Smart City Platforms Market Size, Share, Trends, Growth and Forecast 2032

Smart City Platforms Industry Prospective:

The global smart city platforms market size was worth around USD 172 billion in 2023 and is predicted to grow to around USD 680 billion by 2032 with a compound annual growth rate (CAGR) of roughly 16.5% between 2024 and 2032.          

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Smart City Platforms Market: Overview

Smart cities are made up of a "system of systems." These may include smart city lighting, building automation systems, emergency management systems, security and access control systems, intelligent grids, renewable energy, water treatment and supply, transportation, and others. The smart city concept is not new; many of these technologies existed long before the phrase "smart cities" was used.

However, many end users are increasingly striving to integrate data from these separate systems into a coherent whole to provide a comprehensive perspective of the city's overall performance and state, as well as its numerous functionalities.

Key Insights

• As per the analysis shared by our research analyst, the global smart city platforms market is estimated to grow annually at a CAGR of around 16.5% over the forecast period (2024-2032).
• In terms of revenue, the global smart city platforms market size was valued at around USD 172 billion in 2023 and is projected to reach USD 680 billion by 2032.
• The increasing adoption of the 5G network is expected to drive the smart city platforms market over the forecast period.
• Based on the offering, the platforms segment is expected to hold the largest market share over the forecast period.
• Based on the deployment model, the cloud segment is expected to dominate the market over the forecast period.
• Based on the application, the smart infrastructure segment is expected to capture the largest market share during the forecast period.
• Based on region, North America is expected to dominate the market during the forecast period.

Smart City Platforms Market: Growth Drivers

Growing adoption of IoT devices drives market growth

The widespread use of the Internet and IoT devices is radically changing urban infrastructure management and city operations. According to Cisco, machine-to-machine (M2M) connections enabling IoT applications will account for more than half of the world's 28.5 billion connected devices, with connections from smart speakers, fixtures, devices, and associated systems totaling 14.6 billion. This tremendous proliferation of connected devices allows cities to develop sophisticated smart city monitoring and management systems across multiple domains.

For instance, Las Vegas has made significant investments in IoT sensors to control traffic congestion and environmental challenges, adopting an intelligent system capable of analyzing carbon dioxide levels and ambient traffic conditions to optimize traffic light operations even during off-peak hours. Thus, the aforementioned facts drive the smart city platforms market during the forecast period.

 Smart City Platforms Market: Restraints

High switching and installation costs hinder market growth

High switching and installation costs are a significant challenge to smart city platform industry expansion. Sub-meter-level energy visibility is a significant leap in building automation and smart city platforms, allowing for more effective facility management. Companies are investing in enhanced features, improved functionality, and compatibility to improve operational capabilities, which raises the cost of developing automation solutions.

Installation of these systems may involve considerable wiring upgrades, which adds to the cost. The high initial expenditure required for smart buildings is a major barrier to their broad implementation. Smart city platforms include advanced reporting capabilities, simulation tools, and back-office functionalities. These features are increasingly available through a variety of cloud deployment strategies, including private, public, and hybrid cloud options.

Smart City Platforms Market: Opportunities

Rising product launch by key market players offers a lucrative opportunity for market growth

The rising innovative product launch by the key market player is expected to offer a lucrative opportunity for smart city platform market growth.

For instance, in February 2024, NEC Corporation India, a leader in IT and network technologies and a wholly owned subsidiary of NEC, announced the launch of enhanced technology solutions as part of the Global Smart City Suite, which includes NEC Mi-Command (Integrated Command and Control Centre), NEC Mi-City (Citizen Engagement Portal), NEC Mi-Eye (Intelligent Video Analytics), and NEC Mi-WareSync (Warehouse Management System). These solutions seek to provide transparency and visibility for effective management and decision-making, offer smooth operations among organizations and authorities, and improve experiences for citizens, businesses, and communities.

Smart City Platforms Market: Challenges

Lack of standardization and interoperability poses a major challenge to market expansion

The absence of standardization and interoperability among different technologies, systems, and data formats is one of the biggest problems in the smart city platforms market. This problem causes inefficiencies in urban administration by delaying the adoption and scalability of smart city initiatives. IoT devices, artificial intelligence, cloud computing, and edge computing are just a few of the technologies that are combined in smart city platforms. Platform and service incompatibilities arise from the usage of proprietary protocols and data formats by several suppliers.

Furthermore, smart city platforms handle massive volumes of real-time data from utilities, public safety, energy grids, and traffic management. The ability to integrate and assess cross-sector data is hampered by incompatible data formats and sparse APIs.

Smart City Platforms Market: Report Scope

Smart City Platforms Market: Segmentation

The global smart city platforms industry is segmented based on offering, deployment model, application, and region.

Based on the offering, the global smart city platforms market is bifurcated into platforms and services. The platform segment is expected to hold the largest market share over the forecast period. The increasing rate of urbanization demands effective city administration strategies. Platforms for smart cities provide integrated methods for efficiently managing infrastructure, services, and resources to meet the demands of expanding metropolitan populations.

Based on the deployment model, the global smart city platforms industry is segmented into on-premise and cloud. The cloud segment is expected to dominate the market over the forecast period. Cloud computing provides on-demand resources, allowing communities to grow smart services according to demand. It eliminates the need for expensive on-premise devices, resulting in lower capital investment. Thus, driving the segment expansion.

Based on the application, the global smart city platforms market is segmented into smart infrastructure, smart governance and smart education, smart energy, smart mobility, smart healthcare, smart buildings, and others. The smart infrastructure segment is expected to capture the largest market share during the forecast period. The combination of smart infrastructure and smart city platforms is altering urban living by increasing efficiency, sustainability, and security. The demand for AI-powered, IoT-driven, and cloud-enabled platforms will continue to drive market expansion, establishing smart cities as the future of urban development.

Smart City Platforms Market: Regional Analysis

North America dominates the market over the projected period

North America is expected to dominate the global smart city platforms market during the forecast period. The extensive use of smart city solution providers and large ICT expenditures by governmental organizations are the main drivers of the region's dominance.

A strong environment for invention and execution has been produced by the presence of significant technology providers like Cisco, Microsoft, and IBM. The swift adoption of smart city platforms has been facilitated by the region's sophisticated technology infrastructure and robust government backing for digital transformation projects. These platforms are used more and more by cities in the US and Canada to enhance resource management, boost sustainability, and improve municipal services.

Cities have been able to implement more effective and responsive urban management systems due to the region's emphasis on data-driven decision-making and sophisticated analytics capabilities.

Additionally, the foundation for the creation of smart cities in North America has been reinforced by the incorporation of cutting-edge technologies like 5G, cloud computing, and artificial intelligence.

Smart City Platforms Market: Competitive Analysis

The global smart city platforms market is dominated by players like:

• Fujitsu Limited
• Hitachi Ltd.
• International Business Machines Corporation
• KaaIoT Technologies LLC.
• Bosch.IO GmbH
• Amazon Web Services Inc.
• NEC Corporation
• Quantela Inc.
• SAP SE
• Intel Corporation
• Oracle Corporation
• Fybr
• Google LLC
• Telefonaktiebolaget LM Ericsson
• Alibaba Group Holding Limited
• Cisco Systems Inc.
• Huawei Technologies Co. Ltd.
• Microsoft Corporation

The global smart city platforms market is segmented as follows:

By Offering

• Platform
• Service

By Deployment Model

• On Premise
• Cloud

By Application

• Smart Infrastructure
• Smart Governance and Smart Education
• Smart Energy
• Smart Mobility
• Smart Healthcare
• Smart Buildings
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa