Security Industry Has Only Viable Home Automation Revenue Stream: Gartner

Clearfix
JohnA's picture
Home automation - security providers have the best business model
Home automation - security providers have the best business model

ADOPTION of home automation systems in Australia, the United Kingdom and the U.S. is still in the early adopter phase with penetration of 10 per cent, according to research firm, Gartner Group.

A telling finding was that outside alarm systems, fewer than 50 per cent of households pay for home automation solutions, most these contracts are for alarm monitoring solutions, suggesting that security providers who use automation to make their security systems more appealing to users may hold the only dependable recurring revenue stream in the home automation business model. 

“If suppliers are to successfully widen the appeal of the connected home, providers will need to identify what will really motivates current users to inspire additional purchases,” says Amanda Sabia, principal research analyst at Gartner.

The Gartner survey found that home security alarm systems have adoption rates of 18 per cent, home monitoring services are at 11 per cent, home automation or energy management 9 per cent, health and wellness management is 11 per cent. According to the research, overall adoption rates were 5.5 per cent greater in the United States. 

“Messaging needs to be focused on the real value proposition that the complete connected home ecosystem provides, encompassing devices, service and experience.”

Using a scale of 0 to 100, 10,000 online respondents were asked about feelings and preferences toward the value of devices, appliances and applications in the connected home ecosystem. Three-quarters of respondents indicated they are happy to manually set temperature and lighting controls versus only 1-in-4 who expressed an interest in having devices anticipate needs in the home. Furthermore, 58 per cent of respondents showed a preference for separate, independent, stand-alone devices.

Gartner found that respondents are starting to see the value of one app for integrating their connected home devices, appliances and services, as well as the importance of brand certification for their connected home devices and services. More than half of the respondents 55 per cent rated 51 or more toward the preference of one app integrating connected home devices and services, while 58 per cent rated 51 or more toward the importance of hardware and services being certified by a specific brand.

“Messaging needs to be focused on the real value proposition that the complete connected home ecosystem provides, encompassing devices, service and experience,” says Jessica Ekholm, research director at Gartner. “The emphasis needs to be on how the connected home can helps solve daily tasks rather than just being a novelty collection of devices and apps.” ♦