Home LAN / Automation Business
These notes were a first pass at sketching this business.
A more recent, much more expansive business plan is
The following are a set of notes that start to define a business plan
for the market for networking and automation in private housing.
Products / Services
There exists a substantial opportunity for installing and servicing
networking and automation systems (hardware, software, services) in
single-family homes. This opportunity is especially advantageous for
new house construction, so the initial target market will be builders
of new houses.
This is based on several observations:
There are several burgeoning industries targeting this market
(high speed modems, appliance-type routers, structured wiring,
X10 home automation, smart controls, security systems).
Consequently, there is a plethora of affordable, usable hardware.
What is needed is the software and service organization to bring
these pieces together.
- More and more houses will have need for multiple computers,
scattered throughout the house. The main impediment to this is
lack of systems administration skills.
- More and more homes will have high speed, 24-hour Internet
connections (DSL, cable modem). This poses the need both for
shared access and effective firewalling.
- Many new homes already have built-in low voltage wiring for
telephones and cable. The trend is towards "structured wiring,"
which also supports audio and data.
- There are a large number of home automation gadgets available,
which can be more effectively deployed and managed through
central computer control and structured wiring. (The "home
automation" industry is projected to grow at 30%/year at
least through 2005.)
- The effective use of client-server technology in the home is
new and largely unexplored terrain.
I see the product as:
The actual product configuration will vary significantly from house
to house, depending on costs, the house design, and the buyer's
- An equipment rack with firewall computer and UPS, typically
installed in an equipment closet in the basement. This is
flexible and expandable, allows easy service.
- Structured wiring from equipment closet to all rooms in house.
- Fixtures in rooms for connecting user-provided equipment, such
as computers, audio/visual systems, telephones, fax, printers,
surveillance equipment, sensors, etc.
- Powerline wiring controls (light switches, dimmers, etc.).
- Miscellaneous gadgets.
- Software to control all of above.
There will also be services associated with this product. Services
to end users may include: maintenance, remote monitoring and
troubleshooting, help desk, training.
New housing is particularly interesting, because:
New houses would typically be sold with a warranty and service
contract on the installed equipment, which the buyer can renew
- It allows us to install wiring and systems before the walls
are finished, which makes the task simpler, less expensive,
and offers more opportunities for more extensive integration.
- Sales would be made to (and through) builders, a relatively
easy market to target. (Albeit one which tends to be local,
so we need a business model that makes it possible to deliver
services independently and locally.)
- Houses are financed over long terms, at favorable interest
rates, and consequently tend to have greater price flexibility
than selling discrete systems. (E.g., you can bury a $10K
computer/automation system in a $400K house, where it becomes
a significant selling feature for a small increment in cost.)
There would be three levels of business organization:
Initial financing of the umbrella organization could come from venture
capital, but all franchises would also be allowed (required?) to invest
in the umbrella organization, so that over time the umbrella becomes a
co-operative, effectively controlled by the franchises.
- There would be a central umbrella organization, which would:
- Hold brand names and certification credentials.
- Sell franchises.
- Sell training and services to/through franchises.
- Coordinate and in many cases do research and development,
including testing of components and systems, and open source
- Publish specifications and reviews of suitable components
for installation. This may include joint purchasing services
(possibly including component kits), although it is expected
that franchises will not be required to buy through the
- Provide second-tier support services and handle escalations.
- Generate publicity and customer-oriented marketing materials.
- There would be local, independently owned franchise companies,
which contract with the umbrella organization for use of brand
names, services, and marketing materials.
- There would be local, independent "affiliates", who have limited
rights to use brand names, services, and marketing materials for
specific tasks, such as installing wiring and/or setting up
networking. These may include existing companies, such as
security systems and high end audio/video consultants.
The franchises are permitted to engage in other business, and maintain
their own identity. Franchises may to some extent specialize (e.g.,
construction phase and post-sales service may be done by different
franchises), so long as there is adequate local coverage.
I expect that most franchises will be formed as partnerships between
a local Linux consultant and someone already engaged in local
construction trade. Financing for franchises may be available,
but I'd prefer to see a record of previous business success.
Workable systems are (in principle) available now, so there is no
need for a preliminary development phase. Initial work is to collate
what is already available, and to start deployment into real world
systems. This begins an iterative feedback process of refinement
and further development.
Software development should be broken down into reasonable modular
components, and organized as public open source software projects;
e.g., under sourceforge.net.
(The umbrella organization is not a software company; its function
is to evaluate, integrate, and market. In doing so it will stimulate
and contribute to software development, but will not attempt to own
or monopolize that software.)
I've collected some links.
From local discussions, a list from