The alarm industry is about to reach a critical curve in the road so hold on tight. According to Ron Rothman, president of Honeywell Security and Custom Electronics, it's a change like you have never seen before.
Two major trends occurring at the same time represent remarkable opportunity, according to Rothman. “With the technology trend things are changing in the telephone business. The traditional phone is disappearing,” he says. “As far as the demographic trend, we are becoming technology savvy. We want content tailored to ourselves.”
These trends are at the forefront, as last month Honeywell officially unveiled the alarm industry's first line of Global System for Mobile Communications (GSM) technology products that use dual and triple communication paths to ensure highly reliable alarm transmission and delivery. This communication platform enables dealers to expand services and increase the value of accounts. The radios use General Packet Radio Service (GPRS) and the Internet as primary communication paths. They are designed to meet the needs of the future, expand the dealer's customer base, and maintain and increase recurring monthly revenue .
Additionally, this end-to-end solution in combination with the AlarmNet backbone, will help dealers transition customers to the latest digital technology as current radios that use analog Advanced Mobile Phone Service (AMPS) networks are phased out.
Rothman is spearheading the product rollout. “Sometimes when certain events occur like this which require the focus of all our resources—it can only be done by the business leader and I am passionate on this particular topic,” he admits.
“What started a few years ago as a very subtle trend is now in crescendo, into really a watershed market. I truly believe there are 25 million alarm systems that will need the upgrades,” he adds.
Existing radios can be easily replaced with this communication technology which allows for new capabilities. Rothman says he talks to hundreds of dealers of every size on a constant basis and the message is getting through. “There has been dramatic acceptance in the last 12 to 18 months as we really have been able to tell the story and explain what our observations are,” he explains.
“The moment of denial is past,” states Rothman. “Dealers are no longer claiming VoIP and cell phones are not issues.'” Now they are looking at how many of their accounts' communications are being properly met.
According to Rothman, the convergence of both the technology and demographic trends are fueling each other. He believes dealers should offer a multi-path technology whenever possible, A “national kickoff” on October 16, 2006, emphasized this philosophy.
“It is going to be an education process from us to the dealers on how they can sell the added reliability, the added service, and as we roll into next year, the remote control and interactive features,” he says.
To that end, in addition to education, Honeywell offers letters and marketing brochures for customers, as well as a Quick Install Guide and Tech Spec Sheets.
Rothman feels. “It's going to create the opportunity for dealers to get more recurring, and more average selling price which leads to better retention and a higher value of owning your business. Because there is going to be two sets of accounts as we go forward: the ones that are multi-path end to end and the digital dialer accounts, he explains, “the accounts that have remote control will be worth more.”
According to him, some 15 to 20 percent of the residential systems Honeywell sells right now already have radio on them. “It's a big number and I believe it will grow dramatically with the introduction of this product,” Rothman asserts.
The company is not worried to be forging the path of innovation. “We are winning new clients everyday. I am sure there are other companies that have solutions. I welcome the competition. It is healthy and exciting. It makes for more ideas.”