Platform Disruption ― Overcoming Connected Home Adoption Challenges
Service Providers and Device Makers: Smart Home Friends or Foes?
IoT: Protecting the Consumer Experience
Driving Value With New Use Cases in the Smart Home
Accelerating Smart Home Adoption Through Voice Control and Alexa
Call it a CX world ― that’s for customer experience. Or you can call it UX for user experience. Regardless, you must call it a goal for the business growth and success of the connected home and the Internet of Things (IoT).
Existing and emerging platforms, beyond a router but closer to a hub, will melt into ecosystems: not the kind that’s a biological community of interacting organisms, but a complex network or interconnected system.
At least at this time, there are more frenemies than friends or enemies among device makers, resellers, service providers, cable and broadband firms, security/automation firms, installers, certification and standards organizations, software and app developers. All of those players came to CONNECTIONS, the May 2016 Parks Associates’ Connected Home Conference.
Most were in tune to the CX and UX mantra. But, while having a shared vision, not everyone at the conference was on the same page. For instance, home penetration of professional security monitoring, which most everyone believes is a mighty gateway tech route to the smart home, is pegged at anywhere between 17 and 30 percent of households by various speakers, which is a big swing.
Headquarters in Dallas, Parks Associates is a market research and consulting company specializing in emerging consumer technology. It hosted the 20th anniversary event in San Francisco in late May.
Still, conference speakers and attendees seem to agree that professionals in the security and smart home arena, as well as their installers, are essential cogs in the smart home wheel, even with do it yourself (DIY) and especially with “do it for me” (DIFM) households.
Research released in coordination with the conference: Parks Associates reported that 78 percent of U.S. broadband households bought at least one connected consumer electronics device in the last 12 months and 58 percent plan to buy one this year.
While all sessions proved valuable, here are some nuggets from a handful of them.
A keynote by Daniel Herscovici, senior vice present and general manager at Xfinity Home, the Philadelphia- based Comcast business which provides professional security monitoring, smoke and water detection, real-time text and email alerts as well as viewing of live video. More recently, its EcoSaver is a cloud service that helps save money on home energy bills.
Herscovici proposed four core categories of connected home experiences:
- Safety and security ― police, fire and ambulance
- Peace of mind ― access control, home check-in, water leakage
- Save money ― electricity, gas, water
- Lifestyle ― lights, audio, shades, entertainment
“It gets harder to monetize from this top to bottom,” he observed, but saw mass market gains in redefining security to include peace of mind at least. There are also opportunities as legacy systems (75 percent to 80 percent of the installed base, he contends) need updating. “Some platforms have often been around for up to 12 years. It’s like moving from flip phones to smart phones.”
Only over the past 6 to 12 months, the Xfinity executive reported, Google searches of the phrase “connected home” increased significantly. Among accelerated and emerging specifics of interest:
- smart doors,
- smart door locks,
- smart refrigerators,
- smart thermostats, and
- smart washing machines.
According to Herscovici, research also shows that:
- 40 percent of households want connected cameras;
- 26 percent want a video doorbell;
- 20 percent want connected lights;
- 13 percent want a smart lock.
He believes that the industry suffers from vertical overload that causes a subsequent vertical rebellion. “To address such a vertical rebellion, the industry created [open] platforms.”
Still, there also are consumer perceptions and platform challenges:
- Devices are sexy.
- Services are useful.
- Platforms are neither.
“You can hide the platform into home security, but does that really drive the mass market?” He sees the future: Embedding the platform into all new devices. On who pays, and how they pay, the connected home bill, Herscovici commented that an extended and revised business model which now often stresses only recurring revenue “has too much friction” as more consumers join the Internet of Things bandwagon. Frictionless distribution also is a goal. “Mass market adoption requires less friction” throughout, he said.
The Xfinity executive predicted a future one-two punch. “Expand the definition of the platform ― consumers’ routers and gateways can be a powerful platform ― and [find ways] to use existing devices already in the home” as part of that expanded platform description. No doubt, “the platform ― hardware and software ― is a solution. Think an end-to-end solution.” Echoing other CONNECTIONS speakers, Herscovici suggested three essentials in delivering the consumer solution:
- curated devices and certified services;
- professional installation;
- a single contact for support.
