Not many companies like to take on the might of Google but with Nest recently unveiling its latest, thinner smart thermostat, David Crookes talks to a well-known British company aiming to claim it own sizeable share in the connected home market
The Next Big Thing, we have so often been told, is not the latest smartphone, wearable or revamped operating system. It’s the connected home – or smart home, as some like to call it. Research by Time showed that 84% of people in the UK are interested in buying at least one smart home device, with 58% considering smart lighting, 56% household utilities and 54% security.
There is no shortage of companies lining up to offer an array of items in return for customers’ well-earned cash. At the beginning of September, Nest announced that it was revamping its smart thermostat, making it thinner, blessing it with a better display and including a feature called Furnace Heads-Up, which keeps an eye out for potential overheating. In July, it unveiled a revamped smoke detector and a new security camera. It also has an initiative called Works with Nest, which allows everyday items from Zuli smartplugs to fans to washing machines to hook up with its own products.
But even though the company makes the majority of its devices available in the UK, another well-known British company is looking to make greater inroads on these shores. What’s more, it seems to be winning people over, firmly knocking Nest into second place this side of the Atlantic.
It’s natural that Nest gets a lot of press coverage given its connection with Google. It was also an early pioneer, introducing the Nest Learning Thermostat in 2011, following it up with the smoke detector in October 2013. It was at the centre of a $3.2 billion takeover the following year, and eyes are firmly on Nest because of the resources it has – some 460 employees – and also because of the great brains that will be beavering away within the walls of its offices.
There’s no doubt that its products are impressive and that it has an important role to play in the development of smart home technology. But in the UK, Nest has some serious competition in the guise of the old former state-owned giant British Gas, and in the past month or so, the latter has expanded the range of products it has to offer.
These range from the Hive thermostat which goes head-to-head with Nest, a smart plug, smart lighting, window and door sensors and motion sensors. It also has a multizone add-on, which allows different areas of the house to receive different levels of heat. Don’t tell Sid, but British Gas is actually doing some pretty cool stuff, and it’s all controllable through a smartphone or tablet.
Kass Hussain has a greater grip on all of this than most people. He’s the director of British Gas Connected Homes, which oversees the development of the Hive products, and his ambition is stark. He wants Hive to become as powerful a smart home ecosystem as Nest could ever be, and he wants it to eventually reach out and touch the majority of items that will go to make up the so-called ‘internet of things’. What we’re seeing from Hive at the moment is only the start, he says, but he has to take things slowly. The connected home industry will only flourish, he insists, if people are introduced to it gradually.
“Regardless of what you hear in the press, people are not ready for a Jetsons lifestyle and we are mindful of that,” he says. “What resonates in my head is our customers saying, ‘give me control but don’t take control from me’. This is so important to us.”
For this reason, the Hive thermostat started in a relatively simple way. It connected into the heating system and allowed the temperature to be increased or lowered via an app. It was possible to create a schedule and to see a heat history, but that was pretty much it. “We could have loaded Hive with lots of clever features, but we didn’t,” explains Hussain. “What we wanted to do is take what is on the wall and make it easier to control on a smartphone. We knew that programming the phone would be easier than programming the thermostat, which most people admit to not understanding.”
But now that many people have become familiar with the app and what it can do, Hive is getting ready to up the ante. “By taking small steps and building them up – which is what we’re doing with Hive 2 and with the new products – we are earning people’s trust,” he adds. “Only then can we become more intelligent about things. It has to be a journey.”
Hive 2 is the second version of Hive Active Heating. Like the Nest thermostat, it looks highly stylised, having been designed by Swiss entrepreneur Yves Béhar (it even comes with a choice of colourful frames to suit people’s décor or taste). In making it attractive, Hive and Nest have changed the perception of thermostats from being a beige blot on the wall to something that is trendy and in need of highlighting. Thermostats are now gadgets, and thousands of people are buying into it. What’s more, they’re showing people just what’s possible in the home.
This is where things become interesting. Hive has 200,000 customers, which is far in excess of its rivals (“We sell more in a week than our competitors do in a month or two”), but then it does benefit from having the might of such as well-recognised company behind it. Even so, that makes it the most important player in the UK right now when it comes to smart homes, and Hussain says that it will do all it can to remain in that position.
“We do keep an eye on the competition, and there are some great products out there,” he says. “But I think it’s a good sign there are lot of competitors in this space. Competition breeds innovation, and it provides value for customers. It keeps us on our toes. But there is no organisation in the UK with the complete end-to-end experience that we have. We have retail partnerships and a large in-house tech development team. We have fantastic engineers – 10,000 of them making 50,000 trips. No one is more qualified than us to know British homes.”
