In 2002 global distribution systems (GDS) for the travel industry literally took off as important technologies. From 2006 to 2010, online sports betting firms set the standard for dealing with transactional volumes. Following the introduction of the iPhone, 2010 to 2015 was a period of major growth for mobile telecoms providers, and with a computer in every pocket and compute moving to the cloud, collaboration was a key vertical in IT between 2016 and 2018. The same technologies would lead to the growth of the Internet of Things (IoT) since, and now in 2023, as we feel the impact of the climate emergency and the energy crisis, smart infrastructure is coming of age.
Thomas Kiessling has been a business technology leader at each of these junctures. He was head of eTravel at Amadeus, the major GDS provider, before becoming CTIO of gaming firm Bwin, andthen on to be CEO of the digital business unit of T-Mobile, followed by a series of CTO roles in collaboration and IoT startups. As CTO for the Siemens Smart Infrastructure division, he's clearly good at spotting a wave of change. So why is now the time for smart infrastructure? Kiessling says:
There are key transformations that create a lot of value. IoT's journey started 10 to 15 years ago, but its take-up is still quite low, so Siemens have the potential to drive IoT based on their core competency, automation.
It is the same pattern of good platform engineering to provide value to customers.
The invasion of Ukraine by Russia in 2022 and the subsequent energy crisis at a time of high inflation have given individuals and organizations more impetus to move to sustainable energy and become more careful with their energy usage. Formed in 2019, Siemens Smart Infrastructure is focused on smart energy grids, smart buildings, smart power distribution, grid edge and e-vehicle charging. This series of offerings provide business and technology leaders with the same ability to manage power and usage as they have in cloud computing. Kiessling says:
This is one of the ingredients to solve the energy crisis, and that allows us to get rid of gas.
Arguably the move to sustainable energy and grids should have happened much earlier in major western economies. Kiessling says regulations inhibited the wider usage of solar on commercial property, for example, while in some countries, on-shore wind power is spinning up too slowly due to backward public opinion and poor planning policy. Whilst businesses didn't grasp the opportunity, he says:
The fact is that nobody cared, and it was not top of the priority list for building owners.
Causing the wave
To date, commercial buildings, and homes, have consumed energy from the grid. But the energy crisis has increased the business case for sustainable energy use in commercial buildings. Owners and tenants will increasingly want to manage energy usage.
The World Economic Forum reports that commercial property consumes 40% of the world's energy and emits 33% of the greenhouse gases damaging our environment. As organizations aim to become carbon neutral, they will need accurate ways to capture and analyze energy usage data. Kiessling says many organizations are using labour-intensive ways to understand their energy usage. Kiessling adds:
The market is pretty rudimentary; they are pulling together their energy reports from the main metre. But the Dean of a university, for example, wants a de-carbonization plan, and from the metre, there is not that level of transparency.
Kiessling says this is why smart infrastructure technology is the next big wave of business transformation, akin to mobility or the GDS. He explains:
You have regional building fleet players in the USA and Europe, and then you go down one level to the multi-site and company operators in a vertical market, and all of them are talking about this.
With distinctions in geography, building size and type, Siemens set out to create a series of technologies that would suit the building owner or operator and their needs. Kiessling says:
We have developed a platform that is modular and scalable so that it won't hit the profit margins of businesses. Platforms and IoT enable the understanding of assets and create a data lake. You can then build a great analysis to make the building more effective and productive. Smart infrastructure is not expensive and will create savings of 30%.
As a result, energy usage will become a two-way relationship with utility companies. Commercial buildings with solar panel roofs will be able to sell energy back to operators as well as consume it.
The pressing environmental and energy situation is not the only reason property companies are seriously considering smart infrastructure. Facilities management and maintenance is, like so many other sectors struggling with a skills shortage, and IoT is one-way building operators will be able to keep their investments in good condition with fewer staff.
Smart systems integrator
The demand and pace of change in IoT and clean energy are such that Siemens is not planning on going it alone. In fact, the German giant sees itself as, in part, a systems integrator for smart infrastructure. Although the business has much of the hardware and technology within its own products, the business is also offering Siemens Xcelerator, an open platform for other technologies and startups. Kiessling says of Xcelerator:
It is an integration play; we support non-Siemens equipment, for example. Our goal is to support the client, so it does not matter whether it is a Siemens building management system or someone else's. We can provide the data connectivity layer.
We are also working with Accenture and mid-sized firms that are focused domain experts in schools, for example.
As CTO for Siemens Smart Infrastructure, Kiessling says his job has two areas of responsibility, developing the enterprise architecture of the business unit, but also working closely with CTO peers at customers to adopt and use smart infrastructure.
Embarrassingly for me, Kiessling recalled that I had interviewed him when he was CTO of sports betting firm Bwin back in 2010. Between 2008 and 2012, sports betting firms were at the forefront of digital innovation; their use of data, low latency infrastructure, transaction engines and online design was streets ahead of financial services, retail and many other sectors.
Kiessling's career journey and ability to be in the right markets at the right time is a testament to him as a business technology leader but also an indicator that smart infrastructure is about to come of age.
Smart homes were being showcased back in 2000, but as technology such as eSIM makes IoT easier to implement and the platform approach to enterprise technology has become the norm, then the tools are there for business leaders. The reason to be smarter users of energy is not new too, but the need to respond to the environmental crisis and the risks of relying on Russia for carbon fuels have accelerated the case of smarter infrastructure. All of this combines to make smart infrastructure the next wave of technology-led market transformation.
Of course, I had to ask Kiessling what he thinks the next waves will be after smart infrastructure. He said:
Data, robotics, AI and food. The meat economy is unsustainable.
It would be unwise to bet against his insight.