Roberts: Security and home management solutions offered from service providers will be even more prevalent in 2012. The good news about broadband home management offerings from these companies is that they will collectively increase awareness of the benefits such solutions provide to consumers, which will drive consumer interest and adoption. Dealers and integrators can leverage this new market demand by providing interactive solutions of their own. DSC provides solutions via their C24 Interactive offering to dealers and integrators, enabling them to offer broadband home management and security services to their customers. This is not only a compelling solution for dealers and integrators, it’s essential if they want to compete in this vastly growing market.
Dunn: It appears that these “outside players” intend their services to be integrated with products and services offered by other companies. The security industry needs to have a broader value proposition than just security to compete with the services these additional players are beginning to offer.
How should dealers and integrators create services around home/building automation and residential technology developments that provide them with RMR?
Smith: Security dealers have always been much better than home automation dealers at creating RMR. But over the years, competition and discounting in an effort to gain market share eroded the recurring revenue stream for security companies. Adding remote monitoring and automated control of cameras, door locks and lighting can be a way to increase and stabilize that revenue stream. Security monitoring will continue to be one of the best ways to get monthly recurring revenue.
Santiago: Customers understand the basic functionality of a security system and its associated cost. Dealers must promote the benefits of automation features—such as automatically locking doors and adjusting temperature when arming a system—to help customers understand the value in these services. By offering modular, add-on packages—such as energy, video, or lighting, each with nominal incremental costs—dealers are able to increase their RMR while providing the customer with additional value.
Dunn: It’s important that any services tied to RMR create an ongoing value to the customer, so the monthly bill is justified. Traditionally, the monthly value we’ve provided has been security. With home services, we’ve added such new values as remote control and energy management.
Some believe that with consumer-friendly features and capabilities being added to alarm panels, the security component may be overlooked. How do you respond? How does security continue to stay an important element in residential and home automation developments?
Smith: The whole reason phone and cable providers are becoming interested in home systems is to gain access to the security monitoring revenue stream. They are adding additional services to make switching to them compelling. But the main reason a consumer buys these services is because they get all of the additional features in addition to security which they were already willing to pay for.
Santiago: Home automation and video enhance the security offering rather than detract from it. Security is the most critical component of our system and our number one focus. We believe it is the only standalone offering. Without it, the other features couldn’t exist on a large scale due to the cost constraints and economic model that exists in the security industry. Our goal is to integrate these other features into the core security offering. When a system is armed away, lights go out, doors are locked and thermostats are adjusted. All of these features can be done independent of security but the greatest financial and convenience benefits come when integrated with security. Video functionality is a great offering but is enhanced when a homeowner receives video clips of alarm events and can check the status of their home remotely.
Roberts: The “anchor tenant” for a broadband home management system is the life safety feature the home security service delivers. That should always be the priority focus. This is why you see our deployment partners such as Comcast (Xfinity Home Security) and ADT (Pulse) focus their marketing messaging primarily on security and secondarily on home management. Dealers and integrators should only consider UL- or ETL-listed equipment for their broadband home management deployments. While cutting costs on utility bills and saving time managing the home are compelling consumer benefits, those are secondary to keeping consumers safe and protected.