By concentrating all its forces on innovation, the technology world is necessarily Darwinian and selects only those who survive: MP3 versus CD, tablets versus netbooks. Without going back to these “antiques”, and while the “Smart Home” is ready to reach the public, judging by the number of products in this category at the Consumer Electronics Show in January 2015, a new battle is in progress: Google vs. Apple, whereas in the middle stand many Communications Service Providers and Energy Retailers in Europe who are starting to act to ensure their positions.
Infinite possibilities for the connected home
Although dozens of manufacturers propose interesting end-users products, most connected devices do not talk to each other simply, creating vertical user-experience and lack of user-friendly interaction between services. They facilitate end-users adoption and education, with their emotional design and extremely well designed apps, but they create services silos.
Still, the Internet of Things in the home, or rather the Internet of Everything (ie the interaction between the things, the data, the processes, the event, the people), should offer a virtually unlimited potential for interaction and automation, improving the living conditions of individuals in the home and the user experience.
Harnessing the possibilities of interconnect with the entire home and other smart devices that are already there, is a unique value that delivers the real promise of the “smart home”. Answering the question of communication between devices is therefore critical to enable meaningful use cases and to create the network effect for mass adoption.
The solution does not rely entirely on the creation of new industrial alliances, clubs and future standards and protocols, even if Allseen, OIC, Thread, Homekit are critical enablers of simpler interoperability.
Certainly we need to open an IoE ecosystem where devices, services and frameworks can talk to each other, locally and/or the Cloud, simply, regardless of their technologies, brands or ecosystem memberships. The Internet of Everything cannot be limited to wall-gardened ecosystems, even if industrial stakes are obviously high.
To offer enriched user experience, we trust that platforms such as IJENKO’s IoE2 will build bridges between all these major IP and non-IP universes.
A necessary “local” intelligence in the home
Today, an energy supplier or a service provider wishing to create additional value for its end customers to adapt to these new practices is offered a myriad of platforms for the Internet of Things, most of which cannot guarantee service availability even when the Internet is down. Only a local intelligence providing an autonomous rules engine can solve this problem and ensure an optimal quality of service. Applied to the energy management of the home, this local intelligence is even more valuable as real-time, automatic decisions have to be made all the time:
- Should I use my renewable micro-generation, resell it or consume energy from the grid, depending on the ToU and the feed-in tariffs? How can I manage automatically the storage capacity of my Powerwall battery depending on power pricing and my needs forecast?
- Do I need to opt out to the scheduled Demand response operation today or allow it?
The Internet of Things platform must offer this high level of real-time or programmed automation and allow the user to make such decisions, or delegate them to a trusted service, whether it is in favor of comfort, bill optimization or to avoid the trap of fuel poverty.
The IoT, an opportunity for energy providers
In the energy field, the power of the Internet of Things lies in Demand Side Management, based on volume, net pricing or CO2 emissions optimization, especially in peak and ultra-peak periods.
In Europe, as in the rest of the world, energy retailers are facing the following challenges:
- Regulation and the obligation to decrease consumption,
- The commoditization of energy, low margins, and churn,
- Potential new entrants with very significant financial resources and disruptive technologies that might end up disintermediating them from their customers,
- The emergence of the concept of smart cities and territorial, decentralized energy management,
- The rapid decline in the price of batteries for homes,
- Renewables parity and the development of valuable micro-generation models, with the related stress and constraints on the grid due to intermittency,
- Public pressure on climate change, and the increased understanding of the impact of individual and collective energy consumption.
They can be seen as challenges and/or opportunities for the energy retailers, if they surf the IoE wave properly. If they transform themselves in digital services groups, entering the fast and big data worlds, extending personal energy plans and related coaching services, managing demand, production and storage actively, at the individual and the aggregated level, they can benefit from the combination of the value of downstream and upstream services and uplift their business model. The direct sale of IoT devices by their manufacturers is also an opportunity to create service value for their end-users. Energy retailers can create augmented services, mash-up data between their own assets and these third party devices, trigger actions without boundaries via the various interaction channels an IoE platform can facilitate. Thus they can increase retention, customer satisfaction and may be ARPU.
Energy retailers would then become service providers of comfort, light, heat, convenience, happiness with a personalized energy and innovative IoE play, using the same sales, marketing and eco-system strategy & tools as global digital groups, with the same network effects. They could recreate a magical energy experience, and develop sustainable business and community value.