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Vast Home Automation Opportunity Lures Vendors

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Home automation will be a big business. A very big business. The potential market is every home and, in reality, a huge number of small businesses. The types of services that can be offered range from security, energy management, non-security monitoring (nanny cams for youngsters and seniors), data management, health care and many others.

Thus, it is a market that should be watched carefully. If it succeeds to even a fraction of its potential,  it will be worth billions. In addition, carriers and their networks will be significantly impacted by the need to provide services on such a granular basis. The model for providing very small levels of service across an endpoint base of millions of households is complex and still not firmly established.

A good place to start looking at the category is from the perspective of that base home security landscape. These firms likely will move into the broader home automation sector. According to SecuritySystemReviews’ August 2013 Best Home Security Systems, via SiliconAngle, five strong vendors of home security systems are Vivint, ADT Pulse, FrontPoint Security, Protect America and LifeShield Security.

So much money is on the table in home automation that it promises to be nothing short of a glorious free-for-all. Last week, Infonetics Research suggested that service providers, who have their own footprints to mine for home automation revenues, also are interested in mounting over-the-top (OTT) projects aimed at earning money on networks run by others. Infonetics said that Verizon is experimenting with such an approach and that by 2015 the percentage of operators offering OTT services will double.

That would be an interesting development, particularly for the cable industry. Cable multiple system operators (MSOs) are famously collegial and respect each other’s boundaries. It’s not that these companies are especially cooperative. It’s that the legacy of the cable franchising system has encouraged them to mind their old (very lucrative) business. The lure of billions of dollars in OTT revenue may change that attitude. Overall, Infonetics found that more than 70 percent of operators responding to its survey will offer home automation services by the end of this year.

This sector is witnessing tremendous innovation. For instance, ReadWrite writes about Nest, a maker of “smart” thermostats. The company, the story says, last week introduced the Nest Developer Program. The idea is to link Nest to other home automation elements in the home. ReadWrite says that Nest, which will launch early next year, has signed Control4, a company that provides whole-home audio and smart lighting.

That initiative is a sign of the maturation of the sector. At Forbes, Patrick Moorhead acknowledges home automation’s great promise, but points to the profusion of technologies, network protocols and user interfaces. The Nest technology is a stab at solving that problem.

Also last week, iControl Network and EcoFactor, a vendor of cloud-based home energy services, said that they are creating a smart energy service that will integrate energy devices and appliances with data analytics focusing on HVAC and energy uses on the iControl platform. Essentially, the companies aim to bring big data and cloud tools to the management of energy in the home.

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