Zinnov Projects IT to Cost Approx. $2Bn for 100 Indian Smart Cities

Overall Spend to build 100 Smart Cities in India is pegged at $31 Billion (E) between 2015-2020, Over 60% of the total technology spend would be in tier III cities

Zinnov released its much awaited study on “Technology Opportunity in Smart Cities in India”. The study brings to light Government’s plans to building the “Smart Cities” & addressing major urban challenges thereby improving the economic contribution.

The overall investments required to build 100 smart cities would be in excess of $31Bn over 5 years i.e. 2015-2020 and over 5% of total spend i.e. $ 1.5-2Bn would be on technology. Nearly 50% of technology investments would be on cloud solutions spread across setup of private data centers, cloud based delivery platforms, analytics, and IoT enabled solutions, etc.

Commenting on the released study, Praveen Bhadada, Partner & Practice Head, Zinnov said -At $870-950Mn, Transportation and Power would be the biggest technology spending categories within smart city initiatives followed by Water & Sewage, Governance, Waste Management cumulatively accounting for over $ 685Mn in 5 years. Over 60% of total technology spend would be in Tier-III cities

The study highlights that the technology spending would be maximum in West region followed by South, North and East respectively. Nearly ~45% of the technology spend will be driven by 3 states namely i.e. UP, Maharashtra & Tamil Nadu.

As per the Zinnov analysis, 13 states are categorized as the leaders with high spend on both, overall and technology spend, cumulatively accounting for over 80% of overall and technology spend.
Rajat Kohli, Engagement Manager, Zinnov added that the development of 100 smart cities in India would result into $ 200Bn of additional contribution in the GDP, 10 Million jobs and over $ 10Bn savings in traffic congestion with the help of smarter technology.

As per Zinnov, global & Indian tech vendors, real estate developers, cross border government institutes and industry associations would make investments in innovative go-to-market strategies and partnerships to tap this huge opportunity. At present, most technology vendors have limited offerings across key focus areas of the initiatives and it would be a challenge for them to integrate their offerings with new and existing physical infrastructure setup in a smart city. They would need to aggressively work on development of local ecosystem, solution customization and regulations management to maximize the opportunity.

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