Home Automation: An Internet of Things Guide to Smart Home Technology | 1

Home Automation: An Internet of Things Guide to Smart Home Technology

EXECUTIVE SUMMARY: The concept of a "smart home" is not new. Anyone who has seen the cartoon "The Jetsons" knows how the concept works: ubiquitous automation that literally pops out from the walls and ceiling. Reality, however, has been met with various limitations, mostly technical in nature, but some social issues have cropped up as well. So in the future era of the Internet of Things (IoT), every home is expected to be smart well beyond the basic household appliances such as the refrigerator, thermostat or lights. As developers build out new, exciting innovations and customer adoption increases, the smart home will be much more than the simple ability to remotely lock or unlock your front door. Instead it is expected to use actionable situation intelligence in order to detect your entry into the building, turn on the lights to your pre-set preferences, preheat your stove and put on your favorite music. So how soon will it be until everyone can take advantage of the connected home? More than half of 1,000 consumers in the United States surveyed by researchers at Savant believe that home automation will be commonplace in less than 10 years from now. Nearly one-fourth of the survey sample is optimistic that the technology will be an everyday feature in less than five years. The survey further provides insight into what IoT developers should focus on. Most homeowners are looking for control/ease of use (69 percent) and convenience (58 percent) first when purchasing a new technology. Cost savings (41 percent) as well as safety and security (35 percent) were cited as the two primary considerations for the adoption of smart home automation systems among consumers. The do-it-yourself (DIY) approach still dominates the way most people engage with home automation. This makes it hard for developers to gain a foothold in the quick-growing automated home marketplace. However, there is satisfaction for developers that wish to enable do-it-yourselfers and those building new connectors, retrofitting older appliances or starting new and purchase new appliances as needed with embedded IoT technology. Providing a contrast with more integrated solutions, service providers like ADT, Comcast, DirecTV and Verizon have all launched networked home automation systems with SDKs for developers to adopt. No matter how manufacturers, suppliers and system integrators engage with IoT for the home, the out-of-the box experience often becomes the differentiator for customers. "The user experience that filters information from the various devices into one master controller will be most successful," said Kurt Hoppe, formerly with LG Electronics. "Customers don't want to have a different app for every device. That is not a good user experience. There does have to be some aggregate view without too much latency from the cloud. Imagine leaving the house and logging in to lock the door and then logging into a separate app to turn off the lights with a 5-minute lag. If you forget something inside, you have to re-login to turn on lights and unlock the door and then repeat the steps again to lock up and leave."

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Developers therefore are tasked with building systems that link existing devices with the smart devices of the future. Disruptions can and will occur. One only has to acknowledge issues of security and privacy as potential disruptions to home IoT adoption. "In 2013, we went to several conferences and took a poll about IoT awareness wherever we went," says Jackson Bond, co-founder and chief product officer at relayr. "We found the hardware guys are happy building devices and connecting into the cloud, but the software guys were having a harder time. They did not understand the hardware. Even though 30 to 40 percent had heard about IoT and 60-70 percent had already pushed for it in their projects, they were failing because it was difficult to get the programming connected to the bare metal. What's been needed is the combination of bare metal, back end support and user control. The trend is to bring the two sides together: the app economy and the maker revolution. That is where the trend is going." Design and production cycles must also be manageable to keep manufacturers competitive and the IoT for the Home marketplace relevant for homeowners. In 2014, the Application Developers Alliance's Emerging Technology and Internet of Things Working Groups identified five areas influenced by IoT to provide developers insight into creating a robust IoT ecosystem. This whitepaper serves as an exploration of IoT by looking at its current state in home automation, best practices for creating apps and new opportunities to explore. Other investigations cover Manufacturing, Retail, Automotive and Wearables.

INTRODUCTION: Internet cartoon site Joy of Tech recently lampooned the notion of the smart home with a commentary that infers the Internet of Things is talking about you behind your back. While it seems absurd that the light bulbs, the thermostat and the refrigerator are whispering to each other about your bad habits, comic creators Nitrozac and Snaggy are spot on when it comes to the goal for developers and IoT in the home. Each device should not only talk to each other, but should also help keep the home humming while you relax and enjoy yourself.

