The HAN Sweet Spot Update: Invasion of the A Team

Some of the most interesting developments in the home are network transformation recently have been happening on the customers’ side of the meter.  It comes from players eager to get involved at the front lines of this transformation who also appreciate that the gateway to customers is also the pot of gold at the end of the rainbow in getting us to spend more for services beyond just commodity energy.

But these new entrants are not just another bunch of underfunded-start-ups. Instead of Silver Spring Networks, Itron and others focused on smart meters, this group of HAN invaders isn’t waiting for all those smart meters to cough up the data they need to make money out of the smart grid.  They are going to the heart of the matter offering customers products and services to actually do something about their energy use and establish new habits relying upon help  from big brand names we all know and trust.

Why are they here and why now?

With the help of our tax money we have stimulated enthusiasm for all things Smart Grid.   The Federal Government has given grants and loan guarantees to juice the segment and utilities and others have lined up like pigs at the trough.  These new players have bigger bets than smart meters and want control over the gateway to customers converging around the home area network where communications, information, entertainment, security and yes energy management are coming together.

They are not spending money on smart meters but they lust after the data and insight its outputs provide.  They seek to actively engage customers as space travelers in the journey to the energy future, not run from them like most utilities or commodity energy providers.  They know our weak spots—the need for internet speed, the lust for megapixels, the cool of the latest smart phone, the seduction of streaming video and they plan to put it all together to hook us on a HAN solution that does all those things and more.

What more?

They plan to help us feel good about our home energy use.  To play the video game of reducing our carbon footprint, manage our demand better than our neighbors the Jones’, and keep us using their software and services with a bundle of services to brag about!

There is one problem with this strategy.  While we are spending millions installing smart meters they still act pretty dumb since few have yet figured out what to do with all that data the meters are capable of feeding back to us.  California is the first state to order its jurisdictional utilities to begin making smart meter data available to customers and vendors by the end of 2010.[1] That along with the accelerating consolidation of the smart grid sector is driving the A Team to show their cards.

My nominees for the A-Team of HAN market leaders in the future include: Google, Microsoft, General Electric, Intel, Apple, and Comcast among others. Each has the potential to transform the home energy management sector and redefine the customer’s relationship with the utility.  And none of them are really in the energy business nor seek to be—save Google which wants to control every byte of data in our lives, but I digress.

Here is my take on why you should watch this list of A Team players:

Google

Google won approval from the Federal Energy Regulatory Commission to sell electric power, capacity and services at market based rates putting itself into the middle of the competitive wholesale power business.  What does that have to do with home area networks, all that smart meter data will begin descending upon customers and vendors over the next few years and Google wants to “organize and deliver the world’s information” including the insight that comes from energy use.  It also wants to create additional revenue streams from the services its massive data centers can sell handling that tsunami of meter data and offering it in manageable packages to all the smart grid vendors who need it.[2]

Google Energy has the potential to be a major force in aggregating retail energy customers and using their energy use patterns and data to recommend vendors to meet their home energy and home area networking needs.  That is a short list every vendor will want to be on and Google has the deep pockets to deliver on a transformation of the traditional home energy business model. But it will take more than Google’s PowerMeter to make a dent in the HAN market and Google hopes Google Energy gives it an entry into the heart of the home energy business—now it needs some Droid help from apps and tools to make it as cool as Apple is likely to make it on iPhone and iPad.

Microsoft

The Redmond empire is not waiting for smart meter data, its new Hohm home energy management solution goes one step better offering simulation software to not only collect actually energy information from a customer’s appliances and uses  simulation analysis to play ‘what if” to help customers develop their own custom energy management plan.  Microsoft is betting that customers will see the benefits of integrating its home energy management solution into a home area network using a Microsoft home server (maybe a bigger, badder Xbox) to do it all from home computing, home energy management, entertainment and everything we already do on Windows. And rumor has it, Hohm will be free to end use customers paying for itself through advertising on the Hohm web-based social network of vendors and service providers.  It is supposed to let you compare your simulated energy use to those of your neighbors, friends and family using the program to calculate estimated use based upon square footage, tariff rates and other variables.[3]

General Electric

General Electric’s market position across the energy value chain needs little explanation.  When combined with its appliance business and investment in smart grid technology, GE becomes a force to be reckoned with for every HAN vendor.  GE has been actively involved in the standards-setting process to make sure that its appliances, pumps, motors and other energy-used and useful equipment will be able to play in whatever smart grid market environment emerges.  In addition, it seeks to embed sensors into its appliances to feed information to vendors and customers about energy use. [4] This footprint makes GE a player in the HAN market.  Its challenge is to determine how to link its business lines together in a logical set of offerings at the gateway to the customer.  GE has flirted with several vendors of home energy management solutions but does not appear, as yet, to have found one that really offers scalable potential—but eco-imagination is working on bring new things to life so stay tuned.

