The three growth factors of the Smart Home market

Anatoly Lebedev is the CEO and co-founder, Cesanta

The largest share of the IoT pie is taken up by Smart Home devices. Products like Nest and Hue are seen as pioneers, and we see new innovations following suit every day. For anyone eager to explore this market, it’s important to understand the factors behind this growth and how to solve for this segment.

The Growth Factors

In Europe alone, smart home thermostat sales increased by 96% in 2014. 68 million homes are estimated to be smart in Europe and North America by 2019. These numbers are only two small examples of the skyrocketing growth in home automation and smart products.


It may not sound like an obvious choice, however, replacements are one of the main growth factors in the smart home market. When consumers are ready replace their home appliances, they are looking for energy products to help them conserve energy and save costs.

Energy providers in particular offer smart home products as an incentive to replace an existing provider with them. Check out Hive and British Gas as an example, says Anatoly Lebedev is the CEO and co-gounder of Irish company Cesanta.

New Markets

It may not feel like it everywhere, but, the economy is recovering and new markets are growing and opening up. Asia in particular is expected to continue their steady growth and retain their position as global growth leader according to the IMF.

The economic growth results in more people being able to afford appliances such as air conditioning and heating units. While many affordable versions are not going to be IoT enabled, savvy customers will look out for smart devices.


Let’s talk about 27% of the US market, those people born between 1981 and 2000. Right now, smart home devices may not seem like something they would purchase. However, consider a spending power of $1.4 trillion by 2020. They are going to be the driving force that will lead to more than 500 smart devices in a typical family home by 2022.

houseThis segment craves convenience and energy efficient solutions. They are also the first truly digitally native generation.

Getting Connected

Getting connected is becoming more important than ever. The race to market is certainly on for providers. So how can you get your smart products to market?

Inhouse Development

If you have an engineering team in house with embedded development experience, then this is an excellent option for you to pursue. You will get a bespoke solution. Be aware that you will need to maintain any solution and development upgrades etc to stay abreast of technology advancements and security features.

Vendor Solution

Very few organisation have the capability to build a connected solution inhouse. If this is the case and you want to fully focus on your innovation and not connectivity itself, then a vendor solution is for you. Vendors will advise you on the best technology for your innovation. For example, if you require a dashboard for consumers to remotely access a product, then an embedded web server may be sufficient instead of a full scale IoT infrastructure. Question any vendor on the complexity absolutely necessary for now and future requirements.

In the end you want to get to market with your smart home product ahead of the competition and within a reasonable budget. Be sure though, that the quality of the solution doesn’t suffer because of the race.

The author of this blog is Anatoly Lebedev is the CEO and co-founder of Irish company Cesanta

About the author

Anatoly Lebedev is the CEO and Co-Founder of Irish company Cesanta. Together with his team, he helps define the future of embedded communication technologies. He believes that if we want to get to 20 billion connected devices by 2020, then IoT integration needs to be made simple, secure and fast. Anatoly ensures that Cesanta products match this vision.

Previously, Anatoly shaped strategic partnerships in Europe, Middle East and Africa in his 8-year tenure at Google. He is heavily involved in the Irish startup scene and can be found as a mentor at hackathons and startup weekends.

Comment on this article below or via Twitter: @IoTNow_ OR @jcIoTnow


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