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Understanding Revenue Models for Smart Home Technologies
Parks Associates Webcast
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Understanding Revenue Models for Smart Home Technologies
Agenda • Perspectives on the European Smart Home Market
• Money and the Connected Home
• Business Models
• Consumer Value Propositions
• Partnerships
• Success Stories
• Q&A
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Understanding Revenue Models for Smart Home Technologies
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
4
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
www.parksassociates.com | © Parks Associates | [email protected] | 972.490.1113 | @ParksAssociates
Introduction
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
5
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct
- Verisure
Perspectives on the European Smart Home Market
Quick facts
1.6 million customers
Europe’s leading provider of safety and security services for the connected smart home
6,500 Employees and large partners organisation
13 Business in 13 countries in Europe and South America
339 Portfolio EBITDA, million € Net Sales 758 million € Full Year 2012
Owned by Bain Capital and Hellman & Friedman
The Verisure movie
The connected smart home is just a natural evolution
Our offer for the connected smart home
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Introduction
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
10
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
Perspectives on the European Smart Home Market
© 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11 © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11 Cisco Confidential © 2011 Cisco and/or its affiliates. All rights reserved. 11
Creating Connected Home Experiences Dave Davies Senior Director, Strategy & Product Management Connected Devices Business Unit
November 6, 2013
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 12
• More than 50 years of video experience
• Service Provider CPE greater than $2.5B business
• Over 60,000,000 RF-based digital boxes deployed around the world
• #1 in Market Share for IPTV and Cable set-tops
• Leader in residential gateways
• Successful video integration track-record with all major middleware vendors
• Offer and support end-to-end systems and integration services
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 13
Leveraging the Internet of Everything to create the next phase of dynamic new services
Security & Life Safety
• Remote Arm/Disarm
• Intrusion Alarms • CO, Water, Fire
Alarms, Sirens • Emergency Call
Energy Management
• HVAC/Thermostat control
• Supply/Demand • Carbon Footprint • Solar Panel Mgt • EV Charger Mgt
Lifestyle • Control of
Appliances, Lighting, Audio/Video
• Scene Management • Door open • Light turns on • Sleep mode of
thermostat
Health & Fitness • Assisted Living • Heal@Home • Motion Sensing
• Bed monitor • Fitness
tracking • Help pendants
Connected Life
CPE Platform / Hardware
CPE Software Stack
Connected Life Apps
Sensors, Accessories, Appliances
SP Wired and Wireless Infrastructure
Remote Management
Companion Apps
Cloud Services
TR-69/ XMPP
Con
nect
ed L
ife C
ompo
nent
s
© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 14
Go beyond Video/Voice/Data Control security services for the home or office from anywhere
Manage thermostats, solar panels, and other energy equipment on the move
Support eHealth and Telehealth applications like assisted living and fitness tracking
New Applications Higher Life Time Value
Retain more subscribers and extend your brand Leverage investments in the cloud, network, and client architecture.
Differentiate your service in the market to stave off competition
New Revenue
Drive additional revenue from your subscribers Recent Cisco research of consumers in US, UK, and Germany shows a clear monetary value in Connected Life Services: - US $16 - UK £6 - Germany €18
£ €
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Introduction
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
15
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
Perspectives on the European Smart Home Market
Confidential materials prepared and delivered by iControl Networks, Inc. for receipt and review only by any partner subject to a valid and enforceable iControl Networks, Inc. confidentiality agreement. Any receipt, review, or misuse of any of the content exchanged hereunder by any party not a party to this confidential exchange shall be subject to any and all rights available under the law. All rights, title and interest to the materials shall remain with iControl Networks, Inc. Copyright © 2011 iControl Networks, Inc. All rights reserved.
iControl Networks Overview
November 6, 2013
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iControl Networks, Inc.
iControl Networks
Business Focus • SaaS company delivering software platform
solutions for the Connected Home market. • Enabling the next generation of home
management and security.
Market Focus • Broadband service providers, home security
companies, utilities. • Bring together key partners, integrating and
enabling a diverse ecosystem.
Platform Approach • Multiple platforms to meet the differing needs
of various industries. • Technology-agnostic, open architectures
(Z-Wave, ZigBee, Wi-Fi, others).
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iControl Networks, Inc.
iControl Deployment Customers & Their Brands
Top North American Cable Providers
World’s Largest Home Security Provider
Leading Telecom Providers
Quing Home
iControl Powers Connected Home Solutions Offered By Many Of The World’s Leading Service Providers
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Achieving Top Line Results in the Smart Home
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Unlikely (Rating 1-3), 39%
Neutral (Rating 4), 27%
Rating 5, 20%
Very likely (Rating 6-7), 15%
Likelihood to Switch Broadband Provider for Bundle "Q605. If a home service or a bundle of home services that you value was available from a broadband service
provider DIFFERENT than the one currently providing you with Internet service, what is the likelihood that you would switch (once your contract is over) to subscribe to one or more of these services?"
(Among All BB HHs, n=1,500, ±2.53%)
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Achieving Top Line Results in the Smart Home
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Smart Home Service Impact on Attrition
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Achieving Top Line Results in the Smart Home
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
21
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
Is There Money in the Smart Home?
