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Strategies for securing a stake in the connected home

The connected home is now firmly taking shape and there is ample opportunity and time for businesses in every sector from telco and retail to insurance and utilities to stake out their own territory in this emerging market.

Large global players like Amazon, Apple and Google have already positioned themselves as leaders and are likely to remain prominent in the sector, but there are still significant opportunities for burgeoning enterprises in this growing market, which Strategy Analytics predicts will be worth more than 15 billion Euros in Europe by 2019.

The connected home market will be challenging as there will be a huge number of devices, applications and connectivity options, as well as many categories of company involved in the value chain. So businesses looking to make an impact must first consider what steps they need to take in order to secure traction within this market.

We believe that the connected home market is too diverse and changing too fast for any one company to take and retain control of it. So, what exactly does this mean? Below is my five essential considerations’ checklist from Deutsche Telekom’s market insight “How to create growth from the Connected Home” outlining what businesses in every sector need to think about - before taking any steps into the connected home market.

1. An agreed strategy, compelling customer proposition and innovative business model are key requirements for a successful move into this sector. Consider what you’ll do if a competitor enters the market with a similar proposition and starts winning business at your expense. Also, what if you are cut out of the value chain altogether? This can happen if a sector becomes marginalised – so called ‘disintermediation’ – whereby a retailer, for example, could be bypassed by device manufacturers selling directly to consumers and service companies themselves rather than through the retailer.

2. Ensure that whatever product or service you are offering provides a great customer experience from the outset - products and services should be ‘plug and play’ and new ones easily integrated. Connecting into the ‘nerve centre’ of people’s lives through their home routers ¬– with access to security and lifestyle information – requires the highest degree of trust and data protection too, so users should be able to put their confidence in your market presence and reputation.

3. Once you have established a dedicated brand for your connected home offering, innovation should be high on the agenda, and include the exploration of new routes and channels to market.

4. Set-up a dedicated connected home unit within your business, comprising of senior, visionary personnel in charge, and additional expertise in areas where there may be a rapid learning curve, such as in home application design, data analytics and protection techniques.

5. Consider an open platform to ensure access to a large developer community which is producing applications and integration for a diverse number of devices and systems. Joining an open ecosystem means being able to rapidly create new home services via a developer community that offers much more flexibility than closed, proprietary platforms. Also, smaller companies can make headway by joining an existing open platform that offers a standards-based system for connecting devices that allows them to integrate their own products – effectively scaling up to potentially millions of homes and, above all, providing them with a way to build innovative services that customers value and recognise from their experiences with established computing and TV platforms.

Deutsche Telekom’s open Connected Home platform supports the Eclipse Foundation’s Eclipse SmartHome project - a flexible framework that is designed to support the rapid development of new home services. It is only through collaborative initiatives such as this, that we are establishing how a neutral ‘language’ greatly cuts the chances of disappearing into a proprietary dead end, and provides consumers with the reassurance they are buying into a future proof connected home.

You can find more information and download the report, "How to create growth from the Connected Home," here.

Jon Carter, UK Head of BD – Connected Home, Deutsche Telekom

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