Service Providers Entering Market for Managed Home Monitoring

  • Home Automation
More than 1 million home automation systems are expected to be installed in North America in 2012, according to a new report from research firm ABI Research. That figure — which represents a tripling of the 2008 market – is forecast to nearly double again in 2014.

One significant element of managed home automation packages is security. Traditional security service alarm service providers, as well as telcos and cable broadband service providers, are now entering the market for managed home monitoring and automation services.

“Managed home security usually represents good value for the consumer,” says ABI Research practice director Sam Lucero. “It’s something of a ‘plain vanilla’ offering, but it is packaged by the service provider in a way that is relatively easy to deliver. Stand-alone home automation and security systems pose a significant challenge to consumers in both cost and complexity. When home automation functionality is included in an overall security alarm package, it is more seamless and less expensive for the consumer to acquire."

And what is the motivation for the service providers? There are a number of drivers:

  • Service providers have existing relationships with their subscribers that facilitate education about home automation’s benefits.

  • “Stickiness”: Service providers are motivated to deploy managed services to increase their revenue and subscriber retention rates. “Revenue is slightly increased,” notes Lucero, “but it’s not really about that; it’s more about customer loyalty.”

  • Service providers’ efforts are greatly assisted by turnkey solutions suppliers such as InGrid, 4Home, iControl and others, which can help the service providers go to market quickly with compelling offerings.

  • Home security, along with the energy management, health care and media management elements of home automation, are more intuitively beneficial to consumers, resulting in greater willingness to adopt.

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