Value Chain for Devices
In the enterprise, value has shifted gradually from the hardware vendors to the software vendors. Even companies who are "hardware" companies (Apple and Cisco) are just as known for their prowess in developing software. Simply said, the software and the applications became more interesting. Hardware companies either evolved or died.
A similar process is happening in consumer networking. There will still be hardware innovation to happen in consumer networking - new 802.11 wireless standard, mesh radio communication, and others still need to happen. However, the software to support 25-50 devices in the home just isn't there. The "network management" tools are inadequate for the average consumer and the security layer just does not exist.
The basic building blocks are there to make this work - Internet access, a gateway and wireless but the software for the last mile is too old. Every device is treated the same whether it's a 4k TV or a thermostat. No priority is given to medical devices. Gateways cannot learn and they don't react to realtime network conditions. Parents cannot monitor what's happening in their home let along manage it. That has to change.
Another facet that is changing is the consumerization of networking. Again, a similar trend took place in enterprise networking. Hardware companies could sell to a small group of decision makers until companies like Dropbox or Box consumerized their offerings which was then adopted by the end users. The notion of shadow IT and supported applications rapidly changed.
Consumer networking is different because many of the hardware and software choices are made for consumers by their Internet service provider. ISPs purchase a majority of networking hardware and therefore software. Comcast XFi is an example of the consumerization of Comcast's offering. Other providers are following suit which is shifting more of the value to the software and cloud stacks.
It's not just ISPs that drive the value chain. Physical security companies are depending on connectivity to run their services and businesses like Netflix and Peleton require high performing Internet in the home.