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Well... it is great that today the Government of India has committed to partially fund the Smart Cities Initiatives and part of it will also come from the respective State Government. It is my presumption that it is perhaps also in a way applicable to smart cities projects in other parts of the world too.

But... as the smart city projects start taking shape and start their implementation, it will create a very large ecosystem of hardware and network infrastructure, software applications / solutions and support staff along with its user communities of city authorities, citizens and service providers. And what it means - hardware will have to be serviced, repaired and refreshed as time goes by; software upgrades will have to be implemented, newer services will have to be in incorporated to be handled by the software applications / solutions; network infrastructure will need to managed, maintained and upgraded; and data-center spaces will have to be increased and enhanced. Most importantly, it will generate huge volumes of diverse data of all sorts and on all aspects of the smart city management and its administration.

It is all good and great as long as the funding keeps coming in. There are no issues on spending it on all of the above. The question is - What happens when this funding support stops? And it will stop one day for sure; then who pays for "keeping the lights on" or do these smart cities just continue to be a burden on the Exchequer? Also, one needs to understand that the costs for sustaining a smart city ecosystem will only rise with passage of time.

So, what is the solution? 

A "self sustaining ecosystem" with a business model to generate revenues and actively seek opportunities and avenues to monetize it. In fact, it is very important that "monetization" is one of the core objective in every stakeholder's business plan from a long-term perspective. This objective needs to be "build in" the smart city project from its very initial conceptualization stage itself and re-validated and reviewed at every critical stage of the smart city project.

For example, 

• The demographic data generated can be sold to Advertisers
• Value-added smart city services can be charged a nominal extra
• Network infrastructure can be used to provide managed services to business users
• City data can be analysed and offer "analytics as a service" to businesses
• The traffic can be monetized over the smart city network
• End user Software Delivery and End point security can be charged on "per use basis" rather than sold as one-time "per user license basis"

In fact, one will have to be creative and think of "disruptive" and "innovative" ways to captialize and generate substantial ROI. Most important, all stakeholders will have to put their minds together on this and also demonstrate a sense of accommodating, accepting, acknowledging and supporting each other' s "monetization" milestones.  

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Smart City Business Model Smart Cities network infrastructure