#111 Realizing Smart City Potential

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on Thu Oct 27 2022 00:00:00 GMT-0700 (Pacific Daylight Time)

with Darren W Pulsipher, Eric Hornsby,

In this episode, Darren talks with Eric Hornsby, CEO of SmartPoint.io, about technology for realizing smart city potential.

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Eric had a long career in the data center and, more recently, in the digital signage space. His passions are project management and technology deployment and operation. Eric and his team were part of an LG Electronics joint venture company that deployed outdoor digital signage, primarily for advertising applications in dense urban areas, transit venues, and city streets. They learned a lot about other applications in those environments that compute resources and other forms of connectivity that would help enhance the experience brought on by IoT. SmartPoint.io was born out of that ecosystem and a desire to work with and drive opportunity and advancement in that market space.

In the data center, Eric was part of a lifecycle solutions company that helped companies optimize server storage and network hardware from an acquisition, a refresh cycle, and everything in between. His role was focused on helping the channel of companies that sold those solutions, but also how they were purchased, financed, and how they depreciated over time, so he learned not just about the technology but how people were using it and managing that value as an asset on their balance sheet.

When people talk about smart cities, they think of resilience, equity, efficiency, and cost-effectiveness. Cities provide essential services such as roads, public safety, water, and sewer. The primary thing a municipality brings to its citizens is starting to include connectivity, the ability to access computing, and taking advantage of technological advancements to help provide basic services more efficiently. Smart technology has been expensive and risky, and few municipal budgets have room for it.

Eric’s background in finance is an asset in creating and deploying smart city technology in a partnership that provides an affordable model. Being able to deploy the current significant funding for infrastructure projects in resilient and economically sustainable ways is a major tenet of what SmartPoint does when partnering with a city.

To achieve economic sustainability, Eric’s team took a hard look at digital signage, primarily for advertising, which generates a tremendous amount of revenue. Some of the largest companies in the world are primarily funded by advertising revenue, and one of the primary products or resources is the people to whom they are advertising. Layering attribution, customers’ traits, and likenesses increase revenue.

Cities have a treasure trove of value in the people, commercial entities, and visitors that reside within their real estate. So the core of what SmartPoint.io is doing is leveraging that real estate to generate revenue but directly aligning it with solutions that produce meaningful outcomes in city services. Getting this technology into the cities requires help from the private sector and willingness from the public sector to work together.

Advertising revenue, along with being able to tap into the budgets of city services, allows a financial model that raises the tide for all boats, from providing safer transportation to greater returns on advertising. When you tie the advertising benefit back to the people to whom the advertising is directed, you create a circular local economy that increases value and efficiency.

Edge computing is a significant part of SmartPoint.io’s product. The digital signage box is also like a portable data center. Data does not have to go back to a large data center somewhere but is processed at the edge. For example, video data from the ubiquitous cameras in a city to watch traffic patterns is bandwidth-intensive. Still, the data transport is significantly reduced if it is cached, stored, or processed locally.

Three great things about these boxes are that they do a great job of reducing latency, cost and increasing privacy. The privacy issue seems counterintuitive, but the video data, for example, is not traveling over public IP. Analysis happens at the point of capture, so it is not transported across the pipe, observed, or taken several hops where security needs to be tracked. Instead of the image, it sends the event “A person walking down the street.” This data can be scrubbed and anonymized much earlier in the analysis cycle before it leaves the box, protecting people’s privacy.

The boxes could also provide services such as Wi-Fi or 5G hotspots to underserved areas.

Once the boxes are deployed, SmartPoint.io has a team that monitors and operates the technology, just like a data center would for a company. They also partner with advertisers. Many advertisers are interested in migrating from static “paper poster” advertising to digital. SmartPoint.io is a great partner for those advertisers because they come with upfront CapEx funding.

With the cities, the model is revenue share or paid in kind. Instead of just sharing top-line revenue, however, SmarPoint.io produces and operates resources such as IT infrastructure that the city can then use to process optical data at the edge.

