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Cable Technology Feature Article

January 31, 2011

Remote Home Automation and Security Services Emerging in Managed Services Market

By Laura Stotler, TMCnet Contributing Editor

Managed home automation and security services are providing a new option for homeowners who wish to monitor their homes remotely. This new category of managed services is set to compete with and complement the traditional home security alarm market, offering a host of new home security and automation services that may be managed remotely.

Traditional home automation services have been comprised of the do-it-yourself model and the more expensive, custom-designed installation model. According to the latest forecasts from ABI Research (News - Alert), these two approaches limit the size of the home automation market. Do-it-yourself installation requires homeowners to have technical expertise, while custom packages typically come with a high price tag (News - Alert).

By offering home security and automation as a managed service, telecom and cable broadband providers can provide homeowners with traditional security features as well as basic home automation like control over lighting and temperature. ABI believes the managed services delivery model will fuel tremendous market growth for home automation.

“Traditional security firms such as ADT will increasingly be joined in the mainstream by these new providers offering managed home automation services," said Sam Lucero, ABI practice director. "Verizon Wireless announced such a service at CES (News - Alert) this year, and Comcast is currently trialling one in the Houston, Texas area."

The research company forecasts more than nine million security cellular M2M connections will be active in the U.S. before 2015. The company sees the managed services model becoming mainstream in the 2012-13 timeframe. ABI previously forecast that more than one million systems are expected to be installed in North America in 2012. That figure would triple installations from 2008, and the forecast is expected to double again in 2014.

The main distinguishing characteristic of the managed home automation services model is that the product offering is not primarily a security alarm system. The package is instead a basic home automation system, which can incorporate a security alarm system as part of the overall offering, usually with the inclusion of a cellular back-up connection.

Key inhibitors to market growth are the newness of the technology and the newness of the service offerings to potential subscribers. ABI suggests a significant consumer education process will be required, but believes telecom and broadband operators are in a good position to offer it.

The M2M Market Data report from ABI discusses home automation in addition to other machine-to-machine communication topics. It tracks the M2M market based on wireless WAN embedded modules and product revenue, in addition to wireless WAN active nodes and service revenue. 

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Edited by Tammy Wolf