Issue link: https://read.dmtmag.com/i/37034
18 MARKET TRENDS www.securitysystemsnews.com AUGUST 2011 SECURITY SYSTEMS NEWS ‘It’s a fascinating time.’ Industry insiders say home automation is creating brave new market opportunities for residential security T By Tess Nacelewicz O DESCRIBE THE dynamic nature of today’s residential security market, Jonathan Klinger, VP marketing, Honeywell Security & Commu- nications, likes to quote a veteran industry colleague. Klinger said the colleague told him recently that “he’s seen more change in the industry in the last four months than he’s seen in the last four years, and more change in the last four years than in the last 40.” For years, the security market has been static, with the number of North American homes opting for monitored security systems stuck at around 20 percent. But now, Klinger and others told Security Systems News, the addition of home automation— the ability through new technol- ogy for people to centrally (and remotely) control such features as energy use, lighting and door access—is rapidly changing the security landscape, and creating new market penetration oppor- tunities for those poised to take advantage of them. “The trend is accelerating and I think it’s an opportunity for the industry to sort of reinvent itself, to be honest,” said Bob Haskins, VP and general manager of Inter- logix, a UTC Fire & Security company. In fact, according to recent resi- dential trends research commis- sioned by the Electronic Security “It’s not a homoge- neous market.” Jonathan Klinger Association and presented at the Electronic Security Expo (ESX) in Charlotte, N.C. in June, security appears to be taking a back seat to home automation. “This research tells us that security systems are becoming a by-product of home automa- tion,” Dom D’Ascoli, president of ESA and also president of Smoky Mountain Systems, a Franklin, N.C. security company, told SSN. “Consumers want to be able to manage their thermostats, con- trol lighting and view their cam- era systems from anywhere in the world.” “It’s a new oppor- tunity for all of us.” Bob Haskins Haskins drew a similar conclu- sion as a member of a panel at ESX that discussed the ESA research— which showed that companies already are installing a significant number of home automation fea- tures and that many expect to double such installs by 2013. “Security may become the nut, and services the bolt in the future,” Haskins said during the panel discussion. (For more on home automa- tion/home security research, see Security Stats, page 2.) That change is not a cause for worry, Haskins stressed in a later interview with SSN. “Rather than being frightened by it, I think we all as an indus- try should endorse the change,” Haskins said. “I think it’s a new opportunity for all of us. Heck, I’m excited by it.” Other industry leaders expressed similar upbeat views about the way home automa- tion is transforming the security industry. “It’s a fascinating time,” said Jay Kenny, VP of marketing for Alarm. com, who said the trend can result in an increase in RMR and a decline in attrition for dealers. That’s because adding home automation features to security systems makes them more use- ful to customers, keeping them “sticky and resistant to door- knockers trying to turn them to other systems,” Kenny said. “We have been working on this attrition study that shows that … people who use their systems more have much lower attrition,” he said. And customers increasingly want home automation features, according to Kenny and others. Josh Houser, VP of inside sales for Vivint, which in Febru- ary changed its name from APX Alarm to emphasize the launch of some new home automation fea- tures in addition to security, told SSN that the summer-sales-model company is getting very positive response. “So far this summer,” he said, “we’ve put on 70,000 new accounts, and 55 percent of those have elected to do what we consider our upgraded services, [which include] energy manage- ment, door locks, cameras or full home automation. Only 45 per- cent of our new business is doing security only.” JT Hwang, Vivint CIO, added, “And this is our first year. That kind of response rate is unprec- edented and unexpected.” Yet, in an informal reader poll this summer by SSN, more than 50 percent of the respondents listed customer “lack of demand” as the biggest barrier to making home automation part of their business model. Why do some companies report customers want home automation features, and others say custom- ers aren’t interested? “Security systems are becoming a by-product.” Dom D’Ascoli Klinger, at Honeywell, which also is investing heavily in home automation in addition to secu- rity, said businesses have to be aware that what he calls the “con- nected home” market is nuanced. “It’s not a homogeneous mar- ket,” he told SSN. “We need to understand how it’s segmented, and have different offerings for different sorts of end users.” He said the majority of cus- tomers don’t want a complicated, expensive, high-end system. “Our view is that the mass of the market is really looking for AUTOMATE see page 20 Starlite Security Devices, LLC www.ACWhip.com Air Condioner Protecon Patent Pending The Whip™ HVAC The� Protector ►Professional grade the� detec�on device to protect exterior unit of HVAC systems ►Sealed array of eld‐selectable EOL resistors make it virtually impossible to circumvent ►Compa�ble with most control panels; EASY to install In Stock At Call Toll Free: 800 • 452 • 8588