Member Article

Home is where the hub is

Over the past few years we’ve seen a lot of hype about smart devices and the ‘Connected Home’. What we first saw being introduced into the market was expensive, gimmicky products with limited appeal or longevity, while a large number of households didn’t even have the sufficient networks in place to enable them to fulfil their potential.

The technology has now evolved to a point where it’s ripe for growth. Ofcom’s latest report revealed that over 7.5 million UK homes now have access to superfast broadband and PwC predicts that the connected home market could be worth almost US$150 billion globally by 2020[1]. With an increasing number of these households having some form of Wi-Fi network in place, rolled out as standard by the likes of Sky and Virgin Media, there’s a growing market opportunity for service providers.

Every home with a wireless network can integrate some kind of smart connected device. Yet for consumers, it isn’t just about the device itself and high speed connectivity, it’s about the user experience as a whole and the services that can help them get the most out of their technology.

Consumers today are demanding far more control and convenience in their home environments, but simply enabling connectivity and offering on-demand entertainment will no longer cut it in the market. If the Connected Home is to gain widespread (and indeed sustained) interest from consumers, service providers need to understand that customers want more practical applications.

Sustainability and security

Devices that can help reduce household energy usage and improve security will be particularly popular. Smart thermostats give consumers more transparency and control over their energy usage, helping them keep costs down. Customers need to be convinced of the value proposition of the connected home so savvy service providers have to look at ways to better support customers who want to monitor, control and protect their living environments.

Being able to protect your property (whether it’s from burglars, water or fire damage) has always been a major priority and a competitive market for service providers. There’s now a whole range of options available to the consumer – everything from alarms and security cameras to special sensors and smart plugs that enable you to monitor your home from a simple mobile app.

Service providers have to engage and respond to consumers’ concerns as, whilst many people see the potential of smart devices, they are not always convinced by the initial upfront cost of setting up such devices in their homes.

But by successfully positioning homes at the centre of the digital ecosystem, service providers have real potential to monetise the Connected Home opportunity. In addition to providing the technology, service providers are uniquely positioned to manage the process for their customers, from helping them choose the right products tailored to their individual needs, to offering installation and providing on-demand support. Service providers of course already have all of the necessary infrastructure in place to go the extra mile for the customer. Having household products connected to the Internet allows service providers to remotely manage and monitor these devices 24/7. This means engineers don’t need to be sent to the home to troubleshoot any issues that might arise – reducing costs as well as streamlining the whole customer service experience. By offering services such as this service providers can also offer bundled features and increase subscriber ‘stickiness’.

Home and lifestyle management

Players in the connected home market will need to communicate their value proposition more effectively to realise their ambitions - technology is only as good as it is useful to the people using it. Smart home technology has to offer functionality and also be personalised to the end-user. By analysing the data gathered from consumers’ behavior patterns, service providers will be able to tailor their services accordingly and offer a more personalised experience. The Cloud plays an important part in increasing the scalability of Smart Home services in that it can take care of storing home configurations and logs, serving the user interface, communicating with external systems (e.g. weather, email, SMS and push messages), managing user permissions, and keeping a close eye on each home system’s health.

The Smart Home – the new IoT

Those providers who can show the end-user how IP and non-IP devices can be connected together in the home have a real opportunity. Some consumers want the basic function of being able to turn their devices on or off but the extent to which devices can work with each other – interoperability – is becoming increasingly important.

What’s even more exciting is being able to recognise and then memorise the pattern of user behaviour and achieve true automation. Imagine if through GPS technology your home knew that you were only a few miles away from your drive home from work - your central heating switches on automatically and your lights switch on and your favourite music starts playing when you walk through the front door. When you walk in the kitchen the oven turns on and your coffee machine starts brewing your favourite cup. Some home automation software even offers analytics that recognises individual family members’ behaviour and makes decisions based on that person’s lifestyle preferences.

Whilst we’re still some time away from complete integration, whether through a dedicated app or home hub, the idea that separate heating, lighting, water, entertainment, and security devices will one day communicate with each other is the real opportunity for service providers to deliver greater value to their customers. It also provides the opportunity for smaller, more nimble service providers to claim market share by developing innovative new services that tap into the IoT. And this can only be good for us consumers.

[1] PwC, Mega Trends ‘My Life Connected’

This was posted in Bdaily's Members' News section by Daniel Springall .