Deutsche Telekom: How To Create Growth From The Connected Home

In a major new report entitled: ‘How To Create Growth From The Connected Home’, Deutsche Telekom sets out practical advice, but also offers a strategic perspective on the role that utilities can play in the evolving connected home.

 The report examines how utilities can look to increase adoption of smart thermostats, by both leveraging smart pricing and their retention channels, as well as developing new channels to market, employing affinity partnerships, such as with insurers, to drive greater growth.

The report outlines how home energy management services (HEMS) enable utilities to create a positive interaction with their customers, through the visualization, monitoring and controlling of their energy use. And how – with the customers’ approval – smart thermostats and data from other connected home technologies, such as smart meters and home security systems, represent a compelling opportunity for utilities to help consumers better manage their energy costs, while exploiting new commercial models.

According to Berg Insight, the number of smart thermostats increased by 105 per cent in 2014 to 3.2 million in both North America and Europe. Berg claims that by 2019, the number of smart thermostats will grow at a CAGR of 64.2 per cent in both markets, while Navigant Research predicts that global revenue attributed to home energy management products and services will grow from $586.9 million to $2.4 billion in 2023.

Holger Knoepke, Vice President, Deutsche Telekom – Connected Home, explained: “The value of connected homes becomes even greater when there is interconnection with other adjacent categories. For instance, the linking of heating, energy management and security brings with it many intrinsic advantages to multiple range of providers, directly or indirectly. When no one is left in the property – perhaps when a security alarm is set, or there is no movement detected by motion sensors – the heating system automatically turns off. Today, too many of us have our heating on all day, when there is no one at home – wasting money unnecessarily, but also needlessly increasing our carbon footprint.

“With closer integration between energy demand in the home and energy generation, we can save money, be more energy efficient, but also be more considerate of our climate. For home owners, the developments that will be enabled for the connected home could allow us to benefit from new flexible tariff structures that enable them to pay less for energy, when there is excess supply and only run energy hungry appliances, such as washing machines or tumble dryers, when the cost is negligible.”

The report also recommends that utilities consider emulating telcos by offering appliances on a subsidized basis, employing demand disaggregation technology and smart meters to provide flat rate energy charges, thereby providing greater differentiation, realising new revenues, increasing customer loyalty and improving customer retention. The report outlines the risk for utilities if they remain pure commodity providers, especially with the introduction of upcoming legislation in some countries, which will bring about in-day switching.

Holger Knoepke continued: “Today, many proprietary and incompatible solutions continue to enter the market. If this industry is to mature and realise the forecasted growth, and not simply continue to confuse consumers, opening up devices and platforms for seamless connectivity is absolutely essential. Fundamental to achieving this, is the open architecture that we have implemented for our white label connected home platform, as well as the utilization of open source software and third party developers via Eclipse SmartHome.

“Not only do open platforms allow manufacturers and service providers from all industries to connect together, but they also offer translation services between different devices – an ‘Esperanto’ of connected smart things. For customers, an open platform provides much better usability than several closed systems with limited features. For companies, a common foundation greatly accelerates the development of products and services with the benefit that virtuous circle can be created as multiple innovations arise from within the ecosystem.”

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