Smart Home Strategies and Partnerships for Energy Utilities

Smart Home Strategies and Partnerships for Energy Utilities Parks Associates Webcast Sponsored by: Presented by:

Audio Recording To replay the webcast, click here: https://attendee.gotowebinar.com/recording/6360059403061743617 www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 2

Smart Home Strategies and Partnerships for Energy Utilities Agenda Barriers to Adoption of the Smart Home Energy Management Solutions Integrating Energy and Smart Home Solutions Privacy and Security Awareness Partnerships Q&A www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 3

Smart Home Strategies and Partnerships for Energy Utilities Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure Seb Chakaborty Director of Technology (Smart Home) British Gas Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 4

Barriers to Smart Home System Adoption - Awareness Smart Home Familiarity (Q2/14) % of Respondents 20% 10% 0% 10% 20% 30% 40% 50% 60% 70% Very familiar (Rating 6-7) Not familiar (Rating 1-3) 10% 11% 8% 9% 62% 62% 72% 69% 80% Smart home services Smart home products Where to buy smart home services Source: American Broadband Households and Their Technologies Q2 2014 N=10,000 broadband households, ±0.98% 2014 Parks Associates Where to buy smart home products www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 5

Barriers to Adoption - Interoperability Importance of Interoperability by Order of Purchase (Q2/14) 70% % Reporting "Very Important" (Rating 6/7 with 7="Extremely Important") 60% 50% 40% 30% 20% 10% 0% 51% 1st device purchased (n=736, ±3.61%) Source: American Broadband Households and Their Technologies Q2 2014 N=10,000 broadband households, ±0.98% 2014 Parks Associates 58% 2nd device purchased (n=573, ±4.09%) 60% 3rd device purchased (n=520, ±4.3%) www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 6

Barriers to Adoption Privacy and Security Smart Home Privacy Concerns (Q2/14) 70% Concerned (Rating 5) Very concerned (Rating 6-7) 60% 50% 24% 20% % of Respondents 40% 30% 20% 39% 38% 10% 0% Concern over unauthorized access Concern over historical data Source: American Broadband Households and Their Technologies Q2 2014 N=10,000 broadband households, ±0.98% 2014 Parks Associates www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 7

Introductions Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure Seb Chakaborty Director of Technology (Smart Home) British Gas Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 8

Energy is a huge growth opportunity we believe in bundles, partnerships and clear customer benefits Dick Seger President of Strategic Partnerships & & Alliances December 2, 2014

A catalyst for the Connected Smart Home in Europe - with > 20k new customers joining every month 7,000 Employees and large partners organisation 812 Net Sales 812 million Full Year 2013 14 Business in 14 countries in Europe and South America 1.7 Million monitored customers Europe s leading provider of full-service safety, security and home control solutions. Owned by Bain Capital and Hellman & Friedman

Connected and Protected Together with partners we create the smart home

Consumers do not buy a smart home... Consumers buy products and services with clear benefits...

2014 High NPS-scores for the Verisure smart home system reflects earlier consumer research findings 59 Smart alarm system Smart home bundle 17 26 38 45 46 2 6-21

Under-penetrated market 200 to 300 million European households waiting to be connected 18% 18% 4%

Hive British Gas Connected Homes Seb Chakraborty December 2014

Overview of Hive - Is the UK brand name for British Gas Connected Homes Products which launched in Nov 2013 - Part of an innovation hub for British Gas, the largest UK provider for domestic gas and electricity - Hive Active Heating is the no.1 smart thermostat in the UK with over 130K customers - It recently won 10 separate awards and is driving the agenda for connected homes in the UK

What our customer think? - More than 50% use the app daily - 70% say Hive has given them energy savings - 92% would recommend it to a friend - 97% feel more in control of their heating

Connected Homes: Innovation Hub

Products Developed By Connected Homes 130K 700 Trial 500K

Connected Homes Agenda - Build connected products which solve real customer problems to give them control over their lives - Build meaningful customer experiences - Build propositions as part of existing energy services - From no.1 in smart thermostats to other exciting areas of the connected home in 2015 - Build products, partnerships and a customer fan base

Connected Home

Connected Portfolio Expansion

Introducing New Players Voice Controlled Thermostat Single Zone Thermostat

The Lyric Architecture For Homeowners. Enables best in class user experience - delightful, ease of use, easy to install Allows for building a connected home in bite size solutions vs. having to buy and install everything at once Offers one app designed for your lifestyle with one touch button integration Provides beautifully crafted products that look good in your home For Partners. Lowers installation and on-going maintenance costs through remote diagnostics and flash upgrade capability Improves business operations and sales through insights and analytics For Like-Minded Companies. Provides the opportunity to integrate best in-class solutions creating new and exciting value propositions Enables a co-marketing platform for cross-selling

Provides peace of mind when there s too little time to consider Lets you know if you ve left open a door or window. Preventative, not reactive. 29 Honeywell Confidential and Proprietary ECC PAC Template 7/2013

Communicates through multiple media. Peace of mind when away from home or links with your trusted circle 30 Honeywell Confidential and Proprietary ECC PAC Template 7/2013

