarket.Theinterviewshelpedcreateamorenuancedviewofthemarketactorsandtheirproblems.ThegoalsofCopenhagen,theproblemsinvolvedwithpublic investments intechnology,andtheadoption of IoT platforms, was among themain findings of the interviews. Generally, there isconsensusintheopinionthatIoTplatformsandtheirrelatedsolutionscancreatealotofvalueinCopenhagen,buttherearealsoalotofbarrierstoovercomebeforethevaluecreationbecomesareality.

60 Chapter6.Analysis

6.1Requirementspecification

6. AnalysisThefollowingchaptercontainsthefinalanalysis,andwillapplythetheoreticalframeworktotheempirical data and the researched information, with the purpose of answering the researchquestion.TheanalysiswillbeginwithafocusontheneedsofthecityofCopenhageninrelationtoIoTplatforms,througharequirementspecification.ThematurityoftheIoTplatformswillthenbeanalysed,usingthehypecurveandadevelopedmaturitymodel,withthepurposeofdeterminingtheneedand futurepositionof IoTplatforms inCopenhagen. Finally, the STOFbusinessmodeltheorywillbeusedtoanalysethevaluenetworksurroundingtheIoTplatforms,andconcludeasetofguidelinesthatplatformprovidersshouldfollow,inordertocreatevalueinCopenhagen.

6.1RequirementspecificationGiventhescopeoffocusinthisreport,therequirementsarenotanalysedonadetailedlevel,butona levelwhichprovidesanoverviewoftheneeds.Therequirementsareestablishedbasedoninput from the interviewees, research of strategies in themunicipality of Copenhagen, existingmarket researchpapersproducedby consultancy firms, and the stateof the art chapter in thisreport.Thetheoreticalapproachwillbeasdescribedinthetheorychapter;goingthroughthestagesofrequirementdiscovery,classificationandorganization,andspecification.

6.1.1RequirementdiscoveryIn Copenhagen, a number of individual IoT solutions are being tested by CPH Solutions Lab, incollaborationwithsolutionproviders.Someofthesesolutionsareasfollows:

• Awastemanagement system,whichuses infrared sensors in trash cans,with SIM cardssendingsensordatatoaback-endsystemprovidedbythesolutiondeveloperNordsense.

• Airqualitysensorsbeinginstalledinlightpoststoidentifythelevelofpollutiononspecificstreets, with the purpose of guiding traffic towards less polluted routes, rather thanexclusivelyplanningroutesbasedontimeusage.ThissolutionisimplementedbyCitelum,whoisapartnerintheStreetLab.

• Asmartparkingsolution,usingacamerainstalledaboveaparkingspace,situatedbehindthe city hall. The camera compares the number of vehicles to a reference image, todeterminetheavailabilityontheparkinglot,andnotifiesthesystemwhenspotsarefree.

ThesearethreeexamplesofIoTsolutions,whichthecitycanusetobecomemoreefficientthroughtechnology.Butthesolutionsvaryalot,bothinrelationtotheusersandthepurpose,whichalsoresults invariousrequirements foracommonplatform.However, therecanbeanadvantage instreamliningtheimplementationprocesses,aswellasvaluecreatedbycombiningthedata,whichisanincentiveforusingacommonplatform.CPHSolutionsLabalsodescribethisdivisioninthe

Chapter6.Analysis 61


solutions:“WehaveverticalIT-systems,whereoneislookingatwastemanagement,oneislookingat traffic light, and in a completely different department we have the elderly care systems”(AppendixA1,8:00).HavingthisdivisioncanlimitthevalueattainedfromIoTsolutions.AccordingtothereviewbyARUPandCediofsmartcityactivitiesinCopenhagen,thedepartmentsinmunicipalgovernmentsneedstobeabletocooperateand“provideasinglepointofentrytothemunicipalityforsolutionproviders”(ARUP&CEDI,p.12,2016).ThisistheroleCPHSolutionsLabistaking,andinvolvinganIoTplatformmightimprovetheconditionsforthesolutionproviders.AtrendinthesolutionsatCPHSolutionsLabisthattheyareonanexperimentalstage.Thisiswherethepotentialofthetechnologiesisbeingtested,andbusinesscasesarebeingdeveloped,tojustifyinvestments.IoTplatformscancaterfortheseconditionsbyallowingalotofflexibilityintheuseoftheplatform.Thisflexibilitycanbeinvariousforms,includingpossibilitiesofscalingupsolutions,addingand removingextra functionality inmodules, andonlypaying for theusage, rather thanpurchasing the complete solutions. Furthermore, the latest technological trends need to besupported,includingpopularconstrainedcommunicationprotocols.Havingoneplatform,wouldmeanbothcityplanners,solutiondevelopers,operationalpersonnelandperhapseven citizens shouldbeable to access the informationon the sameplatform. It isthereforenecessarytoclearlydistinguishthelevelofaccesseachusertypehas,andperhapsevenprovide some of the IoT data on theOpenData platform. There is a lot of smart city value inprovidingopendata(ARUP&Cedi,2016),aswellasvalueforthecitizensingettingdigitalsolutionsthattheycanaccessthroughmobiledevicesorPCs(COWI,2016).CPHSolutionsLabalsonotesthathavinganopendataplatformhasbeenanadvantage:“theplatformisusedbythemunicipalityitself,asitiseasiertogototheopendataplatform,thanitistouseourowninternalsystems.Thiscreatesvaluetoalargeorganization,insteadofhavingitinvarioushiddencorners”(AppendixA1,23:30).Ofcourse,thedatastorageshouldbesupportedinawaythathasregulatorycompliance,anddoesnotmovethedataoutoftheregion(ArthurD.Little&Telia,2017)(COWI,2016).Theusecasediagraminfigure15illustrateshowthefourmentioneduserscouldbeconnectedtotheIoTplatform.



Figure15–Usecasediagram

Potentialactivitiesofthedifferentusersare:

• Operationalpersonnelshouldbeabletoaccessdatawhilebeingoutinthecity,seetrendsandupdatethedatabasedontheinsightstheygatherfromtheirworkinthecity.

• Thecityplannerswouldhavetobeable to log in, searchthroughhistoricdata,usedataanalytics and combine different data sets. The outcomeof the analysis should bemadepubliclyavailableforcitizenstosee.

• ThedevelopersoftheIoTsolutionsneedstohaveaccesstothesetupoftheservicesinvolvedinthefunctionalityoftheplatform.

• Thecitizensshouldhaveaccesstodatasets inordertoattain insightsaboutthecity,andperhapsevenproposepossiblesolutionstoproblemstheysee,basedonthedata.

Thesefourtypesofinteractionswiththeplatformcouldbemadeonvariousdevices,rangingfrommobilephones,tabletsandPCs.ArequirementforallusersshouldbethattheinsightsgainedfromtheIoTsolutionsshouldbeattainedinacomprehensibleway,andthatthespecificusersshouldonlyhaveaccesstothedataandfunctionalityfittingtheirusertype.Themultitudeofusers,eachwithdifferentneedsfromtheplatform,indicatesthatmanyprocessesishappeningsimultaneously,andcreatesrequirementsfortheavailabilityoftheplatform.Thisalsomakestherulesoftheplatformhighlyrelevant,asthesedefinewhatandwhenfunctionsshouldhappen.Basedontheseconsiderations,therequirementswillnowbeclassified.



6.1.2ClassificationandorganizationFunctionalrequirementsonageneral level,whichthe IoTplatformsneedstobeabletodo,arelistedbelow:

1. Provideinterfacesformultipleusertypes2. ProvideAPIsforsmartcityapplications3. Makerelevantdataavailabletotheopendataplatform4. Providethesolutionsasaservicewithflexiblepricing5. Providefunctionalityinmodulesthateasilycanbeaddedorremovedfromsolutions6. Supportconstrainedalternativestocommonprotocols7. Supportregionaldatastorageandregulatorycompliance8. Addresspublicconcernsinthesolutions

Non-functionalrequirements,orqualityrequirements,whichtheIoTplatformsneedstobeabletodo,are:

• ScalabilityThecityneedstolearnhowsolutionsworkgradually,andcopy-pastethesuccessfulexperimentstootherusecases(IRISGroup,2016).Theyneedthistoattaincompetenciesinternallyonalllevelsofthe organization, and the platform needs to support this gradual development with scalablesolutions,inrelationtoe.g.pay-per-usepricings.

• SecurityDuringtheinterviewswithCPHSolutionsLabandNetplan,thelackofsecuritystandardsappearsasa largebarrier for thediffusionandmaturityof IoT ingeneral.Theplatforms thereforeneed toincludesecurityaspectsinalltheirservice,andindicatetheseaspectsclearly.

• UsabilityMany companies lack skills in attaining large value from IoT solutions, and CPH Solutions Labindicatedthatthemunicipalityisnoexception.Theplatformshouldacknowledgethisgapinskills,anddevelopinterfacesandtoolsthatareeasyfortheuserstoworkwith,inordertolowertheeffortneededtoattainvaluethroughtheplatform.

