The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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H ome security is a hot market, though it might be more precise to say that it is a significant niche in the "smart home" movement. According to IMS Research, the market for home security and automation providers is roughly $13 billion. Home automation, home comfort, home energy manage- ment, home security—there is a dramatic wave of technological development occurring that is being pushed from a variety of different angles. Players, convergence and platform are all in flux. Heating fuel dealers who have made to move into HVAC are likely taking part in the home comfort angle already, with today's sophisticated, Wi-Fi enabled thermostats. With some planning and caution, the movement into home security could be a consideration. Once the purview of large, dedicated service providers like ADT, the technology has advanced to the point where even the homeowner can install a fairly basic system do-it-yourself. Of course, that provides its own issue. While home security might not seem to be a natural fit for heating fuel dealers looking to diversify, it has been established for some time. An early entrant was Standard Oil of Connecticut, which operates Bridgeport, Conn.-based Standard Security Systems. "There were some precedents for mixing security and heat before we got involved," said David Cohen, execu- tive vice president at Standard Oil of Connecticut and founder of Standard Security Systems. "I believe Slomin's [Hicksville, N.Y.] was the pioneer in that. I had just joined the company back in 1991, and I was looking to start some kind of diversification. From an industry-structure point of view it just seemed like a good busi- ness to get into. With oil it's fairly easy for customers to switch but it's not quite as easy with security, nor is it such a big dollar amount that tends to get the customer's shopping juices flowing. With security we are talking $300 per year and people are not typi- cally going to shop hard to try to save a dollar two." A more recent entrant was Tevis Energy, Westminster, Md., which incorporated security through its separate business unit, Modern Comfort Systems. "If you look at the future of heating and cooling—everyone is going to go into home automation. Home automation includes security systems, automation, fire and everybody's thermostat is going to be able to do all of that," said Hank Larsen, MCS business manager. "On the heating and cooling side of the business there's going to be a limit to the efficiency of an air-conditioning unit. So what you have to do now is make the home more efficient to lessen the cost of energy and that's where home automation is going to come in. Security can play a big part of that." Larsen noted that MCS is still in the startup mode with security, but that sales are ramping up steadily. After research- ing the issue, and consulting with companies that were already involved in the service (including Standard Security), they made the commitment. "We are still small, we're still building, but fortunately the heating and cooling side of our company is profitable enough that we can take the time to build the business and build it right," Larsen said. "So we are giving it our best shot and what better place to market to than our existing customer base." 28 JULY 2014 | FUEL OIL NEWS | www.fueloilnews.com BUSINESS OPERATIONS How Secure Is Security? As a diversification option security has some strong synergies and some notable challenges By KeItH ReId