Smart Takes

In connected transportation, a new advertising age

Posting in Cities

Syed Hoda, chief of Cisco's smart transportation unit, discusses the massive business opportunity in connected transportation, and how it could change the way we work, play and live.

A transportation network that's connected lays the groundwork for more efficient operation, from better use of resources to on demand buses. (Just imagine: get to the bus stop, and call a bus to arrive.)

But a networked train, bus or car also means precision when it comes to heightened security. And what's more, it completely re-imagines the business model for display advertising. (In the future: ads for the film Rush Hour 4 -- only at rush hour.)

I recently spoke with Syed Hoda, chief of Cisco's smart transportation unit, to discuss the massive business opportunity in connected transportation -- and how layering a digital network on physical infrastructure could change the way we interact with public transport forever.

SmartPlanet: Transportation is a relatively new vertical for Cisco. What's the interest?

SH: We're having conversations with mayors and government officials: how do you make the city work smarter? Where do we start? It's not just green. It's about sustainability.

Transportation is really a very big area of focus for us. It started about a year and a half ago. We all kind of take transport for granted, as drivers and commuters. What we found is how important this topic is, how much attention it needs -- the industry is really coming to a market transition, and we think we're superbly positioned to drive where we're going next.

Transport is really important. The World Economic Forum did a survey of the top 30 cities in the world and asked the mayors, what area of the city is in most need of investment to upgrade infrastructure? The number one area was transportation over the next five [to] 10 years.

More tellingly, they were asked, "If you put a dollar into one of these areas, what area brings the benefit back to your city best?" Number one, by a factor of three, was transportation.

The role that transportation has played in the development of cities is huge. Phrases like, "All roads lead to Rome." Back in the '50s and '60s, in Atlanta, where I used to live, transportation wasn't that important. Today's trade hubs that are new -- Dubai, Hong Kong, et cetera -- are all transport hubs. It's important for mayors and governments.

The challenge in transportation is that it's going through a real big disruption cycle. More than ever, city governments are trying to make public transit a preferred mode of travel -- to be more green, to relieve congestion on roads, et cetera. It's an area that's top-of-mind.

In most cities, like San Francisco, people still tend to drive more. How do you make public transit more compelling, more user-friendly, a better, more preferred option?

SmartPlanet: What are the hurdles to implementing connectivity?

SH: The challenge is that security is a threat. We've done an OK job in airports -- you don't have a boarding pass, you can't get to the gate.

For mass transit in cities, we're not safe. We're exposed. We don't have a lot of video surveillance and connections there. There have been significant incidents in the world -- London, Moscow, Mumbai, Tokyo. It's a major threat. Most cities are losing money. They need to improve their profitability. They're looking for new ways to find sources of revenue.

Something's happening, technologically, that allows technology to be more relevant today in addressing these issues. That's the "Internet of Things." Now we connect things together: buses, trains, cameras, screens. This phenomenon, which also plays in buildings, is especially true in this [transport] sector. That's why today, we're making a very serious foray into this industry, more so than ever before. You can actually influence things.

SmartPlanet: What does Cisco bring to the table?

SH: The thing that's going on that allows us to be relevant is the convergence of the physical and digital networks in this space. Historically, this industry has thought about physical assets and infrastructure. They were all disconnected; siloed. To truly have real-time information, multimodal…the word "network" -- when they said it, they meant a number of stops along the line. When we say it, we mean our [IP] stuff.

You had an article on your site about real-time information versus transit schedules. It's important for consumers' convenience, but it's also important for officials. Whether it's streets or buses or trains, the need for real-time information [is there]. It wasn't really possible years ago, and it wasn't integrated.

What do you do with that ability? Example: you can now, from a security point of view, put cameras inside stations, trains, buses, relaying video to a control room and monitoring and assessing situations so resources can be sent to address incidents. There's a high-profile case for BART. Force used. Procedures. All kinds of questions came up because we didn't know what was going on. Just the fact that you have video everywhere makes it safer.

In the case of buildings and schools, et cetera, the use of video has changed the way security works.

SmartPlanet: In a time of tight municipal budgets, does additional security really save money?

SH: Security is a top-of-mind issue. You mentioned tightening budgets. In America, Homeland Security is budgeting for it. The U.S. government is funding initiatives to make transportation safer. Cities will have access to government funds to help drive improvements to infrastructure. Does it generate revenue? It doesn't. In a hierarchy of needs, though, it's an important issue. People want to feel safe.

