From our homes to our workplaces, the deployment of smart technology is becoming increasingly prevalent. The Wall Street Journal notes that smart-building-related companies raised $2.88 billion in venture capital in 2021. In previous posts, we’ve discussed the increased use of smart technology in commercial real estate, the importance of a thorough and rigorous research and evaluation process, and various factors to consider in contracts for smart technology. These evaluation and contract processes are vital for developing security guardrails to which smart technology suppliers must adhere. A rigorous, security-centric approach to smart home technology can help protect real estate companies from catastrophic PR and financial fallout from a security incident such as the Mirai malware attack in 2016 that targeted insecure Internet of Things (IoT) devices. The average cost of data breach incidents increases with each year and, in 2021, the average cost of a data breach incident was $4.24 million. More than ever, companies must not only be aware of the cybersecurity risks of these technologies but take the necessary steps to address their vulnerabilities.
Outfitting a commercial real estate space with smart technology can be a significant cost. While the long-term benefits and strategic improvements we’ve discussed previously can make that investment worthwhile, the evaluation period is critical to ensure an impactful ROI. Property developers, owners, and managers should undertake a rigorous evaluation process to ensure the technology procurement aligns with the project’s overall financial plan. And this is not just about getting the cost right. If the technology does not meet the needs of the space, then all the smart technology in the world will not prevent the project from being a sunk cost.
“Hey Siri…” “Alexa…” “Okay Google…” These are just some of the buzzwords and phrases that have entered day-to-day vocabulary as a result of the explosion of smart technology. Internet of Things (IoT) devices are in our cars, in our workplaces and on our bodies. But nowhere is smart technology more prevalent than in our homes. The array of services that are available coupled with the growing number of companies and service providers eager to innovate, should only grow this technology’s market share in the coming years.