When Apartments Get Smart: A look at the growing connected MDU market
Mitchell Klein, Executive Director, Z-Wave Alliance
We see new statistics every day about how big the opportunity is around Internet of Things (IoT) and the residential component of that, the smart home. Groups like
estimate the smart home market will be worth more than 40 billion by the year 2020 - but where does the apartment fit in? In fact, renters make up
35% of the US adult population and almost two-thirds of renters live in structures that have five or more units.
We've seen several new members join the Alliance within the last year from the smart apartment market, and we wanted to sit down with one to get their perspective on the nature of working with connected apartments, condos and other multi-dwelling units. So we talked with Parakeet's CEO Brad Huber about the difference between smart homes and smart apartments, the unique challenges in that market, barriers to entry and what Parakeet is doing to differentiate itself as more competition enters.
Mitch Klein: How does the smart apartment market differ from smart homes?
Brad Huber: It's a completely different animal. First the scale, automating one home is a good problem to solve but automating hundreds or thousands requires interfaces, functionality and a focus on that use case. In the smart home, you have one type of person that uses the system - generally the homeowner(s). In apartments you have a myriad of audiences: renters, owners, managers, maintenance, contractors, and more.
Each of these audiences needs to be able to have access to the system and interact with different interfaces. Smart apartments are really a business-facing product - you're selling the owners and property managers not the renters themselves; because of that, systems need to integrate with any existing software that properties are already using.
Klein: Who are your primary customers and what are key considerations when creating a viable product for them?
Huber: Our primary customers are apartment owners, apartment developers, and sometimes apartment managers. To create products for them, we work with them directly to identify their needs and processes. We make products that work with their processes rather than causing our customers to develop processes for home automation products that aren't designed for apartments.
Klein: What problems does smart tech solve in the MDU and apartment space?
Huber: I feel that the primary application of smart tech in apartments today is renter capability. Renters can do things like remotely give access to people like their roommates and house guests and can remove that access when needed. They can also reduce their monthly HVAC spend, turn on the A/C on their way home from work and adjust the thermostat or lights without getting up from the couch. Because of these conveniences, renters are generally willing to pay more for smart home amenities.
In turn, owners can capture this additional rent and they also get some really great portfolio control capabilities where they can do things like turn off the A/C in all empty units, show units to potential renters remotely and on demand and more.
Klein: What are some barriers to entry?
Huber: In general, getting smart home technology right is hard. It seems easy but making it reliable, seamless, and inline with MDU process adds another layer to the challenges.
This makes it hard for smart home companies that have a consumer focus to do well with a split MDU/consumer market focus; what works for consumers may not work out of the box for an apartment building. In the end it's all about cost and time to market. I believe that MDU smart platforms of the future that gain significant users are already in existence and are being developed today.
Klein: Why did Parakeet choose Z-Wave? How does the technology fit the needs of this space?
Huber: Z-Wave is the clear leader for smart home in MDU in my mind. The protocol is mature and the device offerings are comprehensive. Zigbee is good but it has seen more adoption in the remote sensing market than it has in smart home. Other protocols such as Wi-Fi or Bluetooth have gained significant traction in recent years but the products using these protocols tend to be extremely consumer focused and siloed. Z-Wave is a great choice that allows multiple devices to be controlled by one gateway in an apartment and offer a cohesive experience. Bluetooth and Wi-Fi only devices out there today just don't allow for system level control with multiple device types.
Klein: What's the market potential for smart apartments?
Huber: We see smart technology for apartments as a huge opportunity and a $3B market potential. We also offer vacation rental automation and we see that as potentially being a $600M-$800M market. There is a lot of market opportunities for companies like Parakeet in the future of the smart home.
Thanks to Brad and the folks at Parakeet for the insight into the emerging smart apartment space. The rest of our newsletter is dedicated to looking at other unique deployments of smart technology in non-residential applications. Enjoy and happy summer!
July 26-27, 2017, Houston, TX,
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How Rently's Partnership with Yale Can Help Property Managers Leverage Smart Technology
This past May, Rently
, new Alliance member and national provider of smart home solutions for renters and property managers announced their partnership with international lock provider Yale Locks & Hardware. The partnership included support for the full range of Yale Real Living Z-Wave enabled locks, and every Rently Keyless Hub will function with the Yale Real Living and nexTouch product lines. Through this cooperation, property managers and owners can secure, access, and manage a property remotely - a powerful tool and opportunity for MDU properties of all size and scale.
Rently's technology is designed specifically with property management end-users in mind. Hardware solutions like wireless smart locks, smart thermostat management, and smart lighting can all be accessed via the Rently management portal and keyless app in combination with the Tri-Band Hub. Designed from the ground up, the Tri-Band Hub features Wi-Fi, Ethernet and cellular connectivity, and be completely customized for clients to meet individual branding, protocol and software requirements. Since the Tri-Band Hub is Z-Wave compatible, it can work with the many existing Z-Wave smart products on the market to offer MDU and other rental managers the ability to implement smart home technology without the need for Wi-Fi. This helps to expand the scope of day-to-day property management activities since it doesn't require employees to be on-site managing each individual unit.
