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Colorado vNet Approaches Shut-Down
Provider of lighting controls, audio and video systems and home automation is "in the process of discontinuing operations;" CEO still has hope.
Colorado vNet introduced several new Vibe touchscreens and other products at the recent CEDIA Expo 2009, expecting new funding to come through.
Official Colorado vNet Thread: Dealers Helping Dealers
vNet dealers, reps and employees, please use this forum to help each other get through technical, product, business and other issues associated with Colorado vNet's closing.… View this discussion thread.
vNet dealers, reps and employees, please use this forum to help each other get through technical, product, business and other issues associated with Colorado vNet's closing.… View this discussion thread.
Colorado vNet seems to be going out of business. Founder and CEO Bill Beierwaltes tells CE Pro that a would-be investor failed to meet its commitment to Colorado vNet, forcing the company to close its doors.
Still, Beierwaltes says two parties are "very interested" in saving the company. He should know in a few days if one of them will come through.
In the meantime, however, manufacturers' reps are informing dealers that vNet is closing down.
"We are ramping our business down," one rep told me. He is telling dealers that the company will fill any open orders.
Meanwhile, the outgoing message on the company's main phone number in Loveland, Colo., is this:
Orders are still welcomed via the Colorado vNet Web site, the message explains.
Founded in 2002, Colorado vNet came to market with a new approach to hardwired lighting control. That was followed by multiroom audio, whole-house control, ZigBee wireless lighting controls and media servers.
In May of this year, Colorado vNet said it secured private funding, one month after the company had reported double digit growth for Q1 2009.
Earlier this month, vNet had several new product announcements and a sizable booth at CEDIA Expo 2009, but smaller than in previous years. The company chose instead to launch a 60-city product and training show, plus a lead-generation program for dealers.
All of that was possible despite dwindling reserves because vNet expected new funding to come through, according to Beierwaltes.
"We had a commitment for funding moving forward," he says, but that commitment fell through.
An emotional Beierwaltes says, "When you have to deliver a message like that to employees … I feel crappy."
vNet made headlines in February 2008, when the up-and-comer was offered $500,000 to stay in Loveland, Colo., and to relocate its manufacturing plant there. As part of the agreement, the city also waived $10,000 in taxes and fees.
vNet would get a bonus of $195,000 if it employed 350 full-time employees by the end of 2011. In 2008, at the time of the deal, Colorado vNet employed 81 people, with a payroll of about $6.2 million. Beierwaltes declined to comment on current numbers
According to the terms of the contract, vNet would be obligated to repay the city if it did not reach certain milestones. Thankful for the city's faith in vNet, Beierwaltes says he would be heartbroken if he could not repay the full amount of Loveland's contributions.
"I do not want to leave them in the lurch," he says, adding that he hopes Loveland will be able to offer similar opportunities for other organizations.
According to Beierwaltes Colorado vNet has trained and certified about 950 dealers.
During a recent CE Pro solicitation to dealers asking for input on multiroom audio systems, 22 dealers emailed us with praise for vNet's Vibe audio system. Except for SpeakerCraft, no other vendor came close to that number of responses.
The responses may be due either to vNet's sway with its dealers, or the dealers' genuine appreciation for the product -- either of which reflects well on the company.
Even so, many of these dealers will be stuck with installed systems that may become obsolete or non-functioning without a last reprieve for vNet.
Beierwaltes confirms that free tech support is no longer available, and the fees for support are "just to cover the expenses of the techs."
If they don't pull through, vNet is unlikely to file for Chapter 11. "That implies you have funds," he says. If anything, he adds, Chapter 7 would be more appropriate.
He still holds out for a last-minute savior, though: "It's not necessarily over."
Still, Beierwaltes says two parties are "very interested" in saving the company. He should know in a few days if one of them will come through.
In the meantime, however, manufacturers' reps are informing dealers that vNet is closing down.
"We are ramping our business down," one rep told me. He is telling dealers that the company will fill any open orders.
Meanwhile, the outgoing message on the company's main phone number in Loveland, Colo., is this:
We are in the process of discontinuing operations. Therefore, there is no longer free technical support service. If you require technical support, please leave a message and someone will be in contact to arrange for paid support.
Orders are still welcomed via the Colorado vNet Web site, the message explains.
Colorado vNet Background
Founded in 2002, Colorado vNet came to market with a new approach to hardwired lighting control. That was followed by multiroom audio, whole-house control, ZigBee wireless lighting controls and media servers.
In May of this year, Colorado vNet said it secured private funding, one month after the company had reported double digit growth for Q1 2009.
Earlier this month, vNet had several new product announcements and a sizable booth at CEDIA Expo 2009, but smaller than in previous years. The company chose instead to launch a 60-city product and training show, plus a lead-generation program for dealers.
