Connected home – show me the money?!

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By Jon Carter, UK Head of Business Development – Connected Home, Deutsche Telekom.

A new report by Deutsche Telekom, ‘How to create growth from the connected home’, sets out the key business opportunities and associated models, which will enable a broad range of industries to create new value.

DT’s report outlines a number of different spaces, from home security and connected insurance to energy management and prognostics, and how Europe’s telcos, utilities, retailers, insurers, warranty providers and home assistance providers, as well as appliance and consumer hardware manufacturers can exploit them to capture new revenues.

chart: connected home installed base EU and NAM 2013-2019
Connected home installed base EU and NAM (2013-2019)
Click to enlarge
According to Strategy Analytics, the number of households with some form of smart home system will surpass 100 million worldwide by the end of 2015 and nearly triple in the next ten years’ time to over 300 million. The challenge facing many of the industries listed above is that although this trend will create a very compelling growth opportunity, it also represents a very real threat. This whole technology trend is set to create immense flux, some industries will be upended, new players will enter and disintermediate today’s major players, and value will shift from one sector to another. One of the many insights in the report is how companies will need to focus on selling services rather than consumer hardware, which will impact existing business and operating models, margins and routes to market.

Here let us examine three industries with a compelling interest in the connected home.

1. Telcos can lead the way
Telcos are perfectly positioned to establish ecosystems of third party manufacturers and service providers – leveraging their ownership of the broadband router.

The connected home is a natural extension of the telcos’ quad play offerings. For integrated operators that provide customers with a broadband router or TV set-top box, it is an obvious next step. In the near future, operators won’t just be providing in-home Wi-Fi connectivity, but will also be connecting the majority of their home devices and domestic appliances to the internet.

2. Insurer incentives
There is a particular urgency for home insurance companies to act, as firms in adjacent markets are ready to take a greater role in setting policies and bring more agile business models to the market.

The connected home will provide insurers with more reliable data for risk management, and more real-time data. The most frequent claims are the same across much of the world – water leaks, smoke or fire damage, and burglary. When technologies monitor a home, some of these traumatic events can be identified and prevented. For instance, innovations in water flow meters coupled with analytic software ‘in the cloud’ have the potential to reduce risks, such as a collapsed ceiling as a result of a leak.

3. Strategies for utilities
Home energy management services (HEMS) enable utilities to create a positive engagement with their customers, through the visualization, monitoring and control of energy use. Smart thermostats and data from other connected home technologies represent a compelling opportunity for utilities to help consumers better manage their energy costs, while exploiting new commercial models.

Open for business: Deutsche Telekom´s Connected Home platform
One of the greatest challenges facing firms seeking to enter this market is the lack of common standards and architectures, as well as a lack of openness in terms of the APIs between platforms. To overcome this, Deutsche Telekom has built an open white label platform which enables partners to rapidly integrate connected devices and create new services, leveraging the Eclipse SmartHome open source developer community.

connected homes : smart devices at homeExploiting the open ecosystem, partners can play to their core strengths, benefit from multiple synergies, discover new routes to market, deepen consumers’ loyalty to their brand, capture device data and create new growth for their business.

Deutsche Telekom’s platform has integrated more than 35 partners, including Philips, Osram, Miele, Sonos and Samsung, and in addition to being offered by Telekom Deutschland in Germany, is also supported by major utilities, such as EnBW and Vattenfall

Now is the time to join forces
Now is the time to join forces, combine industry-specific knowhow and drive the connected home forward to realize new growth for Europe. The connected home growth opportunity is real and presents a significant opportunity for a diverse range of industries. The key to success for the future is to maintain an open, agile and flexible course.

Visit www.connectedhomeplatform.telekom.net for more information and iotbusinessnews.com/white-papers to download the report
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