The smart home concept is one that’s been around for quite a while but has never really taken off. There are a variety of reasons for that, some of which I wrote about in an earlier piece about why we hardly made use of any smart home features when we built a new house a year ago. However, one thing that’s becoming increasingly apparent to me is professional installation and on-site support (when needed) is going to be a vital component for mainstreaming this technology and, therefore, the companies that have that capability will have an edge. In this piece, I’m going to give three examples of companies doing this and talk about the implications for others.
AT&T Digital Life – and DirecTV
One company doing this for the past year or so is AT&T, with its Digital Life solutions. The numbers are still modest around this service, partly because it’s such a departure from the services the wireless part of AT&T (which is the business unit that manages the service) has offered in the past. That means training sales reps, educating consumers, and building a set of capabilities AT&T’s mobility arm has never had. As such, it’s been making use of third party installers until now, which creates both costs for AT&T and complexity and a lack of control in how the installation happens on a detailed level. This is where DirecTV makes things really interesting, because DirecTV obviously has a network of installers for its satellite services and these can be used by AT&T to install Digital Life services too. There’s also some economy of scale and scope AT&T can take advantage of here, which it doesn’t enjoy as long as it’s only installing a few hundred thousand home security systems a year. AT&T’s own U-verse service offers another opportunity for bundling products and the associated installations which could provide some of the same benefits.
Google Fiber and Nest
When Nest announced its new products last week, one of the more interesting elements in this context was the fact Google would be running a promotion offering a $50 discount off devices along with free installation for Google Fiber customers. Along with AT&T Digital Life, the Nest is the only home automation product we have in our home and, although the product itself is very easy to use, installation can be tricky, especially if you’re replacing an older thermostat. If you don’t know what you’re doing, you can easily electrocute yourself or damage wiring or, less seriously, simply end up with a thermostat that doesn’t work properly. Google also has an army of technicians out in the field installing Google Fiber, so it can benefit much as AT&T will from an existing base of installers who can help put products in consumers’ homes and get them working. Given that many of Google’s Fiber installers seem to be ex-cable company employees (based on my experience with them) it’ll be something of a transition for them to start installing thermostats, smoke detectors, and security cameras — but it’s not a huge stretch.
Vivint and home automation
Vivint is perhaps a less well-known brand nationally than it is in Utah, where I live. But Vivint has built up a very successful business through door-to-door sales of alarm systems and an increasing range of other products over the last few years and it’s also spun off a very successful solar panel installation business. Vivint’s home automation solutions also leverage the company’s technicians, who install and offer support for their security products as a base service but can now also install and support a wider range of home automation solutions. Vivint is also moving into other home services over time and the installers are a critical part of the capabilities that allow it to do so.
An expensive proposition
Sending installers and technicians to people’s homes is an expensive proposition – in the cable and telecoms world, minimizing so-called “truck rolls” is always a key goal and there’s been a big move away from technician installations and towards self-installation for some services. However, that’s much easier to do when it’s a question of swapping out set-top-boxes or modems or plugging a new device into an existing socket than it is when you’re replacing thermostats or light switches. If home automation is going to go mainstream, installation capability will be increasingly critical, albeit expensive. That’s where having an existing workforce of installers who manage other products makes a huge difference and that’s what each of these three companies (and others) are doing. The question then becomes how companies such as Google (outside the very small Fiber footprint), Apple, and others will manage this challenge. Almost all the standalone home automation products on the market today operate on a self-installation model, which necessarily limits their appeal to serious hobbyists and those comfortable with wiring, except for the simplest products. For this market to move to the next level, we need to see a deeper investment in professional installation, and that’s going to be a hard shift for many of the companies currently in the market.
“For this market to move to the next level, we need to see a deeper investment in professional installation, and that’s going to be a hard shift for many of the companies currently in the market.”
Do you think the technical challenges are so large that Apple won’t be able to come up with an owner installed It Just Works ™ solution?
I know Apple won’t be trying to Uber fix this; that’s for the rest of them. Introducing Bonjour was the first step towards It Just Works ™. Rumors abound with Apple having Apple TV being the control point for Home IoT and network services. Perhaps Apple will successfully reach IJW nirvana and, at worst, solve the worst of problems with only phone/chat/video based tech support leaving a model for the industry to follow.
A reachable goal?
The problem is that the vast majority of smart home products require replacing something that’s currently wired in with something new – even if the new product “just works” it’s got to interface with what’s already there in some way, and that often means messing with electrical wiring, which is just too much for most people to want to handle themselves. There are some things that don’t need a lot of wiring – cameras and such – because they’re free standing and not integrated into home systems, but anything controlling lights, HVAC, garage doors or whatever is going to need wiring.
Then I think the trades will handle this. Trades folks, at least in Canada, are regularly upgrading skills and learning to work with new tech in their fields. Electricians especially, the ones I know, would have no problem with this work.
I would think most or all the elements involved here can be handled by the normal tradespeople that already do similar work. Various parts of our homes will just be smarter, but that intelligence should be inside the device. The installation of a smart thermostat shouldn’t be much different from the installation of a normal thermostat, and we already have the infrastructure to take care of that work.
The key I think will be in smart devices that work well together, and work together easily. But the installation isn’t much of an issue. I might install my own stuff, because I built my own house, but most people will just hire an electrician, a carpenter, or some other contractor (AV specialist, etc). Or they’ll buy a package through a company and that company will sub it out to the necessary trades.
I suspect as smart homes gain popularity, contractors might absorb this work. That would be my guess.
An opportunity for small, focused companies.
The guys who installed our speakers and security system could easily help with automation.
Jan, yes, many will require professional installation.
But in the age of uber, task-rabbit and other on-demand services it doesn’t necessary means that smart home companies need to invest a lot.
It’s a good point, but even then I suspect the technology companies will want to certify and license installers. Lots of risk involved with third party installers, and potentially significant cost too.
The expertise required to install the devices is minimal. Feedback on installers could work. And i’m not even sure Apple/Google need to get involved – people get DIY guys even without their help.
I think your previous column was more correct , with the addition that the smart home doesn’t offer good value, especially if you compare it to something like a smartphone. If it would have offered good value – we would have seen it gone viral -and people would have told others how to find a DIY guy.
“If you don’t know what you’re doing, you can easily electrocute yourself” when you install the Nest. The Nest uses 20-30 volt AC power. Voltages below 42 volts are considered safe by the electrical industry.
I have no financial connection to Nest. I’m just opposed to incorrect scare statements from authors.
I didn’t say it would kill you, but you’d still want to turn the system off before doing anything with the wiring to avoid getting a shock.
Perhaps just a bad word choice. “Shock” rather than “electrocute”.
(Connotations are everything.)
Superb post however I was wanting to know if you could write a litte more on this topic? I’d be very grateful if you could elaborate a little bit more.
Thank you for great content. I look forward to the continuation.