Tuesday, January 12, 2010

Home Automation?...Nope!

“Home Automation” has been around for over 20 years and other than in the very high end, custom integrator market or the geek community it has never received mass market adoption—and that is still true today. The term, “Home Automation” is viewed by most consumers as being something that is too complicated, too expensive and “unnecessary”. It is something that Bill Gates has in his home.

However, Home Energy Management, Safety and Security, and Remote Home Management are taking off like wild fire. Consumers can now get products and packages that address these needs at major retailers such as Lowes, RadioShack, Fry’s and Amazon and giants such as Best Buy are planning rollouts. What has changed that is driving this growth?

- Solutions that actually resonate with consumers: Not many really care about “automating” their home, but many care about saving money on utility bills, being more green, protecting their home better and being able to manage these things while on the go.
- Easier to install: With wireless technologies like Z-Wave and Zigbee, homeowners and renters can install these solutions easily without running wires and putting holes in the wall.
- More affordable: Lighting control for $40, thermostats for $99, door locks for $199, all available today at large retailers makes this more accessible for the average consumer.
- Interoperability: Technologies such as Z-Wave have created interoperability certification programs that have over 350 products from different brands that work together on the same home network.
- Technology that actually works: In the past, the more affordable technologies such as X-10 or the “Clapper” either had very limited functionality or they were not consistent in their quality and performance. Now with technologies from Z-Wave, Zigbee, Insteon and other low priced technologies are powering high quality products from major home brands such as Schlage, Black & Decker, Trane, Leviton, GE and many others.
- The Killer APP…control with your mobile phone: Studies have shown that there is a very high interest in consumers wanting to be able to control their homes while on the go. However, having to use your office computer or open up your laptop while in the airport has never been a good user experience. Now you can turn on your air conditioner, let you child in the door when she forgets her key or make sure you turned off your lights all from the convenience of your iPhone, Blackberry or other mobile device.

In addition to all of these compelling market drivers, there is a synergy developing between the retail channel and other major channels that are investing in these categories. The Cable and Telco service providers have been aggressively looking for a “quad” play (in addition to voice, high speed internet and television content). All three of these compelling Home Automation services leverage their broadband services delivery and their potential for another recurring revenue model. The Service Providers are trialing and rolling out Safety and Security services and Energy Management services worldwide. Typically they cannot and do not want to support the breadth of product hardware that consumers will embrace. They have been actively looking at “hybrid” models that include retail partnerships for the distribution of the products consumers need to fulfill their service.

Likewise Utilities and local governments are highly motivated to provide consumers with the tools to help them shed load during high demand times. Again, they do not want to be in the business of supplying thermostats, light switches, pool pump and appliance controls to the end user. However they will supply incentives for consumers to buy these devices at their local retailer.

It is clear that now is the time for retailers to prepare themselves for the looming boom that the affordable control of the smart home will bring to them.