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Connected-home devices include all smart appliances (washers, dryers, refrigerators, etc.), safety and security systems (internet-connected sensors, monitors, cameras, and alarm systems), entertainment (speakers, TVs, game consoles, etc.), and energy equipment (smart thermostats and smart lighting). The process of building the connected and well-automated home has been a challenge since the early days, and developers should expect smart home experiences to continue to be very personalized in the next few years. Incorporating the Internet of Things in home-oriented apps typically means cobbling together different devices in varying intervals or connecting all the things at once. Developing for either scenario is a challenge but not exclusive to IoT for the home. Similar to the obstacles can be seen by the manufacturing industry. On the industrial side, Kipp Bradford of O’Reilly Media wrote in Forbes that opportunities lie in creating products and apps that can talk to each other, using the example of a Nest thermostat and his home’s HVAC system. As of now, there’s no way for the two to communicate, which is exactly the opposite of one of IoT’s main goals. "Companies that recognize the new business models created by well-designed, smart, interconnected devices will be handsomely rewarded. When my Nest can talk to my boiler, air conditioner, and Phillips Hue lights, all while analyzing performance versus weather data, third parties could sell comfort contracts, efficiency contracts, or grid stabilization contracts," Bradford wrote. Other high-profile names like Belkin, Netgear, AT&T, Verizon, Comcast and ADT are moving into the IoT field, largely in home automation and security.

The Connected Home, A Quick History We've all seen the home of the future as presented through the eyes of Disney in the 1960s or GE's vision of the home in 2025. But in light of the development of the Internet of Things, these models of an automated home are no longer as futuristic as they once appeared. In the 1970s, organizations such as X10 brought the connected home closer to reality with advances in automation by using power lines to facilitate communication between appliances. In the 1980s, the National Association of Home Builders quickly established a working group to address the notion of a cyber-architecture for home environment controls as well as advocating for more technology in the home. The 1990s found further advancements in connecting homes especially in the areas of networking and power. However, most projects for the connected home were limited to wealthy homeowners. The INTEGER Millenium House, debuting in 1998 in Watford, UK, focused on improving environmental performance and overall building security. In the 2000s, more connected homes came online. Companies like Crestron provided a comprehensive secure environment, but nearly exclusively appealed to the ultra-wealthy. Other companies spent their turn of the century to improve interoperability. Sonos Connect attempted to combine music with the IoT experience by using wireless network controls. Working groups were formed, mostly to establish partnerships and encourage best practices. The Digital Living Network Alliance created a cross-industry coalition of more than 200 consumer electronics products, paving the way for device interaction and interoperability. More recently, companies have acknowledged the need for more comprehensive standards beginning with the latest in IEEE networking protocols, followed by associated web services and developer APIs for building better home automation systems.

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"There are lots of standards out there but not one of them is dominating the field," says Sandro Olivieri, a senior manager at AT&T Foundry. "What that leads to is a lot of closed walled gardens. Apple is an obvious example of this. There are some benefits of an Apple system, a Samsung system and a “Works with Nest” system. The reason this is important, however, is that as things progress, it won't matter if everything is connected because it won't work if devices won't talk to each other." Handheld devices like smartphones can also be an integral part of realizing the full potential of home automation. A case study by the Wireless Multimedia & Networking (WMN) Research Group from Kingston University in London explored how an iPhone 4 supports a smart home, with the aim of monitoring the resident inside and mapping his or her movement. The study assumed the resident will constantly carry the smartphone, which will give the exact coordinates of his or her location. Among other things, this shows that the person has left a room even if the light switch isn’t turned off upon exiting. The main goals of this ongoing project are to learn how mobility affects data transmission by wireless home networks, where hardware should be located as smart homes are retrofitted or built, and to identify a non-complex wireless network for smart homes. Ultimately, developers working on IoT deployments for the home should feel confident that they are architecting efficient, secure and inexpensive homes for a broad range of customers.

HOW WILL IoT WORK IN THE HOME

Developers working on Internet of Things projects will find similarities between the home deployments and other vertical areas: manufacturing and retail. Similar tools will be used to develop these programs, and most working groups provide resources for those looking to start building the next smart home.

