flash insight: which frameworks can dominate the smart home market?

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Flash Insight: Which frameworks can dominate the Smart

Home Market? July 2016

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Market Forces – Overview

To succeed in the fast growing and maturing market, smart home providers define their contribution based on functional, commercial, and technical success factors.

Smart Home

Market

The market in its

current condition and

development

Suppliers

Suppliers for frame-

works, communication

standards, ecosystems

Products

Platforms, devices

and services on the

market

Technologies

Technological trends

with relevance to the

market

Customers

Focus on customer

segments and their

needs

Functional Success Factors:

Solve an existing problem and

support appealing use cases

Provide unique selling proposition

Provide usability

Integrate a wide range of other

devices and services

Commercial Success Factors:

Minimize end customer costs

Minimize time to market

Technological Success Factors:

Definition of make or buy split

based on core competences

Selection of one or several

complementing open standards

Flash Insight Smart Home Frameworks | July 2016

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In a growing smart home market product manufactures face a jungle of evolving technologies, which can be divided into three building blocks. Three Building Blocks of Smart Home Technologies

Ben

efi

t M

ajo

r p

layers

Weave HaLow

6LoWPAN

Open Communication

Standard2

Enable the communication between

local gateway and the end devices

(actuators, sensors, and switches

Overcome one of the major

impediment for smart home

Standard for the exchange of data

between devices in the home Defi

-

nit

ion

Powered by

Product with

ecosystem1

Facilitates market entrance on the

base of a running system

Benefit from sales channels and

integration provided by ecosystems

Running product with integration

possibilities or white label options

Brillo/Weave

Amazon IoT Smart-Home

Framework1

Decrease time-2-market by re-using

the software of the framework,,

Participate in further developments of

framework and of innovations with

limited effort

Software that can be used to develop

own products

1) List contains major providers, but is not necessarily complete 2) Proprietary communication protocols like Homatic-IP or Insteon not listed


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Smart home provider have to define a make or buy strategy and to choose between different building blocks to support the development of their products and services. Options

Smart home

provider

Framework

Framework

Framework

Framework

Framework

Open

communication

standard

Open

communication

standard

Open

communication

standard

Open

communication

standard

Open

communication

standard

Product with

ecosystem

Product with

ecosystem

Product with

ecosystem

Product with

ecosystem

Product with

ecosystem

Functional

USP

Functional

USP

Functional

USP

Functional

USP

Functional

USP

Development of all

components by the

manufacturer

Result: faster development,

functional integration

possible, communication

integration impossible

Communication integration

possible, no functional

integration

Integration possible, fast

implementation

Communication integration

depends on ecosystem,

easily addressable

customers

High effort, not

advisable

Not advisable due

to integration

limitations

Possible option for

device providers

Option for all

market participants

Option for device

and service

providers

Building blocks

Developed by product

manufacturer

Used by product

manufacturer

Indirectly used by

product manufacturer Flash Insight Smart Home Frameworks | July 2016

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Frameworks have a stronger strategic impact for smart home providers than communication standards and ecosystems. Strategic Comparison

De

gre

e o

f p

os

sib

le in

flu

en

ce

fo

r th

e

sm

art

ho

me

pro

vid

ers

Functional Coverage

high

low

low high

Communication

Standards Frameworks

Products with

ecosystems

Communication Standards:

Enabler for market success but limited impact

Frameworks

Maximal impact due to functional range and

influence smart home providers

Products with ecosystems

Limited freedom to define market-changing

products


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The components of a smart home system provide the distributed functionality and communicate using different media and protocols. Smart Home System Components

Client: Access

point for end user Configuration

Control

UI

Manual management

Cellular communication

Smart Home Devices:

Actuators, Sensors,

Switches Measurement, sensing

Execution of actions

Limited logic

Cloud: Remote

Intelligence Smart logic, automated actions

Normed semantics

Authentication, authorization

Remote access

System management

Gateway: Enabler of

local communication Physical connection to end

devices

Smart logic, automated

actions

Normed semantics

Communication

within HAN1 Physical to application layers

Semantics

On

sit

e

Re

mo

te

1) HAN: Home Area Network Flash Insight Smart Home Frameworks | July 2016

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The frameworks have different targets; some support the whole customer-to-customer process, others concentrate on specific process steps. Frameworks: Analysis Overview

Smart Home

Devices Communication Cloud Gateway Client

Smart Home System Components

Fu

ll-s

tac

k

pro

vid

er

Se

lec

tive

pro

vid

er


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To analyze frameworks, they can be categorized by different kinds of deliverables for the customer-to-customer process that needs to be supported. Framework deliverables

Smart Home



De

live

rab

les

integrated development environment (IDE) or IDE plugins IDE

e.g. client modules, libraries for gateways and sensors/actuators Software

environment that can execute my code for clients, gateway or cloud Runtime

Environment

software as a service, e.g. cloud, database etc. SaaS

hardware e. g. smartphones, gateways, … Hardware

Documentation e. g. hardware specification, communication specification, object specification, device

and function abstraction Standards


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Among the full stack providers, Homekit and Brillo/Weave have the highest number of deliverables. Number of Deliverables per Process and Framework

Smart Home



Example:

Qivicon provides 2 of 6

possible deliverables1) for

gateways

The 6 core deliverables of the frameworks are: 1. standards, 2. software, 3. run time

environment, 4. SaaS, 5. hardware, 6. integrated development environment.

