Residential Security: "Bring It On" Home

The residential market has long been an important segment to the alarm dealer. Although the landscape of the security market in general has undergone major transformations over the last two decades, revenues in the residential market continue to grow.

A recent inquiry of Security Dealer readers and other studies show that the residential market is far from saturated. Between the introduction of new technologies and the burst in new home construction, opportunity still knocks on the homefront market.

This month's featured interviews represent companies that can help dealers significantly capitalize on trends in residential security. While hardly the whole story, it can give you an idea of how developments in residential security continue to unfold on a daily basis. Every person involved in the security industry knows that in order to be successful, you need to be alert to the needs of your market. Delivering the best customer service possible and offering reliable products are the other elements necessary to survive and succeed in residential security.

Despite corporate mergers and the big push in the homeland security arena, manufacturers are also developing marketing campaigns to bring new technologies to the homeowner. Their interest proves that there is business out there. Alarm dealers, by being visible in their communities, can reach out as well, and tune into one of these emerging marketing channels.

The installation of wiring/cabling, adding infrastructure, networks, and Internet services represents a big opportunity. They affect every technology and market, especially the residential market. Although you may not think you are doing this work now, you really are when you consider that every system you install involves either wired or wireless connectivity, and off-site communications. With the constant introduction of open architecture protocols, and appliances and products that use them, consumers are realizing that what you are offering them today is indeed future-proof; that they need these products to assure their family's safety and comfort; and, that the time to buy is now.

Video products are also increasingly coming into the home. The demand is being accelerated by lower costs for the equipment, wireless and network based connectivity, and remote surveillance abilities. While there was a time the alarm dealers' monitoring services involved calling the police in the event of a burglary, broadband technology now enables dealers to enrich their clients' lives (and their own recurring revenue stream) with a complete menu of additional services to protect customers more comprehensively, as well as provide non-emergency, yet still vital, services, as well.

For some dealers, the future may hold the development of new marketing and business partnerships. For others, it will involve learning new products and technologies. For most, it will involve both, along with as a lot of hard work and good luck.

Hooking Up with Builders
Recently, Honeywell introduced the Honeywell Builder Program, a far-reaching, single-source program that combines access to the industry's most robust product lineup, the power of a recognized consumer brand, a range of sales and marketing tools and a pool of top notch dealers.

The new program encompasses products from multiple categories, including several security components: intrusion and motion detection systems, latchkey monitoring, fire detection and smoke warning systems, and video surveillance. It includes systems, devices and services. Some of these require licensing to install as well as structured wiring. Structured wiring components are currently available from most security distributors.

Security Dealer asked Honeywell's Sr. VP of Program Marketing, Ken Weinstein, to elaborate on some of the details of this new Honeywell (HW) program.

Security Dealer: What is new about this program?
Ken Weinstein: What's new is that the program is wrapped around the use of HW products in new homes. Structured wiring is a key security component and integrator that enables connectivity across several platforms in home electronics, allowing homeowners to integrate the most advanced home networking technologies. It's the offer of HW products in multiple product categories to a builder that's the key differentiator from just selling one product line at a time in a disjointed manner.

Security Dealer: Comfort Controls, Honeywell's popular line of thermostats, whole house humidifiers and zoning solutions are part of this program. Heating and air conditioning are a specialized service. Are you envisioning the alarm dealer or system integrator to diversify into this market?
Ken Weinstein: Not on the installation end, but on the sales and marketing end. Alarm dealers and integrators can readily sell Indoor Air Quality products, for example, that the HVAC contractor will install. The "technology salesperson" in a design center can handle any HW product with the installation handled by the appropriate contractor of the builder. The sales consultants in the field are calling on builders to get HW products specified. Once specified, the appropriate HW dealer/contractor performs the installations.

Honeywell designed the Builder Program to consolidate home-enhancing products that consumers increasingly request when planning new residences. Customer surveys show that 60 percent of homeowners will install individual room temperature controls in the next home they build. By the end of 2005, it is expected that 47 percent of homeowners will specify structured wiring to easily and seamlessly integrate phones, stereos, televisions and computers.

Security Dealer: What products in these categories does Honeywell offer that are controlled through a LAN, and what platform does Honeywell have which ties them together with the alarm panel?
Ken Weinstein: HW has shown its Apex system integrated with an HW HVAC system with control of thermostats and security from a wireless PC. We also offer a structured wiring system with an integral Pentium 4 PC that can serve as a Tivo type device and provide video and audio around the home, as well as connection to an HVAC HW system to control heat/AC based upon an event, vocal commands, time of day, etc.

