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There’s Money to be Made in the Smart Home

Smart Home Blog_image[1]The race for the smart home is off and running. Almost every global tech brand, from Apple to Amazon to Google and Samsung, to smaller entrants like Canary, August and tado, want to firmly establish themselves in the home.  Why? They see the home as the next big thing to go digital. The market for smart home services and devices is big. And it’s going to get much bigger in the next 5 years. The total smart home market is estimated to be $115 billion by 2019. Service providers can address a good chunk of it – about 55-60%.

There’s definitely money to be made here. To help service providers understand their specific opportunity, we developed the Cisco Monetization and Optimization Index Model for Smart Home. Use this tool to get customized views of revenues, profitability and rate of return for various smart home services.  With the popularity of Google Nest and Dropcam, it’s evident that the smart home is no longer just the realm of millionaires or technophiles.  Strategy Analytics forecasts that 40% of U.S. households will have at least one smart home device in use by 2020.

Cisco Smart Home MOI: North America TAM

Cisco Smart Home MOI: North America TAM

The fact that the smart home is rapidly becoming mainstream doesn’t surprise me. I don’t consider myself a true gadget geek or DIYer. However, just in the last year, I personally installed a wireless home security system and several monitoring cameras. Now, It’s hard to imagine not being able to see my toddler at home with the nanny anytime using my iPhone.

Strategy Analytics recently released the results of a survey of 7000 consumers throughout North America and Western Europe, which assessed interest in smart home services as well as willingness to pay for them.   The results are unmistakable. There is large, pent up demand for residential services that provide security, peace of mind and convenience.  What was surprising to me was the size of the gap between those who currently have a smart home service and those who do not (but were willing to pay for them). For example, in Germany only 2% of respondents had professionally monitored home security. Yet, 45% who did not have the service were very interested and willing to pay up to 17 euros a month.

Consumers clearly see the value in services such as home security, energy management, and elderly monitoring. What has held back purchasing? The market is fairly price elastic, so high price levels have been a deterrent. People are willing to pay for these services, but less than what’s currently charged. Awareness was another barrier. People generally weren’t aware that these services are available. For those who were aware, they had concerns about cyber intrusion and privacy.  Now, what does this mean to service providers who have entered or are considering entering the smart home market?  Recognize that you have unique advantages and assets that can help you take a leading position in this market. Initially, your marketing influence and retail reach can overcome low awareness.

Then your experience “in the home” and customer trust come into play. Your residential customers expect you to understand and solve all of their in-home voice, video, and connectivity problems. If an IP-connected device in their home is not working, they are more likely to contact you than the device manufacturer. You have the tools and the experienced technical and support personnel to handle potential customer issues around the connected home.

Know also that customers want these services from you. The trust you’ve built over time is so important when it comes to services involving personal security. Strategy Analytics found that consumers preferred to get their home and family monitoring services from service providers than from OTTs in the ecommerce, retail, or electronic manufacturing space.

Along with this trust, are the advantages of established billing relationships and the ability to bundle discounted smart home services with rest of your offers. Smart home as the “Fifth Play” makes a lot of sense for both you and your customers.

A tangible advantage is the equipment (gateways, set top boxes) that you have placed in the home – devices that can potentially be used to deliver these new services. Consumers want easy set-up and one single control point for their smart home services. And you can provide it for them. You can help customers simplify how they buy, set up and use their smart home solutions.

Service providers are well positioned to be a leading player in the smart home market. To ignore this opportunity or give it short shrift means leaving large sums of money on the table or worse.   What’s worse? Being dis-intermediated from your customers in the home by aggressive OTT players.

For more information on Cisco MOI check us out here.

 

 

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Energy Management Savings Not Just for Large Enterprises

In all my years as an IT professional, I’ve witnessed a lot of deals and collaborations between companies. But, it wasn’t until I joined Cisco Energy Management that I saw a partnership with a hippo.

Did that get your attention? I hope so.

The truth is Cisco Energy Management did partner with a hippo – Planet Hippo, the first Internet Service Provider (ISP) in the UK to offer cloud Energy Management capabilities to its customer base of small- and mid-sized enterprises.

What I like about the cloud-based model is that it does not require additional hardware or operational costs associated with on-premises software deployments, which removes the financial barriers that many smaller enterprises have to overcome. Today, the Planet Hippo and Cisco Energy Management partnership works together to:

  • Help bring innovation to customers in new markets
  • Work with any ICT device connected to the network, regardless of device type or vendor
  • Cut energy consumption for savings costs of up to 35 percent
  • Deliver a return on investment within a few months
  • Satisfy the Energy Savings Opportunity Scheme (ESOS), a mandatory energy assessment scheme for organizations in the UK

We are excited about our partnership with Planet Hippo and I encourage you to watch the video below to learn more about how this solution is helping businesses thrive.

