Cisco Pioneering Digital Infrastructure for Massive Projects in Saudi Arabia

February 1, 2008

By Charles Waltner, News@Cisco

Cisco Systems has joined with the Kingdom of Saudi Arabia to pioneer cities for the 21st century.

On the eve of his attendance at the World Economic Forum in Davos, Switzerland, Cisco chief executive John Chambers visited Saudi Arabia to oversee the signing of agreements to design the information and communications (ICT) infrastructure for three of the world's largest real estate development projects. Saudi Arabia views these new cities as "islands of change" that will attract companies from around the world and create jobs, in the process helping the country's economy diversify beyond oil exports.

The event not only marks a promising opportunity for Cisco but also underscores the growing importance of nations and regions outside of the traditional "G7" economic powers, such as the United States, Japan, and Germany. More and more, "emerging markets" such as Saudi Arabia are playing a bigger role in global commerce. The country's economy, for example, has enjoyed 14 percent annual growth over the past five years. With these projects, Saudi Arabia aims to build on that success to expand its economy and become a hub of business, research and global transport.

Certainly, Saudi Arabia is thinking big. The city developments, sponsored by the Saudi Arabian General Investment Authority (SAGIA), are massive and rival in scale any other contiguous real estate projects ever attempted. The largest of the three, the King Abdullah Economic City, located in Rabigh on the western coast, will cover 65 square miles (168 square kilometers) and include a seaport, industrial zone, business district, and residential developments to support up to one million jobs. Dubai developer Emaar Properties, is managing the multi-billion dollar construction effort.

The second city is the Prince Abdulaziz Bin Mousaed Economic City in Hail, which will cover 60 square miles (158 square kilometers). This city is planned as a comprehensive logistics and mining hub and will include an international airport, rail link, dry port and operations center. The government expects the development, run by Rakisa Holding Co., to create 30,000 jobs and double the city's revenues during the next 10 years.

The third project, Medinah Knowledge Economic City, will be a 2 square mile (5 square kilometer) development by Seera City Real Estate Development Co. Saudi Arabia expects to invest nearly $7 billion in the venture, with hopes of creating more than 40,000 jobs in knowledge-based industries, such as healthcare, digital technology, and tourism.

While details of each project vary, they all offer a blank slate for Cisco to pioneer a new generation of communications infrastructure. Just as the cities will be built from scratch, Cisco will design every major facet of the ICT systems for these projects from the ground up. "The sheer size and varied communications needs of these cities present Cisco with a breathtaking challenge but, more importantly, a unique opportunity to prove our unmatched capabilities," said Wim Elfrink, Cisco's chief globalization officer.

Cisco will apply the "intelligent infrastructure" concepts from its real estate practice to these much larger and far more complex developments. The communications networks for each city will tie together buildings, people, public spaces, and transportation centers over fiber optic lines offering bandwidth of up to one gigabit per second (Gbps) while making wireless connectivity ubiquitous with Wi-Max and other cutting-edge technologies. Besides planning the digital infrastructure for connecting each element of the city, Cisco will also design the communications networks for the projects' commercial, residential and industrial buildings.

Saudi Arabia is looking to Cisco to do nothing short of redefine the state-of-the-art in technology infrastructures. And Cisco intends to do just that. Harnessing Metcalfe's Law, which states that the value of a network rapidly increases as the number of devices connected to it multiplies, Cisco aims to bring all communications and logistical operations on to a single, ubiquitous digital infrastructure based on Internet protocol.

From smart elevators and "invisible" security to RFID inventory tracking and automated transportations systems, Cisco will design communications systems woven into the fabric of life within these cities. "In the end, I think Saudi Arabia chose Cisco as its partner for these project because of our clear vision of how information and communications technology can help these cities thrive," said Badr Al Badr, managing director of Cisco's Saudi Arabia operations.

Beyond Cisco's unrivaled technical expertise, the company's demonstrated long-term commitment to the region and to Saudi Arabia's development plans helped Cisco win the much-prized consulting contracts, said Caspar Herzberg, Cisco's operations director in Saudi Arabia. Information technology vendors and consultants from around the world eagerly courted Saudi Arabia to be the technology advisor to these uniquely ambitious developments.

In 2006, Cisco announced it would invest $265 million in Saudi Arabia over the next five years, increasing its number of employees in the region nearly 10-fold and more than doubling the number of its network academies in the country.

In addition to its financial commitment, Herzberg said the involvement of Cisco's highest-ranking executives helped the company become a key partner in the Saudi city developments. Wim Elfrink, now located in Cisco's India campus in Bangalore, has been actively helping with the projects and has been able to quickly meet with developers and government officials to discuss pressing issues. Several visits from John Chambers to the region over the past two years also boosted Saudi Arabia's confidence in Cisco's interest in the region. "They have really appreciated the availability of our top leaders," Herzberg says.

This is not the first time Cisco has helped build smart cities. Most recently, the company announced plans to work with Malaysia to create the communications infrastructure for its i-City development in Selangor. Cisco has also played a key role in other projects such as Dubai Internet City, Hong Kong's Cyberport, and Belgium's I-City.

Interest around the world seems to be growing in these cities from scratch. South Korea is in the midst of building one of the world's largest privately financed urban developments, New Songdo City. And countries in the Middle East, including Morocco, Egypt, Jordan and Dubai, are looking to the Saudi projects for ideas they might apply to their own countries. Certainly, people will be watching to see what the future of communications looks like in Saudi Arabia.

Charles Waltner is a freelance writer in Piedmont, Calif.