The value proposition though, is that the infrastructure is the same you can actually use to generate revenue or make passenger experience better. By delivering broadband to a moving train, I can do security, but I can also deliver other services: Wi-Fi for passengers. We're actually testing this with a couple different cities in pilot projects, and it's going quite well.

You're going to have high-quality, video-conferencing ready Wi-Fi in trains. That's important for businesses.

By offering Wi-Fi, it's not just the revenue I'm making to sell Wi-Fi -- I could give it away for free. It makes it more compelling to take my train, rather than drive. Rather than drive from New York to Philly, I can take a train and be more productive. Same for a bus. I can relay local information, or I can sell ad space in my screens: real-time information messages, entertainment, et cetera. Anything you want can now be delivered inside a moving train or bus. That's the same infrastructure used for security.

SmartPlanet: None of this has to do with sustainability.

SH: There are two buckets: generating revenue; saving money. New York is a great example: how valuable is that space inside Penn Station, or Times Square, in terms of eyeballs? Massively. How much money was generated with ads in those spaces already? Millions, and that's using paper. Paper is boring. But now you can target -- it's not just selling advertising, it's changing the business model.

At one moment in time, imagine taking every screen in every bus and train station in New York at 5 p.m. on a Friday, all showing the same ad for a film. That is the same coverage as the Super Bowl. At the same time, I can sell space to a small Mom-and-Pop store in Brooklyn, only to the stops in their neighborhood. You can use those assets in a different way.

You and I on a subway on a Saturday afternoon have different needs. Why not have it customized?

At the same time, that infrastructure allows me to do a better job in planning. The operational benefits are enormous. In the past, there was very little flexibility built into the system. You couldn't dynamically do it well. For a sporting event in a mid-sized city, it was hard to do that before -- figure out how much I need on certain routes. Capacity is a perishable asset in transportation.

It's a huge number -- we just couldn't think about certain operational things before. In New York, real-time information is starting to roll out now because it's a massive system, and the policy and physics -- testing takes time. If I have broadband everywhere, I can change assets in and out rapidly.

This is a way to make it easier to adopt change.

SmartPlanet: What keeps you up at night?

SH: The different changes definitely keep us up at night. Three buckets: technology, process and policy, and risk. This is an area that you can't try things out without a lot of risk.

First, technology. It's getting there -- it's not fully there yet. For example, the buses in Los Angeles are completely equipped and ready for this: routers, Wi-Fi, et cetera. That's not the case everywhere in legacy systems like London or New York. The physical subway station, train or bus isn't always ready. As fleets are refreshed and stations are built, we'll be able to build things more readily.

The Atlantic/Pacific station in [Brooklyn] New York -- that's a newer station, a newer structure. More and more, trains and buses, the new models are equipped for this stuff. They have fleet management applications that are ready to go. New infrastructure drives a higher demand for these services.

For digital technology, that's also evolving -- the ability to deliver high-quality, high-speed bandwidth in a moving vehicle isn't sort of mass-market; it's in its early stages. It's by no means beta technology, but it's not mass-market yet. How many systems are doing high-speed broadband in a [local] train?

It's not just about cost there; it's about quality. We have some new things we're developing on our side for this.

Then, the stations and train end points: technology to help you as a passenger. The information you need from that subway or bus station being delivered to you; that's also new technology, much more user-friendly. It's a virtual concierge to help guide you through the possibilities in that city or locale.

Technology is moving along rapidly. But we're still early adopters. It's kind of like smart grid -- imagine connected buildings, but in a mobile way.

Second, process and policy. It's certainly a challenge. Who pays for what? Who decides for what? That governance is still relatively siloed sometimes. In Singapore, it's very easy. In other cities, it is complicated. Governance models and policy and process are different across many different regions of the world. You have to be ready for that.

Finally, risk. This is a place where cities don't want to be first very often. They have to see somebody else do it first. There are cities like Singapore and Stockholm that other cities are watching. Road pricing in London has other cities assessing it. We're at a point now where cities are trying something out.

SmartPlanet: Who or what drives this change?

SH: It's a combination of cities that are going to pioneer this. What cities are realizing -- and our point of view is -- you can't do a sort of "Big Bang" thing. You need bite-sized improvement.