A major “curate” point: The process and knowledge of what products to select is more complex. “Narrow it down. Work within categories and curate products in those categories. Make it simple. One or two cameras. [Users] can expand after that.” He pointed out another headache when the aim is to handle all types of product. “Each device has updating needs. Managing patches in connected home ecosystems will not be perfect” and expensive.
Also, business objectives among service providers and device makers are not aligned.
- there must be differentiation of products;
- the platform adds value to the product; and
- data use is to control that data and expand customer relationships.
- the aim is to sell more products;
- the platform needs to add value through integration; and
- control data to maintain and enlarge customer relationships.
For Broadband and Security:
- commoditize products;
- centralize value in creation of the platform; and
- control data through customer relationships.
Stuart Sikes, president of Parks Associates, started the discussion by suggesting that the “core value in the magic is the platform and who is doing the driving.”
Among take-aways from panelists: Amena Ali, senior vice president and general manager at WeatherBug Home, part of Earth Networks, Germantown, Md., which leverages big data intelligence to deliver focused IoT help by integrating hyper-local weather data with connected devices. The bottom line: Deliver predictive energy efficiency insights to homeowners and, at times, their utility companies.
- energy usage data for energy efficiency
- home insights
- device optimization
- connected thermostat
- other connected devices
- energy efficiency
- demand response, load optimization and consumer engagement
- bring onsite capability to home and energy controls
- save money
Ali added that as prices [of components in the connected home] come down, one key is to determine the right place where the intelligence should reside. “Devices are simpler with more intelligence and can be enabled by cloud services.”
Kristine Faulkner, vice president/general manager, home security and smart home [Cox Homelife] at Atlanta-based Cox Communications, the broadband communications and entertainment company, providing advanced digital video, Internet and telephone services over its own nationwide IP network, is the third-largest U.S. cable TV company, serving approximately 6 million residences and businesses. Centering on new and expanded services to the home, Faulkner highlighted basic “meat and potatoes” services:
Protect ― Professional home security monitoring with sensors, carbon monoxide, smoke and water detection. Keyless management of entry into the home with door locks.
Monitor ― Check in about what’s happening at home via indoor/outdoor cameras, video recording with motion search and cloud storage access.
Control ― Customers can manage utility-provided cost savings use with thermostats, light bulbs, in-wall switches and appliance modules.
Faulkner emphasized the need to build awareness. “Sixty percent of Homelife customers never had a home monitored system before.” She added that there is a need to recognize lifestyle and changes. “Service providers should look at totally integrated services including entertainment, too.”
Scott Harkins, vice president IoT partner programs at Honeywell Connected Home, Melville, N.Y., stresses comfort, convenience and security. He pointed out that, concerning consumer value, “deliver value beyond the product and add unexpected value after the purchase, too.” And, he advised to also market to utilities, homeowner organizations and home warrantee firms.
Beyond channels to market ― professional installation, DIY, utilities, retailers and others ― Harkins sees increasing value through the developer community with publicly available open application program interfaces (APIs) as well as curated APIs for security and the connected home. “Sweet spot APIs mostly aim at home security and energy” right now.
Everything has a cost, the Honeywell executive pointed out. “Business models? Without an annual or monthly subscription, the security space [may make more sense now] but connected home evolves to [maybe] an on-demand model into the future.”
Letha McLaren, chief marketing officer, Icontrol Networks, Redwood City, Calif., describes her firm as a software platform provider that “powers the smart home.” It works with companies such as Xfinity Home, Time Warner IntelligentHome and Cox Homelife as well as service providers including ADT Pulse, Telguard Home Control and Monitronics.
It’s now a matter of peace of mind, she said. Still, there must be “on ramps” [for customers and professional security providers] to be able to “wet their whistle” and also reach out to those who do not want a fully featured connected home.
May 2016 research from Icontrol Networks found exceptionally high satisfaction among customers who opted for a do-it-for-me smart home solution: More than 96 percent of respondents report they are “very satisfied” or “satisfied” with their systems. Beyond satisfaction, those with professionally installed solutions feel the cost is justified: Approximately 96 percent said they would purchase their systems again and 98 percent would still opt for professional installation today.