Intel

The Consumer Electronics Show was the venue Intel used to show off its Intelligent In-Home Device which is part of its new Smart Home Energy Management System.[5] Intel’s modus operandi is to be integral to every computing device, so naturally it wants to migrate from traditional PCs and MACs to other mobile platforms and devices customers will use in the future to manage their home energy use and other purposes.  Intel showed off its own wireless device at the CES show to demonstrate its commitment—and get the jump on Apple’s iPad coming shortly.[6].

So whether you see this as a logical extension of the Intel Inside strategy or a fear of being left behind as computing goes mobile in cell phone, iPad and other devices not running an Intel solution, the company is trying to stake out its territory and leverage its consumer brand to create revenue from embedded technology in whatever HAN devices emerge ahead.

Apple

You know you want one!  iPad, I mean, the device is the newest toy in the Apple collection of must have devices.  Cool by definition, the iPad is less than a MAC but more than an iPhone, but it has the potential to be the device of choice for the user friendly front end to the home area network gateway.  According to Patently Apple[7], two patent applications, Intelligent Power Monitoring and Intelligent Power-enabled Communications, were filed by Apple with the US Patent Office in May 2009. The dashboard device would use data collected using existing house or building wiring which turns outlets into high-speed Internet sources.  This is old technology but it has not be successfully deployed on any scalable basis so it’s somewhat surprising that Apple would marry its cutting edge iPad to old school power line data communications.  We’d expect more than that from Steve Jobs and Company so stay tuned.

That said, Apple is a good example of a play capable of turning the HAN segment upside down the same way Apple has done for music and cell phones.  And you know the iTunes business model is a great one to think about adapting to providing home energy management apps.  The challenge for Apple is not owning the user friendly front end but finding the right partners or vendors to go beyond that into the complexity of meter data management let alone the Google Energy-like entry into power services. I don’t expect that, but Apple can still own the gateway to the customer with a cool combo of iPhone and iPad based apps and the leverage of Apple TV and MAC minis as servers for the entertainment and online access we all crave.

Comcast

OK this is a stretch because Comcast has not announced its intension to compete in the HAN market for energy services, but no one will deny that Comcast is a competitive player in that space because of its cable, internet and phone services all conveniently bundled.  Now Comcast is starting to introduce a newer, faster, better service it calls Xfinity. [8] What is this new service?   It is part of a major expansion of Comcast bandwidth initially to handle streaming TV and movies on demand but bundled together with 100mbps internet service, phone communications, and cable channels it is not too hard to imagine the ‘Comcast energy channel’ and the Xfinity home energy management service to slurp in all that energy use information utilities will have to make available and use it with the help of your TV ‘clicker’ or iPhone or iPad to manage all your HAN needs.  Stay tuned to a clicker near you!

So what?

The energy business is being turned upside down by disruptive technology and new market rules.  But the situation is more complex and potentially much better for customers because that technology is causing a convergence of communications, information, entertainment, security and now energy.  We will have choices to make and the vendors who serve our needs today may be very different in the future.

Yes, we will pay more for it—much more, but just as we adapted to paying more in one month for a cell phone than we used to pay Ma Bell for a land line in a year—we’ll adapt to this change too.

Can I get the sport package with that?


[1] http://162.15.7.24/PUBLISHED/FINAL_DECISION/111856.htm

[2] https://www.ferc.gov/whats-new/comm-meet/2010/021810/E-18.pdf

[3] http://www.microsoft-hohm.com/

[4] http://www.genewscenter.com/content/detail.aspx?newsareaid=2&releaseid=6845

[5] http://download.intel.com/pressroom/kits/events/ces2010/pdfs/Otellini_CES_Keynote_factsheet.pdf

[6] http://www.intel.com/consumer/products/technology/wirelessdisplay.htm and http://edc.intel.com/embedded/homeenergy/

[7] http://www.patentlyapple.com/patently-apple/2010/01/apple-reveals-smart-home-energy-management-dashboard-system.html

[8] http://www.xfinity.com/customer/

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