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Exclusive: Nest Talks Strategy, Opportunities for Pro Security Channel

Nest talks to SSI about its Nest Secure smart alarm system with monitoring by MONI and its video verification offering through I-View Now aimed at the pro channel.

Exclusive: Nest Talks Strategy, Opportunities for Pro Security Channel

The company whose Learning Thermostat disrupted the climate controls industry tells how it is spreading its wings in the security business.

Little change had been seen in household thermostats for decades when Nest Labs swooped onto the scene and introduced its elegantly designed smart alternative in 2011 to quickly set the marketplace aflutter.

Consumers flocked to the product and that soaring success captured the fancy of tech giant Google, which acquired Nest in 2014 and has been the wind beneath its wings ever since.

Having furthered its fortunes with the self-installed safety devices like Nest Protect smoke and CO alarm and Nest Cam (following the purchase of Dropcam), the company is expanding its products portfolio and offering professional security dealers a unique value proposition to help them grow their nest eggs.

That offering was revealed last month when the firm announced the integration of its Nest Cam security cameras with I-View Now’s alarm video verification platform, enabling pro security installers to pursue new recurring monthly revenue (RMR) opportunities for their residential and small business customers.

I-View Now integrates security system signals, video sources, Cloud applications and Internet-connected devices into Nest’s Cloud platform to give end users, monitoring centers and emergency responders better information so they may prioritize resources.

I-View’s Software as a Service (SaaS) model requires no additional software or hardware to purchase at the edge, in the monitoring center or for emergency responders. Nest’s line of indoor and outdoor cameras includes the recently released Nest Cam IQ, featuring enhanced intelligence that makes it especially suited for deployment as part of this new integration.

Unifying these technologies and constituencies may reduce false alarms, and promote faster response times and safer communities. Security dealers can participate by joining the Nest Pro Program.

“There’s been a lot of demand from the channel of security dealers saying, ‘Your cameras are cool, the technology is cool, I have customers buying them,’” says Nest Head of Professional Channel Gene LaNois. “They would ask, ‘When are you going to enable these cameras so they can work with the security systems we install and monitoring station we use?’ There’s a lot of news here that we’re excited to announce.”

In September, the Nest Secure alarm system was unveiled along with an exclusive partnership with MONI to handle monitored response. In addition, the Nest Hello video doorbell is set for an early 2018 release. Among the company’s other innovations is increasing voice command capabilities through Google Assistant integrations and expanding the overall product ecosystem through its Works with Nest program.

Founded in 2010 by former Apple engineers Tony Fadell and Matt Rogers, Nest products today are sold in 18 countries and installed worldwide. Now in its third generation, according to the company the Nest Learning Thermostat has helped save approximately 14 billion kWh of energy to date, which is enough electricity to power New York State for 100 days.

As the firm further entrenches itself as a foundational component of the modern connected home, it aims to have an equally profound impact on security. To learn more about Nest’s business strategy, its market perspective and opportunities for the pro security channel, Security Sales & Integration spoke exclusively with LaNois, Product Marketing Manager Erick Low and Product Manager Nitin Viswanathan, as well as I-View Now President Larry Folsom.

Together they explain how Nest is taking flight to establish a new pecking order among security products suppliers.

Please describe how Nest Labs is organized as a brand, and its expanding portfolio of products.

GENE LANOIS: Nest goes to market through four channels. We have our retail channel, which are big-box stores, nest.com, our ecommerce business, enterprise & energy, which includes partnerships with banks, insurance companies, utilities and telcos. And then we have the professional channel, which I manage, working with contractors and installers across various trades.

We primarily deal with four trades, but that keeps expanding with the growth of smart and connected products. Today they are HVAC, custom integration, electrical and now security. Within those trades, we work with wholesale distributors that provide products to those contractors, installers and dealers. We also work with all the single and multifamily homebuilders and land developers. Our view of the business is wide and diverse. When we started with Nest Cam it was our first entrance into the security business.

We’re now members of ESA [Electronic Security Association] and SIA [Security Industry Association], and we participate in the ISC West and East shows. We also continue to build our brand in the security space, via Nest Thermostat integrations with companies like Vivint, ADT and Alarm.com. All of that has enabled us to stay with the pulse of the industry while simultaneously building our product portfolio.

Nest Learning Thermostats can be part of a security system integration with a smart connected alarm system. Our Nest Protect is a smoke and carbon monoxide alarm. We have our high-definition cameras, and this year we’ve introduced Nest Cam IQ indoor and outdoor security cameras, which offer advanced intelligence and software capabilities. We introduced Nest Secure, which is our security system. We’ll also be introducing Nest Hello, our new video doorbell, in the first quarter of 2018. It’s an exciting time for us to be able to get in a bit deeper into the security industry by having more products that fit that business.

ERICK LOW: The Nest Cam IQ outdoor camera is a great fit for the pro audience and a lot of installers and their businesses. It fits with other things you may already be installing, so it just makes sense to keep a few handy on the truck so you can bring it to customers in the field. You may start with something like a Nest Cam IQ outdoor security camera, but it’s a great way to also move into other products in the home, like thermostats or smoke and CO alarms.

