Small-timers with big ideas can always make their way into the industry In recent years, home automation technology has given birth to the “Smart Home” in which internet-enabled and controlled devices are bringing a new level of comfort to the standard house. From locking doors to setting the temperature to opening the blinds for a view of the sunset, technology is transforming the home into something reminiscent of the now-quaint 1960s sci-fi cartoon, The Jetsons. Of course, we’re still waiting for our jet packs and flying cars, but the house itself is doing far more of the work than anyone thought possible just a few years ago. Future Of The Home Automation Sector? “We have seen a lot of consolidation over the last five to seven years, and a lot of it was because of the economy,” says Dave Pedigo, Senior Director of Learning & Emerging Technologies at the Custom Electronic Design and Installation Association. “As much as you see the potential for consolidation, I also see a lot of potential for startup companies that have the ability to make products and are innovative, serve a purpose and can change the industry.” In an era of 3D printing, rapid prototyping and small companies powered by social media and crowd funding, small-timers with big ideas can always make their way into the industry, he adds. “It’s put us into what I think is the next industrial revolution,” says Pedigo. “While a lot of this is going to very large companies, at the same time I wouldn’t discount small or startup companies that offer goods that are unique and useful.” 4K: Opportunities And Challenges "It’s put us into what I think is the next industrial revolution. While a lot of this is going to very large companies, at the same time I wouldn’t discount small or startup companies that offer goods that are unique and useful", says Dave Pedigo of CEDIA “Right now it seems like 4K video distribution will be the next big trend,” says Brad Hintze, Director of Product Marketing for Control4. “4K is the next step in high-resolution video and in our opinion it will not be like 3D. 4K will have staying power. It is for this reason that we came to market with our own suite of 4K video distribution equipment for the Control4 Smart Home.” He believes content is the main driver, both in adoption and hardware design. Network providers like Comcast and Dish Network, all have their own roll-out plans for 4K channels and content, which will eventually bleed into consumer adoption. “But from a hardware and automation perspective, it presents challenges because the industry standards for image display and copy protection are evolving rapidly,” explains Hintze. “Control4 recently released our fully HDCP 2.2 compliant 4K A/V Matrix switch products, which eliminates the black screen produced by playing copy-protected content from studios on non-compliant equipment. Being able to adapt to this wave is what will keep us ahead of the curve!” Intelligent Sensors For Smart Home Industry experts predict that sensors in the home will reach a level of sophistication never considered in early versions of Smart Home. These devices will know when the house is empty and be able to shut off heating and cooling systems. Smart phone with geolocation will then tell it when the owner is on her way back so it can start adjusting the temperature to a comfortable level. “There will be an app on a phone that shows that you’re going to be home in a few minutes,” says Rawlson O’Neil King, Communications Director of the Continental Automated Buildings Association. “Then the house unlocks when you are at the door. The garage opens after detecting you’re close to the house. You have lights that turn on and off at certain times by detecting your presence.” Industry experts predict that sensors in the home will reach a level of sophistication never considered in early versions of Smart Home. These sensors will also end once and for all the question of “did I lock the door?” or “did I turn off the stove?” And, it won’t just be lights that turn on and off. Sensors in washing machines will know that clothes have been put inside and will start the cycle at a time when costs are at a lower level, he adds. These sensors will also end once and for all the question of “did I lock the door?” or “did I turn off the stove?” Home Automation – A Double Edged Sword With the move towards home automation, the coming years will see a greater emphasis on security as more and more devices become accessible – and hackable – on the web. As a security expert at the Federal Aviation Administration prior to joining Vivint as Chief Security Officer, Joe Albaugh saw attacks against critical infrastructure and industry. “The underlying theme was they are computer connected, the data is online and accessible and many of the attacks and threats are exactly the same,” he notes.
Many security dealers and installers are expanding their offerings to include home automation equipment The growth of home automation and “smart home” technology has created a unique opportunity for security companies of all kinds. With security systems already in about 20 percent of American homes, many security dealers and installers are expanding their offerings to include home automation equipment. Internet Connected Devices After all, why just offer monitoring and alarms when you can also enhance the customer’s home experience with HVAC regulation, light controls, door locks and a host of other mechanical – and internet addressable – offerings? “You’ve got the traditional players who have been in the residential security business for a long period of time,” says Alper Cetingok, Managing Director, Head of Security, Defense & Government Services with Raymond James, a financial company. “And, literally every alarm monitoring company or residential security company has some sort of smart home offering. Some are rudimentary, but they have one.” Cybersecurity Risks These companies’ experience in security comes in handy when dealing with the downside of home automation – cybersecurity. Network-controlled home automation devices can lack basic security controls, enabling hackers to access sensitive functions such as door locks and even mundane appliances such as toasters. Security Focused Products Having the ability to keep tabs on your home, who is there, who has come and gone, are advantages of smart home systems One of the prime assets offered by security firms is just that – security experience. “We take security very seriously in the design of all of our products, and especially in the design of our architecture and device communications internal and external to a customer’s system,” argues Brad Hintze, Director of Product Marketing for Control4. “We see a lot of start-up companies releasing DIY (do it yourself) smart home products that may or may not have that very same focus on security for their customers, and often can be overlooked in the rush to market. We address some of these security concerns by way of regular communications on ‘best practices’ for securing your smart home, on our blog and to our dealer network.” Customer Relationship Even smaller security installers can capitalize on the same strategy practiced by a giant like Comcast. A company that is already in a customer’s home with a technology solution has an advantage over an outsider. Just as Xfinity Home builds on customer relationships acquired through cable and security monitoring, companies are looking first to existing customers to add value. Network-controlled home automation devices can lack basic security controls, enabling hackers to access sensitive functions such as door locks and even mundane appliances such as toasters “We see customers’ entry point into home automation come from a variety of perspectives,” says Hintze. “A lot of times it can be regional too. Certainly home audio/video systems are one of the original points of entry, but now home safety and security is a big player for us as well. Having the ability to keep tabs on your home, who is there, who has come and gone, what time family members came home, that status of your alarm, if there are any leaks, are just some of the advantages present with a Control4 Smart Home system. Energy Savings is a hot topic and pain-point as well, but in all fairness you have to have good reporting to quantify. But anecdotally, everyone can see the advantages there, especially when you combine things like motion sensors with lighting and climate control.” Security companies can also provide extra value by steering customers to devices and solutions that not only work together, but offer the right level of security. “From my perspective, our goal is making sure that those devices we offer are built securely and operates securely together,” explains Joe Albaugh, Vivint’s Chief Security Officer. “Many of the devices (in the market) are built with either little or no security in them or with configurations that are default and not changed. One of the reasons we built solutions designed to work together so that we can ensure the security of those devices.”