Digital signage can be interactive, which benefits people trying to find services, restaurants, shopping, events, and entertainment. Commercial tenants can use it as a portal for new economic development because they can reach the people walking around. In turn, the boxes give back valuable information, such as how many people were downtown or if an ad campaign successfully brought them there.

This model will help smart cities because it defers the cost of CapEx and the OpEx of managing the hardware out in the wild and the refresh cycles. Taking risks on expensive, relatively new technology is also not a normal behavior for a municipality, so partnering with the private sector with a significant appetite for risk, know-how, and funding helps the cities to mitigate the risks and costs and get further out in front of where they would be typically comfortable.

In the end, Eric says that successes are starting to build in this space, and they build on one another. Everyone is learning new things, and it’s an excellent opportunity to come together and build community, which is what cities are all about.

Podcast Transcript

1

Hello, thisis Darren Pulsipher, chief solutionarchitect of public sector at Intel.

And welcome to Embracing

Digital Transformation,where we investigate effective change,leveraging people, processand technology.

On today's episode, Realizing Smart Cities

Potentialwith CEO from SmartPoint, Eric Hornsby.

Eric, welcome to the show.

Darren Thanks for having me.

Hey Eric, I got really excitedwhen I first heard about what you guys doand when I talked to youthe first time, I says,

I got to have Eric on the showbecause this is really cool.

What you've been doing.

But before we dove into the funstuff, well, this might be fun to give mea little bit on your background.

Yeah. Happy to.

So I'm Eric Hornsby,obviously with Smart Point.

I know I've got a long tenurein the data centerand more recently, digital signage space.

We've been working with Intel Corporationfor quite some time,have a very strategic relationshipthere aroundmarket ready solutionsand other go to marketsthat we've benefitedfrom mutually with Intel.

But you know myself,

I have a lot of passions aroundproject management,technology, deployment and operation,all things that fallwithin the bounds of Smart Point IO.

We as a team most recentlywere part of an LG Electronicsjoint venture companywhere we deployed outdoor digital signageprimarilyfor advertising applicationsin dense urban areas, transit venues,city streets, what have you.

And we learned a lotabout really other applicationsin those environments that computeresources and other forms of connecttivity would help enhance the experiencebrought on by the Internet of Things.

So smart point was really bornout of that ecosystem and, and a desire toto work with that market space and driveadvancement and opportunity there.

Okay, Angela,

I'm going to hit on somethingyou said you started in the data center.

So right.

All right.

What in the worldare you doing out in digital signage?

Because going from data centerinto digital signage, those are likediametrically opposed.

Right.

So you got to tell me how you got there.

It was an interesting transition.

So I was part of a company that was awhat we would call a lifecycle managementor lifecycle solutions companyin the data center space.

So we helped companies optimize serverstorage and network hardware from aan acquisition and a refresh cyclestandpoint and everything in between.

And my role was very focused on helpingthe channelof companies that sold those solutions,but also how they were purchased,how they were financed and then howthose assets were depreciated over time.

So in that role, I learned quite a bit,not just about the technologywe're selling, buthow people were using it and how they wereyou know, really managing that that valueas an asset on their balance sheet.

Fast forward toreally 2015.

I had an opportunity to do some consultingfor a companyin the digital signage space.

They had just signeda partnership agreement with LGand with LG being a channel ledgo to market company.

I was able to to help with some adviceand some market directionthere as well as standing upsome new financialmodels that that company wentwent to market with.

And you know, fast forward several years,it turned into aa full time opportunity that I was. Time.

Happy to accept andthe rest is history.

Okay, so you're the first finance guy

I've had.

Come on to see you now.

All right, so this would bereally interesting to hear that,because you've come up with something

I think is really creativewith what you guys are doing.

And it is how do I actually make ittechnology real in our cities.

We've been talking about smart citiesfor, what, a decade?

You're right.

But the cost of it and managing it,there's a lot involvedin really creating a real smart cityand using it.

I thought, I think it's pretty brilliant,your financial backgroundand you understand all this stuff.

Tell me, tell me what vision you haveas far as smart cities go.

And because when you first mentioned this,

I was like blown away.

I thought it was pretty, pretty clever.