• EnvironmentalAsmentionedinthemarketoverview,thecityofCopenhagenhasaclimateplanfor2025,whichindicates the need for becoming carbon neutral and being responsible as a city (KøbenhavnsKommune,2015).Thisplanisoneofthemaindrivingforcesforsmartcityinitiatives,andalsotheutilization of IoT. IoT platformswill therefore have an advantage, if the positive environmentalimpactofthesolutionsismarketedwiththeplatform.Furthermore,theoperationoftheplatformneedstobedoneinawaythatCopenhagencanjustify,inrelationtoapartnership.


6.2ForecastingIoTplatforms

• OpennessBoth Cisco and Netplan describes the modularity in design as an advantage for creating thefoundationforcollaborations,andattaininganecosystemaroundtheIoTsolutions.Theybothreferto the complications that lock-in can create, if partnerships are formed based on immaturetechnologies,andhighlyrecommendtakinganopenapproachtotheIoTplatforms,thoughAPIsandpartnerships.Theestablishedrequirementswillbeusedintheanalysisofthebusinessmodel.ButbeforegoingtotheSTOFbusinessmodelanalysis,aforecastneedtobeconducted.

6.2ForecastingIoTplatformsAsmentionedinthetheorychapter,acombinationofthehypecurveandamaturitymodelwillbeused,with thepurposeof analysing the futurepotentials and capabilities of IoTplatforms. Theoutcomeofthisforecastwillbeusedincombinationwithananalysisoftherequirementsandthebusinessmodel,toindicatehowIoTplatformscancontributetothevaluecreationinCopenhagen.

6.2.1HypecurveanalysisThehypecycleanalysiswillbebasedonthemodeldevelopedbyGartnerResearch,asitiswidelyusedandincludesafocusonIoTplatforms.AnimportantdetailofGartner’shypecycleforemergingtechnologiesisthatitlooksattechnologiesonaglobalscale.ThehypelevelofIoTplatformsmightbe different in Copenhagen, but as was found in themarket review, the Danish IoTmarket isfollowingmanyofthesametrendsastheglobalmarket.GartnerResearchisamongtheworldleadersintechnicalresearchandadvisoryservices,andhasageneralfocusonthetechnologicalsector.Thehypecycleispublishedannually,andispartoftheGartnerTrendInsightReport,whichanalysesenterprise-andecosystemdigitaldisruption(Gartner,2017a).Figure16illustratesGartner’shypecycle,withtheevolutionofIoTplatformsoverthelastthreeyearsadded.Thesearemarkedwithredarrows.



Figure16–GartnerHypeCycleforEmergingTechnologies(Gartner,2017b)

Asthefigureillustrates,IoTplatformshasenteredthepeakofinflatedexpectations,andthehypecontinues to rise.This isalsovisiblewith the increasingamountofplatformproviders,asmanycloud- anddata analytics based companies bundle their services andoffers themonplatforms.Companiesareexperimentingwiththeplatforms,andthefindingsfromtheseexperiments,suchasthelackofcommonstandards,andthesecurityandprivacyrisks,arebeingcoveredbythemedia.EspeciallytheareaofsecurityandprivacyiscausingsomenegativeconnotationswithIoT,indicatingapossibleturninthehypeoftheplatforms,ifthisareaisnothandledwell.HackingIoTdevices,andformingso-called“botnets”,usedtooverflowwebserverswithtraffic,hasbeencoveredwidelyinthemedia.Anexamplehereof is theMiariBotnet,whichaffectedpopular sites suchasNetflix,Twitter,Reddit,AirbnbandtheNewYorkTimes,byattackingaDNSserverinOctoberof2016(NewYorkTimes,2016).However,thehypehascontinuedtorisesincethishackingattack,indicatingthatthreatsrelatedtoprivacyandsecuritydoesnotaffectthehypeextensively.Between 2015 and 2016, the hype increased quite a bit, almost entering the peak of inflatedexpectations.Butbetween2016and2017,theincreasehasbeensmaller.Thishappenseventhoughthedotonthecurvechangedfromdarktolightblue, indicatingthat insteadofaperiodof5-10



yearsbeforereachingtheplateau,itisnowforecastedtohappenin2-5years.Thesmallerincreaseinhypemightindicatethatthepeakisalmostreached.Ifthisisthecase,effortshouldbefocusedatavoidingplummetingintothetroughofdisillusionment,wherethecapabilitiesofIoTplatformsisdoubted.Whenlookingatthehypecycle,itisimportanttonotethatthishypeoccursveryearlyinthelifeofthetechnologies.Linden&Finn(2003)illustratesthisnicelybycombiningGartner’shypecyclewiththeS-curveanda commonadoption curve, as seen in figure17.Basedon this assumption, theadoptionandperformanceoftheIoTplatformsareintheverybeginningphases,andthepotentialforthetechnologyisthereforelookingverygood.

Figure17–Gartner’shypecyclecomparedtotheS-curveandadoptioncurve

(Linden&Finn,2003).The second part of this forecast will focus on the maturity of IoT platforms, to attain acomprehensiveviewonthedevelopmentoftheIoTplatformsinrelationtosmartcities.



6.2.2MaturitymodelanalysisMaturityinrelationtoIoTplatformscanconsistofmanyelements,asthecapabilitiesandservicesoftheplatformsarewideranging.AsfoundintheresearchonbothIoTingeneralandIoTplatforms,the areas consist ofmany technological elements. In relation to smart cities, the research alsoindicatedthemulti-facettednatureofthearea. Itcanthereforebehardtosummarizethemostessentialelements,andarrangethemonascaleinaccordancetotheirmaturity,butthefollowingsegmentswillstrivetodojustthat.Theanalysisisbasedonareviewofrelevantexistingmaturitymodels, combinedwith the findings in the state of the art chapter, themarket reviewand theinterviews.Basedontheseelements,thekeyfocusareasofmaturityinrelationtoIoTplatformsforsmartcitieshavebeenselected.Thefocusareasareasfollows:

• Resourcesandcapabilities• TechnologiesprovidedontheIoTplatforms• TechnologiesallowinguseofIoTplatforms• SmartcityengagementoftheIoTplatforms• MarketreadinessforIoTplatforms

Resourcesandcapabilities,andservicesprovidedonIoTplatformsInrelationtotheresourcesavailableinthecompaniesprovidingIoTplatforms,thematurityisveryhigh,asthemaincompetitorsaremarketleading,globaltechnologyproviderslikeMicrosoft,Cisco,Amazon,and IBM.Thecapabilitiesarenot locked inverticals,whichcouldbethecasewithe.g.providing data analytics separately from an IoT hub or cloud storage services.Many of the IoTplatformsarebasedonthedynamicinterconnectionofthecompany’sotherservices,andprovidetheseserviceseitherbythemselforbundledontheplatform.Thematurity inrelationtothis isthereforequitehigh.TheservicesofIoTplatformslistedinthestateoftheartchapter,canbeusedasareferencetowhatamatureplatformshouldcontain.Someprovidersmightonlyhaveoneora fewof theseservicecapabilities,andrelyontheuserstodeveloptheremainingelementsthemselves,orfindthematotherproviders.Inthiscase,aplatformwouldnotbeparticularlymature,asthescopeofservicesis low.ThemarketreviewfocusedonIoTintheNordiccountriesbyArthurD.LittleandTelia(2017)lookatthisinrelationtoIoTbusinessmodelmaturity,andlistthefollowingstagesfromleast mature, to fully matured business models: visioning, innovation, commercialization andecosystem. In relation to thebusinessmodelmaturity of the IoTplatforms in Copenhagen, thecollaborationbetweenCisco, TDCandCopenhagen Solutions Lab canbe seenas anecosystem,wherecompetenciesaremergedtoattainalargervalue.However,thisisseenasahighlymatureexample,and isnotcompletely reflecting themajor IoTplatformprovider’sbusinessmodels,asmanyoftheseseeminglystrivetoprovidetheentireIoTsuiteofservicesthemselves.



