When you think of the list of up-and-coming technology that gets people excited, the smart home is right up there with smartphones, wearables and VR headsets. However, there’s been a bit of a Wild West vibe with connected devices that each use their own control app and fail to work cooperatively.
Tech companies like Apple (AAPL), Google (GOOG) and Samsung (SSNLF) have recently begun making moves to become the standard that makes home automation realize its potential. And now Comcast (CMCSA) is also making a play for the smart home, with news that it’s acquiring PowerCloud Systems.
What is PowerCloud Systems? It’s a small company that provides managed Wi-Fi solutions for retail markets, specialized wireless routers for Wi-Fi access points in high volume areas (such as public or enterprise Wi-Fi hotspots) and the SkyDog smart router and network management tools for home use.
According to Tech Crunch’s Ingrid Lunden, Comcast bought PowerCloud Systems in a deal that came in at under $50 million.
So why would Comcast bother with such a small-potatoes purchase, especially while its busy trying to convince regulators to approve its proposed merger with Time Warner Cable (TWC)?
The smart home is on consumers’ minds. It’s getting plenty of headlines, and some of the biggest names in the technology industry are moving fast to stake a claim on the market. There are dozens — if not hundreds — of companies making connected and/or smart devices for the home. You can buy connected thermostats, security cameras, washing machines, TVs and even coffee makers. For the most part, each has its own control software or app, they operate independently, and there’s growing recognition that these Internet-enabled devices could pose a security risk.
Apple recently unveiled HomeKit, the standard it hopes will end up with an iPhone and Siri controlling all those devices, Samsung is pushing its Smart Home platform, and Google has begun assembling smart home pieces through the purchase of Nest Labs and Dropcam.
Most of these initiatives are aimed at the big prize — becoming the technological control hub for the smart home.
But connected devices need Wi-Fi and often Internet access in order to do their thing. That’s where the security risk comes in. Who knows what information about your home, preferences and occupancy patterns that smart thermostat is broadcasting back to a server? Who’s to say that cyber criminals couldn’t access a smart refrigerator on your network, upload a virus and leave you with a broken metal box full of rotting food?
PowerCloud’s core competency is managing and monitoring the network access of connected devices. It developed hardware and software that provided a single access point and let users easily manage devices individually, including prioritizing performance, setting rules for when or what they could access, monitoring network usage in real time and sending alerts when something wasn’t right.
In its role as a broadband provider, Comcast currently provides the Internet access for its customers’ smart devices. It’s a natural step for CMCSA to build on that position by using PowerCloud technology to expand into home network management and security. By doing so, Comcast becomes an active part of the smart home, not just a passive data transmitter.
Buying PowerCloud Systems doesn’t put Comcast on the same level as the big tech companies that are competing to be the platform that standardizes the smart home. It’s not going to become that elusive single point of access for controlling all those smart devices and ensuring they all get along. But it does put CMCSA in the role of gatekeeper — providing a security layer to help protect connected devices, helping homeowners decide which devices get network access (and at what level) and reporting on traffic to and from connected devices.
If nothing else, the purchase of PowerCloud gives Comcast bragging rights among ISPs as being part of the smart home instead of simply providing the network pipe. Security fears are a great angle to play on, and Comcast can benefit with smart marketing. As the smart home becomes even more buzz-worthy, highlighting the network management and security aspects could help Comcast drive revenues even higher.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
