The enterprise and telco path toward smart home adoption and revenue generation has not been smooth, at least to date. Although the opportunities are great, there has been too much siloed thinking on all sides, which has in turn stifled innovation and also delivery.
However, the tide is turning, and the future looks bright, with considerable innovation just around the corner. A new concept called community IoT illustrates this potential rather neatly -- and potential it certainly has. The expanding Internet of Things ecosystem will have a $1.7 trillion annual economic impact in cities by 2025, according to the McKinsey Global Institute. (See 6 Reasons Smart Homes Are Smart Business)
One reason for this growth: individuals' continued move to urban regions. Half of the world's population lives in cities, and by 2050 that will rise to 70%, the Alliance for Telecommunications Industry Solutions predicts.
Fascinatingly though, this city-dwelling majority must contend with the fact that 99% of apartment buildings worldwide have no digital infrastructure, which presents a major opportunity for social innovators, telcos and enterprise alike.
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One example where these smart home technologies are being brought together in a win-win situation is a social community service that was rolled out in Germany in May 2017, which exemplifies the benefits of wider smart home connectivity for apartment tenants and perfectly highlights the business opportunities available from future smart home innovations.
Smart home community: the concept
In this German example, within five minutes and without any technical skills, any resident can use an app to start a private social platform for their building. By fusing together smart home technology, IoT and a social network, neighbors and inhabitants of apartment blocks can enhance traditional smart-home offerings by extending them beyond a consumer's home, creating a vibrant new community -- and in doing so creating a new business opportunity that underscores a wider future impetus.
As a result, community IoT connects homeowners in building blocks or gated communities, then links them with facilities management and property managers. In the future, such digital social constructs will become common, as individuals unify around environmental, ideological or perhaps merely pragmatic groups that deliver valuable use cases.
Whether via shared smart sensors or by manual reporting, tenants can easily log and report building faults and breakdowns to relevant authorities. For example, a resident can log a broken elevator or non-functioning communal light and a repair technician allocated. Other members of the community could then follow the progress of the repair, rather than logging duplicate requests. Where apartments are non-serviced, a premium service with a home emergency repairs provider could be connected -- or offered as an option.
Enterprise traction opportunity
Once a solution connects to smart meters it will be possible to monitor irregular usage and pre-empt damaging leaks, for example, by use of an energy measurement service. In another example, users will receive a community alert that an intruder alarm has been triggered enabling fast response as well as enhancing security for the community as a whole.
This new social community business model offers added value to the smart home proposition, and also delivers a new set of opportunities to property developers and maintenance technicians. Building managers and contractors will benefit from smoother workflows, aggregating specialist jobs across sites and also by gaining the trust of tenants through regular interaction, clear communication and rapid response.
Meanwhile, property developers stand to benefit by smoothing the commissioning and signing of new apartment buildings, as building managers log and track user-reported requests. They'll also see significant savings across larger portfolios by aggregating issues and fixing them in bulk.
Marketing and service opportunities
The potential for high traction cross-selling and upselling among peer groups is particularly strong. A seminal 2015 report from McKinsey identified that marketing-inspired word-of-mouth generates more than twice the sales of paid-for advertising, and these customers have a 37% higher retention rate -- a fact that has led to today's burgeoning "influencer" marketing budgets.
In terms of services, there is huge potential in the future. Not only via enhanced premium services -- such as professional alarm response services -- but also installation and maintenance offerings. Telcos with in-home experience and downstream data provision are particularly well-placed to take opportunity of this new market.
Then there are the data aggregator services; for example, third-party energy measurement tools that offer tailored utility packages to suit usage and environmental tastes and sharing economy services for transport or storage; in short, the opportunities are almost limitless. Perhaps it is time to start planning today, for a more connected and social tomorrow.
— Thomas Rockmann is responsible for all aspects of the Connected Home business at Deutsche Telekom and has been instrumental in growing the business and delivering the white label solution with partners across Europe.
(Home page photo source: Juhasz Imre from Pexels)