Icontrol Networks is a smart home platform provider, enabling telcos, home security companies and broadband service providers to offer smart home solutions to consumers. Icontrol’s recent acquisition of Blacksumac adds a direct-to-consumer facet to its business through Piper, an all-in-one home security and automation device.
Icontrol Networks is a smart home platform provider, enabling telcos, home security companies and broadband service providers to offer smart home solutions to consumers. Icontrol's recent acquisition of Blacksumac adds a direct-to-consumer facet to its business through Piper, an all-in-one home security and automation device.
We spoke to Icontrol Network's VP of Marketing Greg Roberts about the acquisition and a recent study released by the company.
Can you elaborate more on the reasoning behind the acquisition of Blacksumac?
The vision for Icontrol Networks is to have a connected home solution for every household in the world. From our perspective, the beginning stage was building platform solutions for companies that promote mass market solutions under their own brand name to drive awareness in the marketplace. Our customers began mass market adoption of smart home solutions through their organizations, including their marketing power, backend infrastructure and customer support. That has proven to be a very successful adventure for us and for our deployment customers.
We then looked at the connected home space in North America and internationally and found that our smart home offerings were fulfilling a big need in the marketplace for solutions that could be deployed by service providers and home security companies. We also saw an opportunity in the smart home space for renters and those living in multi-family dwelling units (MDU). One of our interest points was having a direct-to-consumer solution because we didn't feel like that market was being addressed by any solution available in the marketplace. As we learned more about Piper and its feature set, we determined that it was a perfect fit for that audience. Piper fits in the international marketplace. Beyond North America, the consumer education and adoption of home security is much lower; for example, in Japan and some other Asian markets, we see less than five percent penetration for home security. The international market needs a vastly different solution that doesn't necessarily key in on home security, but includes a peace of mind value proposition in addition to a host of other features and functionality that deliver smart home benefits.
What kinds of acquisitions will Icontrol Networks be looking at in the future?
We're very pleased with our portfolio of offerings for today's smart home marketplace, but the smart home industry is evolving and changing every day. New players are coming into the marketplace, and there will be many more—both big and small—entering this space in some way, shape or form over a very short period of time. We think the market's going to consistently change for the foreseeable future. We'll continuously look at the market holistically and determine if there are any gaps that emerge from this changing industry. We're looking at the industry from the perspective of both further developing technology ourselves and also acquiring new technologies and utilizing those to improve our solutions.
So Piper not only addresses the renter and MDU market, it's also your first step into the international marketplace?
Icontrol already has a lot of business development activity internationally and is constantly looking to expand. We already launched with Swisscom in Switzerland, and they've put forth a solution called Quing Home, which is powered by an Icontrol software platform. You'll see a lot of those types of solutions emerging in the marketplace in the next 6 to 12 months.
About the 2014 State of the Smart Home Report. Why did you conduct the study?
While building mass market adoption for smart home services in North America over the past five to seven years, we watched our deployments and the industry grow, but we wanted to take a step back and evaluate the direction we were headed and whether our features and functionalities for smart home solutions were meeting consumer demand.
So we embarked on this national quantitative study and tested a host of features and functionalities that are part of today's connected home deployments to see if they were meeting consumer expectations.
When we got all of that information back, the item that really jumped out to us was that family security and protection continues to be paramount to smart home solutions in the North American marketplace. Remarkably, 100 percent of the 900 to 1,000 participants surveyed for the study said that smart home systems without personal safety or security were unacceptable. This gave us an idea about the level of importance for that feature, and we thought this was worth sharing.
But the importance of security features wasn't all that surprising, was it? I suppose it was the level of significance that really stood out?
Six or seven years ago, research showed that there was an appreciation for the peace-of-mind value proposition in smart home solutions, and we were very confident that the right way to deliver smart home solutions to the marketplace was through home security. We're seeing a significant shift in the market in that the level of importance for family and personal security as part of smart home solutions is a much stronger driver of mass market adoption for smart home solutions today.
Was there anything else surprising about the results of the study?