TechnologiesallowinguseofIoTplatformsOne of the fundamental challenges ofmaturing IoT platforms is the technologies onwhich IoTservicesarebased.Inthestateoftheartchapter,thecommunicationprotocolswerefoundtobediverseandinlackofindustrystandardsfordevelopmenttoleanon.CPHSolutionsLabalsoidentifythisasabarrier:“Today,youcan’tevengotothemarketwithfivedifferentsmartcityproblems,andfind five sensors thatworkson the samestandard. SomeuseWi-Fi,othersuseLoRaand soon”(AppendixA1,36:00).ThiscreatesbarriersfortheadoptionofIoTservicesandsolutions,asmanyoftheimplementationsareexperimental,andfocusonmonitoringoroptimizingcurrentsolutiontechniques.Ericsson(2015)proposesamaturitymodelfocusedontheenablementofIoT,whichcontains the following five levels: monitoring, control, optimization, automation, and systemautonomy.Inthereport,themajorityofDanishcompaniesareonthemonitoringlevel,andafewareoncontrolandoptimization.InamaturitymodeldevelopedbyGartner(2016),thelevelsarecategorised as: initiating, exploratory, defining, integrated and optimizing. Here, the levels dealmorewiththespecificIoTsolutions,whereasthematuritymodelbyEricssondealswiththepurposeof the solution. However, the same barriers apply, and the uncertainty in relation to thetechnologiesisnoexception.Thematurityofthetechnologiesreliesonstandardisationeffortsaswellasdiffusioninthemarket,andatthecurrentstage,thematuritymustbeconcludedaslow.SmartcityengagementManyoftheIoTsolutions,whichtheIoTplatformseitherillustrateasexamplesofwhattheycanachieve,oralreadyhavehadsuccesswith,aresmartcityrelated.Butonlyafewoftheresearchedplatformsare,orhavepartsthatare,specificallydedicatedtosmartcitypurposes.Toanalysethelevel ofmaturity in relation to smart city capabilities or engagement, the aspects of smart cityevolutionresearchedinthestateoftheartchapterareused.Theseare:visionandcommunication,technology requirements, development of initiatives, and collaboration. A maturity modelframework by the European Parliament (2014), used to rank the smart citymaturity level of anumberofEuropeancities,includesfourlevels,whichcansupplementtheonesfromthestateoftheartchapter.Theseare:smartcitystrategyorpolicy,projectplanorvision,pilottestingsmartcityinitiatives,andatleastonefullylaunchedsmartcityinitiative.Thematuritylevelsinthismodelarefocusedonthecityitself,butcanbeusedtoillustratehowwellanIoTplatformfitswiththematurityofasmartcity,andtherebyimproveaformofsymmetrybetweenthetwo.Accordingtothe development of smart city initiatives in Copenhagen, and the testing done in CopenhagenSolutionsLab,thematurityisataratherhighlevel.Whatislackingisapartnership-approachfromtheplatformprovidersside(inexceptionfromCisco).Thiscollaborationmightleadtoanecosystemonthemarket,wherejoinedforcescreatesuniquepossibilitiesforimprovingthecities.ThiswouldbethehighestformofmaturityandsmartcityengagementfromtheIoTplatformprovidersside,butinreality,theyareonlyintheearlylevelsofengaginginsmartcityactivities.



MarketreadinessforIoTplatformsTheIoTplatformsareofcoursealsohighlydependentonthemarket’scapabilitiesofadoptingtheirservices.Inthiscontext,thefindingsformthemarketoverviewandthehypecurveanalysiscanbeusedtodeterminethescaleofmaturityforthis focusarea. Inthebeginning,themarkethasnoknowledgeoftheIoTplatforms,andthematurityisattheverylowestlevel.Asknowledgestartstospread,sodoesbothmaturityandhype.ImplementationswithIoTplatformscanthenbeginonanexperimental level, and the hypemight get exaggerated due to the imagined potentials of theplatforms.Whentheplatformsbecomeusedmore,thehypewilldeflateastherealizationofnotlivinguptotheexaggeratedexpectationshappens.TheIoTplatformsarecurrentlyatamaturitylevel in between these two stages. The maturity rises with the market adoption, and is at amaximumwhentheIoTplatformsareanintegralpartofthemarket.Figure18illustratesamaturitymodel,whichhasbeenproducedbasedontheanalysisofthefocusareas.Itisacontinuousfixed-levelmodel,wheretheorangefieldsindicatethelevelofmaturityineachfocusarea.Byfindingtheaveragematurityofallfocusareas,ageneralmaturityisfoundtobearound2,8,meaningthematuritylevelisslightlyabovethemiddle.Thisquantificationgivesaverygeneralizedconclusionofthematuritylevel,asthereisahighvariancebetweenthefocusareas,butcanbeusedtoillustratethattherestillisquitealotofdevelopmenttodofortheIoTplatformstoreachahigherpotentialandvaluecreation.The maturity model, in combination with the growth curve, shows the very early stage ofdevelopment,whichIoTplatformsarein.ForecastingIoTplatformsthereforeillustratesthattherearealotofuncertaintiesintheircapabilitiesandthatalotofhypeispresentatthesametime.Thisseemslikeanunstablecombination,andmightaffectthehypearoundtheIoTplatforms,ifeffortsforincreasedmaturityisnotinfocus.However,thevaluepotentialbytheuseofIoTingeneral,andtheplatformsasatooltowardsachievingthisvalue,wouldbeverygoodforboththemarketandCopenhagen.The followingpartof thischapterwill focusonthebusinessmodelbehindthe IoTplatforms,withthepurposeofanalysingwhatitconsistsof,andtolocateareasofimprovement.

70

Ch

apter6

.Analysis

6.2ForecastingIoTplatform

s

Figure18–MaturitymodelforIoTplatformsinSmartCities.Adoptedfromthefollowingmaturity

models:(ArthurD.Little&Telia,2017)(Ericsson,2015)(Gartner,2016)(EuropeanParliament,2014)


6.3Businessmodelanalysis

6.3BusinessmodelanalysisNowthattherequirementsfromthecity’sperspectivehasbeenclarified,aswellasthepotentialforthetechnologicalaspectsoftheplatformshasbeenanalysed,thewaysinwhichIoTplatformscancreatevalueforCopenhagenwillbeinfocus.ThisisdonebylookingatthebusinessmodelofIoTplatformsusingtheSTOFmodel,andanalysingwhichpossibilitiesthereareforimprovedvaluecreationineachofthefourdomains.Thislastpartoftheanalysiswillthereforegothrougheachofthefourdomains,andendwithaconclusionoftheoutcome.

6.3.1ServiceDomainThevaluecreatedbythecompany,andconsumedbythecustomerorendusers,iswhattheservicedomainisfocusedon.Inorderfortheprocesstofunction,andforcustomervaluetobecreated,theservicehastobeneworinnovative,andtobebetterthanwhatthecompetitorshastooffer(Bouwmanetal,2008).IoTplatformsprovideaservice,whichbundlestogetherfunctionalitythatindividuallymightnotbecompletelynew,butmergedintoaplatform,providesinnovativesolutionsandtherebycreatesvalue.Buttheexperiencewiththeplatformalsohastobevaluable,andthisisdonebyunderstandingandadaptingtothecharacteristicsoftheusers.Asfoundinthetheorychapter,themainaspectsoftheservicedomainaretheintended-,delivered-expected-,andperceivedvalue.Thisfollowingsectionwilllookintotheseaspects,andfocusonhowthebusinessmodelcanbeaffectedinwaysthatmatchtheestablishedrequirementsandmarketconditions.IntendedvalueIoTplatformsmainlydealwithB2Bservices,astheplatformsareusedtocreateadditionalproductsor services. This also means the customers who purchase the platform services might be thedecision makers of a company or organisation, whereas the end users can vary from solutiondevelopers,projectmanagersorotherinvolvedemployees.Thetypeofvaluethatiscreateddealswithparametersthataredifferentfromconsumerproducts.IoTplatformsthereforearguablyhastodeliverlesssocio-emotionalvalue,suchasthesenseofbelongingorself-actualisation,whereasinstrumentalvaluessuchascontrolandprivacyhasahigherpriority.Themarketsegment,whichIoTplatformscanfocusoninrelationtosmartcities,isespeciallylargeinCopenhagen,asthepublicsectorhasalargepresenceonthemarket.ThisisalsotheopinionofNetplan: “in Denmark, where the state is very large and they have many physical buildingsthroughoutthecountry,thepotentialsofvaluecreationfromIoTislarge,comparedtoe.g.asmallcompanywithsmallerphysicalpresence.ThescaleisthereforeanaturalincentiveforgettinglocalgovernmentsinvolvedinIoT”(AppendixA2,43:10).



ThemarketreviewalsorevealedalargepotentialintheIoTmarketinrelationtosmartcities,butanumber of barriers limits the market growth. An increased focus on both communication ofpossibilities,aswellascollaborativedevelopmentwithcitymanagementcouldbeawayofbringingmore of the intended value into the actual value creation. CPH solutions lab also believes co-creationisawayofachievingvaluefromIoTsolutions:“Wecan’tdevelopthesystemsourselves,butthecompaniescan’tdevelopsolutionsthatfitourneedsperfectlyeither,soweneedtodoittogether”(AppendixA1,41:20).ThevaluepropositionfromtheCiscoKineticforCities,asdescribedinthestateoftheartchapter,istocreateasmartcityframeworkthatimprovesoperationaleffectiveness,promotesflexibility,creates opportunities and reduces risks (Menon, 2017). This is rather vague, which valuepropositionstendtobe,creatingsomeuncertaintyinwhatthedeliveredvalueactuallyconsistsof.Thestrengthoftheplatforms,beinghighlymodifiableandprovidingmanydifferentfunctionalitiesintheirsolutions,canbehardtoformulateintoclearvaluepropositions,increasingtheneedforclearcommunication.Some platforms have a multisided approach to the market, where they propose partnershipsbetweendevelopmentexpertsinvariousfields,withcustomerswhoneedspecificIoTSolutions.Anexampleofthis istheAzureIoTSuite,whichhascreatedanetworkofpartners invariousfields,includingsmartcities.ThevaluepropositionforthesideoftheplatformwhichdemandstheIoTsolutions, is to make the development simpler and tailored to their needs, whereas the valueproposition for the side providing expert skills, is to reach new customers and expand theirbusinesses(Microsoft,2017c)(Microsoft,2017d).Inrelationtotheservicesprovidedontheplatform,thetrendofseparatingtheservicesinanumberofcategories,asCisco’sKineticforCitiesdoes,canalsospecifytheintendedvalue,andbettermatchthevariousneedsofthecustomers.InthecaseofCopenhagen,theycouldstartwithasingleIoTsolution,andonlyutilisethe“thingsasaservice”option,andlaterscaleuptothe“businessasaservice”category.DeliveredvalueThedeliveredvaluefromIoTplatformstosmartcitiesingeneral,isdependentonthetechnologicaldecisionsintheplatform,aswellasthevalueactivities.TheIoTplatformsareinvolvedinthefourthlayer of the architecture stack developed in the state of the art chapter, and this means thecapabilitiesrelyonbothprocessing,analysingandprovidingdatafortheapplicationlayertoaccess.Thedeliveredvalueisthereforehighlydependentonthecapabilitiesofconnectingsensorstotheplatform,aswellasmanyofthetraditionalcloud-basedactivities.Securityhasalsobeenidentifiedasanimportantaspectofthedeliveredvalue.ThisisageneralchallengeinrelationtoIoTsolutions,