A well-received panel presentation at CONNECTIONS ― IoT: Protecting the Consumer Experience ― was moderated by Patrice Samuels, research analyst with Parks Associates. Samuels immediately threw down the gauntlet. “You have to meet or exceed the expected customer experience. Devices, services, onboarding, security and privacy” are among IoT elements. Concerning consumers with some level of IoT, 28 percent report problems so, understandably, professional support services have and will increase. Samuels then turned to the panelists.
John Kieny is vice president, business development at Milpitas, Calif.-based CSS Corp., a global player in technology support of enterprise and consumer products, managing IT infrastructures (stand-alone, cloud or mobile-enabled) and deploying networks.
Aim, according to Kieny, is a ubiquitous security and connected home support solution. “You want to enhance stickiness.”
He advised that tech support expertise will only enhance the user experience by securing the IoT world with:
- an active delivery framework that transforms support from reactive to pre-emptive,
- customer acquisition,
- customer service,
- technical support, and
- a higher level [or more expensive] premium tech support.
Rob Conant is founder and CEO at Cirrent, San Mateo, Calif. The company concentrates on making IoT and connected home products easier to use while addressing the most complex part of such products: getting them connected. There are tens of millions of public home hotspots, for example, with help coming from instant and secure cloud connections. “But setup [of the connected home] has not gotten any better with a failure rate of more than 20 percent” while return rate is high, too, Conant contended. “The dream is out-of-the-box, ease of installation, working-right-away connected devices.”
PlumChoice, Lowell, Mass, provides remote technical services and support to various telecommunications, Internet service provider, OEM, cable, retail and e-tail companies. Channing Lai, director, project management, pointed out that while 78 percent do not own a smart home device, of those 20 percent hesitate to buy smart devices because of concerns about security and privacy. “Specialized tech support for providers” pays dividends. Awareness and adoption is on the front end but “without assistance, they don’t buy” so you have to proactively coach end users. “It all comes down to the customer,” Lai said.
Support.com is a multinational computer technology corporation that provides online tech support from its headquarters in Redwood City, Calif. Among its relationships are Comcast Xfinity, OfficeMax, Office Depot, Carbonite and Staples. Especially for the Internet of Things environment, “you can’t sit around waiting for things to break so you have to fix them,” commented Lee Gruenfeld, vice president of strategic initiatives.
William Oget is vice president of engineering at Redwood City, Calif.-based Arrayent, with an IoT platform delivered as a software-as-a-service solution and which enables manufacturers to connect their products with their customers via the Internet. Relationships include Maytag, Whirlpool, Chamberlain, Jenn-Air, Osram Sylvania, Procter&Gamble and KitchenAid, to name a few.
Oget sees consumer IoT platform requirements to include:
- rapid time-to-market,
- products launched in retail,
- third-party security audited,
- global footprint,
- scale tested, and
- appliance and device protocol support.
In this CONNECTIONS panel discussion, one topic was IoT security and privacy covering device loss and theft, hackers, viruses, spyware, identity and data theft. The latter was voted the number one concern in a poll of the audience.
While much has been written about security and privacy – unauthorized invasion of home cameras, fear of home appliance takeovers, breaking through wireless locks and even seizure of computer rich and Wi-Fi enabled vehicles -- there was a qualified consensus by panelists that, if consumers really want a product, they will justify the rareness of incidents or they will somehow get around security and privacy threats. But the bad guys are out there and getting savvier, too.
It’s [security and privacy] that’s less about the device and more about the network they sit on. But it depends on the type of device such as lightbulbs compared to smartphones, contends Kieny. It’s a balance of convenience, value and security.
Moving to the real world in the panel discussion, Driving Value With New Use Cases in the Smart Home, connectivity enables new opportunities to create value. Platform vendors and manufacturers are aggressively connecting with each other to drive value for consumers as standards groups seek to simplify the complexity of integration, commented panel moderator Tom Kerber, director, research, home controls & energy at Parks Associates.
“Interoperability is table stakes and there are more edge-to-edge needs, too,” Kerber contended.
Curt Schacker is vice president, managing director, connected products at New York City and San Francisco-headquartered EVRYTHNG that has an IoT smart products platform. The company manages digital identity data in an intelligent IoT “smart products” cloud to connect consumer products to the Web and drive real-time applications.
“Take a broad view [of use cases] with things that must be connected to the Web, including ‘not so smart’ products. Everything and everyone can gain” by having digital tech in some way, Schacker asserted.
