Security could make telcos more than a utility in the smart home

With the smart home becoming more of a reality, new research from Open-Xchange suggests the largely ignored security market could be a money-spinner for the telco industry.

As it stands, no-one has really taken ownership or responsibility of the security side of the digital economy. More of our lives are being moved online, more of our time spent on a larger variety of devices, though there hasn’t really been a drive to make this virtual world secure.

“The market for connected devices is ballooning as we all scramble to fill our homes with the latest gadgets, all aimed at making our lives simpler,” said Rafael Laguna, CEO of Open-Xchange. “Yet, the convenience of connected home technology should not let us neglect our family’s online privacy and protection.”

According to the research from Open-Xchange, the average household contains five smart home devices, though only 15% of UK parents use cyber-software or apps to control access and protect the IoT connected devices. 28% of UK parents have no plans to strengthen security measures for their connected devices, though 85% of them would leave a service provider in the event of a data breach. 17% do not use any protection at all, and 67% use anti-virus and anti-spam software to protect only their desktop devices from malware, adware and phishing tactics. The smart home is potentially an open-goal for a lot of nefarious individuals.

While it would be an uphill struggle, there is an opportunity to make money. Of course, many consumers, your correspondent included, takes security for granted though the blame would lie with the telco in the event something went wrong. There is of course an education process to undertake, consumers are responsible for security inside the home not necessarily the telco, though such products could offer the telcos an opportunity to generate additional revenues on top of connectivity.

This is not necessarily a new idea, Orange is running a smart home security business in France, though little of these ideas are currently being used in the UK.

“With more than 70% of IoT devices vulnerable to attack, there is a massive opportunity for internet providers to update their offering, raise brand awareness and unlock new revenue streams by offering a truly secure online experience for all,” said Neil Cook, Chief Security Architect at Open-Xchange.

As it stands, the internet players are shifting the focus on the smart home away from the router and towards products like speakers which will house the virtual assistants. In moving the focal point, control of the ecosystem is also shifting, potentially relegating telcos to the role of connectivity utility. For the telcos to avoid the dreaded downfall to utilitisation, value must be added to the ecosystem and security is one way which it can be done.

For many consumers, the connectivity provider would also be a logical place to source security solutions, and the telcos do have a credible relationship. Most consumers would already trust their connectivity provider, while few telcos have been the victim of a costly, both financial and reputational, data breach. Logic, credibility and accessibility, the router, all combine to put telcos in an excellent position to offer security products.

Sooner or later investors will start asking executives why everyone else is making money from the digital economy while the telcos are simply collecting the connectivity crumbs. This is certainly one way which that awkward conversation could be avoided.