Home automation typically requires five components to function. These components can be assembled ad-hoc -- in a DIY fashion -- or managed through a central hub.

1. Sensor (measures temperature, light or motion detection) 2. Controller (a general-purpose computer or a dedicated automation controller) 3. Actuator, (motorized valves, light switches and motors) 4. Bus (wired or wireless for transmitting instructions) 5. Interface (human-to-machine and/or machine-to-machine)

As developers build systems that read sensor data and manage devices, the opportunities are open when it comes to mastering the connected home. Among those currently popular include temperature, lighting, security, video, entertainment, appliances and irrigation. How homeowners engage with these components depends on their comfort level with technology in general. "If the consumer can derive the value of the end-point device, they will buy it," says Kurt Hoppe, formerly with LG Electronics. "Most consumers in North America we've found are open to the devices and not worried more about the privacy issues. In Europe - especially in Germany - they are very sensitive to privacy concerns. There is high consumer awareness with connected products, connected lights and video cameras. Europeans are focused more on cost savings with IoT than in North America. To the Europeans, it's important if they have a connected home that adjusts the temperature as they are crossing some sort of geo-fence that ensures it will be warm or cool once they come inside."

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DIY IoT Customers are typically more aware of IoT and smart homes through DIY devices that are purchased and installed separately. The Nest thermostat, Dropcam video cameras, WeMo smart plugs, Yale locks, Philips Hue light bulbs and Sonos wireless audio products all fit this category. Home automation products have been around since the 1970s. Enthusiasts with the technical ability and eagerness to get their hands dirty can quickly get connected. The costs associated with installation are typically lower than relying on a professional service that design and deliver mainstream and luxury home automation. Developers need to be sensitive to certain issues when designing for these DIY platforms, according to Ahmed Daoud, CTO at Playtabase, which makes the Reemo wearable wrist controller for the connected home. The systems must include updates that run in the background. They must connect to broader systems with common wireless protocols such as Wi-Fi and Bluetooth, allow for some level of customization and they must be easy to install. "Generally developers are not aware of the problems of user interface," says Daoud. "They are more concerned and eager to work with the technology. If the interface is clumsy and hard to work with, who cares? If there is a problem, there is always a workaround. Let someone else worry about it." That exclusive attitude doesn't work very well when you are talking about a consumer interface, he adds. Customers need a clean set up process, as a delayed process can quickly become frustrating. "You have invested money and time in a product that is supposed to make your life easier and exciting, and here you are forced to sit disengaged from anything else in your life and sit in front of this device and set it up," said Daoud. "The shorter you can make the set up process, the more successful your product will be." Another concern is the social issue around data sharing from home devices, according to Jean-Marie Bonnin, an administrator at Institut Mines-Telecom, a French public higher education and research establishment. "In our experiments, we measure information. People are free to keep the data in the service, or in the cloud or on their mobile device," says Bonnin. "You can determine which part of data is private and which part you can share with. The problem emerges when you are not able to combine all of the data. It becomes difficult to determine the customer needs with only part of the data present."

BIG NAMES BATTLE TO CONTROL THE IoT HOME While the image of developers typically translates to small agile teams of dedicated people around a single project, the reality is that most of the largest technology companies already have their strategy in place and are very likely to flex their muscle in the next five to ten years. Apple is the dark horse of the bunch. While the iPhone maker does have Apple TV, Apple Watch and HomeKit in development, Apple does not have an official stance on the Internet of Things. However, the company will likely use its user-friendly products and simple touch interface as the argument that it can be the one company to rule all of consumer IoT.

