Nest says interoperability is game changer for smart home sector

Interoperability in the smart home market is critical for exponential future growth, says US tech company.
Published: Tue 24 Jan 2017

Nest, the smart home business that Google bought for US$3.2bn a few years ago, put European expansion of its thermostat, camera and smoke alarm products on hold for just over two years until these could be localised correctly. The company has just added Germany, Austria, Italy and Spain to its list of 190 countries that can order these products.

Unified smart home market will take time

Localisation proved to be a major challenge for the company. In the case of Germany, for example, there was not only making sure that voice recognition worked correctly in German, but that the hardware itself would be usable there. The screws for the smoke detectors had to be tested and adjusted to work on the materials typically used in ceilings in the country, since these devices cannot be mounted on walls there.

Matt Rogers, Co-Founder of Nest, says the smart home market is still “three to five years” away from being more ubiquitous and unified.

Other than localisation, Google has been building Nest as an extension that will interoperate with whatever home hub is in place, be it Google’s own or for example, the Echo from Amazon. It is about giving consumers choice, according to the company.

Amazon Echo would appear to be the most obvious choice for Nest. According to Business Insider, Amazon Echo looks to be winning the race for the smart home hub of choice with an estimated installed base of 1.6m units. Consumer Intelligence Research Partners pegs the installed base even higher at around 3m units. These figures are based on stats for Alexa app downloads (1.9m since its release in 2014) with the differences resulting from assumptions about numbers of app downloads per household per device and app re-downloads.

But according to David Moss, President and CTO of People Power, while Nest promotes openness in its marketing, the company's restrictive terms and business model don't deliver on that message. People Power is a smart home services company headquartered in California. He explains: “Google wants to be the brain of your home, your building and life, and so they need access to lots of data to do that.

"They've taken some very strategic steps in the formation of their terms of service, and their policies for how you connect with their products in a way that enables them to maintain control of the data and ultimately be the brain." 

Prioritising customer choice

By the end of 2015, nearly 20% of all American households with broadband connections owned at least one smart home product, according to research firm Parks Associates. Over the next decade, that number is projected to grow to 66% as more thermostats, cameras, video doorbells, door locks, lights, controllers and yet-to-be-released smart home products make their way into households.

The biggest issue facing the industry today is actually not the technology but the business models that companies such as Nest use in an attempt to gain control over their users' data. But, the reality is that consumers want more than one connected smart device and these will probably be purchased from various different suppliers. Instead of aiming to be the owner of the consumer interface, the industry will have to design solutions around customer choice. Once proprietary systems give way to a more open environment, the market is likely to enjoy major growth.

The objective of the connected home experience is to enhance the lifestyle of the consumer, delivering an anytime, anywhere, borderless lifestyle where all devices work together whether the applications are entertainment, home control or energy management, explains Harry Wang, Park Associates.

Many large IoT players approach the smart home market with their own priorities top of mind, and that strategy is holding the industry back, according to Moss, an open mobile platform for IoT service providers. "Because there's so much money behind each of these different protocols, I don't exactly see them all going away." However, it could take at least a decade before the industry adopts a global standard, he says. 

For the promise of this truly connected home to be realised, says Wang, it is imperative that the connected devices can exchange data among themselves as well as with third-party applications and services. Common barriers to smart home market growth are the results of interoperability challenges, and include inconsistent and limited connectivity capabilities, lack of contextual richness of data, expensive devices with long lifespans, and point-to-point integration strategies that quickly become unmanageable.

“As the smart home market is increasingly moving towards a battle among multiple ecosystems led by influential companies from the technology sector and the service provider industry, it has become urgent that the industry must accomplish interoperability at all three levels: device-to-device connectivity, device to-platform and app-to-app. A close collaboration among smart home ecosystems could minimize the danger of a fragmented user experience and bolster healthy growth of this exciting market.”

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