Navigant Research Blog

Amazon’s Key Service Echoes Growing Concerns Over Privacy and Security

— January 2, 2018

Amazon’s latest service innovation has raised questions about how far the boundaries of technology can be pushed to make consumers’ lives more convenient. The Amazon Key delivery service, along with the Amazon Cloud Cam and a compatible smart lock, allow users to grant access for in-home deliveries. The service solves issues around package theft and customer availability to receive a package. It works by sending the user a 4-hour window on the day of delivery and confirming the assigned courier is at the correct address at the intended time by scanning the package barcode. When the package is scanned, the user receives a notification of the imminent delivery, the Cloud Cam is activated, the door unlocks, and the user can watch the delivery in real-time or check back later to ensure the delivery went well. The service was made available in 37 cities for tens of millions of items in November 2017. This sounds simple and straightforward, but media and industry specialists are scrutinizing the limits this service approaches by letting strangers into people’s homes. And to be fair, there are already issues with it, including a flaw that allows couriers to disable the security camera and door lock (which Amazon has promised it will fix).

Can Security Solutions Tamper Concerns?  

This new service is one among many offerings in the residential sector that emphasizes growing concerns over consumer privacy and security. From the common belief that our beloved social media sites are spying on users to publicized hacks of big name brands resulting in leaked personal data, consumers are increasingly wary as technology becomes a more intimate part of their lives. Stakeholders across the value chain recognize the need to implement more robust security solutions, and new regulations that aim to protect consumer data are emerging, such as the General Data Protection Regulation (GDPR). But for many, cybersecurity is only starting to become a priority, and companies are still figuring out how to deal with growing threats.

Threats of Scale

Data privacy and security become especially complex in the consumer electronics world because the home is a sanctuary and should be private and secure. At the same time, the hacking of a Wi-Fi router has much lower stakes than the hacking of a power plant and can be considered less of a priority for investment in security. Manufacturers promise data privacy and secure devices, but customer sentiment does not always resonate with these assurances. There is also the question of responsibility and whether the manufacturer, chip provider, wireless protocol alliance, or the consumer should be held responsible for security and data privacy. Consumers want to partake in social media, adopt smart home devices, and lead more convenient lives, but don’t want to feel like they are being watched, listened to, or followed, and they don’t always understand the risks associated with using technologies (such as the collection and sales of personal data).

Convenience vs. Safety

Privacy and security are increasingly affecting consumers at home. Residential customers are skeptical of technologies that have the potential to compromise privacy and security, which is affecting market growth. In order to progress the Internet of Things in the home, it is important for stakeholders in the residential space to be transparent with users about the measures they take to ensure the security of devices, software, services, and data privacy.


As Summer Winds Down, a Look at Residential Demand Response Leaders

— September 19, 2017

Summer 2017 was relatively light from a demand response (DR) perspective in North America—aside from California, which saw extreme heat waves. There were not a lot of opportunities to test the capabilities of DR resources that utilities, regional transmission organizations, and retail electric providers had stockpiled to prepare for high load levels or energy prices. However, there was still plenty of merger and acquisition (M&A), technology development and new program design activity taking place.

Navigant Research took this opportunity to compile a Leaderboard that examines the current vendor landscape for residential DR (RDR). The report analyzes the strengths and weaknesses of the key players in this global industry and displays those rankings visually in the Navigant Research Leaderboard Grid. This Leaderboard utilized broad guidelines to determine which market participants should be included to allow for companies that offer hardware and/or software and focus on technology or include program implementation services.

The Navigant Research Leaderboard Grid

(Source: Navigant Research)

This Leaderboard evaluated 15 companies based on 10 criteria to determine which competitors are Leaders, Contenders, Challengers, or Followers in the market. As the global RDR market has heated up in recent years, leading companies have invested heavily to develop their capabilities and strategy. There are a number of companies focused on other aspects of the smart grid arena now beginning to tackle the DR space, as well as many startup companies with new hardware and software offerings that take advantage of the plethora of available energy data and communication options for devices and customer messaging. Some of the incumbent RDR vendors are finding that they need to partner with these new players to keep pace with the changing marketplace.

The RDR industry is still maturing relative to the energy industry in general, but great strides have been made in turning DR into an operational resource for grid operators. In addition, this report combines both software and hardware offerings, as well as technology providers and program implementation services, which are all different segments that require diverse skill sets. Few companies attempt to serve all sides, thereby offering a complete solution.

As Navigant Research has published a series of DR-related Leaderboards over the past few years, it has been interesting to see the high level of new players and new technologies that enter the market on a regular basis. By the time the next is published, I expect to see more companies come on to the radar screen and disrupt the market, along with more M&As as successful startups are swallowed up by large energy players looking to expand their reach in the space.