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Summary: Cisco Awarded Top International Honor for Energy Management

At the end of last month, September 30th,  Cisco received the International Corporate Energy Management Award from the Association of Energy Engineers (AEE) for our global energy management program and our commitment to reducing greenhouse gas (GHG) emissions globally.

Ali Ahmed, who leads the Global Energy Management and Sustainability team within Workplace Resources at Cisco, was honored that Cisco received this award and very proud of the work that Cisco have done in setting aggressive targets and pursing high value projects to achieve the targets.

His Blog, summarized here, talks about:

• In 2009, Cisco met a goal we had set in 2006 to reduce business-air-travel emissions worldwide by 10 percent against a 2006 baseline
• In 2012, we met a commitment to reduce all Scope 1, 2, and business-air-travel Scope 3 GHG emissions worldwide by 25 percent against a 2007 baseline.
• In February 2013, we announced a set of five new goals related to our operational energy use and GHG emissions.

Cisco Allen TXTo achieve these goals, Cisco approved $57.5 million in funding for 2014 through 2017 for the creation of a program called EnergyOps.

Since we launched the EnergyOps program, we have completed or initiated 344 energy efficiency and renewable energy projects. This has reduced Cisco’s energy annual use by 105 GWh and GHG emissions cumulatively by over 1 million metric tonne of CO2e.

Examples of some of these projects include solar installations in the United States and India, numerous indoor and outdoor lighting improvements, and various types of upgrades to HVAC systems at many of our campuses, like our Shanghai location. Cisco estimates that the projects we have completed or initiated to date will save approximately US$15M annually. Read More »

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Energy Management Pays Off for Hammond School District

“Cisco Energy Management has given us a great deal of visibility into our energy consumption and usage patterns and has shown us that energy management can be done easily and seamlessly to deliver a significant return on investment in both reducing our carbon footprint and cutting costs.”

Mark Hennessee
Hammond School District Energy Manager

Technology fascinates me for a host of reasons. It improves lives and makes businesses more productive and efficient. It literally touches every facet of our lives, as does energy. In fact, the convergence of technology and energy is proving to be a pathway to smart and sustainable environments. The key is getting past the challenges.

Read More »

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Cisco Awarded Top International Honor for Energy Management

On September 30, 2015, Cisco received the International Corporate Energy Management Award from the Association of Energy Engineers (AEE) for our global energy management program and our commitment to reducing greenhouse gas (GHG) emissions globally.  We are very honored to receive this award and very proud of the work that we have done in setting aggressive targets and pursing high value projects to achieve the targets.

Cisco has set and achieved a series of environmental sustainability goals.  In 2009, Cisco met a goal we had set in 2006 to reduce business-air-travel emissions worldwide by 10 percent against a 2006 baseline. In 2012, we met a commitment to reduce all Scope 1, 2, and business-air-travel Scope 3 GHG emissions worldwide by 25 percent against a 2007 baseline. In February 2013, we announced a set of five new goals related to our operational energy use and GHG emissions. To achieve these goals, we approved $57.5 million in funding for 2014 through 2017 for the creation of a program called EnergyOps. The EnergyOps team is comprised of energy and sustainability professionals who identify and implement energy efficiency and renewable energy projects throughout our global real estate portfolio working with local facilities teams, engineers and project managers.  Many of the EnergyOps team members are Certified Energy Managers through AEE.

 

Solar PV array on top of Cisco's data center in Allen, TX

Solar PV array on top of Cisco’s data center in Allen, TX

 

Since we launched the EnergyOps program, we have completed or initiated 344 energy efficiency and renewable energy projects. This has reduced Cisco’s energy annual use by 105 GWh and GHG emissions cumulatively by over 1 million metric tonne of CO2e. Examples of some of these projects include solar installations in the United States and India, numerous indoor and outdoor lighting improvements, and various types of upgrades to HVAC systems at many of our campuses, like our Shanghai location.

The multi-year EnergyOps program is not only helping us achieve our energy saving goals, but also manage operational expense,  reduce exposure to fluctuating energy prices, and reinforce our commitment to being environmentally responsible. We estimate that the projects we have completed or initiated to date will save approximately US$15M annually.

The AEE Awards are presented annually at the World Energy Engineering Congress to energy companies and professionals who have achieved international, national, regional, or local prominence in their fields.

Please read more about Cisco’s commitment to reducing GHG emissions at csr.cisco.com.

 

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