Navigant Research Blog

Facebook’s Scandal Shows Importance of Data Privacy in Smart Homes

— May 3, 2018

The world’s most valuable resource is no longer oil. It’s data. In the digital era, data not only powers various online services, but also increasingly powers the real world as devices become more and more connected. Virtually any activity a person can engage in now leaves a digital footprint, and artificial intelligence technologies like machine learning have brought to light the value in these footprints. The giants in charge of this data economy—Alphabet (Google), Amazon, Apple, Facebook, and Microsoft—have massive power and influence. Considering recent events, this is something to be ever warier about as consumers.

Facebook’s Scandal

Facebook has been under immense scrutiny over the Cambridge Analytica scandal. In short, it involves the unauthorized sale of private data to companies that used the data to manipulate the US presidential election and arguably other major global events.

Until now, the added convenience a technology like Facebook brings to our lives—such as relevant news, event planning, and the ability to connect with friends and family—has seemed like a price worth paying in exchange for our data. What this story shows about the tech titans who control our digital era is that our data is not only used to target us with more relevant stuff to buy. It’s also shaping the world we live in and making real-life impacts.

What Does This Mean for the Smart Home?

We are increasingly letting these big tech giants into our lives, not only through use of their traditional online services, but through physical devices in our homes. The increasingly popular and widely adopted devices peddled by these companies, be it smartphones, voice-activated speakers, connected cameras, or smart thermostats among copious other residential IoT devices, are creating touchpoints in the home by which these companies can collect even more data.

As consumers, we may think our data is fairly useless. The Facebook scandal shows that all the data we give away for free has immense real-world value. It’s more important than ever for consumers to be aware of the devices that they bring into their homes, how their data is being used, and the effects that can have, especially as the smart home market continues to grow.

Should Consumers Abandon Connected Tech?

This isn’t to say that consumers should stop using online services or avoid adopting smart home technologies—that is unrealistic. It means that as we continue to adopt connected devices, construct smart ecosystems in our homes, and divulge the details of our personal lives to these companies, data privacy needs to be top priority. This is increasingly becoming the case. General Data Protection Regulation (GDPR) is set to take effect at the end of May, and it will massively influence any company serving EU citizens and residents by requiring measures be taken that better protect and ensure the privacy of user data. Though this is a positive development, there is much to be done in the realm of data privacy.

For consumers, it’s important to consider the worth in convenience via technology. While the prospects of a smart home can bring a range of benefits to our lives and the bigger picture of smart grid operations, the value in what we provide digitally-driven companies should not be taken for granted. For device manufacturers and smart home tech vendors, it’s more crucial than ever to be transparent and reassuring about the investments they are making in protecting our data in order to avoid losing consumer trust and hindering technology adoption.

 

Tech Companies Are Shifting Health Services to the Home

— April 12, 2018

The healthcare industry faces many challenges due to a growing elderly population, increased lifespans, general population growth, and a greater number of chronic conditions. The digitization of healthcare is solving some of these issues by enhancing the quality and cost-effectiveness of patient care and support. Digital healthcare solutions can empower consumers to better engage and control their own health, moving healthcare services from the hospital to the home, a trend that is discussed at length in the Navigant Research report Capitalizing on the Nexus of IoT and Home Healthcare.

Amazon Leading in Health Innovations

Stakeholders across the residential value chain are recognizing the potential opportunity in the convergence of the Internet of Things (IoT) and healthcare, as demonstrated in increased market activity over the past year. For example, Amazon, which has made significant strides in recent years with its Echo products, Alexa digital assistant, and various in-home services, has also been making significant (though somewhat secretive) investments in healthcare.

The company alluded to its plans in 2016 when CEO Jeff Bezos was quoted saying, “I think healthcare is going to be one of those industries that is elevated and made better by machine learning and artificial intelligence. And I actually think Echo and Alexa do have a role to play in that.” Since then, the company has announced a partnership with J.P. Morgan and Berkshire Hathaway to improve healthcare services for its US employees, partnered with Merck and Luminary Labs for the Alexa Diabetes Challenge, and piloted an Alexa skill with Libertana Home Health for elderly care.

Other Companies Are Capitalizing on This Market

Amazon is not the only tech company becoming more invested in the health services industry. Uber also recently announced its Uber Health service, which allows a range of healthcare professionals to book rides to medical facilities on their clients’ behalf.

In March 2018, Google outlined a roadmap to move the healthcare industry to the cloud, which includes its new Cloud Healthcare API to help healthcare organizations manage, analyze, and detect trends from patient data. Apple is investing in health through the rollout of its Apple Watch 3, which is enhanced with several health features like heart rhythm monitoring, which the company is also focusing on in a pilot with Stanford Medicine.

Health Emerging as a Smart Home Use Case

IoT technologies are expected to have a major impact on the healthcare industry, and are already shifting many services into the home and hands of consumers. This has created the emergence of health as a value proposition for the smart home. Significant investments from tech companies not only show the significance of this market, but also contribute to increased competition. This is a signal to other companies invested in the residential market that healthcare should weigh in as a use case when developing future roadmaps for their products and services.