What’s really cool about the Nest Cam IQ outdoor is it’s weatherproof, tamper-resistant and designed to be plugged into a power outlet inside the home. For customers interested in getting a Nest camera this is something a pro would be really well suited for. We’ve done research and seen that some consumers aren’t comfortable doing that type of install. Previous outdoor Nest cams were more DIY-oriented. The IQ is a good alignment of product that fits this segment really well and fits in with what the pros are already doing.

We’re also working to bring more intelligence to the cameras with things like facial recognition technology through a feature we call familiar face alerts. That allows our cameras to detect a familiar face like loved ones as well as an unfamiliar face like a stranger and send a personalized notification to a phone. That’s a big initiative we’re going to be marketing and branding to get the word out.

Nest invested time speaking with pro security dealers to incorporate the features into the Nest Cam IQ that they desired. They include advanced intelligence, Supersight and thoughtful mobile alerts.

What is it from a corporate standpoint that Nest likes and finds so appealing about the security industry?

LANOIS: If you look at the security industry and what’s happening, you’re seeing high growth in smart and connected products, and many of them are stemming from the industry itself. You have people who just a few years ago used to install an alarm system with cellular backup where it could make a call, but you couldn’t access it.

Now, all of a sudden, technology has changed including the capability of arming and disarming your home, or maybe turning on and off a light via your security system, has started to become more the norm.When consumers are looking for these solutions, who do they turn to? A lot of folks are turning to the security industry for connected products. Between consumer demand and professional technology adoption, it’s a nice fit.

What does the security channel look like for Nest in terms of wholesale distribution, online, brick and mortar, etc.?

LOW: Today, we have globally just over 32,000 Nest Pros. These are companies that signed up and expressed interest in aligning with Nest and purchasing our products. That’s at the installer-contractor level. Getting started with us is super simple, just go to nest.com/pro. Following a short approval window you’ll gain access to the Nest Pro portal.

Over the past four years, we worked very hard to establish a network of wholesale distributors that support those contractors. We now have security distribution both at national and regional levels. A security installer can go to their favorite wholesaler and access Nest equipment the same way they would any other equipment they buy.

Have you found security to present any interesting wrinkles compared to custom electronics or other trades?

LANOIS: The value proposition in many of the trades we work with is really related around hardware profitability and new customer acquisitions. When you look at the security industry, they want the same thing but they are also looking for recurring monthly revenue, which is not the typical path to profitability in those other trades.

Part of our business is making sure that not only do we create technology products that look amazing, are well designed and have incredible feature sets and customer interaction, but it’s also about trying to make sure we understand the needs of the security dealers that want to grow their businesses. This is why it was so important for us to partner with I-View Now and create a solution that offers them a recurring revenue opportunity.

Let’s talk deeper about opportunities for security pros to partner with Nest. What does that look like? If I’m interested, what process do I need to go through?

LANOIS: There’s a couple of value proposition opportunities. One is with Nest Secure, where we’re bringing a Nest-quality security system that is positioned as a DIY because of the simplicity of its installation. But it’s fully capable and will be offered to the security dealer network and the trade itself, not only through our Nest Pro portal, but also through wholesale distributors.

The Nest Cam IQ is part of a full line of security cameras aimed at the pro security provider. The new integration with I-View Now allows those dealers to offer video verification and grow RMR.

We will have a program where a security dealer will be able to buy our hardware, install that hardware and have that system monitored through MONI. The other offering springs from our experiences over time speaking with security dealers who love our cameras. But because there was no recurring revenue stream enabled and it had no tie-in to the security brand or system they were installing, they did not see a business value in buying and selling our cameras to their customers.

So last month at ISC East, as part of our Works with Nest program, we announced recurring monthly revenue opportunities with all our security cameras via new integration with I-View Now. The integration with I-View is our way of enabling a security dealer to utilize the great technology of our cameras as part of a professionally monitored security system, and generate RMR for their business. The ability to help them position the value, safety and benefits of video alarm verification, and associate the Nest brand as a vehicle for profitability is an exciting venture for us.

Read on to learn how Nest formed its relationship with I-View Now, as well as voice control’s role in the world of security…

About the Author

Contact:

Scott Goldfine is Editor-in-Chief and Associate Publisher of Security Sales & Integration. Well-versed in the technical and business aspects of electronic security (video surveillance, access control, systems integration, intrusion detection, fire/life safety), Goldfine is nationally recognized as an industry expert and speaker. Goldfine is involved in several security events and organizations, including the Electronic Security Association (ESA), Security Industry Association (SIA), Security Industry Alarm Coalition (SIAC), False Alarm Reduction Association (FARA), ASIS Int'l and more. Goldfine also serves on several boards, including the SIA Marketing Committee, CSAA Marketing and Communications Committee, PSA Cybersecurity Advisory Council and Robolliance. He is a certified alarm technician, former cable-TV tech, audio company entrepreneur, and lifelong electronics and computers enthusiast. Goldfine joined Security Sales & Integration in 1998.

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