and needs to be included in the platforms’ capabilities. The analysis of the technological- andorganisationaldomainswillincludemorefocusontheaspectsthataffectthedeliveredvalueExpectedvalueFromthecustomer’sside,thehypearoundthetechnologycanhaveabigimpact.Asfoundintheforecast,highexpectationsasaneffectofhype,hasahighpossibilityofresultingindisappointmentswhenthesearenotmet.Manytechnologicaltrendsinrecenttimehaspromisedalotofpossibilitiesandvalue,butalsodisruptsthecurrentstateofsociety,toadegreewheretheremightbealotofinsecurity in the success of the technology. CPH solutions lab also see this in relation to IoTplatforms:“combiningalloursystemsintoone,wherethecitycanbecontrolled,isnotsomethingwedo today, so itwill requirea largechange inourworkprocesses (AppendixA1,8:25).Theseinsecuritiesareimportanttorecognize,astheycanimpactthevaluecreation.Onewayofdoingthisis to extensively analyse what the implementation of the platform requires from the city’sperspective,inordertoclearlycommunicatewhatitwilltaketoachievethevalue.TheIoTplatformprovidersneedtobecomeexpertsinthefieldofsmartcities,fortheplatformstobeapplicableinalarger scale. CPH Solutions Lab says this is what the collaborations are aimed at: “they [IoTplatforms]needtomaketailoredsolutionsforindividualcities,andthisiswhatwecallpublicandprivateinnovation”(AppendixA1,43:59).PerceivedvalueTheperceivedvaluemightalsosufferduetothehighexpectedvalueasaresultofthehype.Butsincetheplatformsarepresentedasframeworksandtools,asCisco’sKineticforCities,thecontextdenotesthatthevaluewillrequiresomeeffortfromthecity.However,thiseffortdoesnotseemclear,anditwasfoundthatalargebarrierforthemarketadoptionofIoTsolutionsingeneral,wasalackofknowledgerelatedtotheuseofthesolutions.TheIoTplatformsthereforeneedtoclearlyidentifytheirrole.Thiscouldbedonedevelopingusecasesandbusinesscasesincollaborationwiththecity.WhenlookingatIoTplatforms,itisevidentthattheyfocusalotonthevaluecreationmadepossiblethroughbundlinganalyticalservices,withtheothercapabilitiesoftheIoTplatform.Netplanalsoidentifythisasatendency:“servicesrelatedtodataanalyticsandsolutionspecificdatahandlingoftenrequiremassivecomputationpower,andthereforelargecompanieslikeIBMandMicrosoftseebigbusinesspotentials in theseareas” (AppendixA2,1:02:50).Thisbundlingof serviceshaspotential to increase the value significantly, and is an important element of the platform’scapabilities.Strengthsinspecificserviceareas,whichcanbeprovidedinthesebundledservicescanalsofunctionascompetitiveadvantagesfortheindividualplatformproviders.Lastly,theeffortandtariffalsohasanimpactontheperceivedvalue.Especiallytherequirementsfortechnologicalknowledge,andthedisruptiveeffectspreviouslymentioned,increasestheamount



ofeffortneededtoattainvaluefromtheplatforms.Thepricingofthetariffswillbeanalysedinthefinancialdomain.

6.3.2TechnologicaldomainAsmentionedinthetheorychapter,thehighcomplexityinthetechnologicalcharacteristicsofthecompaniesprovidingIoTplatforms,makesitdifficulttoperformanextensiveanalysiswithinthescopeofthisreport.Butbylookingatthekeyelementsofthetechnologiesbehindtheplatforms,themostessentialareascanbeanalysed.Thesekeyelementswereestablishedbothinthestateoftheartchapter,aswellasinthemarketoverviewandtheforecast.Bycombiningtheseelementswith the requirements from the city, the analysis should be able to identify an optimalway ofstructuringthetechnologicaldomainofIoTplatformsinCopenhagen.PlatformapplicationsFirstly, the platform contains a number of applications, through which the users access thefunctionalityoftheplatform.Theapplicationsapplythetechnicalfunctionalityoftheplatformtothestreamsofdata,tocreatevalueforthecustomers.Inmanyplatforms,anessentialapplicationistheonewiththegatewayfunctionality,linkingtheplatformtothethings.Thisapplicationisthenconnectedwithamultitudeofotherapplications,suchastherulesenginesconcerningdeviceanddatamanagement,storageapplications,IDmanagementandregistries,andmanyothers.Alltheseapplicationscanbeaccessedandmanagedthroughtheplatforminterface.Butthisinterfacecanbeaccessed indifferentways,dependingon theenduser’s context. IoT solutiondevelopersmightaccesstheinterfacethroughtheirPCs,whilecitymanagementandoperationpersonnelmightusetablets or mobile devices. In most cases, it will only be developers who use the platformmanagementinterface,astheIoTsolutionsoftenhavetheirowninterfaces,throughwhichtheendusers access the services, but someadvanced IoTplatforms also have interfaces or dashboardsaimedattheendusers.Ineithercase,themultitudeofusersshouldbeconsideredwhenprovidingtheplatforms.Animportantelementoftheapplicationsingeneral,isthatdatasecurityandprivacyisanintegralaspect.CPHSolutionsLabalsoidentifiesthistobeessentialinrelationtocitymanagement:“Inthefuture,privacyiscompletelyessentialtohaveundercontrol.Inlocalgovernmentsthismightevenbemore important thanon theprivatemarket” (AppendixA1,12.20).Datasecurityandprivacythereforeneedstobeavailableinallaspectsoftheplatform,tobeabletomeettherequirementsofthecity.Vastamountsofdataaretravellingthroughtheplatform,andinsomeIoTsolutionsalowlatencymight be essential, while others are less time sensitive. The latency was found to be highlydependent on the choice of communication technologies, so the platform needs to be able toprovideinstantaneousaccesstothedata,ifthisisarequirementfromtheusers.



ServiceplatformsSome of the technological architecture for managing the platforms can come from externalmiddlewareplatforms,suchascustomerbillingsystems,customerrelationmanagementsystems,andmuchmore.Thiswill vary fromplatform toplatform,andmanyof themoreestablished ITcompanies might not need external service platforms. But service platforms can also concernaspectsthatmaketheplatformmoredynamic.IfanIoTplatformdoesnothavemachinelearningcapabilities in its arsenal of services, a service from a provider of machine learning could beconnected to the IoT platform, and thereby increasing the value creation. Other examples offunctionalitieslikethesearedatabases,artificialintelligence,andblockchain.Thesepartnershipsorconnectionstoexternalserviceplatformscanbeseenasaformofmarketcollaboration.Here,theIoTplatformsneedstobeopen,inordertocombinesolutionsinwaysthatmatchestheneedsofthecity.Theyalsoneedtoprioritizetheresearchofthemarketforpotentialpartners.Netplanexplainsthisasaformofagility,whichisveryimportantforIoTplatforms:“Itishard,butthey[theplatforms]need tobeopen inorder to survive.Theyknowthis,but it requiresa lotofagility tonavigateinanenvironmentwheretechnology,suppliersanduseisconstantlychanging”(AppendixA2, 01:05:28). Agility in the platform, in relation to interoperability with other solutions, alsocombatsthefearoflock-in,thatmightbepresentwiththedecisionofselectingoneIoTplatformoveranother.Netplansays:“Youbecomelocked-intothetechnology,anditcanbehardtoopenupformarket competition, and reap the advantages of sharing the needwith others, which givescompanies incentive to provide the solution cheaper” (Appendix A2, 1:00:20). The need forpartneringwithonespecificcompanyisalsonotparticularlyinterestingfortheCityofCopenhagen,as CPH Solutions Lab explains: “Whether it is one platform from one provider, or a number ofsolutionsfromavarietyofprovidersisnotimportant.Ourgoalistosolveourproblems”(AppendixA1, 39:40). The agility and openness of the platforms can thereby be an advantage for the IoTplatforms.Theopennessandpartnershipswillbefurtheranalysed intheorganisationaldomain.Additionally, Interoperability isexpected toaccount for40%of the totalvaluepotential for IoT,makingthisanimportantelementtofocusonfortheplatformproviders(ArthurD.Little&Telia,2017).CiscoalsoidentifiesthisasoneofthemaincompetitiveadvantagesofanIoTplatform:“Webelieve theplatformshouldbeopen,bothdownwards in thevaluenet,bynot locking inwithaspecificsensorsystemsupplier,andupwardswithopennesstothirdpartyapplicationsthatusethedatafromthesensors.ThisfunctionalityshouldbeprovidedwithopenAPIs.Otherplatformsthathaveinterestsinspecificsensorsuppliers,tendtobecomemoreclosed.”(AppendixA3,10:10).Ifthedataissharedwithandopendataplatformforthecity,additionalmarketpotentialcanbecreated(COWI,2016).However,thedatahandlingneedstobedoneincompliancewithregulationsfromthecity,whichcouldincluderequirementsforregionalstorageaswell.AccessnetworkandbackboneinfrastructureThereneedforconnectivityandbroadbandinternetaccessisverylarge,whenprovidinginternetbasedservices,whichtheIoTplatformsdoes.Theplatformsthereforecouldusemultipleinternet