Jay Kenny is senior vice president of marketing at Tysons, Va.-based Alarm.com Holdings Inc., with its technology and cloud services to power security and smart home solutions, including interactive security, energy management, video monitoring, intelligent automation and wellness. Connected is a broad array of smart devices, making them controlled through a single intuitive mobile app.
More players are now gaining maturity in this category and impacting the next evolution of home controls. “Installations are only going to get more complex,” Kenny predicted. So third-party professional installation makes sense.
Mark Skarpness, chair of the IoTivity Steering Group with the Open Connectivity Foundation (OCF), explained that IoTivity is an open source project, a software framework enabling connectivity for the emerging needs of the IoT. And OCF is helping establish IoT standards and certification of products. Skarpness also is director of embedded software in the Open Source Technology Center at Intel Corporation of Santa Clara, Calif.
OCF recently unified the entirety of the former Open Interconnect Consortium into the foundation after the consortium acquired assets of and combined its technologies with those of the Universal Plug and Play Forum last year. The more recent name change was necessary with the addition of new members such as Qualcomm with its AllJoyn technology and Microsoft, to name a few, Skarpness commented. “New [connected home] uses speak to the need for standards,” he observed.
Mike Stauffer, senior director of business development, Internet of Everything, at San Jose, Calif.-based Qualcomm Atheros, a developer of semiconductors for network communications, particularly wireless chipsets, looked at the technology broadly from smart bodies to smart homes to smart cities. “We are the arms dealer for others who need IoT.
Winifred Chang, director IoT business development, LG Electronics USA, of Englewood Cliffs, N.J., said, “Use cases must save time and are easy to use.” Home security company ADT and its Canopy embracing the smart home, has partnered with big names such as LG and its cameras. LG is a member of The Thread Group, with its emphasis on open systems and IPv6 (6LoWAN) Wireless Personal Area Network gateways as well as a member of the AllSeen Alliance, aimed at enabling industry standard interoperability between products and brands with an open source framework that drives intelligent experiences for IoT.
It is an open world, according to Chang, with:
- open platform,
- open connectivity, and
- open ecosystem.
Consumer awareness is important, said the LG Electronics USA executive. Keep use cases simple ― people understand remote controls, she advised, pointing to a Parks Associates study indicating there now are 6.7 connected devices per household. And don’t forget: IoT and connected home product and service providers can follow a household family through the various stages in life, Chang suggested.
There was some panel agreement when talking about the challenge to monetize. There always is a cost, at least in energy and effort. But the outcome is increased product value and brand loyalties.
Amazon Echo is a voice-enabled wireless speaker. The device responds to the wake word “Alexa.” With chances to develop into a platform or an ecosystem, Echo offers weather from AccuWeather and news from a variety of sources, including local radio stations, NPR and ESPN. It can play music from an owner’s Amazon Music accounts and has built-in support for Pandora and Spotify streaming music services. There’s support for Nest thermostats and If This Then That (IFTTT) for connected home devices. IFTTT is a free Web-based service that allows users to create chains of simple conditional statements called “recipes.”
Echo maintains voice-controlled alarms, timers, shopping and to-do lists and can respond to questions about items in Google calendar.
“Amazon is relatively new to this space,” stated Isbitski. But the family is growing quickly with Echo, Amazon Tap (with a non-removable, rechargeable battery for portability) and Echo Dot while all access the Alexa voice service, free to developers. The differences between these Amazon devices are mainly related to hardware.
Isbitski contended that “voice [for the connected home and IoT] will be everywhere” thanks in large part to ambient intelligence (AI). That refers to electronic environments that are sensitive and responsive to the presence of people, including voice. It is a vision on the future of consumer electronics, telecommunications and computing. “AI can understand talk but also understand how we talk,” said the Amazon executive, and who asserts that touch will no longer be a primary interface.
The technology uses far field communication for larger range and which is a twin of near field communication, the latter which comes in almost every smartphone and sometimes applied to physical access control. “You have to crawl first before you can walk and then run,” Isbitski pointed out. Voice control is in the crawl stage.
However, some others at CONNECTIONS in various sessions were not as eager about broad use of voice control. One speaker stated that “a voice cannot do everything” and may prove limiting in some applications.
As the dust settles on CONNECTIONS, the May 2016 Parks Associates’ Connected Home Conference, Stuart Sikes, president of Parks Associates, sharpens his after-event perspectives in a question and answer interview.
