The market for home automation has been slower than expected to take off. Hampered by false expectation (re: The Jetsons™) and complex technology, home automation is not yet near the market some hoped it would be.

However, automated homes still hold an allure for consumers, and still have the promise for new revenue and customers to companies that supply products and service within, and to, the home.

The key driver for a true automation market in the home is, in reality, outside the home. Electric companies and other service providers are being driven by their own competitive needs to deploy networking to the home for meter reading, load shedding and balance, outage detection and theft detection.

Some forward-thinking utilities recognize that automated meter reading is just a part of what they could be using to increase their value to consumers, decrease their costs, and maximize their customer care programs.

Open platforms such as LONWORKS® provide much more than a simple meter reading solution.

They are, in fact, a full networking architecture that may start with meter reading, yet provide the capabilities to economically offer such value added services as predictive warranty and failure correction for white goods, pay-per-use revenue, monitoring and control, and many more.


After much hype, home networks (not automation) have arrived. Today, over 5.9 million US households have home networks, albeit high speed data networks, and over 60 million homes have computers . We also know that the most likely household to buy a new computer is the household that already has a computer. Naturally, if you’ve got multiple computers, you need to network them and of course access the Internet. To do so, you need a cable/DSL modem and a router. And that, in a nutshell, is the state of the broadband industry today.

So where does that leave the home automation market? Consumers most likely to buy home automation solutions tend to be focused on high speed data sharing, those not falling into this category tend to represents the “slow-to-adopt” or “won’t adopt” market segment.

I suggest that while there is a market for home automation, the larger home “automation” market is being built by competitive demands on electric utilities and other service providers. Of these, the ones that can get to market fastest, with the most benefit to not only themselves but the consumer, are the electric utilities.


Electric utilities have good reason to drive down costs in their regulated business and are looking for new revenue opportunities on their deregulated half. While the degree or intensity of these reasons vary amongst them, utilities in the North American market have for years been looking at ways to at least drive costs down with automated meter reading programs. However, for technology and market reasons, most electric utilities have not looked beyond simple meter reading applications to more advanced networked energy applications.

Such networked applications could benefit utilities and consumers in many ways. On the pure operational cost side, utilities can drive down costs for meter reading, connect and disconnect, outage detection and location, and demand management. On the consumer side, outage detection, remote meter reading, and demand management (fewer or no black outs) have clear benefits.

Today’s networking platforms such as the LONWORKS device networking platform, have a very compelling value proposition to utilities, and by extension, consumers.

Leveraging Existing Infrastructure

Electricity utilities already have a connection to virtually every residence in the country. The vast majority of the components in these grids are operating with limited knowledge of the use, or abuse, of the product they carry. In order to leverage their existing power grids – essentially turning them into communications networks – utilities need to upgrade the electricity meters, distribution points and service centers. Figure 1 shows the three part infrastructure chain that utilities need to focus on to upgrade their existing infrastructure.

Figure 1 – Three Part Chain: Service Center, Concentrator at Distribution Points, Meter

Yes, it sounds expensive but in a business sense it is not. Consider the following:

* Once the first service center and distribution point is upgraded, each meter that goes in begins to contribute to the overall ROI. So instead of waiting for all the meters, distribution points, and service centers to be deployed to start getting a return, the network begins to show positive returns as it goes in and over the entire course of the initial deployment.
* The data concentrator serves anywhere from a few to hundreds of homes, spreading the cost out across each home.
* Unlike meter reading only applications, a networked approach allows utilities to realize benefits in other non-meter reading areas such as inventory, service, billing, customer care, theft detection, capacity planning and others.
* Consumers begin to benefit as the system goes in with better responsiveness to outages, no intrusive meter reads, accurate usage tracking and others.
* One utility, Enel S.p.A. in Italy, is already doing it. Enel is over 2 million meters into installing 27 million meters. Their 2B Euro investment has an expected payback of 4 years. Visit the Enel Contatore Elettronico project online at .


Now that the utility has the network running, what else could they do? It happens that many of the services in the monitoring and control market are also low bandwidth. For instance, to monitor the perimeter of a house while at work or away does not require constant vigilance. Instead, all that’s required is a reliable connection that can transmit an event, in this case either a perimeter breach or system malfunction, which is a very small information packet. Such a packet could easily be transmitted over low-bandwidth, power line based home automation networks.

The criteria of high-value/low-bandwidth services includes product use and health statistics, short messaging and warnings, energy use data, product ID and warranty information, diagnostic information, and many others. All of these, developed as applications could be carried over the exact same infrastructure that a utility, like Enel, can put in place to optimize and reduce operating costs and efficiencies.


In the end, the infrastructure that a service provider creates to reach the shell of a home will be the catalyst for manufacturers, service companies and others to create the automated products that may one day make the home automation market what we always thought it could be. Certainly such service provider driven infrastructure removes one of the cost obstacles that make device monitoring and control a difficult business proposition – the infrastructure to reach every home, not just the ones with networked PCs.