What a noted research firm got wrong about the future of smart cities

Wed, 2015-12-09 06:00 -- Doug Peeples

Gartner, the highly regarded analyst firm, has predicted where to expect growth in connected devices. As you'll see below, they think it will occur in smart commercial buildings and smart homes.

I have two issues with these forecasts. First, the projections for smart homes are overblown. That industry is still making two big mistakes. For one thing, their gear is still far too hard to install and set up, typically requiring a professional installer (even if they claim otherwise). For another, they are still foolishly pursuing one-off, proprietary, individual solutions instead of interoperable platforms. Today you need a separate app to talk to your connected LED lights, a second one to talk to your connected oven, a third one to talk to your security system, a fourth different and incompatible app to control your media center, yet another for your smart refrigerator, etc., etc. Few consumers want that kind of patchwork system.

Second, by focusing on the number of connected devices, Gartner is giving a misleading view of likely revenue growth. Even though more devices will be installed in smart commercial buildings, far more money will be spent on smart traffic and smart energy. -- Jesse Berst

Gartner expects smart cities will be using a lot more connected things, like sensors and other devices, in 2016 than they are this year, a very substantial 39% more.

The company also sees smart commercial buildings and smart homes to continue as the sectors with the highest concentration of connected things and the fastest growth rate over the next few years.

“Smart commercial buildings will be the highest user of Internet of Things until 2017, after which smart homes will take the lead with just over one billion connected things in 2018,” according to Bettina Tratz-Ryan, Gartner’s research VP.

Why commercial buildings?
She also explained why IoT is so prevalent in smart commercial buildings and will continue to be. IoT integrated into building information management systems provides commercial property owners with an encompassing view of facilities management and operations from the data gathered by numerous sensors. “Especially in large cities, such as industrial zones, office parks, shopping malls, airports or seaports, IoT can help reduce the cost of energy, spatial management and building maintenance by up to 30 percent.”

City leaders embarking on smart city upgrades or well on their way may want to keep in mind that commercial security cameras and webcams and indoor LEDs will account for the overall growth in the sector, at least until 2018. “Incentives into the deployment of IoT in commercial real estate will fuel its development,” Tratz-Ryan said.

Forecast for smart homes
The items responsible for IoT growth in smart homes are what you would expect: smart TVs, smart set-top boxes, smart thermostats, security systems, appliances, light bulbs and more. “The growing maturity of smart home platforms through an ecosystem of kitchen appliances, infotainment and home sensors will mean that smart home investments overtake those of commercial buildings in 2018.”

Next year, Gartner forecasts smart homes will account for 21% of IoT operating in smart cities. Transport and utility sectors are ranked third and fourth in terms of numbers of connected devices installed and also are expected to grow into 2018.

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 Doug Peeples is a Portland, Oregon-based writer specializing in technology and energy. Follow @smartccouncil on Twitter.