I'm not sure that I would say surprising, but certainly reaffirming. Asset protection continues to be a big part of smart home solutions, as 86 percent ranked property loss protection as one of the top reasons for using a smart home solution or for interest in a smart home solution.
We've also always considered energy management a key deliverable in smart home solutions because of the multiple consumer benefits that it offers. It was refreshing to see that energy management continues to rank so high from a consumer benefit perspective. 78 percent of those responding to the survey ranked energy management as one of the top features, likely because of convenience and cost savings.
One thing that surprised me was the demand for pet monitoring. Was that surprising to you?
As a pet owner, it was in no way surprising to me. Not only do I personally use my smart home system to monitor my pet and make sure that she's okay throughout the day, but I also have a dog walker that comes in every day, and I have the ability to know when she arrives at my house, when she leaves with my dog, when she comes back with my dog, and when she leaves the premises.
There's a peace-of-mind value proposition in a smart home solution with pet monitoring that I think a lot of people embrace. It's not all about video monitoring and just making sure their pet is okay, but rather about making sure their pet is taken care of. Plus, it's always fun to show your pet off from a live video feed!
That said, I think it's surprising to the industry, but as pet owners become more and more aware of smart home solutions and how video plays a role in them, these features will help drive consumer adoption.
Aside from this type of studies, what are other tools you use to determine end users' needs and wants? Do you analyze usage data? Do you simply ask them?
We do all of the above. One of the beauties of being a platform provider and having a direct-to-consumer platform is that you have access to the data. While we don't expose that data, we can use it to help us further develop our software platforms. Understanding which features consumers are using and how often they use them helps us reformulate our software architectures to better accommodate those use cases. It also helps us determine other use cases that consumers may not be thinking of.
We're constantly learning from consumer usage of smart home solutions, but we're also going out and talking to non-users to better understand what their wants and needs are in a smart home solution and make sure that our roadmap better caters to not just the needs that they are articulating, but those that we think will help them embrace a smart home solution in the future. Besides studying non-users and the data from users, we also do user interface testing to continue to make sure that the consumer experience is intuitive and easy to use. At the end of the day, people will not adopt our solution if it isn't, so that's very important to us.
In your experience, is there a discrepancy between what service providers and end users want?
There isn't a discrepancy, but there is a challenge to deliver on all of the drivers in the marketplace to users.
We collectively determine with our customers which core mass market use cases will drive a significant amount of consumer adoption and prioritize those features and technologies..It's a collaborative process; we've learned from the marketplace, we've learned from users, and we eventually work together to determine the right technologies and features to launch.
Do needs and wants for smart home solutions vary between customers of different types of service providers, such as customers of cable companies vs. customers of home security companies?
I think a lot of smart companies are targeting the use cases that really drive today's consumer into the smart home. As the smart home report identified, the key driver is safety and security. If you look at it from that framework, every solution deployed that is driving mass market adoption and is catering to the mass audience has a safety and security component.
That will evolve, and a lot of differentiation will happen in the marketplace over time. I think it's not a stretch to say that everybody is doing consumer research in this space, and everybody is learning about what's driving mass market adoption.
Can you tell me a bit about the hardware certification program and the process of obtaining that certification? How would manufacturers benefit from the program?
Icontrol Networks powers many of North America's leading home security, cable and telecommunications companies' smart home solutions. The Icontrol OpenHome Partner Program allows device and application developers to develop to Icontrol's open architecture software platform. Once certified, these developers can market their offerings to millions of homes via service providers. They can also leverage Icontrol's international expansion, giving them a world of new distribution opportunities.
Do you accept all applications, or do you limit the number of suppliers for each product category, similar to how a franchise would limit the number of chain stores in a certain area? In what circumstances would you approach manufacturers proactively to invite them into the program?
Our OpenHome program is one of the most important aspects of our business, since it helps eliminate silos among connected devices. We are constantly reaching out to manufacturers and developers, who are critical to the growth in order to continue to reach our goal of offering the largest connected home ecosystem possible. We accept all partners who are interested in our program and willing to follow the program's prescribed criteria.
What percentage of your partners are Asian manufacturers?
Roughly 40% of our current partners reside in Asia.