Consumers across the world are gradually waking up to the idea of the smart home: a house where heating, lighting, door access, security and audio visual (AV) systems can be remotely controlled via smartphones, tablets andÂ otherÂ digital devices.
Estimates from Transparency Market Research published last year suggest that global sales of home automation systems could exceed $21bn within five years, yielding a healthy compound annual growth rate (CAGR) of 26.3% between 2013 and 2020.
Inevitably, demand will vary enormously between one region and the next, with some countries seeing much larger sums of money spent on home automation systems than others. The US is likely to lead the way for example, with home security system sales boosted by comparatively high rates of crime and light restrictions on gun ownership.
Who is buying home automation systems?
Jason GirardierÂ is area sales manager at Control4, a provider of home automation systems in the UK and around the world. Speaking atÂ IFSEC International 2016 recently in a panel debate on the future of home automation, he acknowledgedÂ that the UK home automation market is still inÂ its infancy, but says demand is growing and UK consumers are becoming savvier as more devices and higher profile suppliers have come to the fore.
â€œWe have the ability to control and interact with more devices than ever before, it is a good place to be,â€ he said. â€œAnd companies like Apple and Google are pricking peopleâ€™s interest in what we do.â€
â€œCompanies have not grasped what consumers want and if we do not, a lot of cash will disappear down the mountainside.â€Â Jon Carter, UK head of business development, connected home, Deutsche Telekom
Sean Daly, director at home automation specialist iHomes, saidÂ his companyâ€™s customer base has recently expanded from larger, high-end houses to include smaller properties including flats, apartments and penthouses. Indeed, IFSEC Global recently published an interview with an installer about a home automationÂ installation he had completedÂ inÂ a LondonÂ flat, complete with footageÂ of the system in action afterwards.
â€œEven if they do not have the money [to deploy home automation] now, the people whoÂ are coming to us are planning for it, putting in the cabling to support future expansion,â€ he said.
â€œThe [property] development market in London is currently booming among lower price per square foot price points,â€ added Philip Pini, head of residential development at home and office automation system supplier Crestron. â€œThere is a lot more competition now, which is nice, but there is enough for us all to go after.â€
Others are lessÂ certain that the market is big enough to keep every supplier in profit, however. Jon Carter is UK head of business development for the connected home at Deutsche Telekom, which has invested large sums in building a home-automation business in Germany but has failed to deliverÂ significant customer traction.
â€œCompanies have not grasped what consumers want and if we do not, a lot of cash will disappear down the mountainside,â€ he said. â€œLots are focused on business to business (B2B) but there is also a business-to-consumer (B2C) opportunity and rivals will move in and take that value if we do not.â€
Simplicity and compatibility
Most industry players agree that home automation solutions of the past have often been hard to use, difficult to integrate and in some cases prohibitively expensive.
â€œThe biggest negative is complexity,â€ added Pini. â€œWe have made simple things over complicated and nobody wants five or six buttons on a light switch.â€
Said Daly: â€œUnless you choose the right products that are compatible with each other and are good at networking [those products], you are going nowhere.â€
Yet there is evidence to suggest that situation is changing as easy to use, low cost, do-it-yourself (DIY) devices become more popular among consumers. That is not necessarily a bad thing for the incumbent suppliers focused on providing the underlying networks and systems architecture required to connect them, according to Jason Girardier of Control4.
â€œDIY goods raise awareness of the whole industry and prompt people to do more with integrated systems,â€ he said. â€œAs devices like music players and thermostats become cost-effective, people get more familiar them and then they want lighting and heating controls all around the house.â€
â€œIt is really the back-end infrastructure â€“ the networks and IRS systems â€“ which have not moved on that far beyond faster bandwidth,â€ said Pini.
â€œIn-house people want three main things: lighting, heating and access control. Over and above that, you are going back to the audio-visual side of the market, where you can pick things up from any high street [or online] retailer.â€
Get the network right or you will be back to site time and time again rebooting routers.â€ Jason,Â Girardier, area sales manager, Control4
Being able to install, configure and manage that back-end infrastructure is a key area of differentiation for home-automation solution suppliers anxious to protect their business against incursion from DIY devices and emerging web-based rivals. But acquiring that knowledge is not easy for firms whose heritage lies outside IT.
