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Accenture digital video

Smart home, smart strategy

SMART HOME, SMART STRATEGY

DIVERSIFY PROFITABLY WITH A DOUBLE-SIDED PLATFORM APPROACH

By Liam Friel, Accenture Digital Video

Most CSPs will need to diversify to thrive in the digital economy. The rise of the Smart Home offers one of the best ways to do it.

Pundits have been talking about the potential of Smart Homes for years. Thanks to increasingly pervasive high-speed internet penetration and the emergence of desirable apps like security, heating and major appliances, potential is finally tipping into reality. A recent Accenture study predicted that the Smart Home could bring an additional $100 billion in profits to the communications industry by 2025.

CSPs will reap these profits by developing and operating the platforms on which the Smart Home operates. They’re already trusted providers of connectivity, and increasingly of content. They have billing relationships (often long-standing) and can mine their internal systems for data-driven insight on individuals within the household. Analysing the digital video being consumed by householders, for example, can provide remarkable insight into what consumers want.

CSPs are not the only contenders for Smart Home platform ownership, of course. Digital Disruptors have made inroads with the introduction of AI assistants. While consumers may currently just see them as clever audio speakers, these devices could also provide a front end to a platform. And OTT video providers like Amazon and Google’s YouTube, of course, could come up with that same remarkable insight.

Smart Home, Smart Strategy
CSPs NEED TO MOVE QUICKLY TO MAINTAIN THEIR CURRENT ADVANTAGES IN THE FACE OF THIS GROWING THREAT. HOW TO GET STARTED?

ONE: Flawless network performance. People aren’t buying “broadband” anymore; they’re buying the connectivity that enables their life. Fast, reliable networks are the table stakes that earn CSPs the right to sell more.

TWO: Exploit visibility into the home. CSPs have a unique, usage-based view of everyone in a household. They can mine even more insight by giving customers the ability to opt in to new services in exchange for data. For example, some CSPs are deploying more sophisticated routers that can have differentiated services, automatically managing a multitude of devices and services. By opting in and actively managing their profiles, customers generate even more valuable usage data.

THREE: Now associate devices and services with users to personalise your offerings and customers’ experiences. These should all be driven by analytics, both on the technical side (pro-actively determining problems on networks) and from a user experience perspective (developing living products and services based on habits and preferences).

FOUR: Bring the platform online to house and integrate those services. Though 80% of consumers say they’d love for a single provider to deliver their Smart Homes, no one company could conceivably provide the range of services expected. Behind the scenes, teamwork within a whole new, collaborative operating model will be essential. Providers within this API-based ecosystem will have to talk to each other in a way they never have before. Out front, the owner of the customer relationship will reap the benefits … as long as delivery is to the quality levels expected.

FIVE: Maintain a virtuous circle. Having come this far, the CSP is now in the enviable position of running a double-sided platform, with business growth opportunities coming from consumer users on one side, and service-providing partners on the other. The two-sided platform also lays the groundwork for a new era of highly sophisticated “living services” that can learn and tailor themselves in real-time to meet the changing needs of consumers, workers, patients and citizens.

CSPs HOLD AN INCUMBENT STATUS IN MANY HOMES THAT THEIR OTT CHALLENGERS ENVY. BUT THAT’S A DOUBLE-EDGED SWORD.

Consumers will keep referring back to network performance, often not realising that the devices they keep adding are a drag on performance. (One CSP recently found that homes were adding an average of 10-12 connected devices a year on top of the laptops, phones and tablets associated with individuals in the house.) CSPs have an opportunity here to step in as trusted guides, delivering apps that help people understand and control network usage.

Security is another such issue. CSPs are highly trusted, giving them a distinct advantage in a market where security is amongst consumers’ top concerns. Consumers will find it so important, for example, that a recent report from the European Telecommunications Network Operators and Accenture concludes that European-based operators, used to that continent’s stringent security and privacy regulations, will have an advantage in consumer perception over global players based in countries with more lax data privacy laws. The security that CSPs build into their platforms will be a critical factor in maintaining the trust they’ve established.

While we have seen the rise of some global competitors, and others who are aggregating smaller brands, this is still a marketplace in its early growth stage. There’s enormous potential. Consumers are pre-disposed to look to their existing, local service providers. Scores of CSPs around the world have their foot in the door of the Smart Home. Now is the time for them to push through.

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Liam Friel

Technology Consulting Principal Director

Accenture Digital Video



Ian Harris

Deal Execution Senior Manager

Accenture Digital Video