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Smart Home Weekly: AlertMe Acquired, CSR Mesh, Smart Home Security, Industry Consolidation

Mike Wolf AlertMe Allseen Bluetooth Smart Home Smart Home Show Smart Home Weekly

It's the Smart Home Weekly Update for the week of February 16, 2015

There have been some stories the last few weeks highlighting both the security weaknesses and privacy concerns over the smart home. There’s also a growing sense that certain categories in the smart home are a little over-invested (this is probably also something that can be said for the broader IoT). I touch on both of these in this week's weekly. 

But first I wanted to mention we have a date for the our smart home party at SXSW. NextMarket Insights, along with our great sponsors the Z-Wave Alliance and GoControl, are having THE smart home party to be at during SXSW on Tuesday, March 17th from 5-7:30. It’s at a great rooftop location right next to the Austin Convention Center. We will have invites going out later this week, but save the date if you are going to SXSW.

In case you're the visual type:

Now the news:

AlertMe Acquired by British Gas

Last week AlertMe was acquired by British Gas for $100 million. For those of you not familiar with AlertMe, they are a smart home platform provider which powers the smart home offerings from British Gas and Lowe’s Iris.

I wrote a quick post for the NextMarket blog on the news where I said:

"All of the tech blog coverage I’ve seen basically talks about the Hive thermostat and British Gas, but none (strangely) mention Lowe’s. This is because the AlertMe itself seems to be deemphasizing the relationship, likely due to the fact Lowe’s has been looking for a replacement for AlertMe for some time. The home improvement retailer’s dissatisfaction with AlertMe has been a well-known industry secret and it’s been clear they would be migrating off of the AlertMe platform with the launch of the second generation IRIS line, and this deal could mean we hear more about Iris 2.0 soon."

In short, AlertMe doesn’t mention Lowe’s because the next-gen Iris won’t be based on AlertMe.

I still think this deal is intriguing, mostly because of what an AlertMe as part of a large British energy conglomerate and utility means. More from my post:

"This deal comes about four months after AlertMe launched its next-gen IoT platform. The combination of AlertMe and British Gas as a single entity is intriguing, and it makes one wonder if they’ll try to emulate AT&T’s efforts in offering up the AT&T smart home offering to other service providers (which AT&T is doing in the Asian market)." 

The Takeaway

The deal becomes interesting when you look more broadly at Centrica, British Gas’s parent company. Someone on Twitter told me to look downstream on this deal, meaning those companies owned by Centrica, British Gas’s parent company, who touch consumers. They were right. If Centrica looks to start offering smart home services built around AlertMe, it could instantly open up a significant number of potential customers through its North America subsidiary, Direct Energy, which has over 6 million direct customer relationships. Not only that, the company already is offering Nest thermostats to its customers, which means it’s already dipped its toe in the smart home waters and could use AlertMe to expand to become a fully managed home service provider.

Smart Home Consolidation

The AlertMe news was the catalyst for me to write a piece for Forbes about IoT and smart home consolidation, which is something we’re going to be seeing significantly more of in the next few years.

As I wrote for Forbes, "While there will no doubt be some big winners in all the various Internet of Things markets, whether it be smart home, connected cars, industrial networking or wearables, the reality is that like any big tech category the majority of the spoils often to a very few."

The reality is I think that while the smart home is still up for grabs from a platform perspective and there are still many interest point product categories that have yet to find its “Nest”, many of these categories are rapidly getting crowded with products from established system manufacturers as well as crowd funded and venture backed startups.

The result? We’ll likely see a market shake out in coming years for many of these categories. The IoT cloud/platform space is a particularly tough space, because there are only so many Staples and British Gas’s to go around. And when a company like AlertMe does get a big win, chances are the Techcrunch’s of the world won’t even notice unless a premium consumer-facing brand is attached.

The Takeaway

The smart home and IoTis seen by some as over invested from a venture capital perspective. However, because there hasn’t been a clear winner either in the “god platform” side or in many key point product categories, the stakes are too high for many not continue to invest. I also think Amazon, Microsoft, and others still haven’t made big bets, and those are likely still to come (with some acquisitions as part of the strategy) in the next year or two.

The Bluetooth Smart Home: CSR Launches CRS Mesh Home Automation

The Bluetooth smart home has had a few good weeks. First it was Lockitron making a high-profile pullback from its Wi-Fi smart lock to launch a new Bluetooth smart lock, and this past week it was CSR improving upon its Bluetooth mesh networking technology by further optimizing it for the smart home.

With this news, CSR builds upon its momentum in the Bluetooth silicon space where it has gained significant traction for its Bluetooth mesh technology, CSRmesh. The company's Bluetooth mesh protocol has, up to this point, been optimized for lighting control, but with this update (called CSRmesh Home Automation) the technology is "suitable for a range of applications including control of heating, ventilation and air conditioning, door locks and window sensors.”