Note:

A high number of deliverables means

higher support

reduced flexibility

for smart home providers. The optimal number of

deliverables depends on the positioning of the smart

home provider


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The HomeKit framework places emphasis on the support of the client; the support of the communication and devices is restricted to documentation and software. Detail Analysis: HomeKit

Smart Home



De

live

rab

les

IDE

Software

Runtime

Environment

SaaS

Hardware

Standards Documentation

of API

HomeKit framework

within iOS

iOS on iPhone,

iPad, App.-Store

iPhone, iPad,

Apple Watch, …

XCode, HomeKit

Acc. Simulator

Common Data

Base for each Home

iPhone, iPad,

Apple TV 3rd. Gen

Technical

Documentation

Documentation for

MFi1 devices

HomeKit

Framework

1) MFi Made for iPhone/iPad/iPod Flash Insight Smart Home Frameworks | July 2016

-

-

-

-

-

-

-

-

-

-

-

-

-

- -

-

-

-

-

-

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The providers of selective frameworks start from their core competencies and rely on partners to support the whole process chain. Number of Deliverables per Process and Framework

Smart Home



The 6 core deliverables of the frameworks are: 1. standards, 2. software, 3. run time

environment, 4. SaaS, 5. hardware, 6. integrated development environment. Flash Insight Smart Home Frameworks | July 2016

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The AllJoyn framework provides a flexible support in form of standards and software, covering almost all areas from the client to the device. Detail Analysis: AllJoyn

Smart Home



De

live

rab

les

IDE

Software

Runtime

Environment

SaaS

Hardware

Standards Documentation

of API

Connection of clients

with AllJoyn Network

AllJoyn Thin

Core Library

Documentation

of API

AllJoyn

Router Library

Documentation

of Std.-Library

AllJoyn comm.

Bus

Documentation

of AllJoyn Bus


-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

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Frameworks focus on software for gateways, clients and backend functionalities provided as SaaS. Number of Frameworks Providing Deliverables for each Process Step

Smart Home



De

live

rab

les

IDE

Software

Runtime

Environment

SaaS

Hardware

Standards

Decision matrix for smart

home providers:

Which deliverables can be

procured from different

frameworks?

Which limit the choice of

framework if they not

developed?

Example:

2 frameworks

provide a runtime

environment for

gateways


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Frameworks are essential for new providers of smart home systems; service providers should be flexible in regard to the supported frameworks. Recommendations for Market Players

Implications

Recommend-

ation for action

Usage of frameworks reduces time to market and

development costs

Selection of suitable framework depends on:

Requirements derived from make/buy split, core

competences, integration requirements

Capabilities of frameworks: supported

communication standards in HAN, cloud

services, openness of framework

Support capacities, e.g. developer community

Smart Home Services Providers

New business opportunities for service providers:

Growing market

Innovative new products and ecosystems

Services and data will be basis of many business

models.

Frameworks allow smart home services

(insurance, shopping support)

Frameworks can be enhanced by added value

services (installation, customer support)

Use framework from the start; migration is

expensive and takes a long time

Contribute to a open source system to bundle

a joint force of developers against big players.

Create USP, such as privacy by design,

services, integration options

Partner with framework providers to enable a

complete process support

Partner with companies using a common

framework to reduce development effort

Increase flexibility: Offer required services for a

maximal range of systems supported by

framework


Providers of Actuators/Sensors, Gateways,

or Ecosystems

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Frameworks will be increasingly important for smart home providers in the smart home market. Key Take-Aways

1

Frameworks have a high impact on marketing launch and profitability The selection of a suitable framework as a basis for B2C products determines to a high degree the success of the products.

Therefore, frameworks have an indirect, but very high reach in the market and influence the market much more than B2C

products, platforms with ecosystems, or even communication standards. The more products use frameworks, the more they

will become a commodity and required for market success.

2

Frameworks are in a competitive situation The frameworks have different approaches to the market. Currently it is not clear which approach will prevail. Taking

other market segments as example, it can be expected, that there will be two to three survivors. The key success factors

are an open architecture and a high degree of implemented components e. g. bindings to wireless communication

standards. The frameworks that enable a B2C product provider to launch innovative products with minimal time to

market, will have the best chances to dominate the market.

3 New and traditional market players must react to frameworks New market players can choose from a set of frameworks. Established products therefore face an increased competition

as the new players can enter the market faster and with less costs. Service providers can profit from the situation, as

frameworks enable new business models due to the increased market dynamics.


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Christian John Senior Expert at Mücke, Sturm & Company

Contact details:

[email protected]

+49 151 58243362

More about Mücke, Sturm & Company:

www.muecke-sturm.de

Mücke, Sturm & Company would like to get in touch with you to support in the evaluation of the frameworks and their impact on your business.

Headoffice Munich

Theresienhöhe 12

80339 München

T +49 89 461399 0

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Office Hamburg

Brooktorkai 20

20457 Hamburg Roland Schmitt-Hartmann Project Manager at Mücke, Sturm & Company

Contact details:

[email protected]

+49 151 58243379


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Sources


flash insight: which frameworks can dominate the smart home market?

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