understanding revenue models for smart home …...understanding revenue models for smart home...

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Understanding Revenue Models for Smart Home Technologies

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Agenda • Perspectives on the European Smart Home Market

• Money and the Connected Home

• Business Models

• Consumer Value Propositions

• Partnerships

• Success Stories

• Q&A

3



Dave Davies

Senior Director,

Strategy & Product

Management

Cisco Systems

4

Greg Roberts

Vice President,

Marketing

iControl Networks

Dick Seger

CEO

Securitas Direct -

Verisure


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


Introduction

Dave Davies

Senior Director,

Strategy & Product

Management

Cisco Systems

10

Greg Roberts

Vice President,

Marketing

iControl Networks

Dick Seger

CEO

Securitas Direct -

Verisure


© 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


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

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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


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

17

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).

18

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


Achieving Top Line Results in the Smart Home

19

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%)



20

Smart Home Service Impact on Attrition



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



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?


Potential Smart Home Business Models

24

• 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


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’.


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?


Top Ranked Connected Home Features

29


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?


Choice and flexibility


Consumer Experience

33

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)


Early Adopter – Net Promoter Score

33

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%


Early Adopter Experience

35

-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)


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


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?


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


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

http://www.connectionseurope.com/�

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HOSTED BY

Reception Sponsor Advisory Sponsors

Lunch Sponsor

Break Sponsors

Breakfast Sponsors

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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

© 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

[email protected]

Thank You.

understanding revenue models for smart home …...understanding revenue models for smart home...

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