XTD powers towards commercialising smart cities with IBM deal

The growth of “smart cities” has immense technological requirements and the installation of thousands, if not millions, of devices to make them possible.

Digital transit-media company XTD Limited (ASX: XTD) is looking to be one of the first companies to sync up with this emergent trend by completing the takeover of private company Contact Light. And with the ink barely dry on the deal, XTD has announced a collaboration agreement with tech giant IBM.

XTD’s acquisition of Contact Light remains subject to shareholder approval, which will be sought at a general meeting in late May, although this is expected to be a formality.

Commercialising Contact Light

Under the agreement, IBM and Contact Light will collaborate to create and provide a variety of solutions that combine IBM Cloud and various software as a service (SaaS) offerings with Contact Light’s Smart Cities digital products.

The merger of XTD and Contact Light brings together two different market segments and offers multiple commercial opportunities made available as a result of growing smart cities and burgeoning advertising spend.

Global advertising expenditure was estimated to reach US$535 billion in 2017 and increase a further 5.2% in 2018.

The two fastest-growing segments in global advertising spend in 2017 were outdoor and digital/mobile (50% of total spend), and these segments are forecast to remain the substantial growth segments of all advertising for the next two to three years.

The acquisition aims to dramatically strengthen XTD’s market positioning by adding Contact Light’s suite of technologies and Smart Cities innovation to the Company’s market-leading cross-track digital media systems for transit environments.

In the land down under

In Australia, the XTD already has its products operating in the Melbourne and Brisbane metro rail systems.

Completing the acquisition of Contact Light helps XTD to strengthen its ability to provide innovative products that enhance and accelerate the move towards smart cities that incorporate a variety of sensors as well as software to provide an accurate real-time picture of a variety of dynamic events such as traffic, transport and how people transit throughout a city.

The agreement is likely to help Contact Light accelerate and improve the commercialisation of valuable insights from high-volume commuter movement data that has been collected via Embark, one of Contact Light’s data collection products, over the past two years and is “growing on a daily basis”.

Contact Light develops digital solutions to address unique opportunities for governments, city planners and large enterprise organisations to better understand how people interact with their evolving urban environments.

The new collaboration will include the deployment of Contact Light’s “world-first technology” that allows interaction between digital out-of-home screens and people’s mobile devices.

Scanning Contact Light’s technology

Contact Light’s consumer-focused digital solutions are founded on two products: Nearcast and Embark.

Nearcast is a “frictionless, consumer-driven, screen-to-mobile engagement” system, connecting brands and people to provide valuable data insights.

Embark is a mobile application that connects commuters with real-time public transport information including multi-modal wayfinding in more than 1,200 cities worldwide

Through the use of proprietary hardware and software provided by Contact Light, XTD hopes to generate commercial success by addressing the growth of advertising and the growing requirement for the various digital Internet of Things (IoT) solutions that make smart cities possible.

“IBM is committed to creating smarter cities. For example, earlier this month IBM and Apple announced a major partnership focusing on machine learning via the IBM Watson platform, which will provide continuous learning capabilities for apps such as Embark,” said Mike Boyd, chief executive officer of Contact Light.

“Our agreement with Contact Light is an example of how IBM is restructuring its partner engagement model and focusing on solutions which provide artificial intelligence, cloud, blockchain and security delivered as a Service,” said Anthone Withers, head of SaaS for IBM Australia and New Zealand.

“I see great opportunity in the ability to measure, communicate and commercially transact with people using transit environments via their mobile devices. The benefits are twofold: convenience for the technology users and the rich data it creates for business decisions,” Mr Withers added.