In a new report on smart cities, Boulder, CO-based Navigant Research (formerly Pike Research) names IBM (News - Alert) and Cisco as the current marquee players in this sector, with several vendors waiting eagerly in the wings for their own opportunities.

The smart city concept promotes new, integrated approaches to municipal operations–spurring innovation in cross-functional technologies and solutions. Indeed, smart city projects often span several industry and operational silos – among them, energy, water, transportation, buildings management and government services.

According to the findings of the “Navigant Research Leaderboard Report: Smart City Suppliers,” the widespread interest in smart city programs is creating a global market opportunity. The analysts forecast that the global smart city technology market will grow from $6.1 billion in annual revenue in 2012 to $20.2 billion by 2020, a compound annual growth rate (CAGR) of 16.2 percent. This represents a cumulative investment of over $117 billion in smart city technologies between 2012 and 2020.

The researchers selected IBM as one of the industry’s two leaders because the company’s commitment to smart cities has become a key component of its broader Smarter Planet strategy. Its continued investment in research and development (R&D), products, and city engagements has allowed it to maintain its leadership position despite the growing number of heavyweight competitors.

Above, a chart of smart city vendors, courtesy of Navigant Research
Cisco’s (News - Alert) investment in smart cities also is notable. Its market-leading position reflects its early work with pathfinder cities, such as San Francisco, Barcelona, Amsterdam, and Songdo, as well as its evolving approach to working with a wide range of other cities and communities and a strong group of industry partners.

However, several other companies are contending for top positions in the market. Global infrastructure providers are particularly notable in their commitment to supporting urban development challenges and articulating a more integrated approach, spanning multiple elements of their portfolio. The researchers say that Schneider Electric, Siemens, Hitachi, and Toshiba (News - Alert) stand out for their efforts in this area, commenting that “The ability of these companies to work with cities to realize their vision for smart urban infrastructures will be critical if the promise of the smart city concept is to be realized.”

The Challengers group in this Navigant Research Leaderboard Report comprises suppliers that are targeting the smart city opportunity, but still have work to do in terms of establishing a broad market presence or a clear vision. Several of these players are developing smart city offerings based on their support for government services—including both enterprise software companies (Oracle (News - Alert), Microsoft and SAP) and IT services companies (Atos and Capgemini). “The challenge for these suppliers,” the researchers believe, “is to show they can offer cities a broader range of capabilities that go beyond traditional front- or back-office services and applications.”

This Navigant Research Leaderboard Report offers an evaluation of leading players with the capacity to provide leadership on large-scale smart city projects spanning multiple operational and service areas. The report evaluates 15 leading smart city suppliers positioning themselves to become global leaders in the market, and rates them on 10 criteria for strategy and execution, including vision, go-to-market strategy, partners, product strategy and roadmap, geographic reach, market share, sales and marketing, product performance and features, product integration, and staying power. Using Navigant Research’s proprietary Leaderboard methodology, vendors are profiled, rated, and ranked with the goal of providing industry participants with an objective assessment of these companies’ relative strengths and weaknesses in the growing global smart city market.