 

What Amazon’s Acquisition of Ring Means

— April 5, 2018

At the beginning of 2018, I wrote a blog covering Amazon’s Key delivery service, which was introduced to enhance package delivery by allowing couriers access to customer’s homes to ensure safe package delivery regardless of customer availability. Amazon’s latest innovation raised concerns about how far the boundaries of technology can be pushed to make consumers lives more convenient by letting strangers through their front door. Despite this scrutiny, Amazon is pushing ahead with this service through its latest acquisition of Ring, the camera-enabled smart doorbell startup.

Enhancing the Key Service with Ring

Before Amazon’s acquisition of Ring, it relied on the Amazon Cloud Cam, which it developed to release the Key delivery service, and partnerships with existing lock makers. Ring’s doorbells extend this service’s existing capabilities through an additional camera, and through audio equipment that allows customers to chat with delivery people and answer the doorbell remotely. This deal was reportedly worth more than $1 billion, making it the company’s second-largest acquisition behind its $13.7 billion purchase of Whole Foods Market in 2017, which bolstered Amazon’s Fresh food delivery service.

A Message to the Competition

This move—and its acquisition of Whole Foods—not only strengthens the company’s Internet of Things offerings by extending its selection of connected devices, but also sends a message about Amazon’s commitment to business-to-consumer (B2C) services. By enhancing its Key service with Ring, it is more competitive with other tech incumbents engaged in the smart home like Google (which acquired Nest in 2014 and now owns a range of energy and security products), Apple, and Samsung. B2C services are quickly becoming the business model of choice across a variety of industries, and Amazon is one company that is taking it seriously and executing it well.

In the energy industry, Navigant Research has seen a transformation toward this model, as is highlighted in the Energy Cloud 4.0 white paper. Several utilities are already taking steps toward offering B2C services, including Dutch utility Eneco, which offers monthly energy monitoring services to its customers through Quby’s Toon platform. In the security sector, Comcast is increasingly diversifying and shifting toward offering security and automation services in the home to increase revenue (as US consumers drop traditional cable television packages) and customer satisfaction. Not to mention the variety of other service-based businesses that have skyrocketed in popularity, like Uber, Netflix, and Spotify. Once an online retailer, Amazon has become a diverse service-based business, and the company’s acquisition of Ring to support its Key service is a signal to other retailers that it intends to push forward and innovate in the home services space.

 

Trends from Light + Building 2018

— March 29, 2018

When I registered to attend the infamous Light + Building trade show in Frankfurt months ago, I never could have imagined its massive scale. This colossal trade show hosted over 2,700 exhibitors and 220,000 attendees, and featured just about any company you can imagine with stakes in the digitization of lighting design, building management, and energy—from big building and lighting tech incumbents like Siemens, OSRAM, Schneider Electric, Philips Lighting, and Honeywell to smart home and Internet of Things (IoT) startups like ROCKETHOME, frogblue, and Ubie. During the many miles I walked between exhibition halls, I observed several noteworthy trends.

From Products to Solutions

Several of the vendors I spoke with that have traditionally invested in selling products and deploying hardware are transitioning their focus toward broader solutions based on software platforms and services. For example, Philips Lighting announced a new IoT platform called Interact, which allows the company to deliver new data-enabled services to professional customers through lighting. The company also announced the change of its brand name to Signify to highlight its strategic push toward IoT-enabled smart lighting systems (not just because it was required to as part of Philips Lighting’s split from Royal Philips in 2016). OSRAM made a similar announcement at the show with its Lightelligence IoT platform for developers, as did other lighting manufacturers like CREE and Zumtobel Group, each showcasing its own software solutions to support asset tracking, space utilization, and location-based services using data collected from connected lighting sources.

Li-Fi as an Emerging Technology Trend

Other technology trends featured at Light + Building include Light Fidelity (Li-Fi). At the trade show, Philips Lighting also announced that it is now offering Li-Fi-enabled luminaires, which provide broadband internet connection through light waves. Li-Fi is a wireless technology similar to Wi-Fi, though it uses lighting waves instead of radio waves to transmit data. The technology has the potential to bring additional connectivity to IoT devices. The company is piloting the technology with Icade, a French real estate investment company.

Connectivity through Partnerships

Another set of companies working to accelerate connectivity in buildings are Schneider Electric, Danfoss, and Somfy, which announced their partnership at Light + Building. The collaboration creates a connectivity ecosystem for homes, small commercial buildings, and hotels that allows each company’s products to integrate more easily with each other at the controller level or in the cloud through application programming interfaces, making the deployment and interoperability of IoT solutions for buildings less of a barrier. Initially, the ecosystem will manage lighting, heating, and window shutters on a single platform.

Implications

These technology trends, partnerships, and solutions ultimately highlight the importance of IoT and a shift toward platforms and solutions that bring together data and connectivity to increase efficiency and optimization. Whether it be in buildings and lighting or security, health, and energy, this is a trend Navigant Research sees across a variety of industries. This transformation is discussed in relation to the energy industry in Navigant’s latest white paper, Energy Cloud 4.0.

 

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