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ARM’s comprehensive product offering includes microprocessors, graphics processors, enabling software, cell libraries, embedded memories, high-speed connectivity products, peripherals and development tools. The company's technology designs enable the current and future IoT applications and services. Cisco is a mega player in IoT and even redefines it as the Internet of Everything (IoE). They are using their existing dominance to make IoT networked connections more relevant and valuable than ever before. The company established the IoT World Forum and a $150 million IoT Fund to keep ahead of the competition. Ericsson builds on Cisco's "50 billion connected devices" stance. Included in this vision is the Networked Society where all aspects of people's lives, the operations of enterprises and society in general are impacted by the proliferation of communications. The Internet of Things will be a major cornerstone of an emerging networked society, including the home. General Electric (GE) is a natural fit in the connected home. GE makes appliances, lighting, power systems and other products that help millions of homes, offices, factories and retail facilities. The company likes to talk about its influence on the Industrial internet. Google loves to connect people with information, which has made them an important force for IoT. The company's current initiatives include new notifications on the lock screen, an all-new camera API, OpenGL ES 3.1 and, the new Material design interface. Acquisitions define Google's recent strategy. Nest, DropCam, Waze, several robotics, artificial intelligence and computer vision companies are now all contributing to Google's IoT presence. IBM and its "smarter planet" vision focuses on solving it's client's problems of data overload. While it does have legacy issues around microchips, UPC codes and other technologies, the company prides itself on being interconnected so clients can actually have access to the data. It's work around the connected home has been relegated to the cloud. Intel is the other champion for IoT after Cisco. The chipmaker is working to accelerate the development and deployment of the Internet of Things through building intelligent devices, creating systems of systems by connecting legacy devices to the cloud and enabling end-to-end analytics. Microsoft CEO, Satya Nadella, says the upcoming Windows 10 will tie everything together in the IoT. Currently, the company is demonstrating Microsoft Azure cloud as the connector between its user interfaces and physical sensors. Oracle is focused on supplying the IoT community with software and middleware for a connected world. The acquired Java development platform has made strides in user interface and interoperability, such as a connected car or a remotely controlled graphic printer. Oracle's input into connected homes also seems pushed back to the cloud. PTC uses its ThingWorx platform to speed the creation of high value IoT applications that support manufacturers' service strategies, such as predictive maintenance and system monitoring, Samsung is betting its future on an open IoT world. Boo-Keun Yoon, president and CEO of Samsung Electronics, noted that IoT will "revolutionize our lives” and “unlock infinite possibilities.” Yoon claimed

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that 90 percent of all Samsung’s products will be IoT devices by 2017 and is targeting 100 percent connectivity by 2020. SAP technology offers products in applications, analytics, cloud, mobile as well as database and technology categories. The company also likes to use its mobile capabilities via its Seybold acquisition to address dashboards and interactive interfaces for its customers. Texas Instruments lives under the hood of many IoT products. It provides analog and digital semiconductor integrated circuit design and manufacturing. Like other chipmakers, the company likes to use the cloud to support its embedded wireless connectivity technologies, microcontrollers, processors and analog solutions. Qualcomm is populated by products that run the gamut from smart computing devices to simple machines that have "smart" capabilities. The company is also a charter member of the AllSeen Alliance, which organizes and helps to develop Open Source IoT tools and standards.

Is your company not featured on this list? There is still much to smile about. Small to medium-sized businesses involved in the Internet of Things for the home are expected to see a significant return from the $61 billion in device sales estimated for 2015. By 2019, those IoT device sales are expected to increase to $490 billion, according to research firm BI Intelligence. In fact, 82 percent of small businesses in the United States say IoT has the potential to increase their business opportunities, according to a study released by security software specialist AVG Technologies. The firm queried 2,000 companies in North America, the U.K. and Australia and found the majority felt optimistic about IoT and that the related technologies would be relevant to their business going forward. Revenue from small businesses involved with IoT in the Home is expected to come from a steady stream of apps aimed at specific scenarios involving specific user populations in specific industries, according to Thomas Hansen, VP of Worldwide SMB at Microsoft. "IoT offers an opportunity to gather insights like never before, and we believe it will help small businesses get away from just running a business to finding ways to make it thrive," Hansen said.

