Techno-Economic Analysis of Smart Home Hub and Integration Service

From the perspective of an access network operator, the smart home is an interesting opportunity. Operators have established customer relationships with their existing mobile and fixed broadband offering and view the smart home as an opportunity to create value-added services. Interoperability of smart home devices enables the full potential of smart homes as users are willing to use a single application for all their home control needs. Automation rules are one of the core benefits of smart home and requires interoperability between the devices. Interoperability and the single application as a control method can be achieved with a smart home hub and an integration service. One possible strategy for operators is to provide such hub and service. To provide a smart home hub and an integration service, operators have to choose how to partner with the hub manufacturers. The paper identifies three alternative ways for the partnership using Value Network Configuration method. To compare those three alternatives, called value network configurations, a techno-economic model is created, focusing especially on costs. Three value network configurations are compared with the model using example input data and a single value network configuration is recommended based on the economic results such as net present value, internal rate of return and payback period in combination with sensitivity analysis. The article also introduces a simple approach for modeling the effect of development time when comparing the value network configurations. With the used input data, the results of the techno-economic model indicate that the operator should choose a value network configuration in which the operator deploys their application but utilizes the hub manufacturer's backend.