By combining keyless entry locks and other smart home devices with Tri-band hub and software, Rently gives property managers the ability to also provide smart home technology to residents and it's an interesting selling point for prospective renters. The benefits of using Rently in combination with the Z-Wave enabled locks include reducing key-based liability from renters who fail to return keys or require numerous replacements. Property managers can also generate real-time access logs for every unique door code, allowing them to more efficiently and accurately monitor activity on their properties from anywhere. The power of solutions like Rently in combination with partnerships with top smart home hardware will continue to bring new opportunities to the smart MDU market.
Smartening Up the Sharing Economy: Why Smart Home Tech Benefits Airbnb Owners
by Alex Gil, Caster Communications
Airbnb has projected that they will earn as much as $3.5 billion a year by 2020 - proof that the so-called "sharing economy" is here to stay, said an article
published earlier this year in Fortune. More and more homeowners are choosing to use Airbnb as a way to earn extra cash or help pay their mortgage on a primary or vacation home. So how can smart home product retailers take advantage of this burgeoning market of homeowners? Explaining the benefits of smart home to a customer who may also use Airbnb or a similar home-sharing site is a way to tap into this market.
One of the key benefits of smart home technology is the ability to remotely access a home. Whether a homeowner is sharing their primary home or a vacation property, the ability to protect their investment for many years to come is a key selling point. Explaining functions like remotely locking doors, turning off appliances and making sure windows and other openings are properly closed helps educate those who may have never considered using smart home tech.
Another point for homeowners is the affordability and availability of smart home tech, and communicating that it is no longer reserved for early adopters or the mega-wealthy. Installing a few key smart home devices can be done for under $500, and can help save even more money by helping reduce energy costs or prevent costly home damage.
Security is another big draw for homeowners. Often, a homeowner opts to be away from home when they have an Airbnb guest, so a smart home security system can alert property owners when someone has entered the building, allowing them to quickly alert authorities should a break-in occur. Whether it be through a 4-in-1 security device, smart alarm/siren or smart sensors, the level of control offered with smart home gives Airbnb owners peace of mind knowing that they are able to keep their home secure, no matter who is occupying it.
Today, the affordability and availability of smart home tech means it's possible for homeowners to directly view and manage their Airbnb property no matter how far away they are. This is a powerful selling point and story that Z-Wave integrators can leverage when helping customers better understand and envision the power of smart home technology.
Translating the Benefits of Smart Home for MDU
When it comes to the smart home, we're often talking about how to help consumers better understand the benefits of connectivity. We talk about building solid storytelling around the various use cases - security, safety, comfort, convenience, entertainment. But in those models, we're thinking about the consumer directly. The biggest difference in the smart apartment space is the audience, so many of these companies are thinking past the consumer and onto folks who have a direct impact and influence on decisions within these properties.
And this makes sense - because unlike homeowners, who have a deep and typically longer-term investment in their properties, renters are more transient and ever-changing. Renters aren't usually the decision makers when it comes to what types of fixtures and amenities to add to their own property. The people you really must convince are the property managers and owners of these buildings (typically investors), and what they want out of a "smart apartment" solution might look pretty different from what we typically sell to consumers.
First, owners care about occupancy or vacancy. Any time an apartment is vacant, it costs them money. There are two ways connected tech might help them here; one, they can install a solution that allows them to remotely control the heating, cooling and electricity in each unit and they might even be able to allow access to various parties. This is helpful because it can reduce energy costs and make showing an apartment to a potential new tenant even easier.
The other way is less tangible but may add marketing value. Smart home tech can be flashy when demoed correctly and the right market of potential tenants might see value in living in a unit that has things like a smart security system, safety devices like flood sensors, a CO/smoke detector that provides alerts on their phone when away, or fun lifestyle devices like Amazon Echo. So, if the rental market in a certain area is very competitive, technology can be a way to give a property a unique edge over other units.
The other thing owners and particularly property managers care about is whether tech that's going into the apartment can be tied into existing property management software. Many MDUs today are running some type of platform that allows them to manage the major systems in the building and if the tech going into an individual unit can't pair or integrate with that platform, it's probably not going to be super useful. Therefore, for traditional smart home brands that are looking at the apartment/MDU space, you may have to consider how you tweak your offering to be able to work with popular property management software or at least be open enough to integration.
Ultimately, the growing awareness around smart home will benefit anyone who is trying to develop a product or service in the space. But the messages and benefits for each vertical may look different and a one-size-fits-all approach may not necessarily be the right one.
Z-Wave Challenges in MDUs and How to Resolve Them
by Eric Ryherd, Z-Wave Expert & Consultant -
DrZWave.blog, Express Controls
Deploying a robust Z-Wave network in MDUs (like apartment buildings or hotels) can be challenging unless you follow a few basic rules.
The most common problem in MDU deployment is that many installers fail to take advantage of Z-Wave's number one technical advantage - the mesh network. Every always-on (wall powered) Z-Wave device adds a node to the mesh. But battery powered devices like door locks, sensors and many thermostats do NOT add nodes to the mesh - they merely benefit from other devices on the mesh network. A system where there is one Z-Wave hub and a door lock in each dwelling unit will result in a poorly performing system because there is no mesh! To build a reliable mesh, every device in the network needs at least two routes between the hub and every device on the network. This means you need at least one Z-Wave repeater or lamp module in every network.