ARGUMENT FOR THE DIGITAL HOME HUB While the off-the-shelf can provide immediate results, cobbling together disparate systems could lead to an overly fragmented, and not particularly smart, home Internet of Things experience. Think about the number of remotes in the average living room: televisions, cable service, game systems, music and even air conditioning. As more devices become connected, the number of interfaces to manage will only grow. So should there be a central hub of the home for IoT integration? The rise of the managed smart home market segment includes home improvement retailers like Lowes and Home Depot, who offer simple self-install smart home starter kits. These fit a range of homes previously unaddressed by DIY or high-priced systems. "The reality today is that the connected home needs a hub to make it simple for consumers," says Kevin Meagher, Vice President & General Manager, Smart Home at Lowe's. The company's IRIS system is

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aimed at the mass market. "Asking consumers to download multiple different applications for different devices is not advisable. If you got this hub that bridges the different standards, the advantage is that it will work for everybody." Another argument in favor of hubs is that IoT standards may change, according to Meagher, “standards remain a challenge”.

"There is a limit to the amount of radios that you can put into an independent device and make it affordable so decisions have to be made,” Meagher said. “What the hub model does is make it simple and future proof for customers; as standards change their hubs can adapt and they won’t need to change end devices.”

Many interviewees in a recent GigaOm Research paper on smart home platforms said there is certainly a need for a central hub that would manage accounts and their relationships to the various devices. If this approach is taken, expect Apple with HomeKit and Google Works with Nest and Dropcam to dominate this space. "Future hub technology could be embedded in a set-top box, TV, gaming console or some other new device," said Gigaom Research Analyst, Craig Foster. Microsoft seems to be one of the few existing set-top box makers making strides toward a connected home using IoT-enabled technology. The company is currently demonstrating a combination of Kinectmotion sensor technology along with Microsoft Azure HDInsight and Power BI for Office 365 in the back end as part of its enterprise offerings. However, the company is increasing its own staffing around the banner of IoT. The combination of Xbox and Windows Embedded OS are sure to play a part. Sony's PlayStation division and TV set-top-box maker Tivo are also reportedly working on solutions to integrate IoT technology into their devices, but not much publicly has been announced. Other companies making a play for the connected home include:

• AT&T – Offers its Digital Life platform • Control4 – Offers smart home and smart business products • Savant Systems – Plays in the high-end of the home automation market • Crestron Electronics – Offers home and business automation • Zonoff – The underlying software for Staples Connect • MiOS – The company behind Orange home automation offering • Wink – A spinoff from GE whose Hub is available at Home Depot

• Vivint - Offers home security, energy management, home automation

LIGHTS, CAMERA, IoT Leaving the lights on is no longer an excuse for high-energy costs in a connected home. Connected lighting is gaining in popularity and is resonating with customers at an estimated growth rate of 45 percent a year for the next five years, according to market research. Although wireless lighting controls can be used for all types of lamps (linear fluorescents, compact fluorescents, incandescent and high pressure lamps, etc.), the shift toward the use of LED lighting

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constitutes an important driver for wireless lighting controls. The advent of LED technology brings the potential of new functionality (such as changing color), which will require developers to innovate their control mechanisms. "For example, the Hue Disco app changes the red-green-blue of Philips Hue lights within a themed color set in sync with the home audio system – effectively turning an ordinary living room into a dance floor," wrote Gigaom researcher Foster. "Products like Hue can also be linked to smart smoke detectors like the Nest Protect to provide visual alerts when security is breached or when carbon monoxide is detected." Homeowners are also motivated by energy saving benefits. Early attempts such as Google PowerMeter and Microsoft Home may have missed with customers because they were too early to market. Vendors best suited to addressing this trend will build partnerships with key lighting players, offer a lighting-themed initial proposition and work with organizations such as The Connected Lighting Alliance, which promotes interoperability in the lighting world.

Beyond energy savings, increased IoT for the home adoption is expected to help reduce greenhouse gas (GHG) emissions by 9.1 billion metric tons by 2020 (equivalent to 18.6 percent of global GHG emissions in 2011), according to a report by AT&T and the Carbon War Room. Developers can feel good knowing that the more automated and efficient the home becomes, the more opportunities there are for optimizing resource efficiencies.

OUTSIDE THE CONNECTED HOME When the smart home connects to an equally smart world, the potential of the technology to improve user’s lives increases exponentially. By attaching “smart meters” to the power grid, water lines and other utilities can judge demand in real time and adjust prices just as quickly, creating what is referred to “time-of-use” rates. This allows smart devices, like a washing machine, to hold off on running until the optimal time, saving the owner money and reducing stress on infrastructure at points of highest demand. AT&T’s Mobeen Khan, discussed the potential

power and complexity of such systems, "Many of the smart meters that we connect to along with the utilities can have as many as 30 exterior power meters that are meshed together and talk over each other over a cellular network … We also have lighting systems that are networked together so you can tell if there is a light out and where it is along the network. The same principal applies to the home. You could have Wi-Fi act as the central hub. You could even have these components connected through a land line."

