Latest advancements in technology have forced many traditional security companies to enter the realm of IoT and smart home segments. In this article we talk to a few companies that have made this transition to understand what it takes to succeed in the new market.
Izvor: a&s International
The next big thing in the technology industry is undeniably the Internet of Things (IoT). The concept of connected devices and the benefits that they bring to users have taken the market by storm. According to the research firm MarketsandMarkets, its market size is estimated to grow from US$ 157.1 billion in 2016 to $661.7 billion by 2021, at a CAGR of 33.3 percent during the period. All industry verticals are undergoing a huge transformation in a bid to move toward affordable, accessible and quality services to their customers.
“New applications and use cases, a result of cutting-edge technology innovations, are being developed to address the changing industry needs,” said the research firm in a release accompanying the report. “IoT, in combination with cloud computing and big data, is creating lucrative opportunities for organizations.”
The physical security industry is keenly watching the development of the IoT market while trying to take advantage of the factors that would assist in making its products more efficient. Several security solution providers have already taken steps to ensure their place as the market moves forward. However, several experts warn that unlike other industries, the physical security industry should be cautious when it comes to adopting IoT systems. This is because the very nature of the physical security industry is to protect and while IoT expands possibilities, it also creates more chances for this protection to be weaker. Recent examples of IoT devices being hijacked by hackers are indeed confirming this possibility of security systems becoming weaker with IoT.
Nevertheless, with the right approach, physical security solution providers can reap several benefits from IoT. Traditional security companies who are willing to embrace this new technology have an edge over others, in terms of infrastructure, brand confidence as well as customer base.
THE MARKET TRANSITION FROM COMPANIES' PERSPECTIVE
Contrary to other technological developments, IoT is making its presence known among customers. Even end users are becoming aware of the various benefits that the new technologies can bring and expect the solution providers to come up with them.
Stressing on the connected home technology in Europe that is expected to reach $19,411 million in Europe by 2021, James Somerville-Smith, Northern Europe Channel Marketing Leader at Honeywell Security & Fire, said that the segment is witnessing tremendous growth.
“As a result of this growing demand, consumers have raised expectations about what their technology can achieve,” said Somerville-Smith. “Many now look to combine various household systems into one solution where systems not only work together, but understand each other. Security systems are increasingly a key part of that.”
Stressing further on the demand from consumers, David Ly, CEO of Iveda, said that the market will dictate the transition, and the shift has begun. More and more, customers are demanding ease of use and management and accessibility from their smartphones. This change widens the scope for even non-traditional security companies to pitch in with their offerings.
“They want more interaction and control from security systems,” Ly said. “This trend presents more opportunity for non-traditional security technology providers to now play in the security arena. I think it really is an opportunity for the industry to expand on its product and service offerings. In other words, you don’t need to offer traditional video surveillance/DVR solution or even IP cameras with installation services anymore. The market opportunity is becoming more open and flexible because you no longer need to sell hard traditional security products. For those potential customers who may have passed on the traditional security alarm or video surveillance system because of high cost and cumbersome installation, they may now want just a doorbell camera or a temperature control system. The new choices bring to the industry more customers.”
He added that the company plans to take advantage of this trend by simply being more flexible with the product lineup that they offer. Leveraging the relationship they have with their telecom customers, Iveda will listen to the requests and feedback from their massive customer base. The company will, in turn, seek out technology and manufacturer partners who can help them fulfill the market expectations.
Jeffrey Wu, President of Starvedia Technology, said that the major reason for the transition from traditional security to smart home and IoT-related systems is due to competition and the lowering costs of devices. In short, it can be noted that the customers are key to driving innovation in the field of IoT. As the end users become more and more aware of the innovations that are taking place in the field, they would demand more solutions that are new and effective.
At this point, it would be important to take a closer look at these customer requests in this context. No doubt, they are unique in terms of technology, but what would be more interesting is the end results they aim to achieve.
CHANGING CUSTOMER DEMANDS
Customers really want simplicity, according to Thomas Schulz, Director of Marketing and Communications at ASSA ABLOY EMEA. The spread of technology through our daily lives has made us accustomed to a streamlined user experience.
“Technology has also made us impatient and craving convenience,” Schulz said. “That’s why smart-home IoT devices must be easy to operate and to maintain. They must integrate with technologies we already use — phones, security ecosystems and so on.”
He added that in the commercial market, cost-efficiency is a major driver. For example, the move from wired to wireless solutions means cheaper and less invasive installation, lower energy consumption, and much lower maintenance costs. This encourages companies to explore the advantages of bringing access control much further into their premises. They know with wireless devices it will be cost-efficient, and yet will also offer a significant security upgrade.
Somerville-Smith pointed out that for many customers, having remote control over their smart security systems is a key priority. Mobile phones and other smart devices play a major role in smart security systems, allowing homeowners to control their security systems on the go.
