Smart Home Company Insteon closed its doors and left its customers in the dark

At the end of last week, smart lighting company Insteon abruptly shut down without issuing any warning to its users. Overnight, its line of connected light switches, dimming outlets, wall keypads and smart home sensors lost the ability to connect to Insteon servers. The company also shut down its user forums and removed the leadership page from its website. Insteon did not respond to a request for comment, but when reached via a LinkedIn message, former Insteon CEO Rob Lilleness said he had no information to share and that he was no longer involved in the business.

The sudden move angered Insteon users, who found themselves unable to control their home lights with the Insteon mobile app. Some of the company’s smart switches currently still function as regular on-off light switches, but many models are bricked-in. Customers who have attempted to reset their glitchy devices to factory defaults have found that after doing so, those devices no longer work at all.

“It shows the dangers of handing over control of your home to a solution that requires a cloud platform,” says Ben Wood, chief analyst at CCS Insight. “It’s a decision that should not be taken lightly.”

Shutting down online services is a frustrating inevitability of smart home technology, especially for small businesses that don’t have a massive footprint in the Internet of Things market. They may struggle to support products that require years of continuous service.

Insteon was one of those smaller IoT players. Blake Kozak, senior smart home analyst at technology consultancy Omdia, estimates Insteon had around 1.3 million customers. It’s a small fraction of the smart home market; According to Swedish research firm Berg Insight, more than 50 million homes in the United States use connected lights, thermostats and other technologies. Insteon hasn’t been too active lately either. The company last issued a press release in 2018.

Regardless of the company’s size or footprint, the sudden shutdown raises questions about the kinds of responsibilities Insteon needed to point out to the people who had invested in its technology for the changes to come.

“Other brands have done a much better job of explaining to customers ahead of time to give them some sort of bridge,” Kozak says. “It’s happened before, but it was on the next level.”

For users who rely on door locks, security cameras and smart light bulbs around the house, Insteon’s debacle is a reminder that total control of its devices can be an illusion in the age of the cloud. But Kozak says while Insteon’s mess is certainly a black eye for the smart home industry, it’s preventable.

“I don’t think people should take this as ‘the market is doomed,'” Kozak says. “There’s so much positivity and momentum behind the smart home in terms of the output of these brands.”

Positivity and momentum indeed. U.S. smart home market revenue is growing and is expected to reach $33.7 billion this year, according to consumer research firm Statista. New interoperability standards are also emerging, bringing with them the potential to encourage increased adoption of smart home technology. Chief among them is Matter, an open-source initiative with membership from Google, Amazon, and Apple that will help devices from different manufacturers work together more seamlessly.

Yet, as long as the market remains buoyant, some smart home companies will stumble, fail, and die. When they do, their gadgets, platforms, and apps will likely stop working, leaving customers in the dark.

“Letting consumers down like this isn’t the way to do business,” Kozak says, “but it’s inevitable that brands will give up.”

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