Why Home Automation Still Isn’t Mainstream

Very interesting article, stuart.  I am not so sure that green tech is a killer app… i may be wrong but it strikes me as a bit “light”, no pun intended.  No matter how you cut it, HA is a luxury and not a necessity.  You are absolutely right, creating light scenes and programming them is just not a survival thing, rather a geeky thing.  For the very rich it is a way of saying they are very rich, because they spend upwards of 100k to switch their lights on when a off the shelf device from home depot will do the same job, but that is the point.

That being said, I have thrown my hat in the ring (I am one of those people you describe in the beginning).  The reason I believe the industry is rapidly evolving is 1/ Cheap hardware (yes zig-bee china) 2/ cheap software (I finance openremote which operates in open source) 3/ the ipad /touch surfaces.

I do like your insights into the fact that HA is low bandwidth and will piggy back of existing wifi (not true of zig-bee, that is a dedicated HA protocol in a way .

At open remote we have the ipad, the programming environment, the online tools. I am personally going to CEDIA in ATL to look for hardware manufacturers so we can offer end-to-end.
I must admit to finding the industry rather frustrating in its software state.  I come from an IT background and the integration problems the HA industry faces are both trivial and non-trivial.  The trivial aspect is in the tech, the tech is NOT complicated.  I would encourage anyone to look at z-wave, upnp or KNX (in europe) for rather complete object models of what common day HA is.  The business side is hopelessly f*&cked;. Integration, programming of such and distribution of stacks is needlessly complicated.  Therefore it is expensive.  As a luxury item for the rich expensive for the sake of expensive is good.  For the rest of mankind it does not figure. 

forgot one trend 4/ IP on everything

Stuart - how high up that ivory glass tower does your office reside in, you ever built a HA product before or tried selling it to the mainstream? How do you define screaming benefit? I’ve seen screaming and it’s not normally associated with a benefit…

Two comments that always make me cringe about their understanding of HA.
- the first is when they reference “coffee maker or washer/dryer” being controlled and secondly,100M households available/potential…hell, not even tv’s are in that many homes.

As a former CEbus guy, let me enlighten you to some of the realities of CEBus that only comes from spending millions on development.

- It didnt work! The standard was poorly written, the compliance testing was poor at best and there was NEVER any support from a mainstream CE factory!
- Intellon and Domosys implemented two different sets of CEbus chips sets that didnt play very well together…trust me, I know.

As far as HA being mainstream - aint going to happen until the customer understands why they need it. And no amount of Gov reg’s is going to force us to use a tech we dont understand.

However, let me try to be positive and offer that HA might have a chance when all of the following is true.

1. Customers understand the need and want it like they want HDTV. There ain’t nothing sexy about HA. nope and never will be.

2. Customers can walk right into a Lowes/Best Buy/Radio Shack and SOMEONE there can tell them the benefits and why its so cool and fun. Good luck with that one.

3. An industry launches a consumer facing advertising program like “Got Milk” to explain the benefits of HA in a consistent manner. Not on their margins.

4. Prices comes down near or below that of historical X-10. probably not in our lifetime.

5. Industry has real interoperability between Crestron-AMX-HAI-C4 and others and doesnt require a Cedia pro to keep it running as advertised

6. When the WAF is extremely high

7. When standards geeks get out of the way and let the mfg’s work together driven by a free market - you folks have created too many standards already!

8. Retailers and Service providers want to sell it and spend millions on promoting it to their customers/subscribers.

...and to think that you actually mentioned Obama and Smart Grid as actually helping the HA cause…you might want to relocate your office a little closer to the ground floor and talk to some folks in the trenches…thank god for home schooling and off grid living!

Good comments - keep it going.

nmsmartone, I’m with you.

But mostly I think there is simply little substance in this piece.

Furthermore, I’m no feminist but this line really makes me cringe:

“In a few years no children will be able to show their face in school and few housewives will be able to face the neighbors without a home automation system connected to the utility managed Smart Grid.”

So I guess the house husbands can face the neighbors?

You’re right Julie, I’m sure Duane wont mind

I’m sorry Stuart, I was too harsh on you. Your probably an engineering, left leaning type and probably don’t face too many ground-zero crusty types like me…so, let me have you step aside a bit so I can throw a heater at CE PRO.