Security Dealer: Who supplies the support and how are they renumerated?
Ken Weinstein: The degree of support is determined by the degree of HW content and the number of homes. So, the answer varies.

Complete Turnkey Video Surveillance Package
WebEyeAlert HomeSentry Version 5.0, is a digital video surveillance solution used to help secure and monitor people and their homes. The product can be bundled with CCTV cameras and cabling installation services in order to offer a complete "turnkey" video surveillance package to your residential customers.

Security Dealer contacted Bill Agudelo, Sr. VP WebEyeAlert Inc., for additional information on the new product.

Security Dealer: The system works without a video capture card. How is that possible?
Bill Agudelo: It works with an external USB connected video capture device. This device is powered by the USB port. One end connects to the USB port, and the other end terminates to an RCA style video plug. A simple RCA-to-BNC plug can then enable connection to a standard coaxial video cable in order to connect to the CCTV camera.

Security Dealer: Do proprietary cables connect the cameras to the computer?
Bill Agudelo: Conventional coaxial cable with BNC connectors are used to connect a camera to a computer. An RCA to BNC plug is required to connect from the coaxial cable to the external USB capture device. The cameras, USB capture devices, coaxial cabling and RCA-to-BNC plugs are supplied by the dealer.

Security Dealer: What is the recurring revenue stream?
Bill Agudelo: We provide dealers with a recurring revenue stream for the optional off-site event storage service. Event data is stored off-site in the WebEyeAlert hosted website and is billed quarterly. Please note that the HomeSentry video recording system stores recorded video on the homeowner's PC local hard drive. The off-site event data is a copy of motion event snapshots which are stored remotely.

Security Dealer: Is training required to install this?
Bill Agudelo: We provide basic material to instruct the dealer on how to set up the application and configure the system. Because we are not using an internal video capture board, there is no need to open up the PC in order to install the application. The application can also be installed in a laptop computer, which turns a laptop computer into a mobile/rapid deployment surveillance system. In addition, since we are using the WebEyeAlert hosted website, the homeowner's PC does not need to run a Web Server. This simplifies installation and also means we can run on Windows XP Home Edition.

Security Dealer: Does the installer or the subscriber configure the notification policies?
Bill Agudelo: Yes. For e-mail notification, the subscriber/installer needs to point to the ISP's SMTP Server in order for the e-mail notification to work. In addition, a phone line and built-in modem are required for voice/pager/fax notification.

Security Dealer: Is recording triggered by motion? Please explain the motion detector features.
Bill Agudelo: Each camera can be programmed on the HomeSentry recorder to trigger recording on motion. In other words, there is a built-in Video Motion Detector (VDM) on the recorder. A motion mask can be programmed for each camera. In this way, a motion detection exclusion zone can be defined in order to optimize the detection algorithm. The video motion detector can be adjusted with up to 70 levels of sensitivity, and has been optimized to minimize false triggers, such as incident light, rain, or snow on external camera views.

Security Dealer: What marketing and technical support do you offer the dealer?
Bill Agudelo: We provide qualified end-user leads, marketing and training materials, free product demo, and access to a dealer-only info section on our website.

We also provide free phone technical support to dealers and e-mail support to end users of the HomeSentry product.

Broadening Monitoring Services VIA THE WEB
PremisesConnect from GE Security is a Web-based service designed to meet the increasing demands of security, life safety, and home automation consumers by utilizing the Internet to cost-effectively integrate security, lighting control, and HVAC management. Through personalized notification services, PremisesConnect also offers control over non-security events such as children arriving home from school notification.

PremisesConnect is built on a platform that works in concert with proven UL listed 24 x 7 security monitoring services, broadening the pallet of services the dealer will be able to provide to the consumer.

Security Dealer asked Steve Craig, Marketing Communications Director GE Security, Residential Solutions, for more information.

Security Dealer: What demographic is PremisesConnect primarily aimed at?
Steve Craig: Several-young professionals, families with young children where both parents work, small businesses, VOIP users, apartments/townhouses or university dormitories where broadband is included.

Security Dealer: How is the service bundled?
Steve Craig: Currently, it is not bundled but is prime for this kind of business model. Dealers can bundle this service with traditional central station monitoring or partner with telecommunications providers. This service is a complement to monitoring and provides additional monthly recurring revenue to dealers. It is designed for dealers with their own central stations or those who use third party contract monitoring.

