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Manufacturers build support for connected home devices

There's potential for businesses that want to market Internet of Things-connected devices, but they must tread carefully around privacy and transparency concerns.

The market for connected home devices is growing rapidly, providing manufacturers and service providers with a major new business opportunity. But speakers at the IoT Data Analytics & Visualization conference in Palo Alto, Calif., said businesses need to avoid common pitfalls to take advantage of this emerging market.

Data privacy is among the top considerations businesses need to focus on. Paul Plofchan, vice president of government affairs and chief privacy officer at home security company ADT, said transparency is critical when analyzing customer data.

ADT is currently working on a number of connected home products based on its home security offerings. Customers can do things such as lock and unlock doors, turn on lights, and view video security camera footage remotely. Tasks related to these Internet of Things-connected devices can be automated as well.

Get on the same page with consumers

Tasks like these necessarily require ADT to hold very personal information on behalf of its customers. Plofchan said this makes it important that ADT acts in good faith and helps customers understand how ADT uses the data. He led an initiative to rewrite the company's privacy policy and spell out more clearly that ADT does not share data with third parties.

"We just make the emphatic statement that we don't sell your data," Plofchan said.

ADT also does a lot of data analysis in sales and marketing. For example, it has algorithms that match new customers to products based on customers' stated needs. It also looks for opportunities where customers may be able to receive discounts from their home insurance providers based on the type of security system installed.

Plofchan said these uses of customer data tend to go over well because they compare data from individuals to anonymized data sets of existing customers, providing little risk of personally identifiable information being compromised. Additionally, they provide value to customers.

Make sure customers understand the value

Making the value proposition of connected home devices clear to users is the biggest key to getting consumers on board with connected devices that require them to give up personal data, said Peter Taylor, vice president of products at Belkin International. The company is moving heavily into the home automation space, offering products such as connected light switches, power outlets and security cameras. But as Belkin rolls out these products, which generally report usage data back to the company, product designers are trying to keep in mind different privacy preferences of customers.

For example, Taylor said early adopters may be more likely to give up personal information because they're excited about what a new product can do. But the more typical mass market consumer may be more wary. Proving that the data collection and analysis can improve the product's function or address a pain point for customers can help bring along the more hesitant. Currently the company analyzes how customers use their connected products and sends out email reminders when customers aren't using a product's features effectively. This could be perceived as an invasion of privacy by some, but Taylor said the majority of customers see the value in getting the most out of their connected home devices.

"It's all about trying to get the user to explore what the technology can do," he said. "Analyzing patterns of behavior in aggregate feels like a pretty inoffensive thing."

Don't try to be everywhere all the time

At Panasonic, keeping a low profile is important as the company continues to roll out more connected devices in more places, Hakan Kostepen, executive director of product strategy and innovation, said. He said he and his team observed from several missteps by omnipresent companies like Apple and Google that people don't like to see branded products centralizing the collection of all their data. They can become uncomfortable when the same company collects and analyzes their email, music listening and Web browsing data.

So as Panasonic gets more involved in in-flight entertainment systems and connected car devices such as infotainment and display systems, it's trying to keep a relatively low profile. Kostepen said the context of the event is what's important to the customer, not the brand of the company providing the display or Internet of Things-connected device. The company can gather aggregated data from these devices to analyze how they are used while sidestepping the creepy factor of one company touching many areas of the consumer's life.

"Nobody likes brands that connect everything all the time," Kostepen said.

Next Steps

AWS provides a home for billions of connected home devices

IoT-connected devices set to play important role in the enterprise

John Deere, Home Depot will connect the home to digital platforms

Learn about SAP and its link to connected manufacturing


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