The company’s leadership position in Bluetooth mesh silicon, which is one of the reasons Qualcomm acquired them in October of last year, has put it in the enviable position of helping to drive the Bluetooth SIG’s effort to develop a mesh standard. For those of you newer to this topic, mesh networking makes Bluetooth more competitive with Wi-Fi as well as traditional smart home radio technologies like Z-Wave by helping to overcome Bluetooth's short range limitations. 

According to the release, "CSR is working in the Bluetooth Special Interest Group’s (SIG) Smart Mesh Study Group to help create a global standard for Bluetooth Smart mesh as soon as possible. “CSR is committed to supporting the development of the Internet of Things and is working in the Bluetooth SIG to standardize Bluetooth Smart mesh to ensure interoperability of all compatible devices and prevent fragmentation that could slow market growth,” concludes (Anthony) Murray.”” Murray is the Sr. VP of the Business Group, at CSR.


I’ve been writing about Bluetooth’s momentum in the smart home for a while and CSR has been both a significant beneficiary and cause of the trend since they were the first to offer Bluetooth mesh networking technology at the silicon level. It will be interesting to see how fast the Bluetooth SIG puts mesh into a new standard and how much of that eventual standard is based on CSR’s technology.

Smart Home Security And Privacy

There have been a number of stories over the past few weeks about the security weaknesses of IoT and smart home gear and how smart home technology could be leveraged to invade our privacy.

Just this past week there was the Samsung smart TV story, in which Samsung’s put language into its terms of service that told consumers their conversations could be picked up by their smart TVs and analyzed by a third party.

Specifically: "Please be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party through your use of Voice Recognition."

Then there was an interesting story about how enterprise research firm Synak was able to hack fairly easily into a variety of smart home devices. As detailed by Gigaom, "Colby Moore, a security research analyst who compiled the report, said it took him about 20 minutes to break into each of the assorted devices and he only found one — the Kidde smoke detector — that didn’t have any significant flaws."

Both stories (and those like them) are, on a certain level, frightening and could serve as warnings to both the consumer about this new category and the industry looking to create products for these consumers. The meta story here is one of the mainstream and tech press looking for angles on the smart home, and one new one that they’ve grabbed hold of is the threat these devices have to our privacy and security.

The reality is we’re still fairly early in this space. Some of the software connectivity frameworks in this space like Allseen have defined security components, but given that implementers can use the technology outside of an authorizing standards body means there’s no guarantee security safeguards developed for the framework will be put in place. This is a similar situation we saw with the open source implementations of UPnP a few years ago, which resulted in backdoors in some popular home routers.

And then there’s the fact that business models like that of Samsung’s with their smart TV business show that companies themselves need to be responsible with the data they do gather. Or, put more simply, don't break the trust of your consumer with a boneheaded business decision that puts their privacy at risk.

It may seem like I’m conflating the two issues - security threats and privacy threats - but I think in a way their part of one bigger story that the smart home and IoT industry needs to pay close attention to. The wild west nature of the market today creates the possibility of slapdash and careless approaches to both of these, which will ultimately only feed into more stories and possibly threaten the industry's growth and consumer adoption.


While there hasn't been any widespread well publicized hacks into smart home gear, it’s only a matter of time. Bottom line, the industry needs to get its collective act together around IoT and smart home security frameworks. They also need to guard against business model and monetization decisions that get ahead of the privacy concerns.

Quick Takes

Smart TV Alliance Adds Smart Home

The Smart TV Alliance announced they have added smart home support to their 4.0 specification. What this ultimately means is unclear, in part because the alliance only represents a portion of the smart TV manufacturers (notable absences include Samsung and Vizio). Still, I’ve felt that the smart TV will continue to evolve as an important user and control interface for smart home so this is an interesting move.

Nest Adds Protect Data to Energy Reports

One of the key features for the Nest thermostat has been the reports it provides to users to monitor their energy usage. Well, now they can also check out the data from their Nest Protect fire alarm as well. I’m not sure if the data will be nearly as interesting since the purpose of an alarm is to tell you in real time to DO SOMETHING NOW, but the bigger point is the idea of an integrated information report across Nest devices. I’m intrigued as to what the large story will be over time for Nest reporting of metrics around third party devices added into the smart home network through Works With Nest, which could be an interesting (and also could be a potential privacy pitfall that Nest/Google needs to beware of).

Neeo Hits $1.5 Million on Kickstarter

The Neeo is a smart home remote play I mentioned a few weeks ago. Turns out their did really well on Kickstarter. Their ship dates are happening soon, which tells me they likely had gone down the product development path nearly all the way before heading to crowdfunding (a good sign). With Logitech fully engaged in the smart home, the remote and command interface is an interesting space now with Neeo entering as well. I think consumers are so trained for remote control interfaces that this could be a surprisingly successful category even as Apple and others try to get us to use new-fangled interfaces like watches.

That's it. Subscribe to get this via email. Also listen to the Smart Home Show, where we have great interviews with smart home leaders like this week's talk with Andrew Thomas, cofounder of smart doorbell company Skybell. 

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