Home Sweet Home

Consumers now have the ability to control multiple systems

• By Mike DeMille
• Aug 01, 2011

Considered a fast-growing segment, the home controls sector has experienced numerous changes in recent years thanks to the introduction of affordable, user-friendly technologies.

With these two developments, today’s home control technologies provide consumers with the ability to manage multiple systems within their homes. The sector also is breaking free of the stigmas of being a complicated and expensive application. Now, instead of being perceived as a high-end system only the wealthy can afford, the market is realizing that the average homeowner can have home control solutions.

Homeowners are now technologically empowered to control costs in their homes that have skyrocketed in recent years—such as energy management and remote home monitoring—and they can feed their ever-growing appetite for entertainment options, such as remotely managing the recording of a favorite television show. One of the biggest hot buttons is remote video. Many consumers want the ability to remotely view live video of their home to check on their children after school, or to make sure, while traveling on business, that their spouses are safe.

As a result of the growing adoption of home automation solutions, security dealers can reap the benefits of the home controls market by integrating security with home automation systems. This allows dealers to capture additional recurring monthly revenue and improve overall customer retention.

A Long Road for Home Controls

More than 10 years ago, when home controls technologies were first introduced, the implementation rate proved limited. Touted for its ability to remotely manage the whole house—lights, heat, air conditioning and even music—these systems were typically expensive to purchase and install, with consumers having to pay tens of thousands of dollars to implement a whole-house automation solution.

While price was not an obstacle for homeowners with deep pockets, the high cost associated with home automation technology meant it was not appealing to the average homeowner.

At that time, the ability to remotely manage home automation systems was limited. Originally, remote management capabilities were available only via a Web-based application on a computer, meaning that the homeowner had to physically sit in front of a computer to make changes to the lights, heating or air conditioning system remotely. Access via mobile devices, such as cell phones, was limited and expensive.

The market began seeing a change in the home automation industry about four years ago, thanks to the further development of wireless and cellular technologies.

The driving force behind the broader adoption rate of home control solutions can be linked to consumers’ widespread use of smartphone technologies. With such technology in hand, consumers gain instant access to data for their home no matter where they are—whether at the office, out shopping or on vacation.

It’s About Price, Technology and Remote Monitoring

In addition, the price for home control products has come down with more home control devices incorporating low-power, wireless device technologies. There are hundreds of devices available on the market that incorporate common communication standards or technologies, such as ZigBee or Z-Wave, for lifestyle systems. These two communication protocols are also being used to augment existing proprietary protocols found in wireless security devices, which are dedicated life safety devices.

As a result of communication protocols becoming more prevalent or leveraged to augment systems, such as controllers, thermostats, locking systems, irrigation systems and security sensors, the overall cost of home automation devices, in turn, has decreased.

As early as 2009, more than 18 million U.S. households were using VoIP service instead of copper phone lines. This use of high-bandwidth communications such as broadband and cellular has opened the door for these additional home control services that were less practical on regular phone lines. By this year, AT&T estimated there will be more than 45 million VoIP subscribers.

Both lower cost and the adoption of smartphone technologies are playing a role in the demand for home control solutions, which is expected to grow considerably within a few short years. Last year, Parks Associates, a Dallas-based research firm, released a report indicating that the home controls market is expected to grow from 6 percent to 20 percent by the year 2014 among U.S. households.

Parks’ researchers determined that a few technologies are driving the demand for home controls, including energy management, remote home monitoring and entertainment systems. Because of skyrocketing energy prices, many consumers want to implement energy-management related solutions to help control their utility bills. This can be as simple as turning the heat down a few degrees or limiting the use of the air conditioning system when no one occupies the home.

With remote monitoring, consumers now have the ability to check into the home while they are away. This can include receiving a text message on their cell phone indicating that the alarm system was disarmed when the children returned home from school, or viewing video via the Web or a smartphone that shows the children entering the front door.

On the health monitoring side, home automation can also track activities of older people who might be living alone. For example, a sensor can be attached to a refrigerator or medicine cabinet to report that an elderly parent has opened the door several times during the day. This data can prove useful to adult children who live out of town, providing peace of mind that an older parent who still lives independently is taking care of daily tasks.

Building RMR and Customer Loyalty

The benefits to the consumer on home controls are vast, and so, too, are the benefits to the dealer community. Dealers routinely look for a sticking point with security customers. They want to attract new customers and retain them long-term, rather than spend their efforts trying to recover a lost customer.

Tying home controls to a security system is one approach that dealers take to deliver a system the consumer market strongly values.

By tying in home controls with a security system, security dealers can offer customers a variety of applications to remotely manage and monitor multiple elements within their home. An iPhone or Web-based application might cost the security dealer a few dollars a month, and that expense, plus a small fee charged to the consumer, can translate into additional recurring monthly revenue in addition to the typical central station monitoring fee.

The financial benefits can quickly add up for a security dealer with as few as 50 home automation customers who pay an additional $10 a month for remote monitoring capabilities via a smartphone or Web portal.

In addition, home control systems today are easier to upgrade because they are software-based, so consumers do not have to worry about their system becoming obsolete in a few years. This also is a money-saver for security dealers, who can remotely update the home controller software instead of having to physically make a trip to the property.

Simply put, when it comes to home controls, consumers today want to integrate their home control systems with their security systems, enabling them check the alarm system to see if and when the kids arrived home after school, or to remotely view live video of the babysitter while she watches the kids. In addition, they want the freedom to manage multiple systems within their home from any location.

The market demand is there for an integrated home controls and security approach. Security dealers have a significant opportunity to leverage this demand as they build their business for the future and strengthen their relationship with the customer.

This article originally appeared in the August 2011 issue of Security Today.