Connected Home: Making Money With New Applications

The next logical step in the home-networking evolution is the connected home. With an advanced connected home network, consumers will have access to a whole new wave of applications and services, including energy management, e-health, home automation, security, and content management. But because the majority of these applications are being developed by third-party application and content providers (ACPs), service providers could be left watching from the sidelines if they do not position themselves as a necessary part of the connected-home application- delivery and -management equation.

Fortunately, the connected home offers service providers a unique opportunity to be more than just providers of access and transport services. By leveraging their trusted relationship with consumers and their existing footprint in most homes, service providers can enable the management and delivery of advanced applications, generate new revenue and improve customer retention.

The ingredients required to move the connected home from concept to reality already are in place.

According to a recent Strategy Analytics report, more than 1 billion networked consumer electronic devices are installed worldwide, and more than 4 billion will be installed by 2014. Meanwhile, ACPs have been busy creating advanced applications that will make the connected home a compelling proposition for consumers. And recognizing the opportunity the connected home offers, some service providers already have started to invest in devices that leverage management standards, including the Broadband Forum’s TR-069 bi-directional, remote management protocol. This standard, when coupled with an OSGi applications-management framework, serves as the foundation for the delivery and management of advanced connected-home applications beyond their devices.

Leveraging Relationships

To make the move from access provider to application enabler, service providers can leverage their long-standing, trusted relationship with end users to provide a direct channel to the connected-home market for ACPs. In addition, they can use their operations infrastructure to facilitate the efficient delivery, management and support of the applications and services that ACPs are developing.

But first, service providers must take considerable cost and complexity out of the service-delivery and -management equation. They must make it easy for third-party ACPs to offer, set up and manage their services. Likewise, they must make it easy for consumers to deploy and activate new services and applications on the fly, without stopping or impacting existing services.

The ideal solution should include CPE that support the dynamic deployment of new software, software development kits (SDKs), and a remote management platform that can manage the application lifecycle through the CPEs. In addition, the solution should enable integration of the entire infrastructure into a service provider’s existing operations support systems (OSS) and business support systems (BSS), storefronts, help-desk environments, billing systems and on-boarding infrastructures for third-party applications.

Home-based CPEs will play an important role as platforms for applications in this type of solution and as the vital link to cloud-based applications. These devices already are the central element in most home networks, and their low-power, always-on capabilities makes them an ideal platform to host connected-home enablers based on the TR-069 standard, which then can be managed remotely by the service provider.

By hosting application logic on the CPE and in the network, a lot of complexity is removed from the home. There is no need to install new “always-on” devices, like set-top boxes (STBs) or servers, in the home to enable deployment, delivery and management of new services. This reduces capital expenditures (capex) and operating expenditures (opex) for the service provider, it makes it easier for ACPs to deliver their applications via the network to more homes, and it makes service activation and delivery simpler for consumers.

Managing Life Cycles

Managing connected-home enablers requires application-management software, which will allow service providers to manage the entire application and service life cycle remotely via the home gateway. Configured properly, this software will help service providers target applications to the right set of customers. It will easily integrate with existing service-provider storefronts to support zero-touch application activation, and with third-party portals to enable on-boarding of new applications. Finally, to reduce operational requirements, the software will include robust northbound interfaces that enable integration with a variety of OSS/BSS systems as well as southbound interfaces that allow it to integrate easily with TR-069 remote-device-management platforms.

By leveraging their networks and their installed base of home gateways in this way, service providers can explore new revenue and customer-retention opportunities. Those opportunities may include two-sided business models that will generate revenue from ACPs based on the delivery, management and support of applications and services to the right consumers at the right time and in the right place. And those same business models will generate revenue by providing consumers with a one-stop-shop for the applications and services that will make their connected home a reality.

Ben Geller is senior director/Product Marketing at Alcatel-Lucent, Motive Product Division. Contact him at 630/713-6437.