1. CONNECTED DEVICES WILL TRANSFORM OUR HOMES OVER THE NEXT DECADE.
Over the past two decades, the Internet brought about the first digital revolution; the Internet of Things (IoT) will bring about the second digital revolution. With IoT, connected devices will add powerful new capabilities, including the personalisation of use cases, but more importantly the ability to leverage the ‘cloud’, bringing increased processing power, remote prognostics, as well as the ability for consumers to interact with devices via apps. With more devices becoming connected and aware of other devices, the connected home ecosystem will become greater than the sum of its parts. IoT is set to transform the way you do business and engage with consumers.
2. THE MARKET WILL BE WORTH BILLIONS OF EUROS.
Strategy Analytics claims that the home market in the EU could be worth over €15.46 billion annually by 2019, with 50 million Western European homes having installed IoT technology.
3. THE THREAT OF DISINTERMEDIATION IS VERY REAL WITH INNOVATIVE PLAYERS SET TO ENTER THE HOME FROM ADJACENT MARKETS.
After many years (or even decades) of hype, we are now finally witnessing the emergence of highly original ways to make money from the connected home. IoT has the potential to reorder the balance of power for telcos, utilities, insurers, retailers and manufacturers. It will give competitors, including new and innovative starts-ups, as well as players from adjacent markets, the opportunity to disintermediate them.
4. MAJOR PLAYERS NEED TO ‘STEP UP TO THE PLATE’ IN ORDER TO DRIVE GROWTH FROM IoT.
The market is still to be defined, so now is the time to enter the market, to test new strategies, explore potential alternative partnerships, routes to markets and innovative new models, as a means to drive growth. The risk takers will be the ones who succeed. Try, fail, learn, and try again…
5. TO ENGAGE CONSUMERS, FOCUS ON MEETING THEIR REAL NEEDS.
We have identified ten key principles for success, and foremost amongst them is securing early stage traction with consumers, and that must start with a single, simple, compelling and needsbased proposition which can evolve one step at a time. Take customers on a journey; ensure that on the journey the connected home is part of a broader and more persuasive sales story.
6. THE ULTIMATE VALUE FOR SERVICE PROVIDERS, RETAILERS AND MANUFACTURERS WILL BE IN SERVICES.
Initially, the market may be ‘kick started’ by an impulse purchase of consumer hardware, but for the connected home market to realize its potential, it will need to move from ‘just selling’ consumer hardware to hardware-based services, and from just one connection to connected services.
7. THE MARKET IS NOT HOMOGENEOUS, IT IS DISTINCT AND REGIONAL AND SEGMENT NEEDS MUST BE MET.
It is critical that providers reflect what can often be very different market needs by region; a proposition that may resonate in one market will not necessarily work in another. This insight relates to specific domains, propositions, products, channels to market, and the consumer brands that are selected.
8. CREATE A WIN-WIN RELATIONSHIP WITH PARTNERS.
Build partnerships with brands that strengthen your overall proposition in certain areas and develop commercial propositions that benefit everyone. Players need to articulate clearly how early-stage propositions – such as app-driven connected hardware – can expand and extend beyond the immediate value they create to enable incremental services and partner ecosystems. The foundations of any success will be found in open and agile platforms that support multiple partners and provide the means to realize and monetize the connected home.
9. NO ONE STANDARD WILL MEET THE ENTIRE NEEDS OF THE MARKET, AND HENCE AN OPEN ARCHITECTURE WILL BE A PREREQUISITE.
The standardisation of technology will be one of the greatest challenges of the connected home market. Currently, there are many mutually incompatible solutions, both at a connectivity and at platform level. Based on this situation, Deutsche Telekom assumes there will be no market-dominating technical standards and the many standards will coexist for years to come. As such, an open and flexible platform supporting many different standards and technologies is the only solution to this ‘Babel-like’ confusion.
10. PLATFORMS THAT SUPPORT MULTIPLE USE CASES WILL BE THE ONLY ONES THAT SUCCEED.
Evidence from many different technology markets – be it hardware or software – support the view that so far platform-based approaches have been the only ones to cut through and reach scale. In particular, what has been shown is that platforms that leverage developer communities to enable enhanced features and capabilities and foster innovation are the ones that achieve the greatest success. This is why Deutsche Telekom supports the Eclipse Foundation developer community with contributions of its own and integrates the Eclipse SmartHome project’s open source technology in its own connected home platform.