Washing machine tech with Texas Instruments and IBM You might not think of Texas Instruments (TI) or IBM as heavily involved in providing home IoT technology, but the two companies recently announced a TI tech-based washing machine that has embedded Wi-F that lets a homeowner start or stop a wash cycle. TI is providing the microcontroller, the wireless embedded radios and high-resolution sensor information from the machine to the Internet. For its part, IBM has thrown in its IBM Mote runner its Smart Cloud and other IBM analytics software. So does a connected washer really do all that much? The result is a machine that saves 30 percent of energy output after spinning. For its part, IBM included connectors for the embedded device to talk to Smart Cloud parallel processing - IBM analytics predictive maintenance information and external interfaces for monitoring.

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STANDARDS FOR DEVELOPERS TO FOLLOW Much like the other facets of the Internet of Things, experts suggest that the best way for developers to get involved in IoT development for home is just to pick up a starter kit and do something. "As an app developer you can focus a lot on implementing each individual protocol or focus on one protocol that allows you to connect to multiple protocols at once," says David Moss, co-founder and CTO at People Power. "For developers you need to understand it's important to decide which problem you want to solve long before you choose which hardware manufacturer or partners that support the ecosystem that is out there." “Predictably, the race to create standards for the IoT is nearly as fragmented as the market for operating systems.” As for supportive organizations, IoT for the home is championed by the Open Interconnect Consortium (OIC), AllSeen Alliance and HyperCat. However, there are opportunities for developers/companies that devices connected in a fragmented market. "Everyday people who use the products really don't care about protocols. They just want it to work," says Moss. "I see a lot of devices focused on the ZigBee standard such as set-top boxes. You can put it in a cabinet and you don't have to worry about a line of sight. It's a natural extension of that that your set top box that becomes a hub for ZigBee devices in the home." Technologies for developers in this space to follow include Z-Wave, ZigBee, Bluetooth Low Energy, Wi-Fi, Insteon, Clear Connect, JenNet-IP, Smarthing and HomePlug. "There is an expectation from service providers and retailers that Z-Wave and ZigBee must be supported, but there is a growing body of evidence to suggest that Bluetooth and Wi-Fi will play as important a role, if not more so," said Gigaom's, Craig Foster. "Successful companies in this sector need to evaluate their technology choices constantly."

For those applying to be part of the HomeKit program, integrating Bluetooth radios into hubs and embracing organizations like the AllSeen Alliance could be best primed for success, says Foster.

Developers Wanted: Skills Needed As developers look to engage in IoT there are certain skill sets they will need:

1. Data and Security – Developers will need to understand the importance of data, how to use it and how to protect it amongst growing privacy concerns.

2. UI/UX Design – Developers need to understand how products and devices will be used in order to balance user experience with functionality.

3. Software Architect Skills – Developers will need an in-depth knowledge of software architecture and not just programming.

4. Communication/Networking – Communication is at the heart of the connected home. Developers need skills in wireless, radio and emerging technologies.

Sources: ITCareerFinder and Desktop Engineering

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The Thread Group, a Google-backed venture has been identified by some as having the potential to displace ZigBee from the smart home. Like other standards, the group suggests that something must be done to solve "lack of interoperability, inability to carry IPv6 communications, high power requirements that drain batteries quickly, and "hub and spoke" models dependent on one device (if that device fails, the whole network goes down)."

