Buying Smart Home Services —From Who?

Buying Smart Home Services —From Who?

We have talked before on this blog about the many players in the nascent connected home industry, a tempting but tricky market yet to reach its full potential, where those among the first to conquer will be the ones to thrive. Service providers from different industries and vertical markets are converging in this no-man’s land, drawn by the growth and business expansion opportunities – sometimes competing, sometimes working together – to find their place in this puzzle, with the consumer at its core.

At present, the players best positioned to offer connected home solutions are security service providers, telcos, insurance companies, and energy providers. All of them are working hard to position themselves as the homeowner’s entry point into the connected living market. But how can the consumer decide from whom to buy smart devices? Well, each player has its own strengths and qualities, based on their different approach to the market. This post reviews the unique advantages that each provider offers to the end consumer:

Security service providers

Security companies are in a great position to offer smart home devices in addition to their core services.

  • They offer consumers a solid security background, which ensures not only their reliability but also a quick response in case of emergency.
  • Connected devices can be easily integrated into a smart security system. For example, a motion sensor set in alarm mode can detect an intruder in a matter of seconds and send an alert to the homeowner or the monitoring station. But this same motion sensor can be set to work with a smart thermostat that automatically switches off the heating when the house is empty. Easy and convenient.
  • Smart technologies also offer a great variety of options for consumers, with flexibility to easily switch between professionally monitored security, DIY solutions or even security on demand, adapting to each customer’s needs and providing homeowners with full control over their home, even when away.


Just like security service providers, telcos are in a privileged position to offer smart home services.

  • Telcos offer consumers well-known brands that they recognize and trust, years of experience, and the confidence that they will receive technical support with their services.
  • Another benefit for consumers is that they can add connected devices to their existing services and subscriptions, integrating them easily within their home’s broadband and cable services.
  • They are reliable and offer affordable subscription models, bundles of services and customer support.

Insurance companies

Insurance companies find themselves in a win-win situation when offering smart devices to their customers.

  • Smoke detectors, water sensors, and alarm systems have proven to help prevent accidents and mitigate risks. This is great news for both parties: homeowners are rewarded with lower premiums while having the peace of mind of knowing their property and belongings are insured.
  • This new business model offers the possibility of creating closer ties between customers and their insurance company, thanks to data analytics. In the words of Elizabeth Smith from Hippo, “with a deeper understanding of customers’ needs and habits, insurance providers can offer more personalized coverage and underwrite risk more accurately.”
  • Insurers in the US are already offering their customers incentives to install certain connected devices such as video doorbells and water leakage sensors. Some will even send smart sensors free of charge if a consumer signs a contract with them.

Energy and utility companies

At present, energy companies are leading the European smart thermostat market.

  • Most of them focus on basic monitoring, with the goal of helping reduce customers’ monthly energy bills.
  • According to smart energy expert Susan Furnell, insurance companies should aim to offer consumers real value that goes beyond the device itself. In the end, once more it all boils down to the value of data analytics: offering not just a connected device, but a long-term service that puts consumers in control of their energy consumption.
  • As the customer base of energy companies keeps growing, the market may even experience a reduction in wholesale energy costs if consumers begin to shift to off-peak times, saving significant amounts of energy and money in the long run.

As you can see, each player in the connected home market offers unique qualities, advantages, and strengths, depending on the vertical market they come from and their previous background and experience. Each of them taps their expertise and differentiating capabilities to encompass this new business opportunity and offer what they see as the best solution to their customers.

Why buy Smart Home as a Service?

The one remaining open question asked by consumers is: why would I buy connected devices from a service provider who will require me to pay ongoing service fees?

The main reasons are interoperability, continuity and support. Most of us do not have the expertise to buy various security and automation components and ensure that they all work together. The benefit of buying from a service provider is that they will give the customer a system that works, devices that are interoperable, and ensure that in the event of technical problems they will always have a single point of contact that will offer support.

Connected home technologies offer these market players a unique chance to further engage with their customers by enriching their offerings with a whole ecosystem of smart home devices and new long-term services based on data analytics. But the last word belongs to the consumer. This is especially true given that no offering is markedly superior to the others. Therefore, it will be the consumer who decides which solution best fits his or her needs, and it will be the consumer who determines the winners and the losers in this challenging market.

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