Two years after launching its smart home remote monitoring service amid some fanfare, Verizon Communications stopped offering the service to new customers last October, the company confirmed Tuesday.
Verizon's move is an example of how some smart home and related machine-to-machine systems -- while potentially innovative -- can be complex to implement.
"Verizon's solution was a toe-in-the-water attempt, something that broadband service providers have tried before but have never gone well," said IDC analyst Jonathan Gaw. "Verizon relied on consumers to self-install and self-configure" while other services require technicians to come to the home to install and configure.
Verizon hasn't abandoned the smart home concept and is "revisiting the service to more accurately reflect our vision for the connected home," spokesman Bill Kula said. Verizon hopes to relaunch a new generation of the service sometime later this year.
"We're looking at a wide variety of solutions that will more accurately reflect both consumers' evolving interest in this capability and our vision of the connected home," Kula added.
Current customers will continue to have Verizon's Home Monitoring and Control service and related support from Verizon, and Verizon will honor all product warranties, Kula said.
Verizon won't say how many customers are still using the service, but Kula added: "We have existing customers, so it has sold. But it's fair to say we'd like to see better numbers than we've seen thus far."
The service apparently represented a substantial investment by Verizon, although there's no indication in recent earnings reports of any material loss to the company. Kula added that "there won't be any material financial impact to be reported in earnings."
Verizon promoted Home Monitoring and Control at International CES in January 2012 as means of controlling home thermostats, lights, doors and appliances remotely from an iPod touch, compatible smartphone or FIOS TV app.
The service cost $10 a month in addition to a starter hardware kit costing $130 that provided a gateway device to connect to various modules (some at additional cost) that in turn are connected to surveillance cameras, appliances, lights or thermostats, according to a video report from January 2012 by Eldergadget and current online descriptions from Verizon.
Eldergadget's January 2012 report about Verizon's smart home remote monitoring service.
While Verizon required either a fiber optic FiOS connection or copper wired broadband connection to the home for the Home Monitoring service to function, it worked over Z-Wave wireless technology inside the home. The gateway used with the service combined both Z-Wave with broadband Internet to allow users to monitor and control home systems from smartphones and other devices.
A screen shot of Verizon's smart home remote monitoring service page. Verizon confirmed it has stopped offering the service to new customers.
Verizon had 6.1 million FiOS customers and 9 million wired broadband customers at the end of 2013, according to Verizon's latest earnings report.
Gaw said the success rate of smart home services "has been uneven to say the least." On the successful side, Vivent has more than 800,000 subscribers for home security and automation, while ADT has 615,000 customers for its Pulse service.
Nest, which was recently purchased by Google for $3.2 billion, offers some do-it-yourself services for remotely-managed thermostats and smoke detectors. Gaw called that one of a number of solutions that are a "mixed bag" because the technology needs to be explained to customers, taking time and expertise.
Other companies offer similar services as well, with varying levels of technical support. They include Comcast's Xfinity Home, AT&T's Digital Life and Time Warner Cable's Intelligent Home.
Aside from Verizon, some other telecommunications companies have had to reassess their smart home services, including Telefonica UK, which closed its remote health monitoring service used in homes in July 2013 because of lower than expected subscribers, according to Morgan Mullooly, an analyst at Analysys Mason.
Part of the problem with Verizon's service could be that customers might not expect or desire home security and automation services from a telecommunications provider, as opposed to a long-time security-focused company like ADP, said Steve Hilton, an analyst at MachNation. "In the case of security, thermostats and light controls, why buy it from Verizon?" he said.
And with the Verizon approach, customers had to have expertise. "These solutions are not plug-and-play, and they require someone with a modicum of technology experience to set them up and manage them," Hilton said. "Also, not all thermostats are the same, and my guess is the lighting control required a certain type of lighting system in the home."
Mullooly said Verizon's reboot of the Home Monitoring service will be an extensive proposition. "This investment involves hiring lots of vertical veterans and subject matter experts and also extends to spending a lot of time and money evangelizing solutions in the market."
"In other words -- lots of sunk costs," Mullooly said. "It can take a while to evangelize the market for a bold new product. Perhaps the entry of a consumer electronics giant like Google into this space will act as a catalyst for consumer demand for these types of solutions."
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is firstname.lastname@example.org.
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