Hey, CEPRO - why do you every year or so, nudge some poor unsuspecting writer into telling us “why HA isn’t mainstream”, or worse, “Is this the year of HA”? You know better than anyone why….and so does every successful HA manufacturer. Why don’t you ask a different question about mainstream?

The question I want to learn/debate more about…”Is being mainstream good for the Home Automation Industry and its stakeholders”?

Let me offer the following:

In order to understand mainstream, I believe you have to first define it and understand who benefits from it. Here’s my take for what its worth…

My Official “Mainstream” Definition: a product or service that has demand and availability from Wal-Mart, Best Buy, Radio Shack, Home Depot, Lowes, Amazon, multiple National Service Provider types, Outlet Stores and sold at Garage Sales.

Beneficiaries of Mainstream: Consumers, Retailers, Service Providers, commodity efficient manufacturers (china/india) and geeks in standards bodies. (its the only cocktail hour topic they know)

Metrics of Mainstream: dominate channel players, high barrier to entry, lots and lots of people and zero’s required, big marketing budgets with lots of retail experience, low margins, subsidies and a fatalistic marketing mentality equal to “we’ll make it up on volume”.

Let me suggest within the limits of this blog that “going mainstream is harmful to the HA ecosystem and its stakeholders”.

If you accept the above – then why would any of our dominate control companies want to go mainstream? The retailer will kick their ass, their margins will suffer, their dealer channels will revolt and the consumer will not get the quality of service they have come to expect from the Cedia channel. How long will they sit on the phone listening to some eastern dialect ask them the same question over and over for 90 minutes?

No current controls/automation company in our industry over the past 30 years or in the next 30 years will have the kind of budgets, business model or marketing expertise that will allow them to be successful in the mainstream market. And, there is no subsidy model available to an HA manufacturer from an energy or control’s service provider similar to that of cell phone factories.

No integrator no matter how thick headed or well funded can successfully grow their business with that much market commodity penetration – think Computerland, Businessland, MicroAge etc…won’t mention CC, they were just plain stupid over there;  these guys that I referenced got killed and driven out of the market because of declining margins and the emergence of retailers and Dell and the were magnitudes of order better operated than any collection of small Cedia retailers/dealers.

Industry Success by going Mainstream – I can’t see Cedia staying relevant when you have HA going mainstream – it wasn’t all that long ago when Comdex still ruled the landscape, look at MacWorld – its dead man walking, is it even still here, I forgot about them a long time ago and both shows were significantly larger than Cedia.

So here is my unpaid, unqualified and certainly unsolicited advice to HA/Cedia Industry:

Stay Vertical. Stay niche. Stay focused, and define your value by bottom line (not top) profitability, by your end-user experience and not by price. You have so much more dealer channel loyalty, than BBY, Wal-Mart and all of the wanna-be national installers could ever give you. Don’t abandon what made you great – your dealer channel. Don’t do to Cedia what Apple, Epson, IBM, HP, and Compaq did to their channel partners ComputerLand, Businessland and MicroAge…you only have to look at the PC industry for clues what mainstreaming HA will mean to you.

Ok there you have it, you got what you paid for, so take it for what its worth. Stuart – I hit you when you weren’t looking, now it’s your turn. Oh, and you can have someone else pinch hit for you if you like

What fun!  I never expected so many well considered comments and if my content was not valuable or interesting to you I am sure the dialog in the comment thread it created will fill the gap.

Let me add a bit to my original content with the hope that it addresses some of the comments.  I am not a cheerleader for HA just trying to be a dispasionate observer.  I stand by my belief that government money and regulations pushing smart grid will drive HA at least as far as the meter for some mix of time-of-day reading and load-shedding.  Contrary to the comments that I am a supporter of Obama’s green initiatives, I could not be more on the other side.  But the reality is that the $$$ are flowing and utilities will respond with two-way energy management infrastructure.  My bottom line is that will the utility infrastructure coming from outside and home networking expanding inside the home, we will see many of the past failed visions of HA finally materialize.  Not such much because the benefits are any better than ten years ago, but more because the barriers which inhibited past adoption will fall so low that even modest benefits will drive adoption.

