redseer smart solutions: qatar

Smart Solutions Market: Focus Qatar

RedSeer | Consulting

Summary

In today’s fast changing world, smart solutions such as self-sufficient energy homes, efficient utility services, self-driving cars, smart healthcare based on wearables, etc. which were just a pipe dream a decade ago are now a reality. Rapid advancement in areas of IoT (Internet of things), Big Data, Machine Learning and communication technologies have allowed these solu-tions to become economically feasible and to enter mainstream.

Rapid urbanization is also mandating the need for smart city solutions. Experts' worldwide point out that smart cities will be the future enablers in accelerating economic growth and improving the quality of citizens' lifestyle. World over, individuals, cities, as well as countries are looking at avenues to embrace these smart solutions and are making them parts of their civic planning agendas.

While not as mature as Europe and the Americas, the MENA region is no newbie when it comes to smart solutions, with large projects already underway in the GCC countries. In this paper, we explore the state of the smart solutions market in Qatar, analyse the various segments, future growth trends and look at challenges that need to be overcome to grow the segment success-fully.

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What are smart solutions and what makes them smart?

Technically, “Smart solutions are integrated socio-technical systems that link clean technologies through data and that integrate users and individual behaviour in the form of a wider service and busi-ness model.” In simpler words, any technological innovation/ solution which can help us conserve energy and time and can be automated with minimal human intervention is a smart solution.Smart solutions can be broadly classified into the following segments based upon the area of applica-tion (as shown in figure 1):

Figure 1: Smart Solutions Segments

Smar

t Gov

erna

nce

& Sm

art E

duca

tion

e-Government

e-Education

Disaster Managemment Solutions

Smart Signalling

Automated Parking Guidance

Transport Data Manage-ment

Predictive Traffic Analytics

Automated Route Guidance System

Freight Management

Predictive Analytic for Passenger Travel

Smart Ticketing

Sensor networks

Digital Water & Waste management

Building Automation

Intelligent Buildings: Advanced HVAC, Lighting

E-health & m-health systems

Intelligent & Connected medical devices

Surveillance

Access Control

Central Control rooms & response centres

Smart Grid

Smart Meters

Intelligent Energy Storage

Smar

t Inf

rast

ruct

ure

Smar

t Bui

ldin

g

Smar

t Tra

nspo

rtat

ion

Smar

t Sec

urity

Smar

t Hea

lthca

reSm

art E

nerg

y


Firgure: 2: Smart City

Any city which has a full-fledged infrastructure for at least five out of the eight elements is typically called a “Smart city” (as shown in figure 2):

Smart Security

Smart Governance

Smart Building

Smart Education

Smart Healthcare Smart Energy

Smart Infrastructure

Smart Transportation

100%

57%


Global Smart Solutions Market

Market Split - 2017F

% of Market(by value)(in USD Bn)

Figure 3: Market split by geography & segments

split by segments

We estimate the global market for Smart solutions to be ~USD 425 Bn currently. Asia Pacific & North America are the top 2 markets while Smart Governance & Education and Smart Energy are the top 2 segments globally (as shown in figure 3).

Figure 4: Global smart solutions market size(in USD Bn)

This market is expected to reach ~USD 1200 Bn by 2022, growing at an annual CAGR of ~23% (as shown in figure 4).


Smart Energy

Smart Security

Smart Governance & Smart Education


14%

9%

Smart Healthcare15%

Smart Building10%

17%

14%

21%

split by geography

Middle East & africa

Asia Pacific

Europe

North America

North America

3%

3%

34%

29%

31%

~425

~425

~4252017F

2022F

~1200

CAGR~23%


Global smart solutions market is primarily driven by:

Increase in demand for energy-efficient systems owing to stringent energy saving laws across the globe.

Accelerated push for smart cities and infrastructure growth in emerging countries such as India, China, UAE, Qatar etc.

Technological advances such as advancement of IoT and evolution of cloud based solutions for automation systems.


