Parks Associates recently spoke to David Jones, Senior Director of Business Development at Irdeto, about the market for smart home devices and services in Europe. David will speak at the 12th-annual CONNECTIONS™ Europe Conference, held 1-2 November in Amsterdam.
For more information about the conference, including the online agenda and list of speakers, visit www.connectionseurope.com.
What are the largest recurring revenue opportunities for the smart home industry in Europe?
There is a huge revenue opportunity in the smart home, as it’s clear that the adoption of smart home and IoT devices is only going to increase as consumers take advantage of the innovative features that connectivity provides. The biggest growth areas in the smart home are likely to be those use cases where IoT can improve energy efficiency (e.g., clothes dryers than run on lower heat levels if nobody is in the house) or increase safety (home security systems that can be controlled and monitored remotely). Consumer convenience will also go some way to driving adoption, but is less likely to drive mass growth.
It’s important to remember, however, that as the revenue opportunity grows for device manufacturers, so does the opportunity for hackers looking to take advantage of vulnerabilities in these devices for profit. Hackers will be attracted to IoT devices and systems that are more widely deployed, as the ROI from any attack often comes down to the ubiquitous nature of the targets (seen with ransomware attacks on PCs). Legacy appliances are also likely to be a target due to their powerful processors that hackers can be make use of—devices in the connected home will often be targeted for the use of their computing power in botnets. It’s crucial then that businesses in the smart home and IoT arena rely on optimal security to protect their brand, revenue, and intellectual property.
What are the biggest challenges rolling out new smart home products and services in Europe?
When you consider that cybercriminals operate as businesses themselves, looking for the greatest revenue opportunity and the path of least resistance, it’s clear that security is a major challenge for IoT and the smart home, both in Europe and globally.
Take the threat of ransomware, for example, which has been demonstrated in recent months on PCs. When it comes to IoT and the smart home, we will also likely see ransomware attacks executed that threaten brand damage. Take the example of an expensive consumer appliance like a connected washing machine (or any other expensive appliance that will carry a warranty). Once critical mass is reached, an attack would only need to threaten the possibility of the appliance doing something strange to ensure a mass warranty call from consumers. With widespread adoption of connected devices, there is also the potential for hackers to target them for use in botnets. The potential brand damage and cost of replacement would likely motivate the manufacturer to pay a ransom based on the threat.
With these threats in mind, a change of approach to security in IoT and the smart home is required. Where, in the past, the security strategy for a device was focused on initial deployment, the world of IoT necessitates that device manufacturers view security strategy as a continually evolving protection of their products and their connectivity to their customers. The ability to dynamically update security on a device is needed to counteract the negative impacts of being hacked and to maintain a positive brand image with customers.
According to the recent Irdeto Global Consumer IoT Security Survey, 90% of consumers polled believe it is important that a connected device has security built into the product. Further, 77% of respondents felt that the manufacturer had sole or partial responsibility in ensuring the consumer’s device remains secure.
We are looking forward to hearing you present, but what are you most looking forward to about the show this year?
There are some great speaking sessions and panels at CONNECTIONS™ Europe and I’m looking forward to hearing some of the leading global manufacturers speak, as well as a lively debate in the privacy and security panel session which I’ll be taking part in. Many industries are looking to IoT technologies to improve their relationship with customers and to introduce new services. For most, safety and data privacy is also critical to these services, so they must have security solutions in place to meet consumers’ safety expectations.
Although understanding the importance of security within the industry is increasing, it is still too often seen as a separate issue, or an IT problem, whereas in today’s threat landscape, it should be at the top of the agenda when it comes to IoT. We need to think differently and think like a hacker if we are to develop security strategies that keep consumers safe, and CONNECTIONS™ Europe is a key event for helping to increase the overall level of security understanding within the IoT and smart home sectors.
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