Amazon announced many new features for skill developers and device makers this year at its Alexa Live 2022 event that I watched remotely. The Alexa ecosystem has grown tremendously over the past couple of years, doubling its number of active Alexa customers over the last three years and reaching over one million registered developers, brands, and automakers.
It is impressive that Amazon is growing its Alexa ecosystem at this explosive rate, and I believe its focus is still largely the same as last year and the year before. Its focus is on ambient intelligence, and this year its focus is on enabling those one million registered developers, brands, and automakers to achieve an ambient strategy. Amazon announced a lot at Alexa Live. Let’s take a look at what stuck out to me the most and how these announcements contribute to the Alexa ecosystem.
Focus on the customer experience through SDKs
A large part of the success of the Alexa ecosystem revolves around how customers interact with Alexa-enabled services within the unique medium that Alexa offers. The easier it is for Alexa to offer services and products to customers, the better it is for both parties. One of the ways that Amazon is cultivating an ambient experience is with Alexa Routines, where Alexa is interactive and automatic based on a preset of conditions. Amazon has even said that 30% of interactions are initiated by Alexa, largely because of routines.
Last year, Amazon improved its Alexa Routines with Custom Tasks that let users customize routines inside of skills. This year, Amazon is opening up Routines to developers with Alexa Routine Kit (ARK). ARK enables developers and device makers to surface pre-built routines to customers when interacting with a skill. Rather than a customer using Custom Tasks to build a Routine, a Routine is already built by the desired skill. I believe this is a game changer for routines as it allows developers to create routines that otherwise would be possible through Customs Tasks. Some tasks within a routine may need special permissions or have special back-end enablement that is untouchable for customers. Routines enable automation within a customer’s overall daily routine, increasing the customer experience and importance of Alexa within someone’s day.
One example that Amazon gave that I found was really cool was Jaguar Land Rover and its routine “good night.” This routine will check if a customer’s vehicle is locked, remind the customer of the charge level or fuel amount at the end of the day and turn on Guardian mode. I think Amazon could take these routines to the next level by encouraging multi-service collaboration so that a routine is not limited to one service but multiple.
Amazon also announced its Alexa Connect Kit SDK for Matter (ACKM). The Alexa Connect Kit (ACK) allows device makers to turn their products into Alexa-enabled devices. ACKM opens up the Matter ecosystem of devices to the Alexa ecosystem, including cloud connectivity, over-the-air (OTA), logs, and metrics. Matter is an open standard for smart home and IoT devices that allows IoT devices to work cross-platform. It would allow Google devices, Apple devices, and Amazon devices that support the standard to be interoperable. Amazon has long been a supporter of the Matter protocol. Connecting the Matter ecosystem of devices with the Alexa ecosystem is increasing interoperability between differentiated IoT products while maintaining the benefits of the Alexa ecosystem.
Promotion skills through incentives
Amazon enables developers to build businesses through Alexa by promoting quality and effective skills. Amazon announced Promoted Skills, a new way of promoting skills on Echo Show screens through campaigns. Amazon also announced the Skill Developer Accelerator Program (SDAP), which provides incentives for building high-quality skills. It also announced a Skill Quality Coach that helps Skill developers build high-quality skills. Amazon needs to promote and drive the ecosystem towards high-quality products and services within its Alexa ecosystem. Promoting high-quality skills creates better customer experiences and enables developers to grow their businesses.
I believe the SDAP could also increase business growth by promoting high-quality skills through an incentive. Alongside the Skill Quality Coach, I believe Amazon is positioning developers and businesses to be successful within the Alexa ecosystem.
Another way Amazon is promoting Skills is by increasing the revenue for developers who earn less than $1 million from in-skill products. Normally developers split the revenue from in-skill products, subscriptions, or paid skills with Amazon 70/30, but now, if you earn less than $1 million, it is an 80/20 split. Also, developers who make less than $1 million in revenue per year receive 10% earnings as a value-back incentive, moving it to a 90/10 for skill developers. I believe this revenue increase should encourage developers to create better high-quality skills.
Smart home with Alexa Ambient Home Dev Kit
Amazon also announced its new Alexa Ambient Home Dev Kit (AAHDK), which looks to unify its services and APIs. I believe Amazon has done a great job in the past of making it simpler for developers to implement features within a set of APIS. The AAHDK looks to unify the smart home experience and customer preferences within a set of APIs:
- Home State APIs: Customers can create different modes within the home that are synced between devices, including Home, Vacation, Dinner Time, and Sleep modes.
- Safety and Security APIs: extends Alexa Guard features to other synced devices in a customer’s apps and services.
- API for credentials: Customers can set up Matter devices easier by eliminating the need to enter Thread network credentials.
- API for Device and Group Organizations: Automatically synchronize device and group names between Alexa and apps.
- API for Multi-Admin Simple Setup for Matter: Customers are able to connect preferred Matter Admins to Matter devices.
The AAHDK simplifies the user experience by making preferences, safety and security, and group customizations unified. This unification amplifies the ambient experience of Alexa both for the customer who would otherwise have to manually set up these customizations and the developers who are given simple and ambient access. What excites me is that these are the first five APIs and that Amazon looks to add to this Dev Kit for a more seamless and ambient smart home experience.
We are at an interesting juncture in the entire industry with “ambient intelligence.” It still takes too much human learning and beyond some of the basic commands, most consumers keep it simple. Amazon is doing everything it can to bridge that gap and what was announced at Alex Live moved the ball down that court.
Although I did not hit everything Amazon announced at Alexa Live 2022, I believe that Amazon is growing its Alexa ecosystem by cultivating quality Skills and Routines and promoting ambient intelligence among its developers and device makers.
Amazon understands that while the Alexa ecosystem should grow and become more interoperable with other ecosystems like Matter, it must also grow and promote quality within its quantity. Amazon welcomes Matter devices into its Alexa ecosystem with Alexa Connect Kit SDK for Matter and promotes high-quality skills with its Skill Developer Accelerator Program. There is a lot for a developer and device maker to get excited about within the Alexa ecosystem, and I believe Amazon is showing how it is a leader within the IoT space.
Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.
Moor Insights & Strategy founder, CEO, and Chief Analyst Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Dreamium Labs, Groq, Luminar Technologies, MemryX, and Movandi.