However the standards play out, most developers are adopting open source standards to take advantage of both the wisdom of the crowds and to help them scale. "There is a very strong trend toward open APIs, especially in the last five or so years there have been 10 to 11 thousand open APIs made available," says relayr co-founder Jackson Bond. "If you look at the ability of open source software and hardware designs, this is an excellent opportunity for anyone working on the Internet of Things. The advantage of these open APIs and standards is that developers can leverage them to gain greater acceptance. I would point to what happened to Arduino as an example because the hardware helped create a foundation of makers with passion for simplicity, open source and sharing." In addition to the devices and the software that connects with them, developers should also be aware that telecoms and carriers are now working with APIs that tap into a social networking layer as well as providing specific machine-to-machine (M2M) network services. Currently, carriers are experimenting with M2M networks. These specialized networks dedicated to M2M communications, include providers like SigFox, KORE Telematics, Raco Wireless, Aeris and others. "In an M2M relationship, sensors are mostly off and sometimes they are on," says Sandro Olivieri, a senior manager at AT&T Foundry. "So you don't need a broadband or LTE pipe for this

There's Gold in IoT for the Home While building IoT applications and interfaces is critical for transforming houses into connecting homes, funding these fledgling projects has become just as important for developers and their management teams.

According to researchers with A.T. Kearney, venture capital investment in IoT is growing at 46 percent versus 7 percent in growth of overall VC investments. Cisco alone is investing $1 billion over five years. Intel created a separate IoT business unit to handle investment and strategy for consumers and businesses.

Here are the most active venture capital and corporate investors in the emerging IoT innovation landscape according to CB Insights Venture Capital Database:

• Intel Capital • True Ventures • Qualcomm Ventures • Cisco Investments • Kliener Perkins Caufield & Byers • Felicis Ventures • First Round Capital • Khosla Ventures • Norwest Venture Partners • Foundry Group • Greylock Partners • New Enterprise Associates • Sequoia Capital

While there are a lot of startups building IoT tech for the home, the opportunities to cash in are already available. For example, angel investor David Tisch contributed to the $15 million SmartThings raised prior to being picked up by Samsung in July 2014.

Here's a quick snapshot of the top funded Internet of Things startups between 2010 and 2014:

• Jasper Wireless $141 million • Nest Labs $80 million • SimlliSafe Home Security $57 million • Enlightened $54 million • Digital Lumens $44 million • SIGFOX $32 million • ThinFilm $24 million • Pie Digital $24 million • Neul $19 million • tado $16 million

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type of communication. The benefits are super low latency and super low input and developers should be aware of this."

SECURITY AND PRIVACY CONCERNS As developers continue to build out amazing apps and hardware for the home, a few items should be kept in mind: most importantly, security and privacy.

Privacy and security are always at the forefront of design. It is important to keep the location of the end-user in mind as different jurisdictions can have dramatically different privacy and data collection laws.

In January 2015, the Federal Trade Commission (FTC) released a report making privacy and security recommendations to the industry regarding the Internet of Things. The report highlights numerous examples of positive uses of IoT, but also identifies several risks. "The only way for the Internet of Things to reach its full potential for innovation is with the trust of American consumers," said FTC Chairwoman Edith Ramirez. While the government agency recognizes that IoT is in its early stages of development, the report suggests that self-regulatory programs should be created by industry itself to encourage strong privacy and security practices. The recommendations include:

• Build security into devices at the outset, rather than as an afterthought in the design process; • Train employees about the importance of security, and ensure that security is managed at an

appropriate level in the organization; • Ensure that when outside service providers are hired, that those providers are capable of

maintaining reasonable security, and provide reasonable oversight of the providers; • When a security risk is identified, consider a “defense-in-depth” strategy whereby multiple

layers of security may be used to defend against a particular risk; • Consider measures to keep unauthorized users from accessing a consumer’s device, data, or

personal information stored on the network; • Monitor connected devices throughout their expected life cycle, and where feasible, provide

security patches to cover known risks. The FTC has a range of tools currently available for developers to consider in protecting American consumers’ privacy related to the Internet of Things, including enforcement actions under laws such as the FTC Act, the Fair Credit Reporting Act and the Children’s Online Privacy Protection Act.

Fredrik Beckman, Co-founder of Apptimate, would also add a few points regarding privacy and security in the age of a connected home. This includes:

• Designing for access over public networks, with strong end-2-end encryption and authentication of allowed users, applications and devices.

• Being selective in what data and what control to provide to different users. Consider making data as anonymous as possible to protect customer privacy.