Focus on the customer experience
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Achieving Top Line Results in the Smart Home
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
23
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
Is There Money in the Smart Home?
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Potential Smart Home Business Models
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• Recurring Service Fees
• New Premium Product Sales
• Differentiation in Product Portfolio (Higher Margin Mix)
• Expanded Product Portfolio
• Complementary Product Sales
• Expand Sales Channels (Incremental Product Sales)
• App Sales, Upgrade Revenue
• Mobile Advertising, Lead Generation, Commission on Sales
• Selling Data
• Connection or Transaction Charges
• Energy Management
• Grow Loyalty, Reduce Churn and Customer Acquisition Cost
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Successful Business Models in the Smart Home
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
25
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
What Business Models will be Successful?
Successful business models through partnerships
ASSA ABLOY: ’The partnership with Verisure has enabled our Yale doorman lock to be connected’.
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Successful Business Models in the Smart Home
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
27
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
What Business Models will be Successful?
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Top Ranked Connected Home Features
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Consumer Value Propositions
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
30
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
What should be the focus of smart home systems?
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Choice and flexibility
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Consumer Experience
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0%
2%
4%
6%
8%
10%
12%
14%
France (n=652, ±3.84%)
UK (n=653, ±3.84%)
Germany (n=666, ±3.80%)
Belgium (n=653, ±3.84%)
% S
peci
fyin
g
Home Control Product Ownership (Q4/12) "Q7015. Does your primary residence have a thermostat, garage door, lights, flood (humidity) detector, security
camera, or door locks that can be monitored or controlled from a computer or a smartphone?" (Among BB HHs)
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Early Adopter – Net Promoter Score
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How likely are you to recommend your home control system to your friends or family?"
Promoters 9-10 - Detractors
0-6 = Net Promoter Score
NPS = 16%
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Early Adopter Experience
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-7%
10% 17%
24%
44%
60%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
1 feature (n=354, ±5.21%)
2 features (n=182, ±7.26%)
3 features (n=184, ±7.22%)
4 features (n=176, ±7.39%)
5 features (n=103, ±9.66%)
6 features (n=103, ±9.66%)
Net
Pro
mot
er S
core
NPS for Primary Home Control System by # of Features Adopted "Q7020. How likely are you to recommend your home control system to your friends, colleagues or family?"
(Among BB HHs Having Specified Features)
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Partnerships within the Smart Home
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
36
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
How will companies deliver a complete solution?
Partnerships with true synergies
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Partnerships within the Smart Home
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
38
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
How will companies deliver a complete solution?
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Early Success
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
39
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
What is working in the market today and why?
Sharing the vision and make it work
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Q & A
Dave Davies
Senior Director,
Strategy & Product
Management
Cisco Systems
41
Greg Roberts
Vice President,
Marketing
iControl Networks
Dick Seger
CEO
Securitas Direct -
Verisure
Questions from the Audience?
© P
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HOSTED BY CONNECTIONS™ Europe offers high-level analysis and consumer research, networking opportunities, and information on emerging connected home services and technologies.
REGISTER TODAY www.CONNECTIONSEurope.com
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Contact us today! 972.490.1113 | [email protected]
Conference Sessions Access and Entertainment
The Future for the Set-top Box
Tomorrow’s Challenges in Content Costs and Licensing
Discovery and Personalization for TV Services
Content and Service Strategies to Capture the OTT Consumer
TV Apps and the New Customer Experience
Multiscreen Services and TV Anywhere
Consumer Tech Support in a Multiscreen Home
New Entertainment Platforms and Content Distribution
Home Controls and Management Big Data and Cloud Services in the Connected Home
Interoperability in the Home Controls Market
Integration of Security and Energy into Service Provider Offerings
Engaging Consumers: Connected Home Business Models
The Role of Cloud-Based Services and Big Data in Home Management
Changing Role of Service Providers in the Connected Home
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Strategies for the European Connected Home is a consumer research study that surveys consumers throughout Europe on three key connected-home topics: home controls, tech support, and TV/video services.
Survey Topics
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TV/Video Services • Key features of multiscreen and
advanced TV services • Content discovery habit and
monetization strategies • Consumer segmentation of
subscribers • Analysis of cord cutters, cord
shavers, and cord “nevers” • Effective tactics to attract and
retain subscribers for premium video services
• Adoption and usage of TV Everywhere and multiscreen services
• Current CE adoption in the home
Consumer Tech Support Services • Consumer segmentation • Top features and preferred sources
of support services and warranty services
• Home network: desired applications and common problems
• Adoption of devices and tech support
• Current lifecycle of products and opportunities for tech support
• Consumer process of evaluating a service offering
• Role of cloud services in application support and backup services
Home Controls • Consumer segmentation • Attitudes and adoption: controls,
security, home management, and connected appliances
• Impact of connected products on the home management market
• Features and functions • Association of connected home
services with specific service providers
• Price points most attractive to consumers
• Cultural differences in value propositions from country to country
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Thank You.
© P
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Tom Kerber Director of Home Systems and Energy
Parks Associates
15950 N. Dallas Parkway, Suite 575 Dallas, Texas 75248
Office: 972.490.1113
Fax: 972.490.1133
Thank You.
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