Linear’s more than 50-year legacy includes the early application of passive infrared detection and radio frequency (RF) transmission, which helped transfigure the wireless security and access control markets. Linear made headlines earlier this year when its parent company, Nortek Technology Solutions, acquired 2GIG Technologies, a provider of home automation technology. Linear President Michael O’Neal joins the conversation to discuss 2GIG, which was a sister company of Vivint, and the burgeoning market for home control solutions and services.
What’s been your biggest challenge bringing 2GIG under the Linear umbrella?
That’s an interesting question because quite frankly, I think the major challenge is going to be sustaining what was started by 2GIG from an innovation standpoint. 2GIG did a wonderful job building the Go!Control series of products. Their laser focus was on that product. Linear’s business is much more diverse. That holds huge promise for this transaction in the future. But in the short term we need to balance those longer-term perspectives with bringing to market as quickly as 2GIG did in the past, products that are industry-leading. I think that’s our No. 1 challenge here. We are recruiting engineers and talent to join our team to basically facilitate just that.
How do you go to market with your home automation and home-control products?
Half of our business is effectively designed for four specific partners. We’re still the supplier to Vivint. We’re also a supplier to AT&T Digital Life. We supply others, and we have some others who are asking us to build them product. The other side of our business is providing that same capability, if desired, to a range of other players, large or small. Or providing a standard product which they can acquire generally through distribution but sometimes directly from us.
We offer the market a standard product and we also offer custom solutions. If you’re talking about a trend there is a lot more focus on differentiating hardware and backend, as the market gets a lot more competitive. So we hope we’re positioned to be able to provide, small or large, a custom solution which meets the strategic desires of any of the service companies, whether it be Vivint, or AT&T or a new player, or an existing player we have in our business. Given the fact that we have a factory, and we have a large engineering group and heritage in this space, we are well positioned to support those customers who seek to make a difference from a service or hardware perspective.
Regarding product integration, where do you see home automation going as far as new services, new capabilities?
First of all, to be a little bit contrarian, I think that the equipment ultimately is going to become less a factor. I believe the connectivity and software is going to become more prevalent. That creates challenges for all of us. On the equipment side, the integrators and installers want it to be simpler and simpler. We have to focus on that. There is a huge push and it’s going to come; what is really going to force people to recognize that is when we have players like Lowe’s and Home Depot, as well what’s available on the Internet and the DIY side of the business. It creates a possibility that we can really make installations simpler.
But long-term, it means it’s really going to be about how that hardware creates a solution which is represented by potentially a piece of software or an app or something that’s going to become the new challenge we’re going to have to deal with. Look at computers; we take computers for granted. Our real challenges are when we dump software on it and the software doesn’t work or we put it on a network and the network doesn’t work. We can’t get the printer to work. I think we’re moving from hardware complexity to really simple ways to get this stuff in-house, but we’re moving into a new sphere where the connectivity and software become much more challenging for us.
How much of a threat do you view DIY becoming to professionally installed home control products and systems?
I see there being two types of opportunities. We see it in retail space today. There is sort of a home-system perspective and then there are these niche specific applications. I think long-term everything is going to have to get simpler. At the end of the day, long-term, maybe more people can put stuff in themselves than not, but if you want an aggressive system in your house you’re going to rely on an installer; at least for the next foreseeable future. If you’re going to want some specific applications, you may be able to handle that directly.
Like if I want to control just my garage door, open and shut it through an app, and I can install some device that allows that to happen; that will largely be DIY. But if I want a total installation it is going to be hard for homeowners or small businesses to take the time to do that. I still think there’s going to be a heavy reliance in the short-term on professional installation.
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The 2GIG panel had always worked with Alarm.com software. Will that expand to include other providers?
Alarm.com is still our No. 1 resource for backend and we continue to work aggressively with them. I know we announced some alternatives, one of which being our own backend. At this point, however, we’ve set our business up to be one where we provide technology for what I would view to be the industry leaders who want to take the service side of the business as far as they can. We just need to have in our arsenal a range of capabilities that help them. If they choose to go in a slightly different direction than someone else, we need to be able to accommodate that. So we’ve created a group of possible solutions for them and they essentially will pick what’s in their better interests, where it fits with their long-term strategic view. But certainly from our perspective, our relationship with Alarm.com remains very strong and quite frankly, unless we’re pushed in another direction, that’s our desired partner.
What other vendors are you collaborating with?
We have Uplink and Telular, and those were provided to our customers as options should they desire to do something other than work with Alarm.com. We will still support those backends, but at the end of the day almost everything we have is tied to Alarm.com and our relationship with them remains very strong.
Will you keep the 2GIG brand or eventually phase it out?
That brand has nice cache. It’s going to stick with us. We may be using it on other products. Particularly as that panel begins to expand in terms of its capabilities, of providing other solutions for service providers, then we most certainly will take the opportunity to brand it 2GIG.
Given 2GIG’s former connection to Vivint, is there a perception issue in the channel? Do dealers still believe it is a Vivint brand?
That was a challenge for 2GIG. It is no longer a challenge. It’s clear that we have a supplier relationship with Vivint, but at the same time we are providing that same level and capability to any dealer, large or small within reason, that wants to change their business. I think that separation is relatively clear today.
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