A few decades ago, the term “smart home” was regarded as science fiction and used to describe automation that few homes actually used. However, with the advent of the Internet of Things (IoT), the smart home is emerging for a consumer base that always has smartphones in hand and high expectations in mind.

Home IoT deployments are still measured and tend to occur in high-value homes. While middle-class homeowners have yet to fully embrace it, the market is poised for contractors to pick up the emerging technologies and market solutions.

Neil Strother, Navigant Research’s energy practice principal research analyst, said IoT hasn’t made its way out of the hype phase. He said it is hard to predict which new technologies will have legs. Energy management is a dependable driver, but the problem is the lack of standard solutions.

“A lot of specific, siloed industries are starting,” Strother said.

Doors, for instance, could tie into energy management. If a security system were to detect that a front door were open, it could alert the homeowner and adjust the thermostat to save energy until the door is closed.

“Higher end homes are starting to see [technology] convergence in early stages,” Strother said.

But these early stages are expected to lead to mature solutions. According to Navigant, global revenue attributed to residential IoT devices is expected to grow from $7.3 billion this year to $67.7 billion in 2025.

An international study anticipated similar trends. Global revenues from smart-home-automation systems will grow at 21 percent between 2015 and 2020, according to ABI Research. Followed by Europe and Asia-Pacific, North America will account for the bulk of the smart-home-automation system sales in 2020, representing 46 percent of all revenues.

Wireless technologies from Bosch Security, Honeywell and United Technologies are dominating. However, at the forefront of more universal home automation are some corporate giants—Google, which has owned the Nest brand since 2014, and a more recent response, the Apple Homekit.

Nest Labs began with a smart thermostat and the Nest Protect smoke and carbon monoxide detector. Homekit is built into Apple’s iOS and intended to enable voice assistant Siri to accomplish such tasks as dimming lights or raising the thermostat.

Nest’s own term—the “thoughtful home”—indicates the home can capture and send information, and it can take the next step to modify  operations, such as heating or security systems, based on the data it collects. The biggest challenge for companies such as Nest is educating homeowners, builders and contractors about the technology, said Gene LaNois, Nest professional channel general manager.

In that effort, Nest offers “Pro Events,” which help electrical and other contractors understand the basics. The intention is to make these contractors brand representatives for home builders.

Electrical contractor roles blur
In the meantime, the roles of subcontractors are getting hazy, and many electrical contractors (ECs) face decisions about meeting future needs of more intelligent homes. Heating, ventilating and air conditioning (HVAC) as well as electrical and security systems are experiencing some bleed-over between trades.

“The lines are getting very blurry, and the technology is providing that blurriness,” LaNois said.

Because controls for electrical, HVAC and security systems are merging, subcontractors must decide whether they will provide services outside of their traditional sector. Not all ECs want to do so, but LaNois encourages it. Modern homeowners already have expectations of their home’s operations, but they may rely on a contractor to differentiate and understand different home-automation products.

Nest focuses on providing a system that can scale—for an initial installation of, say, smoke alarms (that send data to a homeowner through the Internet if smoke is detected)—up to a setup that includes everything from HVAC and irrigation to sound systems that would respond to sensor data. Such a system could then, for instance, shut off the thermostat if smoke was detected.

Going further, Nest also has a program underway with Mercedes- Benz in which sensors in the cars send GPS data to the Nest software platform, indicating where the car is and, therefore, when the driver’s home thermostat should activate in preparation of the user’s arrival.
The company also is working with Whirlpool appliances. In this case, a dryer could detect that a resident has left the house and reduce the level at which it is drying clothes to a safer, slower rate.

With all of these choices, many builders are still unclear about what technology they should offer homeowners, but LaNois said Nest is a good option for high-value or middle-income housing. Nest also partners with technology providers so that a sprinkler system, for example, could be integrated with a smoke detector.

Other manufacturers offer their own sensor-based solutions that tie into various home-management networks. For example, Honeywell provides a suite of products and services, including Wi-Fi thermostats and professionally installed and monitored security systems with full home automation, said Brad Paine, GM of Honeywell’s Lyric Platform, Connected Home.

“Honeywell is a leader in thermostats and security systems, and these also happen to be the leading categories today,” Paine said. “Consumers are quickly adopting the benefits of remote access to security systems and thermostats.”

Connected products are being adopted in a bite-sized fashion, Honeywell has found; as people replace their thermostats, many are upgrading to connected products. With that said, the cost for a homeowner to replace many things in their home at one time can add up quickly.

“We see our customers adding connected products to the system over time,” Paine said. “Installers and integrators should be in touch with where their customers are at regarding connected products. Some are ready to go and others are in the informational gathering stage. With that, they should have different level packages and/or the ability to customize packages to the homeowner.”

Before Nest offered its solutions, the current devices “seemed kind of gimmicky,” said Rod McLane, senior director of product marketing for California startup Ayla Networks. Once Nest came onto the market, product manufacturers—from appliance-makers to companies that provide boilers, chillers and air conditioning units—started offering sensors and connectivity. Ayla provides the backbone that links that data to users.

“The ‘gee-whiz’ factor may have been in the connectivity, but what we’ve found is that the value is in the data,” McLane said.

The information coming from the devices in a home is so vast it can be too much to manage unless you have a filtering and managing system.

There is value in the data far beyond what homeowners can learn about their appliances and devices. Residents can gain information about how well their products are working. When they fail, the product manufacturers can gain information about how an entire product line is operating in all homes and make schedule changes and improvements accordingly. That kind of information can benefit contractors as well.

Some electrical and other subcontractors have gotten into the business of managing the data they collect from Ayla Network’s platform to provide ongoing service to customers—a residential manager or homeowner.

“Connected devices extend the value chain and give contractors more options,” McLane said.

Ayla provides manufacturers with analytics and has the ability to parse data out to maintenance providers or contractors. The system also enables rules-based access, which can give a contractor temporary access to data while they provide services in a customer’s home and then rescind that access when it’s no longer needed. Even physical door locks can be released at a specific time for a contractor with such connectivity and data.

Ayla also strives to create the interoperability that isn’t otherwise possible with various devices from different vendors.

“Our belief is, to be successful, you can’t have a closed environment,” McLane said.

When it comes to home products, that’s not necessarily as easy as it might be with the computer industry, where there are only a handful of products to interoperate. Therefore, the platform enables users to link one data stream, such as sensor-based information from an appliance, with another, which could even be weather-feed information. In doing so, weather data could be collected, and an irrigation system in a homeowner’s yard could, for example, turn off if rain is predicted in the next few hours.

Of course, in a world in which a hacker could potentially penetrate a residence through a clothes dryer, a company such as Ayla is constantly upgrading security and encryption to ensure a user’s home is protected.

“Because security is so important, we have engineers on our staff that focus on nothing else,” McLane said.

For contractors that intend to be part of the IoT and smart-home wave, McLane advised that they get engaged with the market now. Both Nest and Apple’s Homekit are worth watching, but in this burgeoning market, don’t discount the many other solutions. There’s plenty of room for growth, especially for ECs.