Market for Energy Solutions Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure Where is the greatest demand for energy services? What applications are your customers using? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 31

Most common energy management applications All Verisure installations include temperature and humidity readings along side with some remote control functions such as smart plugs The remote on/off functions are very popular for heat-pumps and boilers especially for second homes Energy readings combined with household energy and power consumption Price comparisons between different energy suppliers Smart thermostats in combination with the above applications Notifications for power cuts, min/max power consumption, temperature, etc Integration with the security system for away, home and vacation heating schemes

Market for Energy Solutions Why did you start with Hive? Seb Chakaborty Director of Technology (Smart Home) British Gas www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 33

Market for Energy Solutions What are the leading residential energy service opportunities in Europe? Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 34

The Future of DSM Trends shaping the DSM Landscape Ubiquitous Connectivity Multi-Channel Product Deployment Blurred Lines Of EE/DR Data as an Asset

Our View of the Future Connected Products Across All Customer Segments Delivering EE and DR Benefits to both Customer & Utility Managed Via a Single Open Protocol Software Platform Deployed through Multi-Channel Programs Driving Greater Customer Satisfaction Lower Overall Cost per kw and KWh

All Controlled by One Single Platform Residential Small commercial Large commercial Industrial Grid balancing Frequency regulation Spinning/non-spinning reserves Renewable energy integration Peak pricing programs Load shaping Flexible asset grouping/aggregation Facility dashboards for C&I sites API for residential mobile apps

Energy Apps Driving Adoption Seb Chakaborty Director of Technology (Smart Home) British Gas Will we see new energy related services enabled by smart meters that will drive broad adoption? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 38

Energy Apps Driving Adoption What do you see as the key service bundle that will drive broad adoption? Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 39

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Energy Apps Driving Adoption What are the killer apps that can expand adoption of energy services? Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 41

Working toward Interoperability Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell Customers will eventually expect all of their smart products to work together. How will Honeywell meet that customer need? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 42

Mobile web adoption is growing 8x faster than web adoption did in the 1990s and 2000s. Source: supermonitoring.com

The Consumer Decides Let our #1 products work with others Evolve the Lyric experience Leverage our core to create valuable solutions Let others into our connected home system For Like-Minded Companies. Provides the opportunity to integrate best inclass solutions creating new and exciting value propositions Enables a co-marketing platform for cross-selling For Channel Partners. Lowers installation and on-going maintenance costs through remote diagnostics and flash upgrade capability Improves business operations and sales through insights and analytics Page 44

Working toward Interoperability Seb Chakaborty Director of Technology (Smart Home) British Gas How will British Gas approach interoperability? Would the Hive solution benefit from communication with a broad array of smart products? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 45

Working toward Interoperability Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure Why has Verisure aggressively expanded it ecosystem of products? Would Verisure benefit from integrating energy applications? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 46

Overcoming Privacy and Security Concerns Seb Chakaborty Director of Technology (Smart Home) British Gas What is your approach to addressing privacy and security concerns? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 47

Overcoming Privacy and Security Concerns Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell Are the new EU regulatory requirements sufficient to assure customers that their data is private and secure? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 48

Overcoming Privacy and Security Concerns How does Verisure build trust with customers? Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 49

Overcoming Low Awareness Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell Honeywell sells product using a multi channel strategy what is working, what is not? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 50

Partners Help Generate Demand Comfort Control API Development Program: Through web based API software integration, allowing partners of choice to interact with products of choice within their own app. Page 51

Overcoming Low Awareness Seb Chakaborty Director of Technology (Smart Home) British Gas Are you selling Hive in the same way as other value added services? If not, what is different? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 52

Overcoming Low Awareness Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure What go-to-market strategy is required to be successful selling smart home products and services? What is your selling approach? www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 53

Pulling Together Partnerships to Grow the Market What strengths does a manufacturer bring to a partnership? Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 54

Know how to bring a home to this state GROUNDED Build offerings integrating best of partnership Beyond manufacturability to end user experience creation Creating an intelligent home across multiple disciplines

Pulling Together Partnerships to Grow the Market What strengths does the utility channel bring to a partnership? Seb Chakaborty Director of Technology (Smart Home) British Gas www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 57

Pulling Together Partnerships to Grow the Market What strengths does a security services company bring to a partnership? Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 58

Pulling Together Partnerships to Grow the Market Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure Seb Chakaborty Director of Technology (Smart Home) British Gas Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 59

Questions from the Audience Dick Seger President of Strategic Partnerships & Alliances Securitas Direct - Verisure Seb Chakaborty Director of Technology (Smart Home) British Gas Jeremy Peterson General Manager, Home Comfort and Energy Systems, EMEA Honeywell www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 60

Energy and the Smart Home in Europe Download at www.parksassociates.com/verisure www.parksassociates.com Parks Associates info@parksassociates.com 972.490.1113 @ParksAssociates 61

Thank You. PARKS ASSOCIATES

Thank You. Tom Kerber Director of Home Systems and Energy Parks Associates 15950 N. Dallas Parkway, Suite 575 Dallas, Texas 75248 Office: 972.490.1113 Fax: 972.490.1133 tom.kerber@parksassociates.com PARKS ASSOCIATES