serviceproviders,tosecureaccessifoneconnectionisstopped.BothCiscoandNetplanidentifythetelecommunicationinfrastructureasthemaindriverfortheuseofIoTincities,butCPHSolutionsLab has abandoned this idea. This dilemma will be elaborated later in the report. Thetelecommunicationinfrastructureonlydealswiththefundamentalinternetconnection,andabigpart of the connectivity also lies in understanding the trends in communication technologyprotocols,withthepurposeofsupportingthebestofthese.Thisalsofallsunderthecategoryofconnectivitymanagement. In a scenario where a sensor has transmitted data in a constrainedformatsuchasEXIoveraWi-Fibasedlocalareanetwork,thegatewaycouldpassthismessageontotheIoTplatformthoughtthenetworkwithoutanyprocessing.Theplatformthereforeneedstosupport the popular constrained alternatives to the otherwise common and unconstrainedstandardssuchasHTTP.IntheresearchofIoTplatforms,standardssuchasMQTTandWebSocketwerefrequentlysupported, indicatingthatthis ishighlyprioritized.Thismakessense,asthekeyfunctionalityoftheplatformsistohandletheseformsofdata.

6.3.3OrganizationaldomainAsmentioned,therearemanypossibilitiesthatcollaborationcancreateinrelationtosmartcityinitiativesthroughthe IoTplatforms.CPHSolutionsLabbelievesthatthiscollaborationneedstohappenveryearly in thedevelopmentstageof IoTsolutions,andsays:“developers inCaliforniacan’tsitanddevelopsomethingfor6months,andthencometousafterwardsandexpectustopurchaseit,ifwearenotinvolvedfromthebeginning”(AppendixA1,41:25).Andfromthecity’sperspective,therecanbea lotofadvantages incollaboratingwiththeIoTplatforms,asNetplanexplains:“Inrelationtoimmaturetechnology,itcanbeverygoodtogetpartnershipswithsolutionproviderswhohaveagoodmarketpositionandalotofcapabilities”(AppendixA2,01:04:30).Butthestrategiesbehindthesecollaborationsorpartnershipsmightnotbecompatiblewitheachother.Fromthecity’sperspective,CPHSolutionsLabsais:“Itisnotaspecifictechnologyorsoftwarethatis thesolution.Thesolution lies in thedialoguebetweenourneedsandthesolutiondevelopers”(Appendix A1, 42:45). An IoT platform provider most likely also believes this dialogue isadvantageous,butsincetherevenuestreamsaredependentonthesalesoftechnologicalsolutionsprovidedbythem,theywillhaveastrategyrelatedtogainingmarketsizeandincreasinguseoftheplatform.Thisstrategymustnotbetooopportunisticinawaythatlimitsthepossibilitiesofcreatingan ecosystemof partnershipswith other solution providers aswell. Rasmus Blom, a partner inImplementConsultingGroup,wheninterviewedfortheanalysisofDanishcompanies’useofIoT,byIRISGroup,describes the situationas follows: “There isan increasing trend for entering the IoTmarketwithlargesolutionproviderslikeIBM,MicrosoftandEricsson,whoaremakingpartnershipswith smaller solution providers themselves, in order to create solution ecosystems. These largecompaniesknowthattheycan’tmaketheentireIoTsolutionthemselves.Buttheycanbecomeacentral partner for clients, and take responsibility for the complete IoT solution, which actuallyconsistsofpartnershipswithmanysubcontractors”(IRISGroup,p.60,2016).Here,thereistalkofan aggregator ecosystem, as opposed to the marketplace ecosystem. This might create some



competitiveadvantages,butcouldcreateproblemsifsubcontractorsarechanged,andtheservicevaries.Havingamarketplaceecosystemcould insuchascenariocreatemoretransparency,andperhapsevenincreasethemarketcompetition,whichmightaffectthetechnologicaldevelopmentpositively.The followingsegmentswilldescribetherelationwithsomeof themainactors in thevaluenetbesidesthecitymanagement:CreatorsSolutiondevelopersarealsoacustomersegmentfortheIoTplatforms.Theyutilizetheapplicationsandservicesontheplatform,todeveloptheirIoTsolutions,andsellthemundertheirownortheplatform’sbrand.Thesearethemarketactorsreferredtoascreatorsinthemarketreview.Butasmentioned in the statement fromRasmusBlom,partnershipswith solutionproviders canbeanimportantassetfortheIoTplatforms.TheycanincludeIoTsolutions,whichareshowingpotentialinspecificusecasesorsectors,andthroughthispartnership,becomemorecompetitiveinthesesectors.Thepartnershipscanalsocreatealotofvalueforthedevelopers.AconclusiontotheIoTmarketanalysisbyIRISGroupsuggestedthatDanishcreatorscancompetewiththecheapsensorsfromlargeinternationalhardwarevendors,byfocusingonqualityhardwareand-software,whichgivesthesensorsinnovativefunctionality(IRISGroup,2016).Thesecapabilitiesareeasierreached,if the developers focus on the innovative aspects of their solutions, and utilize a strong valuenetwork through the IoT platforms, to deliver other parts of the capabilities. Having a strongpartnershipwiththecreators,canalsoprovidetheIoTsolutionswithanumberoftangibleusecasesforthecitytosee.Cisconotesthisasanimportantwayforthecitytojustify investmentsinIoTsolutions:“thesolutionistofindthecorrectusecasesthatcanprovethevalueoftheinfrastructureinvestments,inrelationtotheneedsofthecityandcitizens”(AppendixA3,5:40).EnablersInrelationtopartnershipswith infrastructureproviders,thepotentialpartnershipswith internetservice providers is not the only possibility. Utility providers alsomanage central infrastructureelements, and investment in IoT solutions in relation to their infrastructure, can create manypossibilities for integrating IoT in the city. Netplan developed an IoT solution for utilities inFrederiksbergmunicipality,whichincludedcoveringtheentirecitywithWi-Fiaccesspoints.Wi-Fiwasselectedduetothecompatibilitywiththedevicesmonitoringtheusageofheatingandwaterintheindividualhouseholds.Theaccesspointswereinstalledinthecity’slights,whichhavefibreopticinternetconnections,andintheseaccesspoints,socalled“outdoormediagateways”wereimplemented, which makes it possible for future IoT solutions to plug directly into theinfrastructure.Netplansays: “Thecollaborationwith theutilitycompany,where thecostsof theinfrastructurewereshared,waswhatmadeitpossible inFrederiksberg.Now,IoTsolutionsareamatterof implementation rather than infrastructuredesign,which ismuchcheaper for thecity”



(AppendixA2,44:00).Thisstatementlooksattheinvestmentfromthecity’sperspective,butitisalsorelevantinrelationtotheIoTplatforms,astheycanformtightpartnershipswithinfrastructureproviders,andtherebymakesolutionsliketheoneinFrederiksbergpossibleinCopenhagen.Thepartnershipscouldshiftfrombeingsupporting,towardsmorestructuralpartnerships,bymergingtheutilityserviceswiththeIoTplatform.Butstructuralpartnershipsmightcreatesomemismatchwiththeneedsofthecity.CPHSolutionsLabsais:“Weusedtowanttohavetheinfrastructurefirst,beforeIoTcouldbeapplied,butthisthoughthasbeenabandoned.Nowitwillbeinsmallersteps”(AppendixA1,4:20).Soperhapscontributingpartnershipsarepreferredinsuchsituations,makingitpossibletobothprovidesmallscaleIoTsolutions,butalsohavingthecapabilitiesofscalingthesolutionsupincollaborationwithpartners,ifthisisneeded.