SDM smartHOME: While not everyone could attend every session, overall what do you see as major take-aways?
Sikes: There is a sentiment that products that truly focus on consumer needs and use cases, not on creating a functional device, are a breakthrough. Giving consumers what they want seemed to be a theme. An example was the Cablevision keynote stating that the company was founded on taking chances to give consumers choices, and that it was time to continue taking those risks to honor the customer.
SDM smartHOME: Product makers, service providers, cable, security/automation firms, developers ― many stakeholders were there and learning from each other. A theme from a number of attendees was emphasis on CX customer experience or what some called UX user experience to better succeed in the mass market. How along that path are providers and how embracing are customers/users to that concept?
Sikes: The industry is learning that UX is everything. In an economy increasingly surrounded by “me too” products, the real winners are those that create an emotional experience with the customer. These are products that bring significant value with minimal effort, learning and management. These are the real “hero” products and they are rare enough that consumers get very excited when they experience one.
SDM smartHOME: Another shared vision is the importance of the platform, although people look at it somewhat differently. How do you view the platform, its importance going forward and the type of organizations providing the platform?
Sikes: The importance of the platform continues to be an academic discussion. That is, consumers buy a solution, not a platform. Once consumers find several solutions they like, they want more, and then they start to ask questions about the capabilities, interoperability and extensibility of the platform. Consumers choose vendors, not platforms. While interoperability is the basis of much discussion, most consumers don’t want to figure out how to make compatible products work together; they want a solution from a trusted vendor.
SDM smartHOME: Seems that some sources of channel sales and/or resale now have or soon will have limited curated products for their ecosystem. It seems like there may be a contention between truly open systems and a proprietary menu of connected devices, platforms, means of communication, etc. How do you see that impacting stakeholders and consumers/users? Less choices? Higher prices? Contention among various platform/hub providers?
Sikes: It appears that a number of trusted products (Echo, Nest, Ecobee, Hue, August, Ring) are becoming the preferred products in their categories and we will see channels surrounding the winners, making it hard for others to compete. If the platform supports the products that consumers know and want, they will win, regardless of standards. This puts increasing pressure on the curated platform vendors such as ADT and AT&T to add hot products to their controlled ecosystems.
SDM smartHOME: A number of CONNECTIONS speakers stressed the advantages of “professional installed” gear, even after a DIY buy or help with existing devices. Does that limit or expand security firms and installers; for example, less bundled product sales and more services and maintenance?
Sikes: If one believes that the majority of the market (mass market) is not willing to install their own products that require anything more than plugging in, then the only way to approach much of the target market is with a product that is surrounded by service and installation support. If home security, by one’s definition, is as simple as plugging in a Canary all-in-one sensor device, then no need for services. However, if one desires speakers, thermostats, sensors to be permanently installed, then these products are severely limited without services.
SDM smartHOME: How far along is the industry with IoT certifications and standards and how important are they?
Sikes: The industry will never be “finished” with these issues, but alliances of collaborators are forming that will address both real and theoretical standards issues. Real standards issues involve making products transparently work together. Theoretical issues involve labels that can claim interoperability. Unfortunately, the industry seems more focused on theoretical standards and less effective at building compatible products. Works with Nest, Thread, Weave, Open Connectivity Foundation, and AllSeen Alliance are all raising awareness and marching in the right direction to help build coalitions of products that work together. Moving toward the acceptance of particular standards is not as important as making your product work with the right partners so that together you can deliver to best solutions to the best price to interested consumers.
SDM smartHOME: Any other thoughts on the role of security and smart home dealers, installers and integrators in the future of smart homes and IoT?
Sikes: Yes. Much of the conversation at CONNECTIONS is about searching for mass market adoption. Anything that increases mass market awareness of smart home products will increase opportunities for dealers and installers, as people will always need advice, service, assurance and help. As easy as some products may become to install, there will always be people who wish to customize them.
SDM smartHOME: IoT: billions of devices and trillions of dollars. But the future includes a mandatory shift from v4 to v6 and end-to-end participants are very slow to shift. Any thought there on that challenge?
Sikes: Markets are good at implementing change when the players’ backs are against the wall. When IP addressing becomes a near crisis, change will occur, and in some cases, perhaps elegantly so.