The hardest thing here is prioritization. What do you do first. By taking bite-sized chunks, you reduce the risk and make it easier to roll things out.

It's like retail: if Walmart wants to do things in a store, they can't think of one store, they have to think of thousands. Same thing here -- I can't think of a bus, I need to think of the whole network. That approach is one thing we're definitely helping send that message to mayors. What is the right bite-sized chunk for your city?

You can do pieces and parts and do a roadmap. First, infrastructure to enable broadband. Then I'll turn services on -- what are the 15 services I want to do for passengers or my operational needs? Then figure out when and where and how quickly to turn them on. Moving from pilots to full roll outs in a very calculated way. It's not just about money, it's about making things work. The public uses this. If I screw up, it's very high profile.

SmartPlanet: Are any cities taking the lead?

SH: It's all over the place. Singapore, Tokyo, London, Mexico City are all setting the pace across the world. It's not just small cities or big cities. It's a combination. Where you have visionary and forward-thinking leadership in cities, you see things happen. People are demanding things. Mayors of cities are setting the standard and saying, "I want my city to be a world-class transportation hub to attract visitors."

Every city is different in America. Now take it to the world -- Brazil, India, China -- they're run so differently. To be able to go at it, understand the landscape and governance model, it's complicated. It's hard.

We're having conversations increasingly with people that aren't used to this kind of conversation. Mayors of cities, a lot of them are learning what Cisco means to their city. This is not a brand name they grew up with. City planners do not think about Cisco when they're in college. They are learning. Transportation planners are learning about a digital network. It's not loosely coupled with physical assets; it's tightly coupled.

More and more, the good news is, transportation is easier than the smart grid. Why? You, me, everyone -- we're users. We go on trains and subways. We're the experts on what we like, what works well, what doesn't. Have information in a station and on my smartphone. In some ways, some sectors are easier.

The conversation gets us the second date. That's all it does. We're finding that more and more mayors and governors are savvy and want to learn from other spaces. There was less 10, 20 years ago. Now, there's more of a feeling of, "I'm different." More leaders in the private and public sector are learning from the other. There's a lot of thirst for knowledge and best practices. Use what's working well in one industry for the other.

That gets us the interest. Eventually, you've got to do it: deliver something besides talk.

SmartPlanet: And the first step?

SH: Stop the bleeding. Get what you've got today. It's a long-term journey. The use of rail or buses or different modes of transportation…we're trying to help improve what they've got today. We think that with your physical fixed network, if you know what you need where, you can do a better job at using these things.

The other thing is the [fundamental] need to transport. We're working with Amsterdam on Smart Work Centers. It diminishes the need to travel -- workplaces that people can walk to, come in, log in, and the systems become my company's systems.

It's not just making trains and buses smarter, it's also reducing the need to travel. It's hard to plan cities that have grown faster than have ever imagined.

What's affected transportation at Cisco more than anything else? Video. In my typical day when I was working in Bangalore, 50 percent of my meetings were using TelePresence. It's not just money -- it's also time; the time it takes to travel from India to anywhere is way too much.

It's not just making these systems smarter, but it's other parts of Cisco that's changing the need for travel. Making it less important for us to be physically together. We didn't have that 20 years ago. It's not just about making my existing transportation system smarter, it's having that connection so that I know what I need.

Imagine in New York or London a subway system of one car, at a certain time of day. Having different sizes of buses. Real-time travel -- I use my smartphone to hit a key, and that's when the bus comes to a particular route. But I can't do that unless I'm connected: physical assets, mobile assets, people connected.

It's the ZipCar concept, applied to mass transit: use it when you need it, with a pay-as-you-go model. Moving freight around, not just people. But I can't do that well unless I have information.

One of the things we thought about when we said we wanted a transportation vertical is, "What does that really mean?" It's not one vertical, it's four: air, road, sea, rail. And they're disconnected.

It's eventually going to be bigger than the Internet. It's the whole world. But it will take time. It's an evolutionary thing. As the culture of people change, and the needs we have change, than transportation will catch up to remain relevant.

The reason why in America the trains don't run on time is because the culture in Europe -- Germany, Switzerland -- remains the driver of need. But our highways need to remain cleared of snow.

I want this. It's something I feel passionate about. I want to live in a world where transportation is smart and connected. It's a hard job, but as a citizen, I can't wait for it.

Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure