Entrance of ‘Big-Name’ Players in Home Control Signals Arrival of Mainstream Market, Says Zonoff

Zonoff, supplier of Staples’ home control platform, will partner with more “big-name” companies by year-end or early 2014, and a service provider could well be in the mix, CEO Mike Harris told Consumer Electronics Daily. Zonoff, a self-described “behind-the-scenes” home control platform branded by other companies, has a “number of partner companies” that it hasn’t made public, Harris said. On whether any service providers are Zonoff customers, Harris said, “None that we can announce yet.”

The acceptance of large, nationwide brands of service providers including AT&T, ADT, Verizon, Lowe’s and Comcast, “cinched” the decision for Zonoff to push its home control platform in a big way now, Harris said. Top-brand retailers and service providers are coming on board for a variety of reasons: the increase in broadband adoption, proliferation of smartphones and tablets and the emergence of low-cost wireless standards along with the semiconductors to power them, he said. “Big, powerful, trusted brands perceived as market leaders are entering the market with connected products,” he said. “It’s not just little guys and hobbyists -- or luxury products -- it’s real mainstream products at mainstream prices.”

In addition to its relationship with Staples, which will go live when Staples begins selling products in November (CED Sept 25 p1), Zonoff has supplied control technology to Somfy for its controllable drapes, Harris said. Zonoff’s model is to partner with large, visible companies, which could be retailers, service providers or device makers, he said. Zonoff provides the platform “and we let them do what they do well,” he said.

After attending CEDIA Expo in Denver, Harris’s takeaway was that it’s “still a luxury show,” but he said “clearly a lot of folks are feeling the pressure from the mass-market players.” He cited Lutron as a company with a pulse on the changing market, which “rather than hoping it goes away” is “doing something about it and getting aggressive about entering in,” Harris said.

The target partner for Zonoff is a CE company that reaches mainstream customers, and Zonoff meets with prospective customers at CES in an off-site suite to demonstrate new products and those in development, said Bob Cooper, chief marketing officer. Zonoff identifies itself as a software platform provider that delivers to its channel partners a combination of software -- the “brains of the smart home that talks to disparate devices over whatever radio language they speak” -- cloud services and apps. Zonoff cloud services include consumer-facing services and partner-facing analytics and metrics, he said. Apps currently cover the iOS and Android platforms and will ultimately include smart TV and Web, Harris said.

Zonoff’s eclectic portfolio is wrapped inside a package delivered to consumers via retailers, service providers or device makers that “leverage their established brand, consumer awareness and channel to market,” he said. Zonoff wants to remain behind the scenes, letting its manufacturer brand partners, including First Alert, Yale, Honeywell, Philips and Lutron, create the public face for the technology. The Staples system is built around the Powered by Linksys theme. In the retail environment, “you won’t see the Zonoff brand,” Harris said.

Zonoff’s revenue model is tailored to individual customers and Zonoff is paid for software through licensing fees and hardware reference designs, Harris said. It also gets paid for hosting cloud services. As platforms become successful, plans call for Zonoff to “participate in incremental revenue” through subscriptions and product sales, he said.

As a behind-the-scenes platform provider, Zonoff has to sell to “a lot of different places,” Harris said. The company tries to avoid channel conflict “the best we can” as much for its own self-interest as its clients. If “our partners end up having what they view as a commodity that everybody has, then at the end of the day they don’t put as much effort or promotion behind it,” he said. “We try to avoid that wherever possible, but inevitably there’s going to be a little of that that creeps into the space,” he said.

And as a cross-brand supplier, Zonoff needs to be “Switzerland” to accommodate its customers’ various needs. The company supports a dozen radio protocols “with more being added all the time,” Harris said. That includes open and proprietary standards and IP-based solutions, he said. With Staples Connect, Zonoff wanted to do something that fit the Staples model of “easy.” Consumers “don’t care how these things connect, they just want it to work,” he said. So Zonoff focused on the devices that mattered to the Staples customer -- both home and small office users -- instead of “trying to have any kind of religion around a radio or protocol,” he said.

The Zonoff architecture is flexible, and the company will be able to add more protocols in the future, Harris said. At launch, the Staples solution will include Wi-Fi, Z-Wave -- for sensors, door locks and thermostats -- and Lutron’s Clear Connect for that company’s low-cost lighting and window covering products, he said.

Harris recognizes that people aren’t going into Staples or other stores seeking out home control products. “It’s early in the market,” he said. At launch, use cases that make sense to “regular people” -- a smart door lock that lets a parent know when a child has arrived home or a thermostat and lighting system that saves energy when the customer is out of the home -- will allow customers to “start inexpensively and grow over time,” he said.

Staples will have a special section in stores where consumers can experience the technology in a “crisp” way that’s live and interactive, allowing shoppers to demo the user interface to see how the products work in real life, he said. Repeating a Staples sales mantra, he said, in a retail store “you have about 20 seconds to get their attention and give them a reason to stop,” he said. The Easy Button concept “permeates everything they do,” he said. Consumer education is going to be one of the biggest pieces leading to the success of mainstream home control, he said. After purchase, support will be “transparent to the consumer,” Harris said. Customers will go to one support area where they'll be directed to a specialist for their particular issue, he said.

On whether there will be room for everyone who wants a slice of the home control pie, Harris thinks the broad array of use cases creates opportunities for a variety of companies. “There’s not necessarily one right channel to reach consumers,” he said. Staples is a “great partner,” but it doesn’t address the total available market, he said. A Zonoff customer that hasn’t announced its product yet is in the home construction market, Harris said. Somfy sells through the window covering installation channel. “That might be a customer that never goes into a Staples store,” he said. The home control market is big enough to accommodate a lot of players “when you look at the breadth of the different solutions,” he said. “There are going to be a lot of different ways that this thing flows,” he said.