Huawei’s Not-So-Smart City strategy

Huawei unveiled its Smart City strategy at a recent event in China, but several major omissions revealed it needs to get a lot smarter yet.

The concept of the smart city is one of the main driving forces behind the development and implementation of the Internet of Things, as central and local governments seek new means to cut costs. Research firm Markets and Markets estimate the smart city segment to be worth $757.74 billion by 2020 with energy consumption, transportation and healthcare notable areas of excitement.

This drive has not gone unnoticed by the technology giants of the world with major player’s cosying up to decision makers in the public sector, seemingly playing the long-game to sniff out big public sector contracts. Huawei is no exception to this rule, and already have a number of pilot schemes to demonstrate the effectiveness of its solutions. On the surface, Huawei is taking a very considered approach to the implementation of the technologies as Jo So, CTO of industry solutions in the Enterprise Business Group offered an in-depth briefing on the strategy, but under scrutiny from several sceptical UK journalists, cracks began to appear.

Firstly, one of the more veteran members of the UK party examined Huawei’s approach to the implementation of smart cities, questioning whether the top-down approach was sensible. All examples of smart city implementation given by the team were led from the top-down. Whether this would be greater energy efficiency technologies in government buildings or traffic lights which automatically switch off at a certain time in the evening, the smart city implementation is geared towards improvements in management not towards benefiting the citizens directly.

A successful implementation of a smart city solution is one which is done in conjunction with support from the citizens themselves. It requires the consent of the general public, mainly due to the vast amount of capital which is required to get such a proposition off the ground. Over the last few years, we have seen a huge number of successful programmes launched around the world, including a proactive healthcare project in Leeds, as well as a smart energy grid programme in the City of Groningen; both of these projects were led from the bottom-up through consultation with the general public, but perhaps more importantly, offering direct benefits to the citizens themselves. Through demonstrating the value of a smart city solution to the citizens, both these authorities were granted greater freedom to undertake future opportunities.

This would not appear to be the viewpoint of the Huawei team as such an idea was shot down. A couple of journalists spoke to at the event came to the same conclusion; the solutions which companies like Huawei is providing are what administrators believe the town or city needs, but not what the citizens want. Huawei believes the administrators have the “people’s livelihoods” at heart, though there was little evidence to support this during the presentation. Without the support of the public, such capital-heavy projects are unlikely to continue indefinitely.

The second crack which appeared was brought about from a question from which focused on the development and implementation of standards. We asked whether Huawei was concerned a lack of standardization of the smart city, data protection, big data and artificial intelligence (etc.) would slow down or even prevent the implementation. The answer was simple; of course it won’t.

While Huawei is not entirely to blame for the lack of standardization, regulations and over-arching policy concerning the implementation of smart city solutions (the team did in fact point out it contributes to the development of such standards) it does demonstrate a glaring oversight in the overall Huawei smart city strategy. The assumption a lack of standards will not slow down implementation is one which may be incorrect.

For the most part, public sector organizations are risk adverse. Yes, there are test sites and pilot projects around the world to demonstrate the viability of a smart city, though this is a long-way from mass market adoption. Decision makers in both local and central governments are generally elected officials in western societies; they are subject to the scrutiny of the citizens of the town or city. Any decisions which are made will be supported and criticized. Spending millions on projects which are not underpinned by standards or regulations is unlikely to be a popular decision. This point does not seem to have been received by the Huawei team.

This is not to say Huawei has not been successful to date. The projects which were outlined to the room were sound. They demonstrated strong ROI and achieved the outlined objectives, though any failed projects were unlikely to be shown to journalists at Huawei’s flagship event. But the point remains; Huawei hasn’t seemed to grasp the complexities of the smart city segment, which would be seen as a luxury in the eyes of the general public for the moment. For, the Huawei smart city strategy doesn’t tick all the boxes.

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One comment

  1. Avatar Sardar Muhammad Ahmad 21/09/2016 @ 5:40 am

    Nice article Jamie, thanks.
    As you know that typically companies segment their market and take a phase wise approach. Huawei seems to be targeting Public sector first to: 1. Share the risk/cost of pilot project with the Govt. bodies 2. Immediate cash stream. 3. Mature its product before going to consumer. Once this public sector segment gets stable, Huawei would have matured its product, it would then launch in consumer segment which usually has a more long term return on investment.
    Secondly, as we have seen in the standards game in upcoming technologies (3gpp vs. CDMA;;; Blue ray vs. CD etc..), different vendors may start with their own set of standards. And whoever emerges as a global leader gets its standard adopted. And I think Huawei is no different in that case.

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