Girardier reported unfamiliarity with network infrastructure as theÂ biggest day-to-day pitfall for most installers.
â€œEverything is connected to the network â€“ if that is not right, nothing will work,â€ he said.Â â€œMany installers are not geared up to the type of network traffic control systems are going to generate.
â€œA lot of people we deal with are from the AV and hi-fiÂ background and that is the hardest thing for them to learn. Get the network right or you will be back to site time and time again rebooting routers.â€
Daly echoes that sentiment but believes suppliers can boost the value of the contract by offering appropriate support and maintenance programmes which cover not only the network element but also the attached devices. The trick for installersÂ is to supplyÂ only devices thatÂ have been tested and approved as beingÂ compatible with each other and toÂ manageÂ customer expectations.
â€œIf the lighting, heating, air conditioning or the TV [attached to the home-automation network] is not working, you get a call,â€ he said. â€œIt might not be your problem, but they [the customer] thinks it is. You need a maintenance programme behind that, but that is a good revenue stream.â€
SecurityÂ creates value
â€œCan I really convince my wife to spend Â£200 to turn on the lights with her smartphone? For the mass market, it has to be security. Consumers love sexy IP cameras with a passion.â€Â Jon Carter, UK head of business development, connected home, Deutsche Telekom
Home automation systems span a range of heating, lighting, access control and AV devices and applications. But the majority of people buying them appear to be interested in implementing some form of home security system, whether connected alarms, IP CCTV or a combination of the two.
A recent survey of the Control4 customer base revealed security was the driver for 92% of smart home installations, said Girardier, with a drive to improve energy efficiency usually a secondary concern.
â€œAcross Europe it is the security market where we can all create value,â€ added Carter. â€œNo customer is interested in getting out their smartphone to turn on their lights.
â€œCan I really convince my wife to spend Â£200 to get that benefit? For the mass market, which is the only one Deutsche Telekom is interested in, it has to be security. Consumers love sexy IP cameras with a passion.â€
â€œI have never had somebody buy a system from me for the sole use of energy efficiency, but it will become more important in the future,â€ said Daly.
Other companies report they are seeing much more pronounced interest in energy efficiency, however. Nest, the smart thermostat manufacturer acquired by web giant Google for $3.2bn in 2014, reports that its thermostat product line â€“ now in its third generation â€“ is now itsÂ best-selling device ahead of its smoke alarms and cameras (though it has also been supplied to the UK market for a longer periodÂ than the latter products).
Even so, the numbers sold are small with estimates suggesting that only around 20,000 units ofÂ Nest thermostats have so far found their way into UK homes.
Sending and receiving data via the public internet, the growth in home automation systems creates new vectors for cyber attacks.Â Â The potential for disruption is considerable, but the real danger is that those devices will be hijacked and used to launch attacks on other connected systems, or compromised to reveal personal information about the owner that can be used forÂ identify theft.
Those risks have led to calls for manufacturers and suppliers of home automation devices and networks to strengthen the information security defences embedded in their platforms. But despite the warnings, most consumer-focused home-automation manufacturers and suppliers remain unconvinced that cyber security is either an issue or one they should take responsibility to address.
â€œCyber security is a key issue, but there are lots of thingsÂ thatÂ can be done â€“ by putting control systems on a dedicated part of the network for example,â€ said Philip Pini from Crestron. â€œThe better quality [home automation] networks have better quality management tools and the ability to use different protocols. But something has to be taken away from a contract to make it cheaper, and we do not typically advise people on something that would be outside our remit.â€
- What do security professionals think about plug-and-play systems
- Challenges like low-light conditions or large spaces â€“ and the threats posed in various sectors
- Which cutting-edge features â€“ such as mobile access, PTZ smart controls or 4K resolution â€“ are most important to security professionals
- What are the most important factors driving upgrades and would end users consider an upgrade to HD analogue