Security Dealer: What equipment is required on site to implement the various features/services?
Steve Craig: You need a Simon V4.1 control panel, Ethernet Interface Module, Ethernet cables, router and broadband connectivity.

Security Dealer: Is remote video surveillance one of the services?
Steve Craig: Video capability will be available by the end of 2005.

Security Dealer: What life-safety services are offered?
Steve Craig: Smoke, CO2, water, freeze, and all security sensors.

Security Dealer: Notification services currently include things like openings/closings, latchkey, etc. What is new about PremisesConnect?
Steve Craig: The PC takes notification beyond security. Users can choose which events they wish to be notified of and by which method (phone, e-mail or text message).

Security Dealer: What is the subscriber's cost, and how much does the dealer make?
Steve Craig: Suggested MSRP to subscriber (dealer customer) is $12- 18/month. Dealer can make $5-6 per month, per account.

Security Dealer: How does the dealer communicate with customers continuously through the website?
Steve Craig: There are opportunities for online marketing, specific messaging, and use of the dealer's own logo on the website. Dealers also can monitor how their customers use the site to better understand their needs and preferences to upsell more product/services.

Alliance to Set Standard for Wireless Home Control Products
Leaders in the home control market, including Intermatic, Leviton, Wayne Dalton, Danfoss, UEI, and Zensys have joined forces to create the Z-Wave Alliance. This consortium is dedicated to solidifying Z-Wave as the standard for wireless home control products.

Developed by Zensys, Z-Wave is a low-cost, two-way, wireless mesh network communications technology that enables consumers to monitor and manage their lighting, security systems, thermostats, garage door openers, entertainment systems and other home products easily, conveniently and securely from anywhere in the world.

To ensure Z-Wave' longevity, flexibility and interoperability as an open industry standard for the digital home, Zensys intends to license its Z-Wave technology to create multi sources for the technology to the industry. In addition to establishing Z-Wave as an open standard, the Z-Wave Alliance will encourage other companies in the home control space to incorporate Z-Wave into their home control products, and work with them to continue to adapt the technology as new uses and requirements arise.

As part of a consumer education campaign, the Z-Wave logo will appear on every Z-Wave enabled product, communicating easy installation, interoperability and consistent quality to buyers worldwide.

Unlike competing protocols, Z-Wave is a fully developed, interoperable technology that is present in more than 70 wireless home control products on the market today, including dimmers, switches, remote controls, USB devices and more. An additional 100 wireless home control products that leverage the Z-Wave platform are scheduled to hit the market before the summer 2005.

The Z-Wave Alliance is harnessing the capability of the top players in the home control space to bring affordable home automation solutions to the consumer, incorporating Z-Wave as the standard protocol. Security Dealer spoke to Raoul Wijgergangs, VP Business Development, Zensys, for more details.

Security Dealer: What hardware is required to Z-Wave enable a device?
Raoul Wijgergangs: A Z-Wave chip, some filters and a few passive components are needed.

Security Dealer: What degree of control is possible over a device?
Raoul Wijgergangs: Control varies tremendously per application/products. Certain products will primarily pass on signals unless specifically addressed to that product. Full control over the network is also possible.

Security Dealer: Are the appliance modules proprietary to each device or can the installer adapt them to a particular appliance?
Raoul Wijgergangs: The installer can adapt them to a particular appliance but needs to keep an eye on the maximum power consumptions.

Security Dealer: You said the system can be adapted to operate security systems. From all manufacturers?
Raoul Wijgergangs: We have looked at the large and a number of smaller security players and so far found a 100% match between their requirements and what the Z-Wave technology has got to offer.

Security Dealer: How about access controls, camera and alarm panels?
Raoul Wijgergangs: Same as above.

Security Dealer: Does the system support voice communication?
Raoul Wijgergangs: Voice Communication can be built as an application on the technology. One product is available that already incorporates voice technology.

Security Dealer: For off-site, what bandwidth is required?
Raoul Wijgergangs: Just a normal Internet connection

Security Dealer: Does your hub require line voltage to operate or does it work another way?
Raoul Wijgergangs: Z-Wave does not require a hub; it is a mesh technology that incorporates battery operated devices.

Security Dealer: Does the system use the client's PC for more than the GUI?
Raoul Wijgergangs: Clients can use a PC, but the system certainly does not require a computer. You can start off your customers with a starter kit that includes two lamp modules and a remote control. No PC experience needed.

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