Cybersecurity is an ongoing concern in the realm of home automation and security systems. Joe Albaugh brought a unique perspective to the subject in July when he became Chief Security Officer (CSO) of Vivint, the second largest residential security and home automation provider in the United States. Albaugh’s approach to the cybersecurity aspects of home automation is based on his 20 years of experience including past positions as chief information security officer for three large, critical infrastructure agencies of the U.S. government. “I preached in the federal government that there is a convergence between automation, operations and administration, all using the same technology and relying on the same operating systems,” Albaugh says. Challenges in the home automation market are “very similar” given the emergence of the “Internet of Things” and the resulting capabilities that will evolve, he adds. Albaugh says home automation, like government and enterprise systems, can benefit from a holistic awareness of risk mitigation that encompasses considerations from logical access control to secure software to authentication and encryption. Albaugh says there is an expectation that home automation systems are secure, but information gleaned from conferences and threat intelligence suggests that isn’t true. “You can look at each piece independently and dedicate resources to each, but a holistic approach gives a better outcome,” he says. “I think having cyber-security expertise and understanding its operational impacts [points to] smart ways to securely enable business,” says Albaugh. “It’s a great time to pair my expertise with the capability and vision of this company.” Albaugh was chief information security officers for the U.S. Department of Transportation and formerly with the Federal Aviation Administration (FAA); before that, he was chief information security officer and acting chief information officer for the U.S. Food and Drug Administration. Headquartered in Provo, Utah, Vivint traces its founding back to 1995; the new company took the name APX Alarm Security Solutions in 1999 and was later rebranded as Vivint in 2010. The Blackstone Group purchased Vivint for more than $2 billion in 2012. With 7,000 employees including 3,000 seasonal sales reps and technicians, Vivint serves more than 850,000 customers in the United States, Canada and New Zealand. Revenue in 2013 was $500.9 million. Albaugh says he was drawn to Vivint because of the company’s mission to combine cohesive, intelligent home automation systems with good customer service. “Coming to Vivint was a way to move up in my career path personally and to be part of something that is evolving to the next level,”he says. "I preached in the federal government that there is a convergence between automation, operations and administration, all using the same technology and relying on the same operating systems" In the home automation market, Albaugh sees the need to balance system functional with the degree of needed security. If a system is “too secure,” it would likely not function effectively; while a “wide open” system would be prone to attack. “I try not to be Chicken Little saying the sky is falling. It’s about risk and risk tolerance. There are different opinions about how secure systems need to be, and a polarity about how they need to be managed,” he says. “I focus on polarity management – is it all privacy or no privacy? – but the answer is somewhere in between. Home systems can use information to make the home experience better, but the issues revolve around transparency and due diligence and education, beginning and ending with awareness by the end user.” Many consumers today are willing to exchange a level of privacy if they get benefits in return; the popularity of social networks are one example. Albaugh points to another example: How credit card companies use private information to avoid unauthorized charges, for example by analyzing spending patterns and notifying the consumer if a charge request doesn’t match the patterns. "With market estimates of the industry reaching $100 billion in total revenue by 2018, there’s a lot of opportunity ahead of us" Albaugh says it’s much easier to make cost-focused risk decisions when an industry is in its infancy – as the home automation sector is now – than later when usage is more widespread. It’s also much more effective (and less expensive) to “build security into” a system than to “bolt security onto” a system later on. “There also is a cost consideration – you don’t want to spend $500,000 to get $5,000 worth of value,” he says. “You want to have all the risks and potential possibilities before you. We have a great opportunity now to build in security pragmatically rather than add it on later. There are many lessons of cybersecurity that are about being proactive.” “I wouldn’t want to speculate too much on the maturity of home automation in 5-10 years, but with market estimates of the industry reaching $100 billion in total revenue by 2018, there’s a lot of opportunity ahead of us,” says Albaugh. Given projections, it’s not surprising that a lot of players are getting involved, including large companies like Google and Apple. “I can guarantee that as we continue to interlace our homes with Internet-accessible technologies – and extend our reliance on automation for everything from convenience and efficiency, to life safety – we will increasingly expose ourselves to cyber-risks,” Albaugh adds. “We should have already learned some valuable lessons from mistakes made in the past, such as bolting on security after the fact, or worse, leaving it off completely.” ”I believe that the automation companies that build pragmatic security capabilities into their offerings and their organizations, and that recognize the interdependencies of each, will be better positioned for success in this industry,” Albaugh says. “That’s why I came to Vivint.”
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