It's called digital living—Are you ready to embrace it?
Interest in and demand for integrated systems are at an all-time high; in every business, integrating data communication with information technology and physical security is commonplace. At home, customers are hungry for the latest products that promote mobility, convenience and entertainment. Integrated systems may be part security, but more often, they incorporate automation, lighting control, whole-house audio and video, gaming and more.
Why the rush to embrace integrated systems? The fact is product availability and the downward-spiraling cost now makes integrated systems more attainable.
Baby boomers may be fueling the demand as much as their offspring. They have become accustomed to the convenience and service afforded by high-speed Internet and broadband connections, Wi-Fi networks and, in general, multitasking solutions that come in a small package and are easier to use.
People want convenience, and now, costs for products have come down significantly. We’re entrenched in Moore’s Law (a founder of Intel who devised the premise that computer technology doubles every two years), but it might be happening at an even faster pace than he predicted.
Computer, microprocessor and multitasking technologies definitely are driving IBS system growth. There is a merging of formerly distinct connectivity methods—think hardwired and wireless—and mobile communications penetration is at an all-time high. Former proprietary systems have moved to open architecture. Wide area and local area networks (LANs) can be wireless, satellite or a combination of multiple technologies. The existing Ethernet has become the perfect place to deploy everything from data to surveillance to a range of other systems and services.
Manufacturers in every sector are partnering to play off each other’s strengths, and this is also resulting in new products and equipment. The continued proliferation of bundled broadband services is also bringing high-speed data networks to the home, rather than simply the office or business. The line between hardware and software continues to blur as products become all-in-one, multifunction devices.
Every market is getting in on what technology has to offer. For example, a London clinic recently started using a combination Wi-Fi network and wireless chip technology to track valuable equipment and assets. At the Hoover Dam, bordering Arizona and Nevada, surveillance cameras with built-in mini computers monitor the site 24/7 and capture high-resolution images. At U.S. Customs, biometrics is being deployed for immigration credentials. Hear about the new global positioning and tracking collar system for Fido? It’s another new entrant to the technology playground.
No single technology stands alone. Rather, multiple offerings piggyback on each other to communicate, send data and automate and secure the home and office.
Whether you call it digital living, integrated systems or mobile convenience, the market is headed up in both business and home sectors.
“U.S. spending on digital living services and products is expected to reach nearly $300 billion by 2010, driven by the rapid adoption of Internet and mobile services,” said Stuart Sikes, president of Parks Associates, Dallas.
Bridging products and services
According to Parks Associates, the U.S. home controls market is expected to exceed $3 billion in 2007. A recent report by Parks Associates, “Home Systems: Home Controls Update,” states that by 2010, more than 30 million households will have a network that bridges numerous products and extends the entertainment experience to multiple rooms in the home. Home controls will benefit greatly from this increasing connectivity and the market will grow steadily over the next six years, exceeding $4 billion in 2010 and reaching $6 billion by 2012.
“Historically, home control systems have been associated with the new-home market,” said Bill Ablondi, director of home systems research for Parks Associates. “We will see this trend change dramatically over the next few years as power line and wireless technologies eliminate the need to rewire existing homes in order to provide control and audio/video distribution capabilities. With the population of pre-existing homes open to home controls, this market will have immense potential.”
Contractors need to know the market for home controls, according to Parks Associates, lacks consumer awareness, not technical capability. “The entry of high-profile companies, together with the increasing adoption of broadband and connected-entertainment services, will help overcome this hurdle,” Ablondi said.
Wireless and mobile services also are driving demand through the roof. Reliability has increased, and range and sustainability have improved. Consumers who want to stream photos, movies and music from PCs to TVs and other video displays around the house will soon be able to do so through new wireless connections for in-home distribution.
At the International Consumer Electronics Show (CES), produced by the Consumer Electronics Association (CEA), the gathering was characterized by the convergence of broadband, content and consumer electronics. The CES show floor included some 20,000 product launches and major partnership announcements spanning industries and connecting consumers with more features, services and control of the content incorporated into electronic devices.
“The show had buzz and optimism and attracted the world leaders of the content, technology and services, communications and automobile industries,” said Gary Shapiro, president and chief executive officer of CEA. Some of the technologies featured on the show floor included digital imaging products, robotics, in-vehicle entertainment, content-shifting devices and gaming/Internet products, in addition to advancements in audio and home theater.
Every sector of the economy is feeling the excitement of integrated systems and services.
The home building market is another example. The increased popularity of installed home technology has resulted in more than 60 percent of builders and contractors employing custom technology installers in 2006, according to the CEA’s Fifth Annual State of the Builders Study released at the International Builders Show in January.
Custom technology installers
“The fact that builders and contractors employ technology installers as often as security installers and electrical contractors is proof that custom technology installation is quickly becoming the fourth trade,” said Joe Bates, CEA director of research.
“Consumers are increasingly asking for installed technologies, whether it’s for a home theater room or an intricate network complete with servers and structured wiring. Clearly, builders, contractors and consumers believe these offerings are no longer just ‘the wave of the future’ but a reality from which builders and contractors are reaping the benefits,” Bates said.
The telecommunications industry is also benefiting from the surge in connectivity and integrated systems. In 2006, the U.S. telecommunications market grew at its fastest rate since 2000, showing convergence continues to stimulate the telecommunications industry, according to the Telecommunications Industry Association’s (TIA) 2007 Telecommunications Market Review and Forecast.
TIA’s annual review of the telecom industry shows the U.S. market grew 9.3 percent in 2006 to total $923 billion in revenue, while the worldwide telecommunications market grew 11.2 percent to $3 trillion. Demand for broadband and high-speed services is fueling this growth, as carriers invest in fiber, IP technology and wireless infrastructures to provide state-of-the-art voice, video and data services, according to the study.
Drink it up
“Consumers are thirsty for broadband, and this report shows carriers are rushing to meet the demand,” said Grant Seiffert, TIA president. “Technologies like voice over Internet protocol [VoIP] and broadband video, as well as mobile data services, are sparking new growth in the telecommunications industry. As a result, carriers are offering more competitive all-in-one bundled packages, and consumers are seeing lower prices and more services.”
The report further forecasts growth in competing broadband technologies such as fiber, satellite, wireless and broadband over power line, which, combined, will account for more than 11 percent of broadband subscribers in 2010. However, in 2006, cable modems and digital subscriber line (DSL) technology continued to dominate the United States, capturing 96 percent of the broadband market, which in 2005 overtook dial-up service. By 2010, 87 percent of Internet connections will be over broadband technology.
More U.S. businesses are using communication systems based on Internet protocol technology. The adoption of IP-based converged enterprise network equipment has surged during the past two years as leases of legacy equipment have expired, the report says. IP/converged systems are expected to overtake traditional enterprise systems by 2009.
Don’t just think of your company as cable installer or electrical contractor, but rather, as a custom technology services provider. This will help position you and your company for the future. Consider what your customers will want and need in the near future and perhaps include the following in your product/company mix:
- Digital living services and conveniences
- Lifestyle products for business and entertainment
- Installers who are savvy in hardwired and wireless and can bring their expertise to the table
- Automated functions that are easy to use from touchscreens, cellular phones or other in-home or mobile hardware
Now that you know the customer’s motivation, you are ready to position yourself as an IBS specifier and installer and propel your company to future success. EC
O'MARA is the president of DLO Communications in Park Ridge, Il., specializing in low-voltage. She can be reached at 847.384.1916 or firstname.lastname@example.org.