All of that was possible despite dwindling reserves because vNet expected new funding to come through, according to Beierwaltes.
"We had a commitment for funding moving forward," he says, but that commitment fell through.
An emotional Beierwaltes says, "When you have to deliver a message like that to employees … I feel crappy."
What about the subsidies from Loveland?
vNet made headlines in February 2008, when the up-and-comer was offered $500,000 to stay in Loveland, Colo., and to relocate its manufacturing plant there. As part of the agreement, the city also waived $10,000 in taxes and fees.
vNet would get a bonus of $195,000 if it employed 350 full-time employees by the end of 2011. In 2008, at the time of the deal, Colorado vNet employed 81 people, with a payroll of about $6.2 million. Beierwaltes declined to comment on current numbers
According to the terms of the contract, vNet would be obligated to repay the city if it did not reach certain milestones. Thankful for the city's faith in vNet, Beierwaltes says he would be heartbroken if he could not repay the full amount of Loveland's contributions.
"I do not want to leave them in the lurch," he says, adding that he hopes Loveland will be able to offer similar opportunities for other organizations.
Colorado vNet Dealers
According to Beierwaltes Colorado vNet has trained and certified about 950 dealers.
During a recent CE Pro solicitation to dealers asking for input on multiroom audio systems, 22 dealers emailed us with praise for vNet's Vibe audio system. Except for SpeakerCraft, no other vendor came close to that number of responses.
The responses may be due either to vNet's sway with its dealers, or the dealers' genuine appreciation for the product -- either of which reflects well on the company.
Even so, many of these dealers will be stuck with installed systems that may become obsolete or non-functioning without a last reprieve for vNet.
Beierwaltes confirms that free tech support is no longer available, and the fees for support are "just to cover the expenses of the techs."
If they don't pull through, vNet is unlikely to file for Chapter 11. "That implies you have funds," he says. If anything, he adds, Chapter 7 would be more appropriate.
He still holds out for a last-minute savior, though: "It's not necessarily over."
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About the Author
Julie Jacobson, Editor-at-large, CE Pro
As a co-founder of EH Publishing in 1994, Julie has edited and contributed to all of the company's publications at one time or another. An authority on home automation, networking, integration, digital convergence and the CE pro channel, Julie speaks often about these subjects at industry events. She graduated with a B.A. in Economics from the University of Michigan, and received an MBA from the University of Texas at Austin. Julie is a washed-up Ultimate Frisbee player.
33 Comments
We are sorry for vNet’s troubles and wish the group well in their future endeavors.
I spoke with Bill today, too, as we have a 100-switch vNet lighting job that, after 1.5 years still does not work. We have put in untold hours, their techs have provided support, they have personally visited the site multiple times and we are still in this predicament. In recent weeks they had pledged to give us back our money if they cannot make it work with one last swap of hardware and software.
Bill says he wants to pay his community, Loveland, back their money. Let’s hope Bill’s generosity extends to the integrator and customer so that integrators selling cVnet product are not left out in the cold while he strives to maintain his local reputation. Without his support, it’s going to be a tough road for both the integrator and the end users.
By the way, anyone wanting to purchase lighting product, I’ve got a sizable inventory!
Tom
All Colorado Vnet Dealers. If they go under we need to help one another so we do not have to pay for the tech support. If any one has a multi link module & 8 4-button RF light switches…. please email me.
Tim, I’ve heard from a couple of people who are interested in getting in touch with you but they don’t know how (your email is protected on the site). Kindly post your email address or if you want to provide it to me personally, I will forward it to anyone that asks. Thank you for your comments.
Sorry, my email is timhasafreelife@yahoo I hope & pray that Vnet does not go away. There are many customers that are very happy with the system that we put in.
Flashback…
‘Colorado vNet Reports Double-Digit Q1 Sales Growth
04.16.2009 — NOT EVERYBODY IS FEELING THE RECESSION.
Colorado vNet reports some good sales news:
Double-digit sales growth in Q1 2009 over Q1 2008
It set its all-time shipment record in February 2009
Colorado vNet also reported record sales growth of 132 percent in December, helping the company increase its 2008 sales 111 percent over 2007.” Ce Pro April 2009
It’s official…I guess we are ALL feeling the recession now.
Too many good companies are dying but at least the banksters massive bonuses are still clearing. http://tinyurl.com/mvu8kx
I agree with Tim and we as Dealers need to stick together and help one another out. We should start a group of Dealers helping one another out. Please let me know your thoughts. .(JavaScript must be enabled to view this email address)
This is very sad :(
I am in New Zealand and have invested quite a bit of money into vNet, mainly in training - travelling to Colorado, purchasing demo cases, creating and printing brochures etc.