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THE IoT HOME OF THE FUTURE Developers obviously have the best vantage point on how the future will shape out since they are building the applications and the connections between the sensors and the Internet. According to the industry experts, there is a lot of ground to cover in our homes. "The house is the last bastion of stupidity," claims Lowes’ Kevin Meagher. "Every business building you walk into has most things integrated such as heating and cooling and lighting. Our homes don't." And while homeowners have gravitated toward easy to understand interfaces (home-energy equipment and safety and security systems, including devices like connected thermostats and smoke detectors) Meagher says developers must do crazy things to enable houses and devices to become even smarter so that controlling the home experience is simple.

"There is the opportunity to have access to APIs and that will allow developers to help customers save water or energy," Meagher said. "The challenge will be how we aggregate data and get all these things working together so customers can simply pick them up and have a high-level application through which they can control them all -- that's what we are trying to do with our [Lowes] app. That's Iris."

The ubiquitous user experience is a sentiment shared by many of our interviewees. "I'd like to have all the devices all around you really work for you in a compassionate way and proactively work to improve your life without you having to have a cumbersome process and overhead that is not constantly customizing and working against you - it would work with you in a very nurturing way," said Playtabase’s Daoud. For example, entering a smart home with your connected device triggers a series of lighting and heating preferences; even down to the softness of the bed, he adds. Through a series of universal standards each device would add value to your persona. That so-called one app to rule them all may be in the hands of a few players in the short term, according to Kurt Hoppe. "I would be happy if millions of homes are smart enabled over the next five years," said Hoppe. "I think the end service provider will want their user experience to be the master UX experience we don't want to pull out our smartphone to open the door and another app to turn on the lights. Hoppe considers the lead players in this consolidation to be the providers such as Comcast, AT&T, Verizon and Cisco. While there is always room for smaller companies building IoT-enabled experiences for the home, existing service providers can make this happen for the mass market with bundled services, teams of field technicians to do the install and service desks to handle customer accounts.

CONCLUSION Ultimately, the out-of-the-box experience should not be an out-of-body experience for customers adopting IoT in the home. Developers should realize next generation platforms need to be able to abstract devices so that onboarding is made simpler and ecosystems built more quickly.

Home Automation: An Internet of Things Guide to Smart Home Technology | 14

"The replacement cycle for a connected home device compared to a smartphone is a bit longer. How often do you need to replace a refrigerator?" asks Hoppe. "Most enthusiasts now are early adopters who are purchasing the IoT device on purpose, but most people will start off buying an add-on connector that takes care of things like energy management. Think of this like a Roku box which is separate from a television and does not require the owner to wait for a better more connected television." Take new-customer onboarding, a journey that typically spans about three months and involves six or so phone calls, a home visit from a technician, and numerous web and mail exchanges.

"Each interaction with this provider had a high likelihood of going well," according to a recent Harvard Business Review report on Customer Experience. "But in key customer segments, average satisfaction fell almost 40 percent over the course of the journey. It wasn’t the touch points that needed to be improved - it was the onboarding process as a whole. Most service encounters were positive in a narrow sense - employees resolved the issues at hand - but the underlying problems were avoidable, the fundamental causes went unaddressed, and the cumulative effect on the customer was decidedly negative."

ONE IN A SERIES This whitepaper is one of a series of documents designed to help developers understand the many facets of the Internet of Things that are connecting to the Internet. The series begins with an introduction and each of the papers focuses on a vertical marketplace such as Automotive, Manufacturing, Wearables, Home, and Retail. The papers include a review of available standards, opportunities for exploration and individual growth, as well as specific calls-to-action that developers can immediately use.

Check out the Introduction, Automotive, Manufacturing and Wearables for more perspective.

ABOUT THE APPLICATION DEVELOPERS ALLIANCE The Application Developers Alliance is a non-profit global membership organization that supports developers as creators, innovators, and entrepreneurs. We promote the continued growth of the industry and advocate on behalf of our members on public policy and industry issues. The Apps Alliance serves a growing membership of tens of thousands of developers and hundreds of companies including: mobile app publishers, platforms, wireless carriers, hardware manufacturers, ad networks, enterprise tools and service providers.