What role will security play in the smart home of tomorrow?

April 7, 2016
Companies discuss the industry’s evolution, future at ISC West 2016

LAS VEGAS – It’s said so often now that it has almost become cliché but the rise of the connected home, more commonly known today as the smart home, has forever altered the landscape of the alarm industry. For most dealers, long gone are the days of installing simple burg and fire panels, replaced instead by a new wave of technology that enables people to interact with their homes in ways that were once thought impossible. In fact, Utah-based NorthStar Home, which claimed the top spot in this year’s SD&I Fast50 rankings, has become one of the fastest growing residential security companies in the nation by leveraging connected home offerings and services. 

Consumers today have an expectation that the systems they install in their homes can be remotely managed with a smartphone or tablet and also have the ability to easily interface with other devices and appliances within their residence. At the core of this technology revolution, security remains one of the cornerstones upon which the larger smart home industry has been built. However, while the industry continues to ride the wave of largely positive consumer attitudes towards connected home technology, significantly challenges remain.

SecurityInfoWatch.com (SIW) caught up with several smart home technology vendors at this year’s ISC West show to get their take on what the future holds for the technology itself and for the security industry as a whole.

SIW: We know how important it has become for alarm dealers to be able to provide smart/connected home products as a part of their offering to consumers, but what’s the next evolution in terms of further enhancing that engagement between people and their security systems?

Avi Rosenthal, vice president of security and control products, Nortek Security & Control: Presently, we live in a world of home control; however, the next evolution will come when we live in a world of home automation. While it’s true the advent of the smart home connected to a panel led to a boom in the industry, currently, there are not a lot of solutions out there that offer intelligent decision making based on the data connected systems are collecting.

To put it differently, we’re living in the world of the app. Through the app, the homeowner is able to turn devices or features on or off or receive notifications when something specific happens but the house does not “think” for itself. As the cost of devices and sensors go down, the amount of information we can capture about our living environment goes up. As we learn more about what’s going on in the home, we’ll start to see systems and solutions that can make those types of decisions on behalf of the house so in a way, the next evolution in terms of engagement between people and their security systems will turn out to be a decrease in engagement. 

Rich Bira, managing director, Fibaro: As smart home technology continues to grow in popularity, consumers will begin to demand a more varied lineup of solutions to choose from based on their individual preferences, budget and home layout. We have already seen the industry starting to shift from control via a smartphone or tablet app only to things like voice integration and gesture control. We are always thinking of new ways to help our customers interact with their smart home in intuitive ways.

Alexi Erchak, CEO and co-founder, BeON Home: Preventative home security, as opposed to reactive, resonates with consumers and is part of the evolution of home security. Traditional home security systems only respond after the fact. For many consumers, the feeling of safety comes from knowing that their security system is designed to prevent break-ins. With smart home technology, a home security system can stop crimes before they happen and create a greater sense of safety and security.

The Internet of Things ecosystem has only enhanced growth and opportunities for security dealers and installers. As more consumers adopt smart home technologies, doors open for home security pros to be at the front of mainstream adoptions as companies serve as trusted experts. It is also a way to form new revenue-generating relationships by offering consumers more than traditional 24/7 home monitoring systems. Adding smart home technologies not only makes for a more savvy security dealer, but it also contributes to the bottom line. By being the neighborhood home security expert and also the trusted smart home expert, dealers can earn more per client than with monitored security alone.

David Box, director of marketing, Icontrol One: There are two separate markets for security and home automation- those who want to do it themselves (DIY), and those who want someone else to do it for them (Do-It-For-Me). In our “2015 State of the Smart Home Report,” nearly three out of four respondents (74 percent) said they would like at least some help with the installation and set-up of their smart home devices – and 52 percent said they would like someone to do all of the installation and set-up for them. As dealers position themselves as the experts, they can approach this DIFM market and become their go-to resource for connected technology. As this relationship builds, consumers will become more engaged with their system and be open to adopting additional technology.

SIW: Despite the impact that smart home solutions have had on the security market, most industry estimates still put penetration rates for home security systems anywhere between 20 and 25 percent. When do you believe the excitement around the smart home will actually translate to increased adoption of security systems?

