Google’s recent acquisition of intelligent thermostat and fire alarm-maker Nest could be a major disruption to the status quo in apartment automation. For decades, the dream of a “smart apartment” has been just that: a dream. The concept of an interconnected, intelligent apartment and common areas has been relegated to science fiction. Owners have not been able to capitalize on the marketing appeal to attract and retain new residents.

In order for the smart apartment to become a reality, there needs to be a significant change in the thinking behind the technology. In our opinion, the scope of a smart apartment needs to be redefined, and how this technology is delivered to the resident must be the place of innovation. This will impact your purchase of appliances in the future.

What is a smart apartment really?

It’s not the vision of wacky gadgets performing niche tasks for residents. Nor is it the more utopian narrative of an intelligent apartment catering after the every whim of its masters. No, quite simply a smart apartment is a connected apartment. One where the varied gadgets and services built in talk to each other in a way that residents can observe the communications and control them. It is a convenience suite that makes every facet of one’s apartment accessible and controllable.

A smart apartment and common areas unifies intelligent appliances and devices together through a network. Appliances and devices are not silos that separate out functions, but are ones that can be communicated across platforms.

Here is a practical vision of the smart apartment: Imagine an oven that accepts digital recipes and communicates back to the resident chef. No clunky interface, just controlled from a tablet. An internal thermometer tracks temperature in the meal. The oven can be dynamically adjusted to maintain that temperature and it knows when the meal is finished cooking. The oven then turns off, reducing energy use while maintaining internal temperature of the dish. During times of peak demand, the oven can communicate back to the apartment’s meter, giving demand back to the grid. The resident chef, out running an errand, gets an alert that their meal is ready, but doesn’t have to worry about the oven burning their food nor it going cold.

Smart apartment, smart grid and electric utilities

Any talk of the smart apartment typically focuses on the resident, but the grid can benefit, too.

The reward of such a system is two-fold. The resident has the added convenience of properly cooked food and the convenience of an alert on their smart phone. In other words, the ability to better control the appliances and devices in their apartment. But for utilities, there is a non-trivial savings in energy consumption. An electric oven uses an estimated 2 kWh per hour, and if you connect all the electric ovens in the U.S. to apartment energy management systems, you’re suddenly talking about a significant amount of power.

But this is only one application of practical interconnectivity between appliances, utilities and devices in the smart apartment. Nest understood this concept by putting the power of the thermostat in users’ pockets with a smartphone app. They took the concept further by giving the Nest a bit of intelligence, learning user patterns like desired temperature and schedule. A truly connected apartment could give residents more control over their apartment technology.

The smart apartment could ultimately become a decentralized control point, a resident-facing touch point that can provide the grid with more flexibility in meeting electric demand.

The smart apartment is both a disruption and a revenue opportunity for owners. Utilities and sometimes apartments that are master metered have the prized resident relationship, but they have largely remained “behind the meter” for the last 100 years. On the one hand, the interface of the smart apartment could disintermediate an electric utility from its residential residents and owners. On the other, the infrastructure and analytics necessary to support the smart apartment is an opportunity for utilities and owners to help bring this technology to the resident, whether through partnerships or otherwise.

The rise of the smart apartment exposes the ongoing shift in how residents may interact with the power grid.

Why hasn’t this been done before?

If the smart apartment is so simple, why hasn’t it been done? The two largest barriers have been a lack of standard protocols and lack of resident/owner knowledge.

Right now, there are many competing protocols for communication between devices. Smart apartment equipment manufacturers want low power mesh networks that allow simple connection between devices. ZigBee, Z-Wave, IEEE 802.15, X10, RF, etc. But these standards require new equipment for residents or owners to buy and right now each major manufacturer locks residents in to their proprietary ecosystem. It’s a heavy investment for limited functionality.

Nest was successful because it used the most ubiquitous standard of them all: Wi-Fi. Virtually all apartments with Internet have wireless networking, and even more ubiquitous are wireless networks from cellular carriers. The future of the smart apartment is not built on new, proprietary standards but on existing technologies that can easily be added on. Appliances with built-in Wi-Fi already exist in some markets. Cloud-based control at the property office is even more forward thinking, with web-based applications that can give residents and property managers an overview of their entire apartment and property.

Software and technology by itself is not the answer though. Google tried this with Android@Apartment, an initiative to bring their mobile OS to resident devices like appliances, televisions and single-use devices. The lack of hardware support has left the initiative barren.

The second problem is resident and owner knowledge and attraction. There are several companies that are in the apartment automation game, but the average resident is completely unaware of Z-Wave, AMX, Control4 or any others. These companies, which make largely incompatible products, have little resident value.

Again, Nest made the smart choice. They sell direct to residents or owners, exclusively in one of the most successful retail chains in the world: the Apple Store. Also Home Depot and Lowes.

A lack of proprietary protocols to adopt and resident-friendly attraction gave the Nest thermostat the best chance at starting the apartment automation race. This is about more than smart lights and locks, or the fantasy refrigerator that tells you when you need to buy milk. These ideas are either too limited or not must-have features for the resident.

The smart apartment will flourish when residents see the benefits: lower energy costs, better cross talk between device and appliance, convenient control, an add-your-device model where residents have concierge choices.

Google’s acquisition of Nest puts them at the forefront of this market. Google has the resident appeal to be successful. Nest has already cut its teeth selling at retail through the Apple Store. Google’s services are all cloud-based and eschew proprietary standards.

The race for the smart apartment might finally be on. Get ready!

The market for the so-called Internet of Things — which ranges from Web-enabled home appliances to centrally linked industrial equipment like boilers and and air conditioners — is estimated to generate $8.9 trillion in revenue by 2020, up from $4.8 trillion in 2012, according to researcher IDC.

From washers and dryers to coffee makers, thermostats to light bulbs, refrigerators to ovens—and really just about anything in between.

The rapid expansion of these connected devices, or “Internet of Things” technology as it is often called, is very exciting. By connecting these devices, we are gaining more control than we have ever had before. We can adjust the thermostat from the office, check the security cameras from the movie theater, or turn the lights off or close the garage door from just about anywhere—whether you’re next door or across the world.

The point is that these connected devices are beginning to revolutionize our multifamily world but they are only going to begin simplifying our residents lives when they are actively working together, and not in a disparate environment.


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