The biggest problem for Z-Wave (and Vera) is that Z-Wave is a licensed system built on hardware that has to be sourced from a single manufacturer (or their one other authorized/licensed supplier). So every Z-Wave device carries with it the pay-to-play model that Sigma Designs enforces in its closed market.
This is relevant as more and more manufacturers enter the IoT space, and increasingly make their products run on WiFi, supported by a cloud infrastructure, mobile applications, or local APIs, or any combination of those. WiFi is comparatively close to free in terms of implementation hardware cost. WiFi chips are made by multiple manufacturers competing in an open market. Wifi is all but uniquitous in both home and professional environments. On top of WiFi are well-established, reliable standards like IP, and a software environment literally bursting with tools, technologies, libraries, and available source code and examples.
The negative of this is that the barrier to entry into the IoT market over WiFi is low, as evidenced by the fact that us weekend warriors and hobbyists are able to create our own WiFi IoT devices on a budget comparable to the cost of a visit to Starbucks. But that low barrier to entry now means there are ton of manufacturers out there flooding the market with cheap WiFi plugs, bulbs and LED strips, most of which will not be around this time next year.
The problem for Vera is that there is much pressure to support both, with the latter (WiFi) being a particular business and engineering problem. Melih has said he wants to support ALL devices, his language suggesting they do it themselves, but it is inconceivable how Vera/eZLO might actually do this in the WiFi space, when each of the already hundreds (maybe thousands?) of manufacturers has its own peculiarities, APIs, etc. And it doesn’t make good business sense at all, IMO, as most of these products or manufacturers will disappear so fast from the market that Vera will scarcely have their support released before they do–Vera’s own engineering investment will never be recouped in actual revenue and they clog their product with support for devices that no longer exist. It’s a fools errand, I think, for them to chase the market like that.
What Vera/eZLO needs to do is provide the tools and infrastructure necessary for those manufacturers to do it themselves and do it well, and this will then also be how both they and us, as customers, tell which products are in the market for the long haul and which are not: if the manufacturer invests their own time to engineer and release their plugin/driver for Vera, they’re probably investing for more than just catching a lucky patch of transient Amazon resellers. I hope when Melih said he wants to support all devices, this is what he actually meant.
But going back to cost, if you look at the cost of a Z-Wave receptable or plug compared to a WiFi plug, the Z-Wave products are consistently at least double here in the US. The cost of the chip and the development tools is likely the reason, because no sane manufacturer would want to make a device that isn’t competitive in the market. The case for Z-Wave, then, is made on its mesh network, but this isn’t much of a case in my view. My WiFi coverage with just a single carefully-placed Uniquiti AP in my home far exceeds the consistent, useful range of my Z-Wave network.
As a further inducement for manufacturers to support WiFi instead of Z-Wave, it is now possible, and increasingly so every day, to control a wide range of devices with Google or Amazon voice-activation out of the box, again, over WiFi. No local controller/hub is needed–the Google/Amazon device, or more correctly, the cloud behind that device, is your controller/hub. This is where I think the “death of the hub” pundits are off base. They’re only looking at voice-activation and control as it is today, and not really looking at the true automation aspects and possibilities, the very personal and individual logic implementation that makes things in your home work when you’re not barking orders at the hockey puck on the counter. Hubs are not going away, they are just changing form. And as most of us with any experience in this space know, relying on cloud services is a dicey proposition, and I think ultimately, after the market gets a bit more education, cloud-based control will not be well-tolerated by the market. If there is any movement away from hubs in the home/workplace, it is only temporary, and will serve to consolidate that market as well (so the question then is, will Vera/eZLO survive that consolidation?).
But we can all see today that there are many more choices available in WiFi-based devices than there are in Z-Wave devices, and although patchy in some functional areas still (sensors?), it already addresses devices that Z-Wave thus far does not (where’s your Z-Wave vacuum cleaner control?). This trend will continue for the foreseeable future, ultimately diminishing Z-Wave’s role in the consumer market to zero except for a few select devices (switches and dimmers, maybe some sensors). Z-Wave, I predict, will find its major role as a supporting technology with the big automation manufacturers, with systems backed by (nearly exclusively) professional design, sales and installation (i.e. consumers locked out). This helps them evolve off their aging individual and proprietary protocols, and relieves of them of any remaining pressure to make their own devices. But with a small number of large customers then providing the bulk of its revenue, Sigma will face both reduction in volume and increasing price pressure, and thus falling revenue and valuation, until it is ultimately gobbled up by one those larger customers.
Long term, for Vera, Z-Wave needs to be just a connection. Everything to do with a Z-Wave centric view of the world needs to be boiled out of the product. Support for Z-Wave itself ultimately needs to be an option (with an appurtenant reduction in cost for those Veras that ship without it). The only built-in protocol Vera needs is WiFi, and if that’s all it has, it can still own a huge share of the consumer market.