6.3.4FinancialdomainAlldomainsoftheSTOFmodelareimportant,butthefinancialdomaininparticularcanhaveseriousconsequences for thebusinessoperations, ifnothandledwell.The following foursegmentswilldescribehowIoTplatformscandealwithfinancialelements.InvestmentcapitalandrevenuesourcesAstheIoTplatformsoftenareprovidedbylargeITcorporations,theinvestmentsourcesarerathersubstantial.VenturecapitalistinvestinginIoTsolutionsinDenmarkhasrisenwith30%from2012-2015,butonly4%from2015to2016.ThisisprimarilylargecorporationssuchasGEandIntelCapital(ArthurD.Little&Telia,2017).Thehypemightbeoneofthecausesofthelimitedventurecapitalinvestments.Therevenuesdependontheamountofusageoftheplatform.Citieshavepotentialofbeinglargecustomers,astheycovermanyactivities,andsolutionsinrelationtotheseactivitiescanbescaleduptothecity’ssize.Incomparisonwithasmallcompany,whoisinterestedinusingIoTsolutionsintheirbusiness,butonlyhasasmallproductionfacility,thepossiblerevenueislimitedcomparedtothecity.Therevenuesarepredominantlysubscriptionbased,butsomeadditionalservices,whichmightbebundledwithintheIoTplatform,canbetransaction-based,basedontimeusage,orotherfactors(Forrester,2016).CostsInan IoTplatform,thatconsistsofmanydifferentcapabilitiesandtechnicalaspects, foreachoftheseaspects,thereisthequestionofeitherdevelopingandsupportingitinternally,oroutsourcingit.Bothvariationswillestablishcosts,butasthetechnicalaspectsareanintegralpartofthesolutionprovidedbytheplatform,thetechnologyisoftenownedandsupportedbytheIoTplatformprovideritself.Havingthesetechnologiesinternallyalsoprovidestheopportunityofcostsharing.Thesameequipmentprovidesmanyservices,andaformofeconomiesofscopecanbeapplied.Anexampleof this is the IoTplatformproviderswhohavetheirowncloud-anddatacentreequipmentand



solutions.Thesewillbeabletoimplementfunctionalitysuchasblockchainandserverless,inverycosteffectiveways.Byalsoproviding these services individually, theproviders createa formofmodularity intheirdesign,andthepossibilitiesofbundlingdifferentservicestogether increases,whichalsocanresultincost-sharingbenefits.ThetechnicalarchitectureissourceofthehighestfixedcostsintheIoTplatforms,buttheplatformswillalsohavecostsrelatedtomanyotheraspects,suchaspowerusage,internetconnectivityandemployeewages. The research and development departments should also be prioritised, sincehavingstateofthearttechnologyiswhattheIoTplatformsrelyon.Thiswillalsoinvolveratherhighcosts,butcanprovidesubstantialcompetitiveadvantages.Somevalueactivitiesmightalsocauseanincreaseincosts.AnexamplehereofisthepartnershipCiscohasestablishedwiththeCityofCopenhagen,inrelationtodevelopingIoTsolutionsinthecity.Asapartofthispartnership,CiscohasagreedtosupporttheDanishIoTmarketwith$100million,inareassuchasIoTstart-upsandapplicationdevelopment(COWI,2016).RisksourcesRiskswill be an aspect of any new technological solution, and IoT platforms are no exception.Especiallywith the uncertainty in standards, the security issues, and the difficulties involved inscalingsolutionsupafteraninitialteststage,therisksarenotfew.Thechoicesinrelationtothetechnical architectureneeds tobe thoroughlyplanned,asone solutionmight create somepathdependency.Bettingonthewrongtechnologycanthereforebecomeveryexpensive,ifshiftingtoanotherrequiresalargeamountofchangeinthearchitecture.PricingThepricingvarieslargely,butasmentioned,itisoftenintheformofsubscriptionsratherthansingleinvestments.Thismakesthepricemoreflexible,andcanbeadjustedtofitthechangingneedsofthecustomers.Manyplatformprovidersalsooperatewithpricesbasedonusage,alsoknownastransaction-basedprices.AnexampleisMicrosoft’sAzureIoTSuite,whereafreeversionsupports8000dailymessagesperdevice,andthemostexpensiveoptioncostskr.31.467perdevicemonthly,which supports 300million dailymessages per device (Microsoft, 2017e). Having a “freemium”version makes it possible for interested developers to experiment with the platform, which isimportantasthetechnologiesareintheearlystages,andthehypeisveryhigh.The prices also heavily imply the scale of the solutions using the platform, as the number ofmessages supported in the different options are very high. Additional analytics capabilities andotherservicesofcoursealsoincludesadditionalprices.Thesepay-as-you-gopricesincreasestheagilityofthesolutions,andmakesitpossibletotestsmartcityinitiativeswithouthavingtoinvestinmorethanwhatisneeded.Providingtheplatformbasedonaflexiblepricingisabigadvantage,



compared to an alternative scenario, where the customer would have to purchase the entirehardwareandsoftwaresolution,insteadofusingitasaservice.CPHSolutionsLabmentions:“Thereisatraditionofpurchasingequipment,owingandmaintainingitentirelywithinthemunicipality,andeventhoughtheevolution is thatwe increasinglypurchaseaccess tothe information, itwillprobablytakeawhiletobeusedentirely”(AppendixA1,30:10).Netplanidentifiesthistrendtobethecommonwayofprocuringtechnology:“Generally,themajorityofmunicipalitiesandregionswill purchaseas a service fromoperators, as it is not a key competencyof amunicipality to benetworkorplatformprovider”(AppendixA2,59:10).Ofcourse,thistypeofpricingalsohassomerisks,asNetplanpointsout:“Ifyoupurchaseasaservice,youhavetohavealotoftrustinasupplier,and that the service delivery happens in an agile, properway, and this is not always the case”(AppendixA2,58:20).Figure19belowillustratesthemainfindingsintheanalysisofthebusinessmodel.

Figure19-SummarizedfindingsfromtheSTOFanalysis(Author)

ServiceDomain•Createdialoguewiththecitytoclearlycommunicateintendedvalue•Categoriestheservicesinlevels•Expandanalyticalskillstocomplimentservices•Supportpublic-privateinnovation•Workonprofitableandenvironmentallyfocusedusecases

TechnologicalDomain•Createopennessthroughmodularity,bundlingandAPIs•Includesecurityandprivacyinallelementsofservices•Attainsectorspecificcapabilitiesandoptionsforadvanceddataanalytics.•Supportconstrainedalternativestocommonprotocols•Supportmultipleusertypes

OrganizationalDomain•Createmarketplaceecosystemtopromoteopennessinvaluenet•CollaboratewithcityonmakingbusinesscasesforpossibleIoTsolutions•Establishcontributingpartnershipswithbothcreators,enablersandoperators.

FinancialDomain•Acommodatecityrequirementsforscalabilityandinitialexperiementsbypricingper-useorwithsubscriptionplans•PrioritizeR&Dforcompetativeadvantages•Sharecostsoftechnologicalarchitecturethroughbundlingofservicesandinnovativedatafunctionalities



6.4ChapterconclusionThe requirement specification illustrated the complexity involved in IoT solutions for the cityofCopenhagen,duetothemultitudeofendusers,aswellasthewidevarietyofchallengesfacedinthecity. Inrelationtotechnologicalfunctionalities,themajorityoftheestablishedrequirementswouldnotbeaproblemtofulfilforthecurrentIoTplatformsonthemarket.Butaspecificfocusonthecity’s-andcitizens’needscouldbeimproved,particularlyinrelationtothepotentialIoT-andsmartcitysolutionshasontheenvironment.TheforecastindicatedthatIoTplatformsareintheearlystagesoftheirlifecycle,basedonthestill-increasingamountofhypetheyarereceiving,andthelowmaturitylevelofboththetechnologies,aswellasthesmartcityengagement.Themarketreviewrevealedattractivemarketsizes inthefuture,andarisingamountofconnecteddevices,whichworksasanincentiveforworkingtowardshigherlevelsofmaturity.WhenlookingattheelementsofthebusinessmodelforanIoTplatform,thetrends,whichmanyplatformprovidersareshowing,fitswellwiththerequirementsfromCopenhagen.However,therearestillaspects,whichcanbeimproved,inordertocovermoreoftheneeds,andcreatemorevalueinCopenhagen.Itisimportanttonotethatbusinessmodelsfunctionasaguideline,andneedstobeupdatedfrequently,inordertoberelevant.Thefindingsintheanalysisarethereforealsosubjecttochangeinthefuture,butbasedonthecurrentmarketconditions,technologicaldevelopmentandcityrequirements,theyproviderelevantinsights.Ingeneral,thereisabarrierinthedevelopmentofIoTsolutionsinCopenhagen,duetoalackofpositivebusinesscases,thatcanjustifytheinvestment.Ciscodescribesthisdilemmaasfollows:“ItisoftenadeadlocksituationwithIoTsolutions,becausetheyshouldbebasedonanetwork-andsensor infrastructure, and this infrastructure does not exist yet. The challenge is that theinfrastructure investmentshouldbe justifiedbasedonprofitablebusinesscases for IoTsolutions,andatthesametime,thebusinesscasesneedtheinfrastructuretobejustified”(AppendixA3,2:30).Thesolutiontothisdilemmaistoprioritizetheresearchanddevelopmentofusecasesthatcancarrythe infrastructure investments.Thiscanbedoneby findingsolutionsthatworkacrosscityverticals.Ciscoalsoindicatestheneedtoincludeafocusonthecitizens:“Ifthecitymanagementcannotidentifythepotentialvaluecreationfromintegratingsolutionsacrossthesilosofthecity,itmightbeadvantageoustotaketheperspectiveofthecitizens”(AppendixA3,8:15).Netplanalsosupports this approach, and indicates that involvement in this process is important for the IoTplatforms:“involvementintheexperimentphaseisawayofunderstandingtheneeds,whichcouldbeanapproachtobridgingthegapbetweenlackingknowledgeandaddedvalue”(AppendixA2,01:09:45).ForanIoTplatformtodoso inCopenhagen,animportantfocus istheenvironmentalgoals,whichthecityworkstowards.Thesegoalsarecreatedwiththecitizensinfocus,andarewhat



