In a wide-ranging interview IFSEC Global asked the company’s UK managing director, Philipp Schuster, about barriers to mass adoption, the growth curve in various countries and the benefits and challenges of entering the market for commercial security installers.
Headquartered in Kollerschlag, Austria Loxone also has offices in the UK, Spain, France, Belgium, Netherlands, Luxembourg, Czech Republic, Switzerland, Italy and the US.
Philipp Schuster, Loxone’s UK MD
IFSEC Global: Can you give us a bit of background to Loxone for those who aren’t too familiar with the company?
Philipp Schuster: In 2009 we saw there was no solution in the market that would appeal to the masses and was up to date with the technology.
This was when Apple brought out the first iPhones. There were solutions for heating control and lighting control, security. There were standalone solutions but nothing that was fully integrated, affordable and that would change how people live in, and interact with, their houses.
Hence the idea of the Miniserver was born. Since then we have gone from strength to strength: we now sell into more than 100 countries, have over 40,000 installations, a network of over 9,000 installers and subsidiaries in 12 countries including the UK and US.
We work with businesses from an electrical installation, security or AV background.
Our systems really control aspects of the entire home. That is one of the main differentiators.
It’s not just a single-point solution which only controls the heating, lights, audio or security – it’s a holistic approach to the smart home.
IG: Is the integrated model one of the keys to home automation gaining mass market adoption?
PS: The industry is being hyped a lot. It is forecast to grow for years and years and years – and yet that mass market adoption as such hasn’t really happened.
There are so many solutions that address one or two aspects. And companies do like Hive or Nest do those aspects very well. But you can never create a smart home with a single-point solution – it’s just not possible.
If you’re controlling your lights from your phone, you’ve made yourself the centralised facilities manager and the console is your smartphone. A smart home should take care of things for us
IG: Is there an education gap in terms of marketing the concept to consumers?
PS: We have the greatest success with people who really look into the topic of home automation. The biggest problem is still understanding what exactly a smart home is.
There is a lot of noise out there. I read articles that say a smart home is where I can control devices from my phone. To me that is nothing to do with being smart.
To us, a smart home picks up on your habits, adjusts things around you without you having to pick up your smartphone – it’s exactly the opposite, even, of the Oxford English Dictionary definition. To us it’s a house that does something intelligent.
If you’re controlling your lights from your phone, you’ve made yourself the centralised facilities manager and the console is your smartphone.
A smart home should take care of things for us. It’s about the convenience, the time savings – everyone leads busy lives, we don’t need another app demanding our attention.
IG: Is there any sense yet that non-techies are becoming interested in the concept?
PS: Like any solution in the smart home industry, our early adopters were technical people who understood the technology, but we’ve seen a great change and our market is very much going away from techies as such, towards mainstream consumers. A lot of our systems are being installed in houses for people who are over 40.
It’s not about keeping up with technology; it’s about ease of use, simplicity.
We’ve tried for many years now to put that into words. The best we’ve come up with is the house is like an autopilot – it does mundane tasks for you. You don’t have to keep track of all these instruments, thinking “I forgot to do this or this”.
Go back five years and the processing power simply wasn’t there; now we can kit out a 3-4 bedroom house for between £1,700-£2,500. If you put that into relation with UK house prices it’s a 1% cost
IG: And how much of a deterrent to the average consumer is the price of home automation systems?
PS: Our prices are actually very competitive and reasonable and they’re dropping.
Go back five years and the processing power simply wasn’t there; now we can kit out a 3-4 bedroom house for between £1,700-£2,500. If you put that into relation with UK house prices it’s a 1% cost.
And that’s why our solution is very appealing to developers. Yet they also realise it’s not about a gadget on the wall.
If I’m building houses for a speculative audience – I don’t know who is going to buy the house – I need to address different demographics. If you can appeal to a 50-year old couple looking to buy a house to retire in that the system will save them half an hour each day in their chores, they might be more receptive to that than a fancy-looking touchscreen on the wall.
IG: Are some countries more enthusiastic about the concept than others?
PS: I would say the German market is ahead when it comes to adoption. This is partly because in Germany about 50% of people build their own houses; in the UK that figure is only 10% – the rest is by developers. It’s not the cliché that the UK is behind technology-wise.
As consumer education progresses I think we will see the same growth profile in the UK. Our company is growing by just over 100% year in, year out. We’re seeing the same across all countries, except each country is at a different point in that [growth] curve – but the curve is the same.
The biggest market in the UK is still homeowners but we’re working with several developers, including the biggest like Barretts, Taylor Wimpey… but adoption there is slower. They go through longer evaluation cycles to make sure they deliver what their customers actually want.
IG: How hard would it be for an installer of security equipment in commercial premises to diversify into home automation?
PS: Home automation is still such a new market and the smart home comprises lots of different bits.
There’s the core electrical installation, which might be the lighting. You have the heating, which traditionally is handled by a heating engineer or MME contractors on the commercial side. You have the security element, the network integrating with AV devices.
So if you come from a security background, you will have lots of experience in that one area. You will need to learn about some of the other, adjoining areas to then provide the right interface, know what to ask of contractors and, bit by bit, take more of the project on yourself.
But I would say it’s a very good background to come from. You have a solid understanding of certain principles and of course our systems integrate with that.
IG: And what are the benefits of the home automation business model?
PS: You can offer a more connected solution that provides greater value to customers and this is what I believe is being missed in many cases: communicating the value that a smart home delivers to the homeowner.
Rather than saying “we’re installing your security system for insurance purposes and it only does security”, you can offer monetary savings, convenience – that is the value proposition as a company going into this.
IG: And what about the cyber risks?
PS: There is a lot of that going round saying your smart home could be attacked. The approach that we’ve taken is to be completely disconnected.
Our systems do not rely on having an internet connection. They don’t need the cloud for processing data.
Data does not get anonymised, evaluated and sent back down. All the processing is done in our Miniserver on site – which means no external connection is required. If you want to control your house remotely then of course that is possible, but you can employ standard security mechanisms such as VPN, encryption. There is no central point where someone could hack into all systems.
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