Rosenthal: Through our own research and efforts of keeping a pulse on the industry, we’re actually seeing a penetration rate of security systems closer to 30 and 35 percent. Security has been consistently identified as one of the driving factors behind home control/automation adoption rates during the past few years and a feature that homeowners want out of their smart home system. 

Bira: We believe that as more connected security products hit the market and are simple, easy to use and have the lifestyle benefits that consumers are looking for, security dealers and installers will be able to take advantage of that demand. Consumers aren’t necessarily interested in all of the advanced technical features that manufacturers taut. They are looking for products and solutions that can make their lives easier and are simple to install.

Home security dealers and installers need to be a source of knowledge for their customers and share benefits of new products as they launch. We also believe that manufacturers need to stay flexible in terms of their offerings and adapt their products to new groups of people that may not be looking for a whole-home solution. There are an emerging percentage of consumers who are more interested in DIY or affordable home security solutions. Manufacturers and dealers can both take advantage when they cast a wider net of products that attract new customers.

Erchak: When consumers think of smart home, they think of simplifying the things they do on a daily basis, and many of those actions, such as locking the doors, automating lights and checking in on the family, fit nicely into the home security space. In fact, a report done by analysts at ABI Research predicted that 15 million American households will invest in smart home security within the next five years — much of this in the form of proactive smart home products. Monitored security can be an important component of home safety, especially in a true emergency. However, with overburdened public safety services, homeowners often look for a proactive approach to keeping their families safe.

Home automation and home security go hand-in-hand. Smart home devices simplify the homeowner’s life and perform tasks so the residents don’t have to, but can offer greater benefits such as energy savings and increased security. Smart security systems will increase in adoption as they become simpler and a task that consumers don’t have to worry about. Adding features that enhance a customer’s everyday life is a key factor of driving adoption of monitored security. Many established played in the home security space are leveraging DIY security solutions that combine flexibility of no-contract monitoring and DIY installation to help drive adoption higher.

Box: Security is the key to driving smart home adoption. Our smart home report found that 90 percent of consumers believe security is the top reason to purchase and use a smart home system, with 21 percent of respondents stating they prefer to shop for this technology at a security or alarm company. This presents a huge opportunity for independent dealers if they are able to communicate the benefits of smart home technology as it relates to security.

SIW: What do you see on the horizon in terms of the evolution of smart home technology itself? We see more devices being brought online and becoming part of the connected home it seems like daily, but where does it go from here and what role will security play in it? 

Rosenthal: The next step for smart home technology lies in bridging the gap between home control and home automation. As the cost of sensors goes down, so too does the overall cost of the system. If the cost of the sensors and smart home systems go down, the number of sensors we can install go up and thus, the amount we can learn about what’s happening in the home. With access to more data from more sensors we can start to make more intelligent decisions automatically. We’re at a point now where sensors are capable of monitoring multiple factors like temperature, light, humidity, motion; an increase in the number of sensors increases the number of data points we have access to which all combine to allow the system to make smart decisions for the homeowner. It’s important to note that the leap from home control to home automation does not mean the security dealer goes away. Security dealers play a huge part in the configuration and maintenance of these systems and as a result, the more complex home security systems become, the more homeowners are going to need their dealer. 

Bira: We believe that there will be an evolution from individual, stand-alone smart products in the home to more whole-home ecosystems of connected devices that work together. Therefore, sensors are becoming more advanced and creating a new level of intelligence for home technology.

Erchak: New home automation technologies are making it easy and achievable for a broad segment of consumers to add security systems to their homes. There are many new technologies that consumers can add that are affordable, easy to install and don’t require a hub or additional installation fees.  IoT technology is being added to home security systems that allow consumers to move beyond needing to constantly interact with your home. Systems are doing more on their own, learning behaviors and preferences and adjusting automatically based on personalization.

Box: Consumers want devices that make their lives easier, while keeping their homes safe. So the evolution won’t be the creation of the “next big thing,” but rather communicating the benefits smart home technology currently provides and making the devices simple for consumers to use, understand and manage. The entrance of outside established companies – like Google and Apple – are helping drive this awareness, but incorporating the element of security still presents an opportunity for independent dealers. Consumers are looking for value adds to their security system and smart home technology provides additional safety features and a personalized experience. Dealers who can provide these adds will see a more satisfied, engaged customer.