geez, Stu, may I call you Stu? I didn’t think eggheads could be so much fun to poke at…wanna have a drink later at my place and talk spec’s…

btw - you do make a very important point re: utility infrastructure/captial spending and home networking colliding, and if I may add to this, the broadband/communications unbiquity, including impending changes to DRM issues which should create new opportunities for the HA industry…although, I stand by my comments about the perils of mainstreaming and the industry’s potential demise and need to stay a strong focused vertical market.

hmmm

I am sorry but $100k to turn on lights is not an industry it is a service niche for rich folks indulging in irrelevant technology.

Personally, when I looked at what was on offer, I couldn’t make sense of it. HA was the first thing that I got out of the budget on my new house when value engineering came around. With the real estate crisis, those days are gone.

I actually was involved with IT standards for a living.  what is blatantly missing here in this industry are standards. 

At the end of the day, the existing installers business model cannot be changed. They are stakeholders in a dying business model. The days of 4 jobs at 200k each with 30% margin for a grand total of 240k income are gone.  It is a new breed of installers that will take over, those that CAN and want to do volume.  It is not a business model for the small retailer.  The others will die like dogs.

It reminds me of discussion of mainframe vs PC.  Did the mainframe guys like the PC? no… why would they? they would sell 2k memory at 2000 dollars and make a great living, they would laugh at the PC manufacturers.  Did they go to the PC? no, they just soldiered on with what they knew.

And yet, moore’s law marches on… we are there with the ipad at $500 when AMX sells a resistive panel piece of crap for $5000. The writing is on the wall. Ignore it all you want. 

Do not treat your customers like idiots to be milked, they will walk away from you. That was my reaction after spending 2 days in contact with the old industry.

The biggest problem with Home Automation (HA) is that the average customer just doesn’t “get it”!  They dont understand WHY they would want lights, shades, thermostats and other controls on a remote or touchpanel…even though these same customers would never do without a TV remote!

I think the best approach to Home Automation (HA) is to start SMALL!  Give the customer a RF (or IR) controlled lamp dimmer when you install the theater WITHOUT telling them about it….wait until you are showing them how to use their system.  When they press “play” on the remote and the lights dim…its a magic moment! 

Altermatively, program ALL of your remotes with “Lights” and “Climate” on the remote.  When the customer asks what those keys do…tell them its for future expansion.  It will get the conversation started (or re-started!).

Most of all, you need to bring up control as early in the presentation as possible!  Any monkey with a van and a pulse can sell someone a TV, five speakers and an AVR only YOU, as a custom integratior can install a system that is convenient, easy to understand, and simple to operate.  Once you have automation features in the theater, your clients will start to see the value of a whole home system.

Home Automation as most vendors see it today is little more than a fancy remote control.  Selling consumers colorful LCD keypads which they can use to tell the house when they are ‘home’ or ‘away’ does not constitute the ‘smart home of the future’ IMHO.

After 10+ years studying the field and building my own HA system software from scratch I believe that home automation systems on the market today lack several key components:-

(i) A sufficiently dense sensor network.  Without this they cannot begin to make smart decisions about room occupancy.  My own home has hundreds of sensors and can reliably figure out which rooms are occupied and which are not.

(ii) Reliable hardware: I have a box full of light switches that no longer work for one reason or another.

(iii) A sufficiently rich programming framework in which to define the behaviors desired from the house.  My own system has a ‘fluent’ language that allows the definition of very complex temporal or sequence based behaviors.  Decisions can include detailed statistical information collected over long periods of time (e.g. comparing how busy the house is now compared to the same time last year) and aren’t just limited to the here and now of a typical table based or simple logic controller.

(iv) A framework that can explain what happened when things go wrong.  This needs to be much more than a simple log (something many systems don’t even have). HA systems need to be able to explain why the lights didn’t come on at sunset last night as expected.  Until they can log what they did (or did not do) and why they did it, installers will continue to play the “call-out-fix-something-leave” cycle.

(v) Well researched common behaviors that can be applied to any home to minimize (or even eliminate) the programming needed.  If each home needs lots of custom code to handle the basic ‘lights off when rooms are no longer in use’ scenario then HA will never become mainstream.