For example, with Honeywell’s system and remote control app, the homeowner is automatically notified on his mobile device if an alarm is triggered, and can set and unset alarms from their phone. When at work, for example, homeowners are notified through the GX Remote Control when the system has been unset – indicating that their child is home from school. With all these capabilities, it is therefore vital that security smartphone services are designed to be simple and easy to use.
“The second requirement for many customers is additional home automation functionality,” Somerville-Smith continued. “Smart security systems like Honeywell’s Galaxy Flex provide homeowners with basic control over multiple elements, including gates, garages, blinds and heating, all through one interface that can be accessed remotely.”
Ly pointed out that the customers are no longer interested in a passive role in security, they take an active interest in the technology and how it operates.
“Our customers don’t want to just look back and see that something went wrong,” Ly said. “They want to actively see what’s going on to prevent any potential danger from occurring. With the widespread use of smartphones worldwide, people depend on their smartphones to manage their day-to-day activities, including home security, and at a cheap price. With that said, our systems now need to be more affordable with more functions and features. Security systems are expected to do more than just alert you when something is happening. It now has to allow for lights to be turned on, lock and unlock doors, open and close curtains, and adjust temperature, etc. These functions need to be performed remotely using a smartphone or any mobile device. With the awareness shifting to more IoT, there is more business opportunities with the masses.”
To Wu, customer requirements revolve mostly around the protocols. Different customers are requesting different protocols. Such things could pose a challenge to companies who would wish to standardize their offerings for seamless integration with other products.
CHALLENGES IN TRANSITION
Despite the obvious advantages that concepts like IoT and smart home bring to security, there are several challenges that manufacturers have to overcome when it comes to reaching customers. Ly named mindset change, cost and the variety of choices as the top ones among them.
“Customers do their research and are knowledgeable about their choices,” Ly said. “Companies now need to be willing to adapt their business model and sales methodology to the new expectations of the changing market. Iveda was never a ‘traditional security provider.’ Our solutions have always been cloud-based, thus transition for us to more IoT devices was a natural progression.”
According to Schulz, the key to success is developing the right products, obviously, and for that companies have to listen to customer demand. But information must also flow the other way. This is a new market, and customers — both end users and the domestic service providers who increasingly provide integrated smart-home solutions — need educating on what’s available, what ’s possible, the strengths and weaknesses of various products and functions, and so on. As part of that information-sharing process, ASSA ABLOY has researched and released regular market reports.
“For example, our ‘Smart Home Security Report 2016’ was based on a large survey looking at consumer hopes and concerns for new smart technologies,” Schulz said. “How could a digital door lock provide homeowners with peace of mind, in ways that mechanical locks can’t? What worries potential buyers about the installation and operation of a smart door lock? How do they feel about opening their front door with a fob, PIN or smartphone, instead of a mechanical key? And what lessons can be learned from examining the already mature commercial sector, in which ASSA ABLOY is an established market leader? Our residential channel partners — domestic energy suppliers, security specialists, telecoms providers — have been able to benefit from our research and this knowledge. We believe this is a business we can grow together with them; partnership is critical to overcoming challenges in this market.”
WHAT MAKES YOUR SOLUTIONS SPECIAL
Moving from traditional security to sophisticated IoT-enabled devices, the companies that we interviewed all had certain specific differentiators that they believed could help them stand out in the market.
“Our product range, for starters,” Schulz said. “ASSA ABLOY already has the largest portfolio of smart door locks on the market, many sold globally under our Yale brand. Yale is a name that homeowners associate with trust. It has been a cornerstone of residential security for decades, and yet at the same time is at the forefront of IoT-based innovations in home security. Further, our smart-home locking solutions are built using open standards, so they integrate easily with many leading smart-home systems worldwide.”
ASSA ABLOY has come up with different integrated solutions in different countries. “These sorts of integrations are exactly what customers want to make the shift from traditional ‘silent’ domestic door locks to smart ones — and we will be pursuing more channel partnerships with service providers through 2017 and beyond.”
Iveda’s Ly pointed out that IoT/Smart home solutions give customers more sense of control over their environment. They can perform more tasks remotely and conveniently from their phones. IoT also gives them more choices in the types of devices and functions they can control around the home or business.
“We see our advantage as having the ability to learn from our telecom customers firsthand with what the market is asking,” Ly said. “Then we and our technology partners work to fulfill expectations.”
A MOVE BEYONDE SECURITY
For most traditional security companies, innovations in the IoT segment would come as welcome developments. This is because the security industry clearly stands to benefit from these developments.
As mentioned before, customers are the real driving force behind these developments. Their demands are fast-changing, which means that the solution providers have to keep themselves up-to-date with the latest in the market to survive. For instance, the technology is getting complex, but customers want simplicity in its operation. They want remote access, but this should not be at the cost of security. These are some examples of the nature of demand that is ahead of the manufacturers.
Other challenges such as convincing the customer and finding a niche strength also remain ahead of these manufacturers. If these difficulties are overcome, we will see the security industry moving ahead, taking full advantage of the technological advancements and market requirements.