Friend or Foe: Should Alarm Industry Fear Giants Like Amazon & Google?
While the large tech leaders may seem like a threat, several experts believe they’ll make the electronic security industry better and stronger.
Ah yes, monitored systems and services — from a business perspective long the electronic security industry’s revenue-generating secret sauce for dealers and central stations alike. Only it’s far from a secret these days.
Although the alarm industry was one of the first to the recurring monthly revenue party, through the years a gaggle of other industries adopted that model, pushing it off in myriad directions and in some cases further refining it.
More recently, a rash of new residential and SMB market competitors has been adding its own ingredients to the security sauce and lapping up that savory RMR. This new, challenging yet exciting and opportunistic landscape guided much of the program and conversation during the 10th annual Electronic Security Expo (ESX) I attended and presented at in Nashville, Tenn.
The great news — as proven by the higher financial standing, profits and multiples seen both in the marketplace and the new Operations & Opportunities Report data — is that the investor/banking community is seeing the value of security dealers and monitored accounts in a much brighter light.
Plus the economy is strong, technology is in demand, and the interest in both security and automation is high with an enormous customer base and expansion footprint.
The not-so-great news is there are more ravenous, smart, crafty and in some cases devious dogs on the prowl than ever before vying to sink their teeth into the security soup bone.
In the past few years, in addition to numerous new startups, some of the world’s largest and most powerful high-tech companies have set their sights on having a large stake in (if not “owning”) the smart home market, including the security piece.
Addressing understandable concern and distress among the alarm dealer community was one of the most riveting ESX sessions, titled “How Will MAGA (MSOs, Apple, Google, Amazon) Affect You and the Industry?”
“Apple and Google can’t do it on their own, they need us as partners,” said panelist Kirk McDowell, an active industry associations contributor whose deep professional experience includes positions with Alarm.com, Interlogix, GE Security and Post Alarm.
He and the other participants maintained that these large providers (e.g. Comcast is a top MSO, or multiple systems operator) and tech leaders will only serve to make the electronic security industry better and stronger.
They also cautioned not to believe those corporations were going to eventually pull out like the telco trials of the past.
“Comcast gets it, and MSOs are here to stay,” asserted McDowell.“Google and Amazon are late to the party, but they are bringing innovation that expands the market for everyone,” said Robert Few, another industry veteran whose resume includes key positions with Criticom Monitoring Services (CMS) and Charter Communications.
Supporting McDowell’s stance, Few added, “People like Nest need dealer partners to install and maintain those devices and systems.”
They along with moderator George De Marco (who serves as ESX chairman) concurred that the “shiny pennies” will draw attention and grow the industry, but not take it away.
One of those gadgets to especially zero in on according to McDowell is voice control devices, which he says will soon obliterate touchscreens as the leading user interface.
The panel was in accord that MAGA is raising awareness of and interest in an array of services that traditional dealers can also offer to increase customer “stickiness.”
Furthermore, most of those newcomers are focused on home controls and convenience rather than true security of life safety. So it is shrewd for security dealers to dwell on those services while also offering popular residential controls.
The panel suggested traditional providers concentrate on ensuring optimal customer experiences, and consider alternative offerings such as on-demand monitoring and regularly upgrading devices in the way mobile phone carriers do.
“Properly market your company and brand,” added Few. “Control your brand and market perception to overcome their high-profile names.”
They made a compelling case, although I am growing weary of the rising tide raises all boats analogy. The much-needed corollary to that is only if the vessels are seaworthy with an able crew and a wise captain at the helm.
Otherwise, it could be time to abandon ship! The lighthouses in this scenario are the wholesale central stations exhibiting at ESX and featured in SSI’s annual Monitoring Issue. They are fully equipped to help turn your craft into a MAGA destroyer.
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