the technological and environmental committee, who are also in charge of the main IoTdevelopments,areaimingat.ThepotentialforIoTplatformsinrelationtosmartcityandIoTactivitiesinCopenhagendoesseemevidentforbothCopenhagenSolutionsLab,NetplanandCisco,buttheyallthinkitwillrequiresometimebeforebecominga reality.BoFinnemann fromCisco sais: “Personally, I think itwill takeacoupleofyearsforthemunicipalitytomatureandinvestintheinfrastructurebasedongoodusecases.”(AppendixA3,11:50).CPHSolutionslabbelievesthattheneedsofcitiesvarylargely,makingithardtofindonespecificIoTplatforms,thatworksinallcities.Theybelieveitistooearlytotell,ifa specific IoT platform can be used for the entire city of Copenhagen, and also focus on thedevelopment of profitable business cases for IoT solutions. Netplan believes the maturity isessential,andthemultiplerolesofthecitygovernmentcanbeabarrierforimplementingasingleIoTplatform:“ThecityofCopenhagenisverylarge,withmanydifferentneeds,whichcanmakeitimpossible to agree on a common platform” (Appendix A2, 1:08:00). However, they continue:“havingone central citymanagementplatform isnot completelyoutof thequestion,but it is amatterofwillandskills”(AppendixA2,01:06:40),andindicatesthatthereareadvantagesofgoingthatway:“ItisnotfinanciallyviabletoestablishindividualITsystemsforeachdepartment,sohavingoneplatforminthisrelationisabettersolution”(AppendixA2,01:07:00).The following chapterwill evaluate the findings from the analysis and the rest of the researchconducted,aswellascriticallydiscusstheoutcome.

Chapter7.Evaluationanddiscussion 83

7.1Relevanceoftheresearch

7. EvaluationanddiscussionIntheintroduction,itwasestablishedthatthereisanincentiveforcities,includingCopenhagen,toutilizethepotentialofnewtechnologies, inordertobecomemoreefficientandsmarter. Inthisrelation,thefieldofIoTisidentifiedasanintegralpartofunlockingthevalueoftechnologyforthecities.AtrendinthedevelopmentinIoTisforITproviderstoestablishaplatform,withthepurposeofaidingthedevelopmentofIoTsolutions.Basedonthisresearch,thefollowingresearchquestionwasestablished:HowcananInternetofThingsPlatformprovider’sbusinessmodelbeadjustedtomatchtheneeds

ofthecityofCopenhagen?Toanswerthisquestion,theresearchhasbeenfocusedonthreeelements:requirementsfromthecity,forecastingthetechnology,andanalysingthebusinessmodelforIoTplatformproviders.Firstly,therequirementsfromthecityindicatedaninterestintheadoptionofIoTingeneral,butalackofclearuse cases, andknowledgeofhowplatforms canbeutilized. Itwas found that the currentbusinessmodelofIoTplatformscontainelementsthatmatchtheneedsofCopenhagen,butitalsoillustratedareasthatcanbeimproved.Hereunder,openness,dialoguewiththecity,andflexibilityinbothpricingandsolutionsincludedontheplatform,aselaboratedintheanalysisconclusion.

7.1RelevanceoftheresearchInmuchoftheliteratureconsultedintheresearchforthisreport,thesmartcityvaluecreationisoftenmentioned as a possible use case for IoT solutions. Having it as amain focus for the IoTplatformsinthisreport,canthereforebeacomplimentaryinputtotheliteratureonthesubject.Furthermore,theuseofIoTplatformsoftenfocusondevelopmentofspecificsolutions,ratherthanthe ecosystem surrounding the platform, and the possibility of using it as a tool for citymanagement,whichmakesthisreportabitalternativeinitsapproach.Asmuch of the literature and existing research indicates, there aremany opportunities for IoTplatforms,butthemarketisatastagewhereseriousbenefitsneedstobeclarified.ThehypearoundIoTplatformsisreachingthelimits,andtangibleusecaseswithsolidbusinesscasestobackthemup, are in high demand. Providing insights into how themarket can collaborate and create anecosystemsurroundingtheIoTsolutions,ishighlyrelevant,andthisreportcancontributewiththeconsiderationsmadeintheseareas.

7.2TheresearchapproachTheresearchhadaninductiveapproach,duetothenatureofthetechnologyandbusinessmodelfocus.Theseelementscanbecombinedanddevelopedinmultipleways,makingastrictresearch

84 Chapter7.Evaluationanddiscussion

7.3Thetheoreticalframework

approachlessideal.Theoutcomeoftheresearch,basedonaninductiveapproachistoestablishatheory. In this research, the theory is that the findings from a combination of requirementspecifications,forecasting,andabusinessmodelanalysis,producesrelevantguidelinesfortheIoTplatformproviders inrelationtosmartcityactivities inCopenhagen.Somerelevantelementsofinductiveresearchdesignhavebeenleftout,tolimitthecomplexityoftheresearch.AnexamplehereofistheGroundedtheoryapproach,whichcombinesbothinductiveanddeductiveelements,in order to have amore detailed strategy for finding the theory (Saunders, 2011). This type ofresearchstrategyalsoheavilyreliesonempiricaldataintheverybeginningoftheresearch,whichdid not fit with the approach of this report, since the background research was necessary tounderstandthesubjectareasfirst.Nowthatthetheoryhasbeenestablished,itcouldbeinterestingtoconductasecondroundofresearch,whichhadmoreofadeductiveapproach,withthepurposeoftestingthetheory.However,withthenatureofthesubjectsinfocus,stillposeschallengesforapplyingthedeductiveapproach.

7.3ThetheoreticalframeworkThetheoreticalapproachofestablishingrequirementspecificationswasselectedwiththepurposeofattainingtangibleinsightsonCopenhagen’sneeds,aswellasanexperimentofapplyingservice-development practices in a strategic and analytical project. The specificity normally found inrequirementspecifications,andthefollowingevaluationofwhetherornottheserequirementsaremet,wasnotfullyutilizedinthisreport.Thiswasbothduetothegeneralizedmeso-levelfocus,andthelackofaservicedevelopmentstage.Thefunctionalrequirementsinparticularwasaffectedbynotbeingparticularlyspecific,whereasthemoregeneralnon-functionalrequirementsfitwellwiththescopeofthisreport.However,thetheoreticalapproachrevealedsomevaluableguidelinesfortheIoTplatforms’businessmodelstorefertolaterintheanalysis,andinthatregard,thetheorywasuseful.ForecastingthetechnologicalpotentialofIoTplatformsinrelationtosmartcitieswasagoalforthisresearch,bothinrelationtojustifyingthehyperelatedtothetopics,forthesakeofunderstandingthedevelopmenttrends,andtoseehowplatformscanevolvetobecomebetterinthefuture.ThehypewasanalysedbasedonGartner’shypecycle,which isdevelopedbyacompanywithmanyresources,butcanbesubjectiveandisnotparticularlyscientific.Sincehypeisadifficulttermtoquantify,itisnotentirelyvalidtoevaluate.Thecontributionitmakestotheresearchisnotnuanced,andcanbesubjective,butitindicateshowthetechnologyhasevolved,andhowitwilllookinthefuture, based on common trends. To attain amore nuanced forecast, thematuritymodelwasselectsasatheoreticalapproachtocomplimentthehyperesearch.Theestablishedmaturitymodelwasbasedon a numberof existingmodels, andused the researchof IoT, smart cities, and IoTplatformstoquantifythelevelsofmaturityineachfocusarea.Inrelationtotheresearchquestion,thematuritymodelcanbeusedasaroadmapforachievingmorevaluecreationinCopenhagen,asanincreasedmaturitycreatesbetterconditionsfordoingso.Inthatsense,thematuritytheoryis

