Tech Adapts as Smart Home Technologies Explore New Verticals

In a recent blog I explained how multifamily buildings are emerging as an attractive market for smart home technologies. This is a vertical that has been largely untapped, but is increasingly showing opportunity for more digital engagement. However, one of the major issues with smart home solutions in multifamily buildings is adapting technology to this new vertical, discussed in detail in Guidehouse Insights’ Making the Business Case for Smart Home Technologies in Multifamily Buildings. Most smart home technologies are designed for adoption by a single end user, and popular connected device manufacturers have not necessarily designed their products to be deployed at the larger scale required by verticals like multifamily. 

Solutions for Home and Business

This is a trend occurring not only in multifamily buildings, but also in small and medium businesses (SMB). SMBs are a largely unaddressed market, as they lie in a hard-to-navigate nexus between commercial and residential business models, much like multifamily buildings. An example is a local storefront with a small energy footprint resembling a residential home that acts commercially with interests in business efficiencies, like increased productivity and energy savings. These businesses lack the scale to deploy major commercial building management systems, but also have different incentives than homeowners. While there are many intelligent building providers offering SMB solutions, the economies and scales, business models, and go-to-market channels for large building owners and enterprise customers are difficult to translate to this sector.

Vendors Adapting to New Verticals

This difficulty has created an opportunity for traditionally residential vendors to move upstream to SMB by adapting their solutions and developing software that enables easier deployment of smart home tech in more challenging verticals. Ecobee is one such vendor, and has adapted its solution to address multi-site businesses. The company’s SmartBuildings thermostat management software allows hundreds of thermostats to be controlled through one portal, optimizing savings and comfort across an entire portfolio of franchises. This software is finding success with companies like Jack in the Box, Subway, and Taco Bell. Other vendors are also addressing new verticals; Nest is targeting low income customers with its Power Project and Vivint Smart Properties is adapting its smart home solution for rental properties. As smart home technologies mature, vendors will continue to look for ways to increase adoption among mass market consumers, which includes customers outside of high income early adopters in single-family homes.