By Thomas Rockman, vice president connected home, Deutsche Telekom
There is a raging debate about which way the smart home industry should go; open or proprietary. The days of proprietary preference in smart home systems may well be numbered but is open the best way forward for all players?
The debate between open and proprietary software stretches back to the earliest days of software development, and at various points the balance has swung in favour of one camp or the other. However, the era of the smart home and the rise of the Internet of Things (IoT) has rekindled the conversation, with perhaps even more vigour than before.
There’s plenty riding on the outcome, for sure. The newest analyst figures predict that the global smart appliances market will be worth $130 billion by 2020 [Smart Home Market Opportunities for Service Providers, Strategy Analytics 2016], and continue to grow at a CAGR of 23.48% during the period 2016 to 2020 [Global Smart Appliances Market 2016-2020,
Sandler Research, 2016].
The manufacturers are supporting this growth rate too, for example, global tech manufacturer Samsung publicly announced last year that 90% of all products that it manufactures will be internet connected by the end of 2017 [How to create growth from the connected home, Deutsche Telekom, 2016].
Long term view
In the very early days of the smart home debate, many of the major manufacturers built their own ecosystems, some based on established industry standards, some based on interpretations of those standards. But the overall drive was often speed to market, rather than a longer term view that recognised the benefits of open platforms for business and consumers. Now the market is a fragmented place, with a variety of platforms vying for visibility.
Of course, being open gives a key edge in this race for consumer recognition as developers and technology manufacturers work together to create interoperable products that also function with other third party software and platforms. This enables users to customise their smart homes devices, and thereby enhance the experience.
There’s anecdotal evidence from many different technology markets that open platform-based approaches have been the ones to cut through and reach scale. In particular, what has become clear is that platforms that leverage developer communities to enable enhanced features or capabilities and foster innovation are the ones that really achieve success. Take for example the Eclipse Foundation developer community with its Eclipse SmartHome project.
Fostering innovation is a critical part of the development process, and on an open platform the developer community is always on hand with help and advice, which shouldn’t be overlooked in importance. For example, in a complex ecosystem such as the smart home, demonstrating new ideas and concepts can be a challenge, so to facilitate rapid prototyping a Scratch extension can be used for ideas based on Eclipse SmartHome, speeding up the process by opening the expert field to external community ideas.
The fact is that opening up a platform to a community of third party developers by offering APIs and software developer toolkits (SDKs) will further enhance and also further extend the reach of a proposition. The Android platform is a classic example of an open environment that has triumphed because it actively welcomed app developers to TV manufacturers.
For companies, such a common foundation massively increases the development of products and services with the benefit that a ‘virtuous circle’ effect occurs, allowing multiple innovations to arise from within the ecosystem. All participants, whether they be customers, manufacturers, telcos, or home assistance service providers benefit from the network effects of an open ecosystem of this kind. We believe that something similar will also happen in the connected home market to help spur the creation of new products and extend the usefulness of old ones. In turn, that will give consumers more reasons to buy connected home products, growing the market.
Overall the connected home market offers enormous value to businesses and consumers alike, but the main differentiator of this market to others could be summarised by interoperability and connectivity through open platforms. Traditional, siloed thinking will not bring the full benefits of this market to the fore, and will make the creation of new consumer propositions all the harder. So, to answer the question of open versus closed in the connected home, the answer is clear; open all the way.
Deutsche Telekom has built an open connected home platform which was successfully launched in Germany under the name QIVICON in late 2013. The QIVICON platform is also available internationally and is already implemented in several European markets.