Romain Fouchereau (Research Manager, Security Appliance Program)

Coming soon to a home near you: energy management systems, camera-enabled door locks and doorbells, remote-controlled heating and lighting, voice controlled appliances. If some of this sounds oddly familiar, that’s because it is. Similar product concepts have been on display in showcase ‘homes of the future’ since at least the 1960s. But a number of developments in technology and business models are making these “connected home” concepts feasible as mass market products. These include natural language software, and the voice assistants it helps create, enabling a more attractive and intuitive control mechanism than the complex console panels of earlier home automation systems.

There are now business models that don’t rely solely on home automation equipment sales: connected home services are expected to unlock future sources of revenue from adjacent markets such as targeted data collection and advertising, intimate retail engagement, and platform lock-in). This in turn has facilitated the entry of major platform players (Amazon, Apple, Google) as “apex players”, which reduces consumers’ fear of “stranded assets” and makes interoperability across vendors easier and more “future proof”.

There are still important challenges to be overcome. Cost remains an issue; connected home offerings may seem comparatively expensive in the context of the benefits they offer. ROI might be diluted and harder to prove on a case by case basis, while easier to prove for property developers or building managers but so does technological complexity and uncertainty; integrating products from different vendors, as well as creating routines involving multiple products or services, can be challenging for many consumers. This makes some potential customers more likely to wait until the dust has settled and a clear winner has emerged. And let’s not forget security and privacy concerns – the subject of some real scares featuring, for example, personal data theft or unauthorized control of a device remotely. This is an area of genuine concern that often makes the big headlines in the new, but it may actually reflect fears about unfamiliar technology as much as anything else.

Ultimately, though, we believe it’s a question of when rather than whether connected home services become mainstream. When preparing their offers, it’s important for suppliers to realise that the Western Europe market is not the same as the North American one, but with different languages and cultural specificities and household demographics that may vary widely across the region.

We believe that vendors, and especially the smaller players of Western Europe need to find a place in the major players’ ecosystem that is dominated by Amazon, Google, Apple, and Samsung. They should try hard to maintain compatibility with all of these ‘apex’ players rather than attempting to pick a winner. And they may find more profitable opportunities in serving customers other than own-residence consumers (i.e., the landlords, developers, and care providers). This will necessarily mean developing resellers and/or systems integrators as channels to market.

On the other hand, end-users need to choose an offering that matches their price sensitivity, level of skills, and willingness to engage with technology, as well as what they are aiming to achieve. Users who have little technical expertise but nevertheless have a clear vision of why they want to connect some aspects of their home (and can afford it) should consider a managed service; but they need to make sure that they evaluate how good the support really is before they sign up.

For more information you can download The Connected Home: Western European Landscape on or get in touch directly! Also, keep an eye out for our next reports on this topic to be published later on this year.