So when whenand there's a lot of talk of smart citiesand depending on or smart communities,connected community infrastructure,there's a lot of really synonymous terms.

But some of the major tenants you'reyou're going to hear are smart.

Cities are resilient,smart cities are equitable.

And, you know, they're really much like,from my perspective, much like an I.T.department would look athow they're serving their companyto do to do better, to be more efficient,cost effective, what have you helpa companybe resilient cities are very similarfrom the public servicesthat they provide, whether those are roadsand bridges, public safety, environmentalcleanliness, what have you.

Sometimeswater, sewer, right, all those things.

So when we think about the base,the basics that a municipalitybrings to their citizens,visitors, commercial tenantsas technologies, technology has evolved,some of those basicthings are starting to includeconnectivity and the abilityto access computeand for different city servicesto be able to take advantageof advancements in technologyto do a better job of those same basicyou know, providing a safe, less congestedfrom a traffic standpoint, environmentthat's also resilient.

So getting back to the financialmodeling resiliency from our perspectivealso needs to meaneconomic sustainability.

We're in a a an amazing timeright now,a historic time in terms of fundingthat's being made availablefor infrastructure projects as a.

Like from IJA. Right.

And being able to deploy that fundingin ways that is resilientand economically sustainable is a majortenet of what smart points doingwhen we partner.

You're looking at financial resilience,which no one ever looks at.

I've never heard financial resiliencein the IT space before, but Ilike I like this approach because I can

I can throw hardware.

And I, you know, I work at Intel.

I want everyone to refresh your hardwareevery three years.

Right.

But realistically, that's not doablewith the budgets that cities haveor states have to do that.

Yeah.

We we took a real hard look at the spacethat we were previously in,which was very narrow in digital signage,primarily for advertising.

And there's a tremendous amount of revenuegenerated in that market space.

We all know some of the largest companiesin the world are primarily fundedby advertising revenue.

Yeah, Google, for example, for example.

And, and, you know, one of the primary,you know, products or resources,there are the peoplewho are being advertisedto their information,their likeness, their traits.

And and these, you know, layer onwhat's called attribution,which increases the valueof the advertising making more money.

So taking a look at that as a focusrevenue stream or ROIfor cities to harness, cities have aa treasure trove of valuein the real estate and the peopleand the commercial entities and visitorsthat reside within that real estate.

So being able to more effectively leveragethat real estateto generate revenuebut align it directly withsolutionsthat produce outcomes that are meaningfulto what the city should beproviding to its citizens, visitorsand commercial tenants is really atthe core of what we're doingand being on board to operate a networklike that and managethat from a not just a technology,but a financial operationsstandpoint is is reallywhat's getting it's getting citiesmore to a point where they cannot just comfortably but confidentlymove forward with with projects that arethat are meaningful and substantial.

To your point, how do we get thistechnology out into the city?

It requires help from the private sectorand it requires a willingnessto work together from the public sector.

Right.

All right.

So explain. Exactly.

All right.

So I like I like the idea. Right.

How can we get hardware,new technologies into the cities?

But it's costly. So we can.

You're saying that we can fund itactually through advertising?

Is that the.

Concept?

Advertising'sa major source of the revenue.

Other sources are that cities spenda tremendous amount of money to providethe basic services that are deliveredby a municipality to its citizens.

So being able to tap into those budgetsas well allows for a financial modelthat really raisesthe tide across all those boatsfrom providing safer transportationto, you know, greaterreturns on advertising.

When you can tie the the advertisingbenefitback to the people who are advertising to.

That's what gets us really excitedand gets us and gets the city interestedbecause you are creating aa circular economy that allows for thatthat resource in the peoplein the real estateto be harvestingthat value more efficiently.

So it's almost it's almost like keeping itmore local in a lot of respects, right?

Absolutely.

Which is which is pretty coolbecause now I can keep thatthat economy in my in my city growinginstead of it growing outside of my city.

Yes, that's the idea.

It's pretty cool.

All right.

So explain the explainthe technology a little bit.

We got a little bit of the business model.

Explainwhat does this look like physically?

So going from a data center background,which is very centralizedin nature to a digital signageon sidewalks, it's very decentralized.

