Frankly, we functioned just fine before we joined the attention-needy Internet of Things (IoT). Now IoT devices infiltrate our daily lives telling us with equal importance whether the porch light is on, or, oh, the basement is flooded. The smart home appears to be doing a lot for us, but what is it really accomplishing? And how do the truly valuable aspects of IoT align with the business strategies of companies producing smart home devices?
In my observation, smart home products and services provide three core benefits: efficiency, safety and convenience. And just as the value of these benefits is not measured equally, the return on investment (ROI) also is notably different for each.
Smart home solutions designed to efficiently manage resources provide a clear ROI-based value proposition. ROI can be directly calculated by the savings or maximized yield of energy (solar, gas, oil, electricity) or other consumables (water, bandwidth). These solutions rely on physical controls (on/off) combined with programmed automation, machine learning or other intelligence that synthesizes external and historical data to optimize consumption.
Efficiency-focused solutions have, for example, permanently altered how homeowners operate their HVAC systems due to the clearly measurable results and low implementation costs. And larger-scale solutions have revolutionized our nation’s energy infrastructure and agriculture industry.
Solutions focused on protecting and preserving the safety and wellbeing of people or property provide a clear value proposition, but less measurable ROI. These products and services typically rely on external environmental (water, light, heat, smoke, humidity, CO2, pressure, motion) and biometric (facial and voice recognition, heart rate, pulse oximetry, insulin level) sensors, combined with physical control and/or third-party communication (audio, video, data). They are designed to monitor, alert and act upon predetermined events. And next-generation products include machine learning to identify, predict and act without predefined user instruction (Nest Cam IQ for example).
Beyond the home security system, safety-focused smart home solutions are beginning to have a significant impact on healthcare and senior care. Technology is enabling home-based medical care via video conferencing and telemetry to reduce the need for in-office consultation. The same principles are dramatically improving senior care by enabling seniors to live longer in their own homes with greater independence.
ROI can be difficult to measure with convenience-based smart home solutions, yet this key benefit is present in all of them. From the original Clapper, to the Phillips Hue smart light bulb, it’s not practical to measure the ROI of remote light bulb activation, but that hasn’t deterred four decades of innovation in this area. It’s the relative low costs of these solutions that justifies the intrinsic value they provide.
Photo frames update dynamically with pictures shared by relatives, window shades open and close, kitchen appliances prepare food with precision, Amazon Dash buttons seamlessly reorder household supplies, vehicles start remotely and devices provide a never-ending supply of entertainment, information and communication capability. Minor smart home investments in everyday activities appeal to our curiosity and improve our quality of life. Like a sports car or a family vacation, their value is measured in intangible ways.
My family’s investments in smart home technology are validated through reduced heating bills, a heightened sense of security knowing that smoke detectors are working, and the convenience of hearing music simply by asking for it. And our future investments in these areas will be evaluated accordingly.