The Connected Home - do or die

A quiet revolution is taking place in the utility sector. Thanks to IoT networks and smart meters, many homes in Australia are now ready to become Connected Homes – smart automated and presumably more comfortable environments that cocoon us in web of responsive ICT connections.

We can only hope that it’s nothing like the Matrix. While the Connected Home market is still in its infancy, analysts put the global value of this market in the range of 50 to over 100 billion dollars within 5 years. Already the solar + storage industry is making inroads into this market.

The vision for the solar-powered smart home is compelling. By combining rooftop PV with learning thermostats, web-connected appliances, energy monitoring software and battery storage, homeowners will soon have unprecedented control over their energy use.

The big question is who will own the Connected Customer’s gateway to the Connected Home services. This is important point because whoever owns it may be the conduit for all future Connected Home services including utility services.

Utilities always assumed they would have a good chance of owning the Connected Customer because after all, they are the current providers of the electrical services and infrastructure that make the Connected Home a reality.

They thought their main competitor would be the telcos and cable operators who also offer a smart home infrastructure. This was a fairly safe assumption until recently.

Technology disrupter models like Uber showed that if you create a more convenient customer engagement pathway with cost saving attached, you can make fulfillment of the service secondary to the customer engagement strategy.

Utilities could easily find themselves locked out of the retail market. And now they know it. ”Utilities could easily find themselves locked out of the retail market.”

 If this happened, it would wipe out the entire existing utility retailer market and would potentially undermine the work distributors are doing to create direct relationships with customers through their solar and storage services.

Proof of the concept is Telstra, who recently set up an Energy Service division offering solar and storage products. It’s headed by Ben Burge, previously CEO of online retail energy challenger Powershop.

More examples will surely follow. In response, utilities are designing new products and business strategies that are aimed at boosting their customer value proposition. They have their heart set on the Connected Home. This could be a do-or-die battle for utilities.

”Utilities are designing new products and business strategies that are aimed at boosting their customer value proposition.” The utilities know their DNA is in engineering and not customer engagement.

Indeed they have been very slow to shift from the rate-payer model to the fully fledged customer service model developed by most other large retailers.

Their servicing platforms and customer engagement strategies are miles behind the banks, telcos and internet retailers. Can they catch up or will they be undermined by a nimble new competitor who serves as the Uber of energy services?

Australian Utility Week – the Digital Utility expo (29-30 November, ATP, Sydney) is focused on this issue. It also outlines the progress of smart metering and the IoT network as it moves across the Australian and New Zealand customer markets as the core technology infrastructure that is required for the Connected Home.