iControl Tells ESX 2014 Attendees: ‘Google Is Not a Friend of the Industry’
iControl exec Paul Dawes weighs in on the Google and Apple threat to security and home automation integrators; Nest Labs suggests dealers embrace its products.
At the recent Electronic Security Expo (ESX) 2014 in Nashville, dealers had Google and Apple on their minds. The event took place shortly after Google’s $555 million acquisition of Dropcam, and Apple’s announcement of HomeKit, the company’s first real home automation play.
Add that to the explosive growth of mass marketers ADT and Vivint in the past couple of years, and it’s easy to see why independent dealers are concerned.
At ESX, at least one industry executive has a divided opinion on what the true influence from Google and Apple will be on the market.
“Google is not going to be a friend of the security industry,” says Paul Dawes, iControl’s vice president and general manager, Connect Business Unit. “Google will help accelerate the interactivity trend. We are only at the beginning phase of the connected home. It’s big … but it’s not really that big yet.”
Dawes sees Apple as less of a threat: “Apple does not have much of an offer. My take is that they saw that home automation is getting buzz and felt like they had to do something. HomeKit is a weak effort. Apple’s main focus is on entertainment, not security.”
Dawes’ comments might have been expected, since iControl is the platform provider for ADT Pulse, as well as Xfinity Home and other cable company offerings. So it would make sense that he might either downplay or pooh-pooh the Google and Apple initiatives.
Plus, iControl now, in partnership with Telular’s Telguard HomeControl, is targeting independent dealers with its security/home automation solution.
“Security is top of mind in the connected home. It’s the function that will draw consumers to purchase home automation. Google and Apple are targeting the smart home channel. Independent dealers need to step up their game and take it to the next level.”
For Dawes, that means dealers need to upsell dramatically among their existing client base. He sees the current 2G cellular sunset as the primary opportunity. He estimates that over the next two-and-a-half years, there are 4.5 million residential security systems in the field with 2G communicators that will need to be upgraded to 3G.
“That’s equivalent to half of the entire number of security systems that will be installed during that time. If dealers are going to have to spend half their time doing these maintenance calls instead of selling to new clients, they need to make sure they upsell those 2G customers while they are on the job site,” he says.
iControl is now partnered with Telular to bring a new 3G Universal Communicator product to the market that is a quick 90-minute installation. It will be out in Q3 2014.
Dawes sees a strong migration to IP-based monitoring, which makes great financial sense for integrators because it increases their profit on monthly monitoring. Currently, most dealers must pay their cellular service provider as much as 20 percent of their monthly monitoring fee. On the flip side, broadband monitoring is free. As broadband monitoring gains steam, Dawes believes AT&T, Verizon and the other cellular carriers will be lowering their fees dramatically to compete. Going forth, Dawes believes dealers should pitch a scenario where all the monitoring traffic is handled over IP, with cellular as a backup.
But Dawes believes the specter of Google and Apple in the industry is going to cause a slew of independent dealers to exit the business.
“I expect there will be between 3 million and 5 million alarm subscribers that will be part of rollups in the next 4 years,” he says. “That means dealers need to maximize their multiples by adding home automation for higher recurring monthly revenue.”
For its part, Google’s Nest Labs was at the ESX show, beckoning dealers to join the bandwagon.
Gene LaNois, general manager/pro channel for Nest, said the most common question he got during the two-day expo was, “Why are you guys here?”
Clearly, security dealers already have their guard up against Google. LaNois says Google recognizes that fact but they sell Nest through distribution to the channel and the wide consumer appeal of the brand is a strong driver of potential security accounts for dealers.
“Homeowners ask for Nest thermostats. If an integrator is carrying it, he can parlay that into a full home automation sale,” he notes.
iControl has already submitted an app for Nest thermostat integration. Now that Nest has formally opened its API, we should expect its thermostats, smoke/CO detectors and ultimately Dropcam cameras and sensors, to be embraced by more installers.
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