Product managers must look to consumer behavior to safeguard revenue.
The Internet of Things (IoT) is increasingly becoming a reality in the home and, over the next few years, it will become even more complex. Different devices, apps and products will mean that each consumer’s own ecosystem may actually become a source of frustration.
Gartner predicts that by 2020, 85 percent of connected home solutions will be linked to a “certified ecosystem.” Certified ecosystems require partners, such as “Works with Nest” or Apple HomeKit, to be certified to attach to the ecosystem itself. Single-product solutions, do it yourself (DIY) ecosystems and even full-service ecosystems can be part of a certified one.
Gartner predicts that by 2020, 85 percent of connected home solutions will be linked to a “certified ecosystem.”
“Connected homes linked to certified ecosystems present new revenue streams and potential pitfalls for product managers, especially with strong market disrupters such as Amazon, Google, Apple and Samsung keen to get in on the action,” said Jessica Ekholm, research director at Gartner.
The connected home of 2020 will represent a significant shift from today, where the majority of consumers are using DIY or “service-based” solutions. In this context, DIY refers to stand-alone products. Service-based solutions charge a monthly fee for additional cloud-based services and technical support.
Figure 1. The Evolution of Certified Ecosystems, 2015 to 2020
Gartner has identified three key trends that are driving this dramatic shift toward certified ecosystems:
- An increasing amount of connected things at home
New and mature connected home users are highly likely to increase the number of connected things they own. Seventy percent of early adopters will want to integrate and assimilate any new purchases into their existing connected home platform, rather than create any additional ecosystems. This trend is born from a desire to keep things simple and familiar as they strive to connect their homes.
- Who are you going to call?
A potential mature-market connected home may need to contact a customer service department to handle the plethora of connected products and solutions. This may lead to a new job role, such as the “connected home engineer,” and support the case for moving toward certified ecosystems, where this level of service requirement can be managed. While it is not certain that all the certified ecosystems of tomorrow will end up supporting all products, it does offer certain assurances.
- Providers are choosing open ecosystems
Current trends show that an increasing amount of stand-alone device vendors are moving toward platform-based providers. Others are integrating with different systems, offering individual smart devices from their own connected home platforms. Google, Apple, Samsung and Amazon are also disrupting the market with interoperability protocols and networking solutions that can create extensive ecosystems that include their own and third-party devices. This represents a shift toward larger integrated operating ecosystems and, ultimately, a certified ecosystem.
An ecosystem that is certified by a large vendor will likely bring certain advantages to providers. Even so, participation in one vendor ecosystem does not stop the vendor from joining another. Certified ecosystems will likely create better value for users, as they may provide a larger network of products that work seamlessly together. They will also create platforms that act intelligently and learn user behaviors, resulting in a common app interface that is able to run on a range of devices.
Gartner clients can read more in the report "Market Trends: The Connected Home — A Move Toward Certified Ecosystems" by Jessica Ekholm. This report is part of the Gartner Special Report "The Connected Home: Impacts on CIOs and Business Leaders," a collection of research that focuses on how the growth of the connected home and the IoT will impact enterprises.
Gartner CIO Events
Learn more about CIO leadership and how to lead your enterprise through its digital journey.Explore Gartner Events
Building a Digital Business Technology Platform
What are the technology building blocks an enterprise needs to support digital business? This report details how CIOs and IT leaders...Read Free Research
AI on the Edge: How AI and IoT Will Catalyze New Digital Value Creation
Two of today's most hyped technologies are AI and IoT. Hardly a week goes by without some "breaking news" about either or both of them,...Start Watching