CAA Executive Symposium Zeroes In on Dealing With Disruption
Panel members explored forward-looking perspectives on the forces impacting the electronic security industry and opportunities for growth and expansion.
SAN FRANCISCO — George De Marco, serving as moderator, opened the executive symposium at the California Alarm Association (CAA) winter conference here with a blunt observation: Security experts are sometimes blind to new ideas and megatrends.
The statement more than hinted at the potential for detrimental consequences. “And that is why we must always challenge our traditional thinking and redefine the business that we are in and learn the new rules that will determine the future of business and of the industry,” De Marco, chairman of the Electronic Security Expo (ESX), expressed.
His assertion helped set the table for a three-member panel to deliberate forward-looking perspectives on the forces impacting the electronic security industry, as well as opportunities for growth and expansion. The symposium, held Dec. 7, included Adam Dunnam, national purchasing manager for homebuilder DR Horton; Jeffery Perri, co-founder and president of ProdataKey (PDK); and, Mike O’Neal, president of Nortek Security & Control (NSC).
The wide-ranging discussion encompassed the residential and commercial sectors, along with topics such as analytics, monitoring and the prospects for security dealers to compete against Amazon and Google, among a raft of other new entrants.
It’s difficult to reckon at this point that any residential security dealer would question the increasing consumer adoption of connected devices and the disruptive effects it is having on the channel. Nonetheless, symposium attendees were given concrete evidence of this very fact with Dunnam explaining that DR Horton, the largest homebuilder in the United States, has begun outfitting every residence it constructs with a smart home solution.
The base package includes the Qolsys IQ2 panel, Alarm.com platform, Honeywell T6 Pro Z-Wave thermostat, Amazon Echo and Echo Dot, Kwikset SmartCode 888 door lock, Eaton Z-Wave lighting control switch and Skybell smart video doorbell.
“We are definitely beyond the adoption side of this; we are definitely into where this has become expected from most of our buyers,” he said. “The tricky part for us was who is going to install it for us. What was the right avenue?”
Installing security contractors can take comfort with DR Horton’s decision, which ultimately rested on who is best positioned and skilled to serve their homebuyers. After internal deliberations, the homebuilder decided only local low-voltage specialists would perform the installations and be allowed to partner with the company to provide follow-up services.
“We feel they give us the best face forward for our customers — that local service aspect,” Dunnam said. “That’s what it comes down to for us.”
PDK, a provider of Cloud-based networked and wireless access control products and services, may be best known for its mobile solution geared for commercial applications. But Perri explained the underserved multitenant residential sector has become a huge movement for the company, and dealers should take notice.
PDK has partnered to integrate its Cloud access control technology into the mobile platform by Dwelo, a provider of smart solutions purpose-built for apartment owners, managers and residents. Fueling the collaboration — and new revenue opportunities — is the marriage of smart home control and perimeter and common area access control in a single platform, Perri said. The administrative software interface, not visible to residents, enables management to establish and enforce authorized hours of use for common facilities.
“We have done a seamless integration to their platform that allows the end user to use the Dwello app — unlock their door, set their thermostat and these types of things. Go to the clubhouse, for example, and they are utilizing our platform, they are utilizing our API to do all the adds, changes and deletes.”
The Value Imperative
The absolute necessity for adding value — to products, systems and services — was a theme that O’Neil invoked throughout the symposium. In fact, it’s a concept that is driving strategic initiatives at NSC, including M&A, and at its family of 16 brands. As an example of the weight the company places on the value-add factor, NSC’s “largest bet” will be to reconfigure every product across its brands to be smart by using analytics, O’Neal said.
Maximizing value will be essential for traditional players — dealers, integrators and manufacturers alike — to compete successfully against major disruptors such as Amazon, Google, multiple service operators (MSOs) and other entrants, explained O’Neal. Devices will need to become substantially smarter and faster in order to create significantly more value.
The continuum of analytics that will help drive that will need to be both at the edge and in the Cloud, he explained; hence, the entire pipeline has to be considered in terms of adding that extra value the industry and its stakeholders require to flourish.
“If those things are in place, this industry can prosper,” he continued. “If they are not in place [other companies from outside the industry] will figure out a way to create more and more disruption for us.”
De Marco concluded the symposium on an optimistic tone, citing more than 70% of consumers choose security professionals as their preferred provider within the home. And while that is great news, he said, moving forward the industry is not entitled to its customers any longer, especially when it comes to residential.
“We have to work at it more. A lot of these disruptors that are coming into the industry they are evolving also and that is something we have to be very cognizant of,” he said. “So, we as an industry have to make sure that we earn that customer each and every day.”
And with that De Marco clicked onto the large-screen projector the slide below, and joked, “So this is what we are trying to do, right?”
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