(vi) Proven energy benefits that people will buy.  In particular, proven energy savings.  My own home now uses 40% less electricity than it did 5 years ago; that’s a very tangible benefit.

You can read more about the system I’ve been building on my blog:http://blog.abodit.com/category/home-automation/

I think that one of the largest issues that the manufacturers in the HA industry need to overcome is hardware reliability.  Being a certified programmer with AMX, RTI, URC and many other manufacturers, I can say from 13 years of industry experience that this is our worst plague.  Software and programming bugs are easily worked out initially after install and programming is easily remedied when an issue arises.  When hardware fails and a customer has to wait for a period of time to ship the product, wait for the repair, then wait again to get the part shipped back (assuming that part is out of warranty and no advanced replacement is available).  Not a major problem if it means you can’t watch TV in a specific room (you can watch TV in a different room temporarily).  This is a major problem if the customer can’t adjust heat or lights in the way they have been accustomed to since the install of the system.

Just my 2 bits.

Hmm. Politics?  No. The fact is that the SmartGrid policy was enacted in 2007.  The key effect of Obama administration was really his appointment of Dr. Chu as the Secy of DOE.  This defunded a proprietary, non-standardized, ZigBee takeover by the 12 investor-owned utilities of the home area network.  A flawed plan to begin with for many of the CEBus comparisons listed above.  While this article fails to list the many other attempts at industry standardization like UPnP, DLNA, HomePlug, etc.

The problem is that manufacturers do not have a business model that goes beyond “pushing boxes.”  So, they have no reason to make standards work.  What do they do? Make them not work. I wasted a couple years of my life learning this.  Utilities will not bring home automation to the masses either.  How many Utility-controlled HANs have been installed in the US?  Less than 500.

No, we’re all waiting for something called the Internet of Things.  It creates a new business model for manufacturers.  Where they make money when your customers are happy, not frustrated.  Until that happens, more bankruptcies and confusion.  It is happening, but not in the way we are used to.  Smart meters are not exactly widely accepted by consumers.  I doubt they’ll gladly sign up for Orwellian measures.

Keep your customers happy with good service and find ways to pay the bills with lowered margins and higher demands.  The Internet of Things is coming, and there will be tremendous demand for our services.  There’s also great opportunity in commercial HVAC/Lighting, but be prepared to prove your ROI, wear a tie, and compete with others to win these jobs. 

You folks agree?

Yep…. the stars are aligning for the Internet of Things to finally be realized…

http://www.youtube.com/watch?v=sfEbMV295Kk

Ishak,

yes, the internet of things (aka IPv6 on everything) is one of the big trends.  Devices that map last inches protocol (IR, z-b/w, KNX etc) to IP will experience explosive growth.

From a software integrator standpoint, the advantage of IP is that integrating becomes a piece of cake. Creating sockets to speak a native protocol is something any geek can do in 30 minutes of work.  At open remote, it is clearly the trend. Also from a distribution standpoint, we are then dealing with digital form, not physical so the cost/complexity goes down.

I am trying to wrap my head around the comments this morning (don’t you love morning clarity).  There are a couple of things that stick.

1/ Technology is here (software, hardware, standards like IP, Touch panels etc).  The tech is complex but not that complex and the tools are here.

2/ Business incumbents complicate things with a negative incentive, crestron/amx dealers I expect most will fight it. To make the leap will require resources as pointed above.

3/ HA is a low value/high complexity problem… not good.  We are dealing with a network of proprietary fiefdoms to achieve panel integration, woohoo!  I wouldn’t put more than a $5k value on the problem (which is better than the current $30k-$100k range) . 

4/ Stop looking for a “killer app”.  Security, Home theater, green tech will have to do.  As a pet peeve, I find the marketing in this industry too influenced by IT.  They are marketing features with a smiling lady next to a push button, when “luxury” is the word.

d/ at $5k x 100M homes (western market?? pulling that one out of the article but I seriously doubt that is accurate) that represents a $500B market…. That is big so something will emerge.  Someone, somewhere will pursue this.

one of the bigger fortunes I personally know made their monies in toilet fixtures.