We estimate that opportunity for smart solutions in Qatar currently stands at ~$800 Mn while the cumulative opportunity over next 5 years stands at ~$4.7 Bn with Smart Buildings and Smart Transpor-tation being the top 2 segments (figure 5):

Figure 5: Qatar’s smart solutions opportunity size-split by segments (in USD Bn)

Smart Solutions Market in Qatar

~4.7

~0.2

~0.3

~0.4

~1.0

~0.36

~1.7

~0.66

4%

7%

9%

21%

8%

37%

14%

Mega Projects: Potential Smart Solution Market (2018-2022)

Smart Governance &Smart Education

Total Market Size

Smart Energy



Smart Healthcare

Smart Building

Smart Security

% of Market(by application segment¹)(in USD Bn)


This huge opportunity in Qatar over next 5 years is driven by the mega projects in run-up to the upcom-ing World Cup as well as Qatar’s National Vision 2030 leading to an investment of more than $ 200 Bn in Qatar. For example, Qatar is building seven new stadiums for hosting the upcoming FIFA World Cup 2022 & has multiple upcoming projects in the transportation segment as well with the key projects being Qatar Metro, Expressways, and Doha Port which provide good opportunity for smart solutions. Construction and transportation form 80% of the megaproject spend in Qatar (figure 6):

There are two business lines in the smart solutions market; namely Product and Value-Add (includes design & Installation of smart solutions) and Service and Maintenance (includes after sales service & replacement for smart solutions). In Qatar, Product & Value-Add currently have ~84% market share which is expected to reduce to ~72% by 2022 owing to the increasing revenues from Service & Mainte-nance and hence, it would be a highly lucrative offering type for the smart solutions market over the next few years.

Figure 6: Split of planned mega project investments in Qatar - By sector

Figure 7: Qatar’s smart solutions opportunity size -split by offering type (in USD Bn)

~0.8

~4.7

Construction

Transportation

Oil & Gas

Power

Water

Service & Maintainence

Product & Value-Add

~16% ~28%


2017F 2018-2022F

~84%

~72%


RedSeer capabilities: Sample case study

The client, an integration and installation service provider with narrow product focus in Qatar, wanted to assess the larger smart solution market and explore opportunities in other segments of smart solu-tions. The key challenges that the client faced were:

Narrow product focus in low margin portion of smart solutions market.

Lack of understanding of the smart solutions market landscape in Qatar & potential opportuni-ties in the short term and medium term.

Limited processes and skills in the organization leading to business done on a bilateral basis with limited business planning.

RedSeer assessed the market and recommended a go-to-market strategy for the client. We took the following to help the client:

The study helped the client to develop an in-depth understanding of smart solutions market in Qatar and develop the ramp up plan to develop its capabilities.

Market potential assessment: We assessed the market potential by building a detailed bottom-up mega-projects based market sizing model. This was further refined using a statisti-cal model which correlated macro-economic indicators & smart solution market. Finally, the market sizing was triangulated with inputs from industry experts & industry reports.

Opportunity Prioritization: We prioritized the lucrative product segments basis market size, synergy with existing client capabilities & competition intensity in Qatar market.

Go-to-market strategy: We developed the value proposition for the client and identified the key capabilities that will give the client the differential advantage in the market on a sustained basis.

The outlook for smart solutions in Qatar seems very positive owing to the abundance of oppor-tunities present for smart solution providers especially in Smart Building & Smart Transporta-tion segments as they offer a combined opportunity worth ~$ 2.7 Bn over next 5 years. Players in the market should develop capabilities in both “Product & Value-add” as well as “Service & Maintenance” offerings as it would enable them to capitalise upon the additional (including replacement) opportunities.

However, our analysis has also shown that Qatar is expected to face challenges during the adoption of smart solutions such as high cost of implementation, technical difficulties due to lack of skilled experts and lack of end user awareness. Hence, Smart Solutions companies present in this region and others that want to enter this geography, need to build on their techni-cal skills either through in-house or third-party programs, need to leverage their partners or even consider joint ventures with companies that can provide it better technical know-how.

Conclusion


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AuthorsSandeep GanediwallaManaging Partner, MENA Region

[email protected]

Sandeep is a digital strategist with a focus on emerging markets with 14+ years of experience in consulting and technology.

Thanks to our contributors: Vivek Singh and Akanchha Jaiswal

Swati NigamEngagement Manager

[email protected]

Swati has 12+ years of experience spanning from working with Financial Services clients, Fintech startups and technology companies in the USA and Asia regions.

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