So definite opposite ends of the spectrum.

And combining what we do from a technologystandpoint is really combiningoperational technology,which definition would would fallinto really things that you're touching,seeing, you know, experience.

Like physical, physicalthings you're interacting. Right?

We were combining that with with I.Tinformationtechnology that you normally wouldn't see,but having it there.

And the reason we're doingthat is because this explosive growthin the Internet of Things and databeing produced at the physical edgeof the network creates an opportunityfor the physical edge of the networkto be a placewhere computation takes place.

So that data not having to go all the wayback to a large data centersomewhere,the workload would be processed.

And then that insight from whateveryou know you're trying to garnerhas to be sentall the way back to the edge.

You can you can do it right there.

Again, keeping it localas a as a tenet of what we're doing.

But edge computing is a major part of ourour product.

And utilizing that edge computingto produce outcomesfor things that are focusedon doing better at the edge.

Okay.

So what I just heard was your digitalsignage is not just a pretty bar,a pretty box with advertising on it.

Yeah, I can actually run compute in those,in those digital signsthat you have on the sidewalk.

That is correct. Yes.

So it's like a portable data center.

Does anyone like throw it in the backof their truck and take off with it?

You need to have plannedpretty far in advance.

They're pretty far invested. Yeah.

Yeah, we we've over the course of the pastsix, six or seven years,we've deployed tens of thousandsof these around the worldfor digital signage purposes.

But we've gotten pretty good at makingsure they stay where they.

Stay, and that's good.

So what sorts of workloads can I runin these digital science signage boxes?

So one of the the types of datathat we talk about a lot is video data.

So there's there's cameras everywhere.

And cameras are watching for thingslike abnormalities in traffic patterns.

They're looking at cars.

They're analyzing how many bicyclesare on the road with the cars and,you know, focusing onhow could we make things safer or better.

And there'sbut optical data from videois is extremely bandwidth intensive.

And so trying to asanybody knows that strive to streamsomething on their mobile device.

You need to have a great connectionto to pull that off.

But if you could you could cache thatyou could store that videoor process it locally.

Then you've reduced the amount of datatransportnecessary to garner an outcome.

So running computer visionanalytics at the edgeis one of the things that wewe do quite a bit of.

All right.

So that decreasesthe total bandwidth that you needbecause you're not going to stream 4Kvideo anymore.

You're just streamingobject data that you've detected. Yep.

Right.

So, so that gives me trafficpattern flows.

That gives me weather,right?

There's a whole bunch of thingsthat these boxes can then you use.

It's basically a Iot node out therethat can doa lot of different things.

If we had to break it down to three,three things, I would sayit does a great job of reducing latency.

So it should be the time it takes toto move that dataprocessor and produce the insight.

Just and that's just simple physics,right?

Less less distance for it to travelthat that same outcome reduces costbecause you're not having to transportthat dataas far.

And the third really hones in on privacy.

So being able to.

Do I would have thought the oppositethere.

I would have thought,what's your privacy thing on this?

Because, oh,

I got a camera watching everyoneand so what's your privacy angle on this?

But again.

It's counterintuitive to me.

Being being able to use that camera data.

I'll call it behind the radioso it's not traveling over public IPallows for analysisat the point of capture.

So we're not we're not sending picturesof Eric Hornsbyacross the pipe back to a data centersomewhere or being observedand having several hops, let's call itwhere security needs to be tracked.

Instead, it's saying there's a guywalking down the street.

Yeah, yeah.

And the data is able to be scrubbed.

They're anonymized much earlierin that analysis cycle.

Before it even leaves the box. Yep.

Very cool.

Now, what else can I do with these things?

We talked a little bit about.

I can put like a 5G,

I can turn this into a 5G hotspotor a Wi-Fi hotspot as well, right?

Absolutely.

Yeah.

So again, it's it's working with citiesto identify what commercial revenuestreams, you know, could we generatetogether at these real estate end points?

And how could we operate a projectfrom a financial standpointthat also bringsto bear different technologies like 5Gyou just mentioned, or a Seabreezeor wi fi.

There's lots ofwe call them underserved areasthat would love to have betterconnectivity.