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useful,anditalsocreatesanoverviewofthefuturepotentialofthetechnology,whichisusefulforthe forecast. In theearly stagesof the research, thematuritymodelwas intendedas themainelementoftheanalysis,butwassupersededbythebusinessmodel,asthefocuschangedtowardsvaluecreation.By using the businessmodel as a theoretical tool in the analysis, a comprehensive view of thecharacteristics of an IoT platform could be created. The STOF model includes a focus on thetechnologicalarchitecture,aswellastheentirevaluenetwork,whichispreferableinrelationtothefocusofthisreport.ThesefactorswerealsowhatmadetheSTOFmodelmoreappropriatethantheBusinessModelCanvas(BMC).Besidesthetechnologydomain,manyofthesameelementsfromthebuildingblocksoftheBMCarecoveredintheSTOFmodel,makingthetworathersimilar.Inboth theories, the amount of information available, highly affects the outcomeof the businessmodel analysis. Focusing on a single platform providermight have resulted in amore relevantoutcome. This could have been Cisco’s platform, as they already have a collaboration withCopenhagen Solutions Lab in relation to IoT and smart city solutions. However, for the sake ofmaintainingageneralizedfocusontheIoTplatforms,aswellasnotdependingontheinputfromonesolutionprovider,thiswasnotchosen.Ingeneral,havingmorethanoneortwotheoriesappliedinaresearch,canincreasethecomplexityto a level that limits the ability of reaching specific conclusions. The three theories used in theresearchforthisreportalsodoesthistosomeextent,buttheyarecomplimentaryinthesensethatthereisalogicalneedforeachofthefindingstheycontributewith.

7.4FutureworkDuetothetimeframeoftheresearch,aswellasforkeepingthefocuswithinamanageablescope,delimitationshadtobemade.Someoftheareasthatwereleftout,butcouldhavebeenparticularlyrelevant,weresecurityandprivacyelementsofIoTsolutions.Theywereaddressedbrieflyacoupleoftimes,butduetotheircriticalimpactonthedevelopmentofthetechnologies,anincreasedfocuscould have been beneficial for the research. Another element, which has been indicated bynumerous sources, as being the key to adopting IoT solutions in the cityof Copenhagen, is thefeasiblebusinesscases.MuchoftheworkdonebyCPHSolutionsLabinregardstoattainingvaluefromtechnologicalsolutionsliesinthisarea,soarelevantaspectoftheresearchinthisreport,couldalsobetounderstandwhatexactlythebarriersforfindingprofitablebusinesscasesare.The outcome of this research includes a set of guidelines and suggestions for the IoT platformproviders,soanaturalnextstep,couldbetodiscussthesefindingswithsomeofthecompaniesbehindtheIoTplatforms,aswellasthesolutiondevelopers,andthecityofCopenhagen.Thiscouldbothadjustthefindingsbasedonthenewinput,andperhapsalsohelpmaketheecosystemaroundtheIoTsolutionsmoreimprovedforvaluecreationinCopenhagen.

86 Chapter8.Conclusion

7.4Futurework

8. ConclusionInatimewherecitiesfaceincreasingchallengesduetourbanization,theintenseevolutionofhighly-capabletechnologiesproposesrelevantandinnovativesolutions.Thefieldsofsmartcities,IoT,andIoTplatformswasidentifiedaskeyelementsinthisevolution,andwerethereforeresearchedinthebeginning of this report. This research provided insights in the complexity of the three areas,includingkeyelementsdeterminingtheevolutionofeacharea.Inadditiontotheresearchonthestateoftheart,anoverviewofthecurrentmarketconditions,aswellasempiricaldatafromthemainstakeholders,wasdeveloped.ThemarketreviewandtheinterviewsindicatedthatIoT-andsmart city solutions have a lot of potential on the Danish market, but uncertainty in bothinvestmentsandcapabilitiesofthetechnologies,generatessomelimitationsforthevaluecreation.The combination of the initial research phase, and the empirical data gathering, provided thefoundationfortheanalysistobeinitiated.To answer the research question, the needs of the city had to be clearly defined, and relevanttheoriesfordoingsowereadoptedfromthefieldofservicedevelopment.Asetofusecasesandanoverviewof interactionexampleswereproduced, and combinedwith the information from thepreviousresearch,resultedinasetoffunctionalandnon-functionalrequirements,illustratingthecity’s needs. Due to the general focus of the research, the requirements were not particularlydetailed,butincludedrelevantfindings,suchastheneedforenvironmentalsustainability,securityandprivacy,aswellasflexibilityinthetechnologicalsolutions.Thesefindingswererelevant,astheycreateapracticalreferencepointforthebusinessmodelsofIoTplatformstoaccommodate.BeforematchingthebusinessmodelsofIoTplatformswiththeneedsofthecity,theusefulnessofIoT platforms in the context of Copenhagen needed to be verified. This was done through atechnologyforecast.Amaturitymodelwasdeveloped,basedontheresearchedcapabilitiesofbothIoTtechnologies,platforms,andkeyelementsofsmartcities.ThemodelindicatesthatmaturityofIoTplatformsisrising,duetothehighlycapableITcompaniesprovidingtheplatforms,aswellastheamountofIoTservicessupported.Factors,whichlimitstheoverallmaturitylevel,includesthetechnological limitations of IoT solutions, as well as the Danish market conditions, and theplatform’s low engagement in smart city activities. The maturity model was combined withGartner’shypecycle,whichindicatedahighamountofhyperelatedtoIoTplatforms.Theamountofhypeismainlyduetouncertaintyoftheplatform’scapabilities,indicatingtheyareintheveryearlystagesofbothadoptionandperformancepotential.TheoutcomeoftheforecastconfirmsthelargefuturepotentialofIoTplatforms,andthecharacteristicsofthematuritymodelinparticular,illustrateshowconditionsforvaluecreationcanbeimproved.The final element of the theoretical framework for the analysis consisted of the STOF businessmodel.Thetheoryallowedforathoroughanalysisofthefourdomainsinfocus,andindicatedkey

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7.4Futurework

areasofimprovement,forIoTplatformstocreatevalueinthecityofCopenhagen.Amongthemainfindingswastheneedforengaginginanecosystemaroundthesolutions,bybuildingpartnershipswithbothdevelopersandcitymanagement.Muchofthevaluealsoliesintheagilityandmodularityoftheservicesprovidedontheplatform,aswellasthetechnologicalcapabilitiessupported.Amainbarrier for adopting IoT and smart city solutions in Copenhagen was found to be the lack ofprofitablebusinesscasesforthesolutions,andthepartnership-andecosystemapproachtobothfunding,implementationanddevelopmentcouldbeawayofovercomingthisbarrier.Asmentionedintheintroduction,Copenhagenisnottheonlycityfacingthechallengesposedbyurbanization.ThetechnologicaldevelopmentrelatedtoIoTplatformsandsmartcityinitiativesisalsoexpandingglobally,which is indicatedby theglobal focusof thecompaniesbehind the IoTplatforms. The specific findings related to value creation in Copenhagenmight not be directlyapplicableinothercities.However,focusingoncities’needswhenofferingIoTplatforms,canplayanimportantroleintheadoptionofIoT,andimprovethewaycitiesapplytechnologicalsolutionstotheirchallenges.It can be concluded that some IoT platform provider’s business models are well equipped formatching theneedsof thecityofCopenhagen.However, thebusinessmodels canbenefit frombeingadjustedinboththeservice-,technological-,organisational-,andfinancedomains.Someofthe key elements for improving thematchwith city needs, includes establishing an ecosystemaroundtheservices,andprovidingflexibilityinbothpricing,technologyandservices.Furthermore,theplatformsmightachievecompetitiveadvantagesthroughsectorspecificcapabilities,andamoredirectfocusonthechallengesfacedinCopenhagen.TheimplementationofasingleIoTplatform,covering thevarious servicedomains inCopenhagen, isnotexpected tobe realized in thenearfuture.Buttheresearchinthisreportindicates,thatanIoTplatformcouldcreatesubstantialvalueforCopenhagen,andmakethecitybetterequippedforovercomingtheincreasingdemandsandchallenges.

88 Chapter9.References

7.4Futurework

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94 Chapter10.Appendix

AppendixA-Interviews

10. Appendix

AppendixA-InterviewsAppendixA1InterviewwithSuneFredskildfromCPHSolutionsLab.Pleaseseethedigitalappendixforasoundfilecontainingarecordingoftheinterview.

AppendixA2InterviewwithMortenKjeldgaard fromNetplan.Pleaseseethedigitalappendix forasound filecontainingarecordingoftheinterview.

AppendixA3InterviewwithBoFinnemannfromCisco.Pleaseseethedigitalappendixforasoundfilecontainingarecordingoftheinterview.

Chapter10.Appendix 95

AppendixB–STOFdomainfigures

AppendixB–STOFdomainfiguresDetailedfiguresforeachofthefourdomainsoftheSTOFbusinessmodel,asillustratedbyBouwmanet.al(2008):

AppendixB1TheServicedomain



AppendixB2Thetechnologydomain

Chapter10.Appendix 97


AppendixB3Theorganisationaldomain



AppendixB4Thefinancedomain

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