IBM: A Smarter Planet One City at a Time - Q&A with Rich Michos

Tue, 2013-05-14 12:05 -- Jesse Berst

 

If any company has carved out mind share as a smart cities thought leader, it is IBM. And the man responsible for IBM's smart cities messaging worldwide is Rich Michos, Vice President Marketing, Smarter Cities. There's a lot underneath that umbrella, including client engagement with innovative cities. This role gives him a truly global perspective and makes him a great choice to provide an overview of IBM's go-forward plans.

A long-time IBM veteran, Rich has held a series of senior positions. You could almost say he was born to the job, given that his father also worked at IBM. Just prior to his current job, he was Vice President of Corporate Strategy with specific focus on growing IBM’s business in Africa. Before that he was responsible for all aspects of IBM's channel, distribution and business partner strategy. Early in his career, he cut his teeth on mainframes and supercomputers.

Although he has a Master of Science in Computer Science, Rich comes across less as a technologist and more as an au courant advertising/marketing type. When he's not flying around the globe for IBM, you might catch Rich running or playing guitar.

During our conversation, Rich made several points that stood out to me:

  • Yes, IBM is intent on building a smarter planet. But they realize they will have to do it one city at a time
  • The proliferation of smart phones is creating a platform for both 1) gathering smart city-relevant data and 2) delivering smart city applications
  • The best way to solve the financing challenge is to start with projects that save a lot of money, then use the savings to finance the next project

Read on for details and to hear his other viewpoints on the burgeoning smart cities marketplace.

 - Jesse Berst , May 2013

Why the increasing attention to smart cities?

The need for more efficient services. Urbanization and population growth are putting stress on existing systems. Smart city technology can help deal with capacity limits and infrastructure strain. Those challenges then become opportunities to improve the city.

Cloud computing is also a driver of smarter city projects, as now even smaller cities can get results through the efficiencies of shared services.

Our previous CEO Sam Palmisano evangelized the smarter planet concept, and the idea that cities can leverage many of today’s innovations. Yes, we are going to help build a smarter planet, but we will do it one city at a time.

What stands in the way of rapid adoption of smart cities technologies? 

In some cases, political will and lack of motivation. For another, the legacy of how cities were formed and organized. Data resides everywhere and it has rarely been well coordinated.  Today every advance is a function of data, so if you can integrate it you can move much faster.

There are also challenges from budgets and governing structures. Democratically elected officials facing frequent elections often have a hard time painting and executing a long-term vision.

Is technology a gating factor? Or do we have the building blocks in place already?

We can leverage several things that have now become commonplace. For instance, we can leverage smart phones and telecommunications networks. They are not only devices for communicating, but they are also sensors to generate data. They are a source of data capture.

Have you seen any creative or new ways to solve the financing challenge?

Yes, by using technology to save money and then reinvesting the savings. In other cases, such as the example of South Bend, Indiana – home of Notre Dame University –innovations in sensor technology and integrated operations avoided millions of new infrastructure investment in the management of water and sewer systems. It's not glamorous, but it's how smarter infrastructure can pay for itself, and often generate savings to pay for other things. (Read more about the South Bend success story or watch a short video on the project.)

Can you cite any governments doing a particularly good job with policy to promote smarter, more sustainable cities?

Policy and capability often go hand in hand. In London and Stockholm, they had to deal with central city congestion. They instituted congestion charging. That was a policy choice that gave them the capability to solve their problem.

Dubuque, Iowa was having issues around rising water rates. They engaged 7% of the population in a pilot project that gave them access to information about their water usage. When they started seeing their usage they found ways to reduce it. With the success of the pilot, the city then rolled it out widely. (Watch a brief video about the Dubuque project.)

IBM is helping some of its city clients with social sentiment analysis. Getting that citizen feedback is key, especially since issues and preferences vary by city. In India we looked at public transportation preferences in Bangalore, Mumbai and Delhi. Safety was the number one factor in one city, timeliness in another.

Can you cite any governments doing a particularly good job with citizen engagement?

Rochester, New York had a difficult time when Xerox and Kodak both contracted their workforces. So city leaders got together with academia and other stakeholders to increase access to affordable healthcare. IBM and the University of Rochester helped to do the analysis. The city worked very hard to educate and inform the population about its Healthier Rochester program.

Has the smart cities market hit the tipping point?

I can't see anyone retreating from the progress they are starting to hear about in other cities. Cities are leveraging technology to be safer, healthier, better places to work. Woe to those cities that lag behind. They are competing for business, for talent, even for artists and musicians.

How fast will the market grow?

This is not the Internet boom, but we expect double-digit growth for as far as we can see. The market will be at $30-40 billion in five years.

How important is the smart cities market to IBM?

It is really about emphasizing our capabilities and our integrated solutions. The things that enable a smart city are analytics, cloud, mobile and social media. Those things drive our strategy. Mobile technology – smart phones and devices – creates a platform and a source of data. Cloud services make everything affordable. And social media is another source of data on citizen needs, preferences and sentiments.

What is IBM's role in the smart cities ecosystem?

Our capabilities distinguish us – our cloud and big data innovations, our intelligent applications, our integrated operations centers. Then come our services – we can come in and put a plan together to make it happen in collaboration with governments and local partners. And beyond that are our great resources in research and development.

What is IBM doing better than any other company?

Our ability to apply innovation. We spend a huge amount of money on R&D, $6 billion per year and we have not wavered from that. But everything we do is geared to practical applications. For instance in Rio de Janeiro, we've been able to implement a flood warning system that came from IBM research. They can do predictive modeling of weather all the way down to the city block. They can see with great precision what will happen, can evacuate citizens accordingly and have cut their emergency response time by one third.

When IBM wins in a competitive situation, why does it win?

If we go in as individual pieces of the company, we can lose. But when we leverage the total capabilities of IBM, we generally win. We can go in and talk to visionary leaders, get our arms around the problems, and then make it happen. We can deliver the entirety of the needed solutions.

What is a favorite smart city pilot or project you've seen recently?

There is a port city in China that is doing very cool route optimization. They factor in weight, volume, depth of the water, tides, etc. They've been able to save 30 to 40% in time and port charges.

There's a California County that is dealing with the state of California's decision to send nonviolent offenders back to the counties. We were able to help them gatherdata from various places including social services and the department of corrections. Then, using analytics, we prepared an individualized program for each person to track them, to be aware of their propensities, to cope with their health issues, etc. It saved money and it lowered recidivism.

What is the single most important thing a city leader should do today to position his city for leadership and success?

I am an advocate of having a vision. I think it's very important for city leaders to think like a CEO. Recruit great partners and develop a plan. It won't all be executable in a short time, but it will give a context and a destination. My advice is think long, act short.

Nice, France has begun its pursuit to become a technology hub. They have a plan. They know where the rail needs to come in.  They know they need to make changes around the airport. They know they have challenges in managing wastewater. And they have specific plans for different parts of the broader coastal area.  There are 47 cities in the greater metropolitan region. The plan creates not just a successful city but a successful region.

Or consider Miami.  The city leaders are pursuing a vision to expand beyond a vibrant services and tourism economy by implementing practical solutions now.  They are finding leaks in their water system. They are applying analytics to burglaries to identify the top suspects. And so on. They started with the vision, now they're putting the pieces together.

What do you want city leaders to know about IBM?

Our people live, work, play, learn and worship in these cities. They are our homes too. There is a real interest, a real passion to make our cities better.  These problems matter as much to IBMers as they do to you (city leaders).

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05/14/2013
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