Installation and Customer Support Play Vital Role in Creating Smarter Homes

— August 10, 2017

The novelty of having a smart home is driving connected device adoption among consumers, but the novelty is wearing off as the concept of a smart home becomes a reality. The smart home market, however, still has a long way to go before it reaches mainstream adoption. One of the major issues this market faces is that many consumers do not understand the value of connected devices. Many customers avoid the market entirely or exchange smart devices for dumb counterparts due to premium prices and installation challenges.

Providers Exploring New Methods

This is an issue that smart home technology providers are trying to tackle by providing additional support to customers. For example, Vivint and Best Buy recently announced a partnership to roll out Vivint employees in more than 400 Best Buy stores around the country. The Vivint employees will be able to give customers advice about smart home devices and even provide installation services. Vivint has traditionally sold its solutions through a direct-to-home approach. The company believes its partnership with Best Buy further develops this approach and its core belief in consultative sales—or human interaction to explain how smart home technologies actually work in the home. This move may help increase adoption by not only providing customers with more support and information, but also making smart home solutions more visible and accessible through availability at a large retailer.

Vivint and Best Buy are not the only companies exploring this method. Amazon is taking a similar approach to increasing smart home customer support by preparing an in-house fleet of experts to offer free Alexa consultations, professional in-home installations of smart home devices, and Wi-Fi networking systems. The fleet, which is part of Amazon Home Services, has been compared to that of Best Buy’s Geek Squad and is currently available to consumers in Seattle, Portland, San Francisco, San Diego, Los Angeles, Orange County, and San Jose.

Professional installation is not an entirely new concept in the smart home space. For example, Comcast requires its Xfinity solutions be professionally installed. It has expanded further into the space with its recent acquisition of iControl, new combination Wi-Fi router smart home hubs, and voice-activated remotes, which can control connected lighting.

Installations Are Key to the Integrated Smart Home

Professional installations and enhanced customer support are key to transitioning the smart home from an early adopter’s market to mainstream. They will also play a role in creating more dynamic, integrated homes that can play a role in a more digitized grid. Though there is no specific definition for a smart home, Navigant Research believes the more integrated connected devices become with the home, the more likely the home can be used for additional purposes like shedding load and stabilizing the grid.

Currently, the market is focused on standalone systems, point solutions, and further developing interoperability between devices to form greater connected ecosystems. However, players like Vivint, Best Buy, Amazon, and Comcast are progressing the reality of the smart home by offering more comprehensive, integrated solutions with professional installations and enhanced customer support.


Embedded Digital Assistants Increasing Awareness about Energy Devices

— August 9, 2017

The smart thermostat space is filled with a range of big players, as depicted in the Navigant Research Leaderboard Report: Smart Thermostats. Alphabet backs the Nest Learning Thermostat, Honeywell offers the Lyric, and Amazon supports ecobee thermostats. Finally, another major technology provider is joining the game: Microsoft.

Microsoft’s Smart Thermostat

Microsoft recently revealed that it will be releasing a smart thermostat called GLAS in partnership with Johnson Controls. Much like the Nest Learning Thermostat, GLAS reportedly senses when a user is in the room. It also determines indoor and outdoor air quality and adjusts the temperature accordingly. Though the company has not unveiled details on the thermostat’s release date or pricing, what is clear is that the thermostat is built on Microsoft’s Windows 10 IoT Core, it will support Microsoft Azure cloud services, and perhaps most importantly, it will be embedded with Microsoft’s digital assistant, Cortana.

Digital assistants are increasingly making their way into smart home devices. Leading thermostat provider ecobee recently released the ecobee4 thermostat and a light switch embedded with Alexa. General Electric will release its Alexa-embedded Sol lamp in September. Apple offers another digital assistant, the Home app, that allows users to control HomeKit devices via Siri. Google’s Assistant can be used to control its Home Wi-Fi speaker, its Pixel smartphones, and even its Chromecast smart TV device. Voice recognition is quickly becoming a significant part of the smart home experience, as my colleague Neil Strother pointed out in another blog.

Digital Assistants Can Coordinate Energy Savings

While energy currently takes the back seat to other use cases like security, comfort, and convenience in the smart home, interfaces like voice activation can help consumers take more interest in controlling their connected energy devices. Consumers do not often think about their energy consumption, a fact made clear in a recent consumer survey. The survey indicates that in 2016, the average consumer of a regulated US utility spent about 8 minutes annually interacting with their utility through digital channels. However, energy devices have a convincing value proposition because they can help consumers save energy and money—it just takes more interaction with these devices to increase awareness around their benefits, which digital assistants can foster.


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