The aim of companies such as Nest and Hive is to get around the problem that had blighted the connected home market for some time: the launch of individual products that needed their own apps and their own hardware but didn’t work well together. Hussain predicts that the industry will eventually consolidate and that only a handful of providers will exist – “perhaps two to five” – each of which will be able to sell a full suite of products and services. “The ones that don’t provide everything will be the ones getting unplugged,” he adds.
Just as crucially, Hussain believes smart homes are not just a fad but have a wide range of uses, which have the power to revolutionise the way we live. Not only does he point to research commissioned by British Gas, which discovered 7.8 million homes were being unnecessarily heated when they were empty, he says devices such as smart thermostats can also empower people.
“I received two really nice emails,” he explains. “The first was from a woman who wrote to say she was a single parent who didn’t have loads of cash. She had Hive fitted and found that although she wasn’t spending more or less money, her family was warmer than before. I wrote back and asked what she meant, and she said, ‘Well, what we’re finding is that we’re turning on the heating as much as before but we’re there and so getting more warm for the money we spent’.
“The second was from a woman who was in a wheelchair and whose husband had Alzheimer’s. By the time she’d sent him upstairs to change the heating, he had forgotten what he went up there for, which is a really tragic story. But with Hive she could do it from the comfort of where she was.”
Even in more regular circumstances, Hussain says smart homes are making a difference, with the devices seemingly winning over sceptics. “And we’re not talking about the typical early adopters of tech but by regular customers across all demographics and technical capabilities,” he says. When people get smart home products installed, there is a disproportionate level of use for the first two or three month, he continues, but the key thing is that they continue to be used.
“What we find is that you don’t get it until you get it,” he says. “When I took my Hive heating home to my wife, I got the typical rolling of the eyes and the comment ‘not another gadget’ but within a few weeks she became a heavier user than I did. We find that 61% of our customer base used those heating controls very day during the winter period, and that’s a phenomenal statistic for people who never bothered engaging in heating in some shape or form at all. I don’t know why people are getting excited, but they are.”
Those customers make suggestions about new features, and one of the biggest is greater integration with other items. Although Hive has smartplugs, thermostats, lighting and sensors, the key is getting them to work together. In the right combination, they could be used to bolster the security of a house – a sensor picking up on movement, activating the lights and switching on the TV (maybe even turning up the heat to make it mega uncomfortable (or not)) – but Hussain has other things in mind.
“To date, we have never used the word security,” he says. “If you want an alarm system that the insurance company will accept, then go to a mainstream provider. That is not what we are trying to tackle today. But we are trying to tackle peace of mind. The smartplugs have an element of security in there, but they have other uses than making a lampshade come on and off. If my wife and I leave the house, we may wonder if we’ve turned the iron or the hair straighteners off.
“We may be unsure if the windows and doors were properly closed. We want to make it so that you don’t need to turn the car around for a double check, and there are all kinds of applications. It’s amazing how kids will turn lights on but not off, for instance; you could switch them all off with a single action. But you can also be clever: if you have left the window open, then there could be an instruction to turn the heating off.”
Recipes are a fundamental part of the connected home. There is an existing app called IFTTT, which allows people to create internet recipes already, alerting to emails or sending items to Dropbox when a certain action is made. It’s still niche, but with smart homes this kind of thing should become second nature, or at least that is what Hussain hopes.
“This is where things get exciting,” he says. “We want customers to create a backbone and update their system piece by piece with new components. When you start to link things together with recipes, it’s like building the infrastructure of the roads in the home. Let’s say someone is in the driveway with a smartphone in their pocket. Hive knows he’s home so turns the heating and lights on and even activates a third-party music system. So you can start to see that multiple devices can interact.”
The third-party aspect is intriguing. Nest, as we’ve already seen, allows other companies to work within the ecosystem it is creating. Is this something British Gas is doing with Hive? “We don’t believe in a closed system, and we think you need to allow consumer choice,” Hussain says. “We also want to open up to partnerships that will allow us to expand our system and make it even more useful. It also means we can do things that we are not experienced in doing. For example, would I buy a door lock from British Gas or Yale? I think we know the answer, and that shows that many things are better done in a partnership. We will certainly be speaking with other companies.
He says British Gas has no interest in delving into every part of the connected home itself. “You have to open your API and software development kits for greater integration of different devices and give users the ability to control those devices with things like IFTTT and Life360,” he continues. “That category has not been announced, but we are looking at that, and there will be an announcement next year.” The buzz around Hive is set to intensify, we feel.