Is Google poised to disrupt the home automation and security market?

Experts discuss the tech giant's potential impact on the industry


Given the recent entrance of cable and telecommunications providers to the market and now Google, Dawes says that the potential customer base for home automation and security is going to increase dramatically. In fact, Dawes says he envisions the market penetration rate for home security as a connected home solution increasing from 25 percent to somewhere in the area of between 45 and 50 percent down the road.

“What we see happening in the security market is it has been a good business with a very solid value proposition and very high recurring revenue on the order of $9 billion to $10 billion a year over the last couple of years,” Dawes says. “We (did research that) looked at who would buy security and who wouldn’t — and 25 percent said they would and 75 percent said they wouldn’t. When we brought in these connected home values, what we saw was an increase to 55 to 60 percent of households that said, ‘I’m likely to buy that kind of solution’ — and that’s what we’re seeing today.”

Warren believes the industry is still in the early stages of moving from home security into automation and that the most significant issue in the market currently is the building of new devices and getting them into the hands of consumers.“Google, obviously, has less boots on the ground capability than an AT&T or Comcast does,” he says, “but they do have a very deep bench in terms of innovation capabilities, development and cash.”

Eventually, Dawes believes connected home devices and the entry of big conglomerates will change the face of home security, much like in the cable television market during the 1980s and telecom industry with deregulation. “It’s going to fundamentally transform the home security industry,” Dawes says. “As these big brands come in, the only ones that are going to be able to compete are the people who have a brand, have a presence and are well-known.”

 

Read Joel Griffin’s full article at

www.securityinfowatch.com/11296169