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Cybersecurity challenges among top concerns for Smart Home as a Service: report

November 2, 2020  By  SP&T Staff

Saturated with smart devices, consumers are frequently turning to experiences that leverage multiple devices and bundle them into distinct service-based ecosystems, says CABA’s “Smart Home as a Service” (SHaaS) Research Report.

The new business model, “Smart Home as a Service,” represents a shift from device-based functions to managed services, and will usher in a new user experience more in-line with customer needs. Ultimately, the speed at which SHaaS emerges will depend on achieving open ecosystems and responding effectively to consumer data privacy and security concerns, the research notes.

Top insights gleaned from the report that outline the key considerations for stakeholders in the future smart-home landscape include:

  • Suppliers Need to Address Consumer Data Privacy and Security Concerns: Because SHaaS requires devices to seamlessly share data in real-time among one another and with cloud infrastructure, consumers are naturally concerned about the privacy of their data and how it will be used. Suppliers and service providers need to build products and services with consumer privacy controls and protections to encourage end-users to take advantage of their offerings.
  • Technology Suppliers with Closed Ecosystems are Precluding SHaaS: Some companies seek to maintain their dominance over the Smart Home market by encouraging closed ecosystems where devices can only interact with one another and the hub if they are manufactured by the same supplier. This inhibits SHaaS because it discourages new entrants and multimodal devices that can support multiple Smart Home service ecosystems.
  • Shifting Business Models to SHaaS Unlocks New Revenue Streams for Smart Home Suppliers: Even when new technologies and services are delivered, the trend is to move towards a subscription model. SHaaS will disrupt traditional connected-home business models. It will mark a shift away from a traditional model in which customers repeatedly pay charges for new devices, device updates, on-device software applications, and mobile app interfaces for each device.
  • SHaaS Will Leverage Devices with Open Network Communication Protocols: The proliferation of Smart Home devices requires interoperability with a Smart Home hub. However, as the hub’s role as the chokehold of the Smart Home ecosystem diminishes, devices will need to interact and share data with other devices as well.
  • SHaaS Creates the Need for a Single, Open User Interface: As more and more smart devices invade the home, demand for a single, centralized user interface intensifies. Ideally, this interface would be packaged as a mobile application, given the prevalence of smart phones. However, product manufacturers are incentivized against conforming to a Smart Home mobile application. The more time a customer interacts with their screen, the greater ability for the OEM to influence behavior and market products and services.
  • OEMs Can Address the SHaaS Market Opportunity by Pivoting to Value-Added Services: Lastly, device manufacturers need to prepare for the future mature state of SHaaS where devices are de-emphasized and function as mere sensors and appliances. To anticipate this, OEMs should concentrate on value-added services, such as energy and asset management, that leverage the consumer data they collect. This data will unlock new revenue streams and improve the OEM’s ability to offer more tailored products and services to consumers.

“In the connected-home landscape, integration with the surrounding smart hubs, currently dominated by a small number of prominent players, will be a critical phase but also a potential stumbling block,” said Ronald Zimmer, CABA President & CEO, in a prepared statement.


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