Navigant Research Blog

The Smart Home and the Invisible Hand

— February 7, 2014

So many activities in our lives have shifted from a specific location to any location, and smartphones are largely responsible.  Phones used to be a fixture in a home, now they are an appendage.  Turning on lights, heat, and the stereo used to mean that one had to walk over to that appliance and interact with it.  Now, of course, the line “there’s an app for that” has entered the home, with more and more smart devices being accessible through branded apps.

Apps that can control lights, stereos, door locks, home security cameras, and even individual outlets have been reported on in this blog before.  Together, they embody the emerging Internet of Things.  The biggest play is in energy management for consumers, which makes energy conservation and comfort staging (i.e., the preparation of a home’s temperature, lighting, etc. in time for its inhabitants’ arrival) easy.  Navigant Research’s recent report, Home Energy Management, provides an informed look at trends in this growing market and the challenges it faces.

Enough Already

There are two main challenges.  First is the wild west of wireless communication standards.  From Wi-Fi to ZigBee and Z-Wave, there is no uniform standard or consortia of participants zeroing in on one protocol or pathway.  (This is unlike the automotive industry, which has recently embraced the Android OS for the Open Automotive Alliance by leading car manufacturers, including GM and Honda.)  In the absence of a single or even a consistent set of communication standards, individual appliance makers will have to choose a standard to pursue.

The other challenge is the interface.  Simply put, there are just too many apps.  From the consumer’s perspective, there could be some app fatigue, as users who admittedly embrace these devices have to find each individual app on their phone to control each device.

A few new players have entered the market to address these challenges.  The most notable is Revolv, which has made a physical hub (in an attractive cherry color) that can communicate with seven different wireless signals in 10 different languages.  Accompanying the hub is an app that integrates all of the wireless devices in the home in a single interface.  This makes home automation much easier from the start.  Added features include a proximity indicator that aids in comfort staging and profiles that incorporate a suite of settings for specific occasions (including song choices, lighting, and temperature.)

Now You See It

Other interesting approaches include Insteon, which has essentially set up its own communication standard, and Arrayent, which has created a common platform for the most common communication platforms.  The cable and ISPs have also jumped in the game.  Comcast (Xfinity) and Time Warner are bundling digital home management into triple-play offerings.  It makes sense; they already supply the cable and wireless for the home.

Where is all this home app explosion headed?  First, the consumer demand for smart meters is growing, and a recent Navigant Research survey indicates that consumers view these technologies favorably.  Clearly, the standards must coalesce to make using and installing smart devices easier for the consumer.  The apps will no doubt improve as well, and be corralled in platforms like those provided by pure-play companies, like Arrayent or Revolv, or by Internet/cable/telecom providers.

But the secret sauce may lie in making these devices smarter.  The Nest thermostat purports to learn the patterns of home heating and adjust its settings accordingly.  And with Nest’s owner, Google, purchasing the artificial intelligence and machine-learning firm DeepMind, we can expect those predictions to become more profound, or at least seem that way.  The irony is that the ultimate vision of the smart home lies in making these apps, platforms, standards, and devices all invisible to the consumer.  A truly smart home needs no interface or no manual.  It just performs optimally, according to its users’ current and anticipated needs and behaviors.  So, in the end, for the ultimate smart home, you might say, “There’s no app for that.”


Microsoft Builds Smart City Cred with CityNext

— July 29, 2013

Microsoft is the latest technology giant to announce a smart city initiative.  CityNext is positioned as a portfolio of technologies and products that can be used by Microsoft’s global partner network to develop solutions for a range of city challenges.  Along with products such as its Azure cloud platform, mobile application support, and data management capabilities, Microsoft is also contributing training and educational services.

The CityNext initiative embraces the core elements associated with smart cities, focusing  on eight critical functions: government administration, public safety, healthcare, buildings, tourism, education, transportation, and energy and water.  Microsoft has also lined up nine partner cities that will participate in CityNext projects: Auckland (New Zealand), Barcelona (Spain), Buenos Aires (Argentina), Zhengzhou and Hainan Province (China), Hamburg (Germany), Manchester (United Kingdom), Moscow (Russia), and Philadelphia (United States).

Microsoft’s preeminence in the government software market makes it, by default, a key player in any move toward smarter cities.  However, its engagement with the new city agenda has so far largely been confined to its work with government IT departments.  CityNext looks more like a marketing initiative rather than a significant product innovation, but it is a good start.  Its ambitions for CityNext rely heavily on its extensive partner network, but Microsoft itself can play a significant role in helping cities rethink their use of IT across a range of operations.

On the Board

In Seattle, Microsoft’s home turf, the company is showing the role it can take in supporting smart city developments.   Microsoft is working on a new smart building pilot with Seattle’s Office of Economic Development, the city’s utility Seattle City Light, and the Seattle 2030 District – a public-private collaborative of downtown Seattle property owners and managers – that aims to reduce energy use by 50% by 2030.  Funded through a grant from the U.S. Department of Energy, the project is using Accenture’s Smart Building Solutions, based on Microsoft’s Azure cloud technology, to increase energy efficiency across around 2 million square feet of commercial building space, with the possibility of future expansion.  The pilot was inspired by a project at Microsoft’s Redmond campus that is using big data analysis to provide energy savings that could reach 10% per year.  The expectation is that the pilot will surpass this figure, achieving energy and maintenance savings between 10% and 25%.

Microsoft’s announcement of CityNext came too late to have an influence on its rating in our Navigant Research Leaderboard Report: Smart City Suppliers.  IBM and Cisco have been pathfinders in the smart city concept, but as our Leaderboard grid shows, the main competition has come from the infrastructure suppliers like SE, Siemens, Hitachi, Toshiba, and others.  Other IT players have been somewhat slower to move beyond their siloed government and utility businesses.  This is changing.  In addition to Microsoft’s CityNext program, Oracle and SAP have also launched broader smart city offerings and IT services companies like Accenture, Capgemini, and Atos are following a similar route.  Increasing competition in the smart city market can only be good for cities – but, as ever, they’ll need to be able to separate hype from real innovation.


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