By John Antonchick, NCN Associates (June 30, 2011)

Kurt Scherf introduced Eric noting that the in-home network is an issue in determining the benefits to the consumer of their service.
Eric noted that Verizon Telecom is the wireline part of their business operations. He then moved quickly to suggesting that they focus on consumer issues where they want to make something consumers are doing “every day” to “make it better”. More challenging is to enable something not being done every day but that is desirable and “make it possible” which means changing the consumer’s behavior. To accomplish this type of service(s) requires a great network, e.g. their FIOS system. Eric emphasized their global IP network: “Big-Fast-Smart” that enable access anytime, anywhere. Verizon has a history of providing network-connected services for many years (before the “cloud” came into vogue). Eric gave examples going back to 2000. He pointed out that the FIOS TV system created “first of its kind features” with both connectivity to the home as well as connectivity and new services inside the home; enabling several services that could not be done previously (e.g. Facebook pictures accessible on a TV, multi-room DVR, etc.).

Eric said that they learned a number of lessons from their experience, e.g. just because you can do something doesn’t mean you should. One example that was required is collaboration with partners that support the consumer ecosystem. These partners add content, services, network interconnectivity, etc. and compatible devices (e.g. from CE manufacturers). They also created advisory groups, including a customer advisory panel, and have done consumer research. The result is high ratings from Consumer Reports, JD Power, etc.

The connected home is now the focus of their attention. Their target audience is the mass market, i.e. consumers who do not have technical expertise, where they want their offerings to be practical, easy to use, easy to sell, etc. Their sales channel includes 8500 sales representative in multiple states.
One of the biggest challenges in the connected home scenario is illustrated by an “intelligent toaster” which for example has a setting for toasting a bagel properly. Eric pointed out that you could add connectivity (WiFi) and other features that would NOT add value to the consumer. So, the challenge is to “get the right pieces connected in the right way” for every day living. Eric discussed the value proposition and customer target in more detail with examples like the difficulty in programming thermostats. Verizon is offering a number of devices that have been made easier to use with software from companies like 4Home and hardware from companies like Ingersoll Rand. The product strategy is to offer three basic kits at a reasonable price including these types of devices; and a monthly access charge of $9.99. The target (initially)is Verizon FIOS customers. The kits are designed to support home monitoring, energy control and the combination of monitoring and control. Eric noted that people are conscious of their “energy footprint” and want to know about their usage. These systems are in a trial in New Jersey and are expected to be rolled out fully within a few months.

Eric showed a “customer dashboard” while explaining that the dashboard is designed to focus on key functions that aid in managing a home, e.g. with the functions that you would use frequently. Functions are accessible from any PC and additional functions can be added if desired. The energy management features provide information in formats that are more understandable by consumers, e.g. providing information about the “energy footprint” by noting the “carbon footprint”. Remote control of home functions from other locations is supported as are scripts of “modes”, e.g. sets of lights turned on/off at specific times. Security cameras and functions are also supported. Eric emphasized that a key feature is integration into FIOS TV. Eric illustrated this ability by discussing how he can supervise his daughter playing in their driveway while sitting inside his house looking at his TV. Eric believes that their current implementation is not final but will need to be improved and evolve. He noted that they also support a “mobile device” service, i.e. on cell phones, to monitor and control the home.

Questions
1) Branding? It’s being called Verizon home control.
2) A self or custom install system? Both. They have worked to make it easy to install components like a smart thermostat. There is an online installernet service to recommend installers.
3) Would It work with multiple phones, e.g. one on a Sprint network; and can it be used in multiple family units? There is a version configured for multi-family units to be released in 2012. Re phones, it can be a value-added service in a Sprint, Comcast, etc. service.