Austin—[Corrected 11:14 a.m. See below.] Doorbells, thermostats, refrigerators, and more—everything in the modern home is becoming a smart, connected device. (You can even monitor your kitty’s litter box habits with the Litter Robot 3!)
There are many other, less frequently discussed appliances that businesses are pitching homeowners on as connected devices, such as air conditioning units and water pumps. Internet-connected “behind-the-wall technology” was core to three acquisitions made so far this year by Resideo, a spinout of Honeywell International (NYSE: [[ticker:HON]]), the conglomerate best known for its home security and thermostat devices. The acquisitions are a part of Resideo’s increasing efforts to develop or acquire new technology, much of which is centered at its new headquarters in Austin, TX into which the company moved last week.
Honeywell, based in Charlotte, NC, spun off two of its business units in 2018 to form Resideo (NYSE: [[ticker:REZI]]), which became a publicly traded business in October. The company is still linked with Honeywell through a licensing agreement to market and sell products like Honeywell Home thermostats and home-focused security equipment. Resideo also manufactures original equipment to be used in other products and has a wholesale distribution business, ADI Global Distribution. [Corrected location of Honeywell headquarters, clarified which product line Resideo licenses, and added the name of its distribution business.]
So far in 2019, Resideo has acquired two startups and the intellectual property of another, a spree that started with the purchase of Santa Cruz, CA-based Buoy Labs in March. Buoy develops a cloud analytics system that monitors a home’s water usage, keeping an eye out for abnormalities that could indicate there might be a leak. It installs a piece of hardware on the home’s main supply line, which connects to an app that analyzes your (water) data. If something is detected, it can be fixed before something disastrous and costly happens, according to Scott Harkins, the vice president and general manager of Resideo.
At the end of June, Resideo bought Pittsburgh-based LifeWhere, which makes analytics software to monitor air conditioners, water heaters, furnaces, and other big-ticket home appliances. LifeWhere also uses internet-connected hardware: A clamp is connected to the wires that power the appliances, which each offer unique data signatures from the currents of electricity, Harkins said.
“A water heater has a unique signature when it’s working versus when it’s leaking,” Harkins said in a phone interview. “Theoretically anything that has power, it is likely going to generate these current changes.”
Both startups, and now Resideo, pay contractors to install and monitor the technology for people, like a mechanic likely does all the grunt work on your car. Equipment like air conditioners and water heaters are expensive, so amateur tinkering isn’t wise, Harkins said.
“We think DIY is don’t install yourself,” he said. “If you’re going to try it, you better be right.”
LifeWhere and Buoy are going to continue to be sold under their current brands, Harkins said. Resideo also acquired intellectual property from Germantown, MD-based Whisker Labs that it’s bringing under the Resideo brand. That software tracks local weather and optimizes the heating or cooling of a home accordingly, Harkins said. Resideo didn’t disclose terms of any of the deals.
More acquisitions may happen in the future, and the company plans to continue internal product development, particularly in Austin, which it considers its innovation center, Harkins said. That’s a necessity in a space like internet-connected devices, in which companies like Amazon (NASDAQ: [[ticker:AMZN]]) and Google (NASDAQ: [[ticker:GOOGL]]) are heavily invested. Resideo has partnered with Amazon and other tech companies on making sure things like microphones integrate for voice assistants, which Resideo doesn’t develop, Harkins said.
The market for smart homes is big, with some 40 percent of homes in the US having some kind of smart technology, according to Oyster Bay, NY-based firm ABI Research. Resideo believes its focus on these more sophisticated smart devices—a water heater, for example, has many valuable components—will keep consumers buying from it and the contractors it works with to install and monitor the equipment, Harkins said.
That’s even considering that some consumers find smart devices a little creepy.
“People think about that, and they have to balance it against the benefits,” Harkins said, adding that any consumer must explicitly give the OK for data to be shared with a contractor. “If you have a $9,000 water (leak) claim, am I concerned about if someone knows my toilet is leaking slightly?”