The cities would love to providethat as a basic deliverablefrom the municipal key.

And those are things that we bundle into.

These these projects.

Are very cool now.

All right. So how does this work?

Because we talked about thisa little bit before the show.

How does it work?

If I'm a municipality, I contact you guys.

You go and deploy these signsin down my main, main street.

Folsom once was where I live.

Folsom, California, Main Street.

Folsom

We put like three or four of these upand I knowas the city, I maintain these things,

I get the advertisers.

Or is it a joint venture with you guys?

How does how does operationallyhow does it work for me?

Because it sounds like I'm going to haveto staff up people that understand Iotand data center and maintain these things.

So we have a teamthat monitors and operates the technologyjust like a data centerwould for a company.

We so we are the operatorand we work with the city.

So where the city would have haddepartments that are leveragingi.t infrastructure perhaps somewhere else.

Now our joint project becomesthat i.t infrastructurethat they are they can usefrom an advertising perspective.

We partner with the existing out of homemedia advertisers.

So there's lots of incumbents out therewho are very interestedin upgrading their technologyor migrating from what's called staticpaper poster advertising to digital.

And we're a great partnerfor for that in its own rightbecause we come in with all of the upfront

CapEx funding, we deploy the technology.

And now instead of selling a static posteradvertisement, the ad incumbentadvertiser has the opportunity to workwith us and to start selling digital.

So it's a great opportunity for a refreshand a significant upgrade to the incumbentout of the companies out there.

So so the silver screen.

So if I'm a city now and I decide, hey,we we really want to do thisdigital signage, there's so many questionsin my head right now.

One is you guys you guys areyou guys are now like a normal billboard,just a digital sign.

So you're getting the revenue from theadvertising that's going on there,right?

The city is allowing you to put thatthere and they're getting some kind ofsomething, I'm sure,whether it's cycles on, you know,how do I put my applications on there?

That because you said, hey,you said we can use the data centerpart of this to do things.

How do I pay for thator do I get a cut of that?

How does that all work forjust does that make any sense?

What I'm trying to get to are sure.

Yeah.

So the term that's often used, I'mgoing to give you two terms.

One is simple, it's revenue share.

So when I hear the. Revenue share,all right.

When I hearhow do we get a cut of a revenueshare has been around for a long timeand that's.

An easy one for people to understand. Yep.

But the other term is paid in kindand paid inkind will often be,

I would call it, a form of revenue share.

But instead of sharingjust top line revenue that's thrown offfrom the project, we produceand operate resourceslike I.T infrastructurethat the city can then useto process optical data at the edge.

And that has an outcomethat the city's desiring to see.

Okay, so that's, that's pretty cool.

So here's, here's a scenariothat I think I would love to see downtown

Folsom again,that Wi-Fi is available for everyonedowntown Folsombecause that would be really coolif it's right on.

On the weekends,they close down the main streetand there's lots of fun thingsout there in restaurantsand it'd be great if Wi-Fi was availablefor all of downtown.

So in this scenario,

I put maybe four or five of your digitalsignage is down there paid in-kind means.

You're going to you're going to make surethat I have Wi-Fi, that we put the Wi-Fiservice in in the in the box and that it'savailable to everyone downtown.

And I'm ready to go out.

And simple and wi fi,

I mean, requires a backhaul.

So you need to havea fiber circuit terminated.

So that's something that we stand up,we pay the ongoing cost of accessto that fiber backboneas a effectively an edge ISP for the city.

So we'll monitor, maintain andand cover the cost of that.

But we do that with the revenuesthat are generatedby the digital signagethat we're deploying.

So that's it's a great exampleand a simple example.

Here's another question I have.

Is your digital signage interactive?

Yeah.

So could I have a mapso I can have a map of downtown on there?

That would be standard.

The vendors in downtownwould put their little logos up there, as,you know, like like you'd seelike an airport, for example.

I can say I need to find a restaurantquick because,you know, I'm starving on my layover.

Sure. Yeah.

So absolutely.

They have a touch screen interactivity.

There's applications called wayfindingis the commonly used term whereif you know, easyto find city services, restaurants,other retail shopping nearby.