An MDU can easily have dozens or even hundreds of units all within Z-Wave range of each other. If each unit has just a single Z-Wave hub and a door lock, then each unit causes interference with every other unit resulting in a cacophony of Z-Wave traffic. A better solution is to have one hub serve 5 or even 10 units with each unit having at least one always-on device within it to provide a good "mesh" node to access the battery powered devices. Always-on devices in adjacent units help provide routing pathways to improve the robustness of the network. The installer needs the proper tools to evaluate the best location for these always-on devices to ensure a high-quality mesh network with plenty of alternate routes.
Another challenge in MDUs is that things are always changing. An owner might install a mirror (which is a metal plate on glass) or a metal appliance that significantly alters the Z-Wave quality within the unit. Even though the mirror or appliance is not in between the hub and the door lock does not mean that it won't cause connectivity problems. The solution to this issue lies again with the mesh network and having alternate routes. Since things are always changing, the hub needs to have a policy to "heal" the network occasionally to adjust to the changes in the environment.
If some door locks seem to have short battery life then you might be suffering from limitations in older, pre-500 series Z-Wave devices. Early generations of Z-Wave would wake up battery powered devices like door locks using only their NodeID to request which node to wake up. This works fine in single family homes since every node on the network has a different NodeID, but in an MDU with multiple adjacent Z-Wave networks, if the door lock in each unit is NodeID=2, then every hub will wake up every door lock in the building any time a unit needs to check on the battery level of any door lock. The solution is to ensure each adjacent installation has a different NodeID for door locks or battery powered nodes. Thus, apartment 101 will have the door lock as NodeID=02, apartment 102 will have the door lock as NodeID=03, and so on. The latest generation of Z-Wave solves this problem so as these newer locks come on the market this issue will disappear.
A few quick rules for deploying Z-Wave in MDUs:
- Always build a Z-Wave mesh
- Install fewer hubs
- Use tools like IMA to validate mesh networks
- Don't build the same network in every unit
- Network must be flexible due to changing environments
Bringing Z-Wave to Cruise Ships: How GOAP Is Leading the Way in Smart Cruise Ship Automation
by Karin Spacapan, GOAP
It's no secret that the cruise ship industry has seen incredible growth over the last few years, with passenger traffic continuing to increase. According to CLIA (Cruise Lines International Association) 25.8 million passengers are expected to take a cruise in 2017. In comparison, in 2010 only 19.1 million passengers went on a cruise. The industry has a huge global economic impact, supporting more than 900,000 jobs in 2015 alone. As of December 2016, there are 26 new ships in order with a total capacity of 30,000 passengers.
Cruise ship holidays offer great value for passengers since a typical cruise ship fare includes nearly everything needed for an amazing experience: food, accommodations, daytime and evening entertainment and transportation between destinations. Ensuring passengers are comfortable and secure are top of mind for cruise ship management. Enter: smart automation systems with GOAP.
GOAP Ltd. is a global innovator in Z-Wave smart home modules and we are dedicated to keeping adventure-seeking cruise ship passengers be more comfortable during their journey with the help of automation services. GOAP has been in the marine business since 1996, and have completed more than 100 projects and installed more than 30,000 passenger cabin controllers to date. Today, some of the world's biggest and most luxurious cruise ships like Carnival Cruise, Princess Cruises, Cunard, Costa Cruises and others are fitted with GOAP fan coil controllers, fan coil thermostats and control systems for fan coils in cabins. Having successfully helped to automate more than 50 cruise ships using different communication protocols, we also began to develop our own smart home solutions using Z-Wave technology.
"Most of the current installations on cruise ships don't place an emphasis on customer satisfaction and the cost of "wire systems" are also sky high. GOAP came up with the idea of implementing Z-Wave based solution to help cruise ships operators to cut down their implementation costs and to avoid unnecessary drilling and cabling," said Bojan Sirk, manager for the big cruise ships project at GOAP. "This offers a better experience for passengers, allowing them to regulate the cabin features according to their personal needs. With the help of a controller they can control lights, shades, room temperature etc. During our testing process we found that using Z-Wave allows for seamless wireless control of passenger cabins. As the cruise ship market is growing rapidly every year, there is no doubt that they are countless of possibilities to implement smart home solutions into cruise ships and other marine tourism segments."
GOAP has also successfully brought 10 years of cruise ship experience to the smart home segment. Our Z-Wave brand
Qubino has a portfolio of 15 innovative products and was last month awarded "The Spirit of Z-Wave" recognition from the Z-Wave Alliance, recognizing companies that excel in Z-Wave implementation and are the most committed to participating in Z-Wave events around the globe.
GOAP's intent is to stay a global innovator and solution provider of intelligent cruise ship controllers and to bring Z-Wave recognition to the thriving marine segment while continuing to innovate for the smart home users - we are planning to develop 5 unique products by the end of 2017!