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Why IoT for the home needs to take the Industrial approach

Recently, there was an article in The Economist, which discussed the state of the connected home and the challenges with its adoption into mainstream markets. The article noted that 72% of consumers are unlikely to introduce smart home technology in the next two to five years. This is a very significant number and one that can’t, and shouldn’t, be ignored by Internet of Things (IoT) enabling businesses, writes Sanil Pillai, a director of Infostretch Labs.

So, what’s the problem? It’s not just the costs associated with these cool gadgets, although that’s certainly a stumbling block. There was a stainless steel refrigerator advertised at a popular big box retailer recently for $998. There was also a smart refrigerator, with cameras for food management, a gorgeous integrated touch screen and other bells and whistles at the same store for a little more than $4,300.

Is the smart refrigerator providing four times the value and functionality of the lesser-priced stainless steel refrigerator? The mass market would say no. While incredibly sharp and fun to have, most people don’t need to spend an extra $3,000 or so for an app to tell them the milk is low.

Another big issue is the interoperability – or lack thereof. There are numerous protocols (Z-Wave, Zigbee, IEEE 802.15.4, 6LoWPAN) utilised by different companies for various products, and they don’t always play nice with one another. For consumers to truly get on board with the connected home, chances are they are going to want all of their devices to cooperate and talk with each other.

If you are a consumer, you still have to look at the functions of these devices and ask yourself ‘what serious problem are they really solving?’ It’s really great that I can turn lights on in different rooms from my phone, but do I need to pay extra for that privilege? Many of these devices haven’t filled a true need.

Despite the IoT seeing sluggish progress in the home, however, it has flourished at the enterprise level. The Industrial Internet of Things (IIoT) has been immensely successful because, when introducing new technology to a business, it is most likely for one reason and one reason only: to drive efficiency. These new telematics systems and sensors are being used in various capacities to increase productivity, streamline logistics such as warehousing and shipping and, at the end of the day, boost the bottom line.

For instance, Virgin Atlantic is creating a fleet of Boeing 787 airplanes and cargo devices connected with IoT sensors and devices, allowing each plane to produce more than a half terabyte of data per flight. Mechanical problems can now be detected before they even happen, which improves turnaround time and increases safety.

UPS is using IoT sensors to reduce its footprint on the environment. They can now monitor their fleet to track mileage, truck speeds and even the overall wellness of vehicle engines. This will improve fuel efficiency and reduce costs, which should improve the company’s bottom line as a whole.

Manufacturers of connected home devices would be wise to view their products through this lens. In order for the average consumer to really get on board and connect their entire house, they will need to see actual value in the way of cost savings. Most people don’t have a problem with opening the refrigerator to check the status of their milk supply.

The other key point that smart home manufacturers need to address is interoperability. For the average consumer, technology and innovations are excellent when everything works well and life is made easier. However, when devices don’t connect with one another because they use different, incompatible protocols – technology becomes a nightmare. At best, those revolutionary devices are now more likely to end up in a box in the basement, at worst they are re-gifted to a family member for the holidays.

IoT devices for the connected home need to focus less on remotely turning the heat up in the house and more on collecting data. Instead of the refrigerator telling consumers that their milk is low, it should instead focus on analysing the entire contents of the refrigerator with a focus on nutrition. This could inspire consumers to change their shopping habits and improve their diets. That shiny new refrigerator is now adding significant value to their lives.

In spite of the slow adoption, there are still some excellent opportunities for technology companies to join the smart home movement. The Amazon Echo and soon-to-be-released Google Home devices are voice-controlled, smart home controllers that should create an opening for new products to expand their functionality. If these two products do very well in the marketplace, then the smart home revolution could really begin for everyone.

Creating connected devices that add value and provide services to the average consumer is a business model that will allow tech companies to thrive. Clearly, the connected smart home has not taken off the way many forecasters have predicted, so there needs to be a change in approach and philosophy.