So they're very useful for that.

And then, of course,offering access to that viaa portal to the cityand to the commercial tenants thereit opens up a new opportunityfor economic development.

For that local economy to reachto reach the people walking around.

No, I see.

I'm already thinking calendar of events,all that stuff would showwould show up right there.

Yeah. That's that's. Entertainment.

Yeah.

It definitely becomes the new digital, youknow, billboard, if you will, for eventsand things that people want to go see,what's new, what announcements are there.

It's a way for the cityto better engage with people.

Well and also gives mevaluable information back, right.

Because let's say I want to counthow many people are downtown this weekend.

Right.

And maybe I did some advertisingfor some event downtown.

I want to see what my take wasas far as not take or seewith the effectiveness of my campaignwas to bring people downtown.

These these cameras could easily counthow many people were downtown.

That was an easy thing for them to do.

There's so much potential here.

I love the model ofbecause one of the biggest problemsthat we've seen with smartcities is the cost of CapEx.

Sure.

And also the optics of managingmanaging this hardwareonce it's out in the wild,that's a big cost to cities.

And then the refresh cycle.

This is another I want you to and Eric,

I know you're going to refreshevery every three years becausewe're going to have great technologyand you're going to want it.

So I know you're going to I knowyou want our stuff every three years.

The city, they'rethey're under much more constraintsas far as as far as that goes.

Yeah.

Well and you know refresh cycle

I'll segway that into one of theone of the challenges with

I would say new industry.

So Iot is still relatively new.

Certainly Iot at the edge is is newand investing in technology at the stage,you'd fall into what I'd callan early adopter category.

Oh, it's expensive. Yeah, it's.

Well, it's expensive and there's,there's risk and anybody who dealswith municipalities would, would know thatthey, they would prefer to de-risk what.

They're doing because. Yeah, you.

Know, and so take taking a chanceon very expensivethings doesn't always fallinto typical behavior of a city.

So again, this is wherepartnering with the private sector,where there is significantappetite for risk and knowhowof how to operate infrastructureto gain reward is a great fitfor municipalities to to to hedgehedge their bets a little bitand to get out further out in front ofwhere they may have been comfortableinvesting on their own.

Now, I, I love the model.

I think it's ingeniousbecause it may just be the waythat we can get smart cities to be realbecause there's so much potential toto having smart cities out there.

I love the financial model.

I think

I think it's pretty clever. So nice.

But it's there's also it's ait's a great community out there.

There's a lot of great events put on.

We were just at thethe Smart City Expo in Miami.

And there's there's a lot of passionfrom these cities to trade informationand share successes, learnings,what have you.

And so for us, when we'rewhen we're talking to a city directly,we typically have two,maybe three topics we want to cover.

The first is really looking athow how could we makethe initiative,you know, financially sustainable?

You've heard me say that a lot. Oh,yeah, yeah. No.

But then every city we've talked to has.

Something.

Something uniquethat they're trying to solve for now.

No differentthan when you call on businesses.

And yeah, yeah.

There's always some little thingthat's unique to them.

Yeah.

So finding, finding what that unique thingis, that is top of mindthat they need to solve forand they think there may be a way that's,that's usually where our focus lies.

And then the third would likely be sharinga success from another municipality.

But you could see has, as you know,successes, you know, build on one another.

So it's it's an interesting market spacewhere we're learning new things, butit's an opportunity for coming togetherand and to build community,which is really what cities are about.

Well, I'll tell youwhat, Eric,when you guys are the new Google Variety,because I think the is pretty cleverand I think it has a lot of potentialto really grow this industry,which has been stagnant.

Frankly, we've been there's a lot of hope.

But as you said, the barriers to entrybecause of the risk of new technologyand cost and OpEx and CapEx, I think islimiting its progression moving forward.

And I like that you guys actually came upwith a really cool solutionto tackle this, a business solutionto a technical problem.

Thank you.

So thanks a lot,

Eric, for coming on the show.

I appreciate the time.

You bet.

Thank you.

It's great talking to you.

Thank you for listeningto Embracing Digital Transformation today.

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