Hopefully someone will come to the rescue and it will be business as usual again soon.
I’m sorry to hear this, they are a competitor of ours but I went by their booth at CEDIA to say hello to a former coworker. I received a friendly demo from one of the sales guys and I liked what they were doing with their media server, some great technology.
If they do get a new investor, they should also get a new CEO.
They did not need to pursue such an aggressive growth strategy, especially in light of the recession. They should have done what most of their customers did, which was to reduce expenses, scale back their expectations and make sure they come out on the other end.
It’s a pity, I have projects underway with their gear.
Not knowing vNet, other forums are suggesting that adapting another manufacturer to a vNet lighting job is going to be difficult. It drives home a best practice. The electrical/electronic architecture and infrastructure you design, should be as system neutral as possible. What if things with the manufacturer don’t work out?, What if you and the client don’t work out? The infrastructure needs to be designed to be able to adapt to another manufacturer and integrator for that fact. Homeowners can not be left in such a vulnerable position.
Putting the buying public through these traumas is bad for the whole industry and affects all us. Sure it drives certain clients into the arms of integrators who have made the right gamble with committed manufacturers and best practices. But it drives many out of the market all together, wary to ever come back. These can be costly missteps and burn potential clients for good.
Although vNets intentions may have been good, it is another cautionary tale of an industry outsider jumping into the fray, viewing our market with big eyes and grand plans.
Unfortunately most of these forays have come to to end just like this. Home owners look at their technology commitments very different than businesses. The rapid rollout that most of these business owners have experienced in their last success (which has capitalized their entrance into our business) usually can’t be replicated in our industry. Once that becomes apparent, these serial entrepreneurs jump ship and look for the next great opportunity.
I do hope they are able to secure some savior. This economy is terrible. The fact that a good company with great people, products and positive product pipeline suffers—while the banker hang on to their cash and take their fat bonuses.
No one wants to take a chance on an innovative small company??
I hate that being a small business in this environment is so difficult. This country was built on the backs of small businesses not the almighty corporations and giants who take us all down with poor judgements.
It has been an exciting ride and I hope it continues, the products were well designed, engineered with a great UI. I hope other manufacturers can learn a few things from Colorado vNet at the very least.
All the best to the team in Loveland.
Something must have gone terribly wrong. I wouldn’t think a seasoned management team, of which Colorado vNet has, would spend a bunch of money they didn’t have to introduce new products and grow as they had. They obviously has their ducks in a row at one point. I smell an internal dispute between investors which drove someone out.
Best of luck to them. I hope they can hold on.
Colorado vNet has over 950 dealer, why don’t all of them get together and invest on the company that gets your meal to your table every day??
That way you all get a say in what happens in the company, and you can stay at float with the products we like.
if anybody is interested contact me. I’m not a dealer yet, But I’ll invest some money on it.
.(JavaScript must be enabled to view this email address)
I’m too am sad to hear that Colorado vNet was closing it’s doors and going out of business. I started with Colorado vNet as their administrative specialist in August of 2004 and then came a large layoff in October 2008. I was one of those casualties. It’s been a long and difficult ride with this recession. I feel for my friends at vNet and wish them successful job hunting! The people are what made this company as successful as it was and they will be an asset to any organization.
I have been getting a good response to starting up a group of techs and dealers. I have been collecting the emails, names and number of any one interested in helping each other out so we don’t have to pay for tech support. Please let me know your thoughts. Thanks to everyone that has responded and will forward all information in couple of days. I am looking into other options and meeting with different people to see what else might be able to work. .(JavaScript must be enabled to view this email address)
I should also make it clear that despite my chagrin over the way this was handled, I think this company has produced some amazing products. I do hope they get (significant) investment or purchased. It’s hard to imagine that it would not be very valuable to a competitor. Their approach has some major advantages.
It’s ironic that they were supposed to ship a fully functional two-way control gateway this Fall. That would come in handy if they are to fold permanently…
They had, and still have, great potential if their new investor brings in a new product strategy that supports their dealers needs instead of just making product and hoping a market will appear.
Their products lacked the core integration capabilities that differentiate CE products from consumer off-the-shelf systems.
I sold some large systems (100+ zones) and they have really impressed the clients but there are a few features I begged for for years that just took too long to bring to market. I saw some of them were due out this year (finally!)
I have some parts reserves but I’ll have to think about how to support my clients in case the company is not resurrected.
If any investors are reading this, I’d be happy to help assess the cvnet situation and help with the turnaround. There are some unique features and technologies that I don’t want to see missing from the market.
Perhaps the problem is their payroll. $6.2mm for 81 employees? That’s an average salary of almost $77K! Good god, what do they think this is, Wall Street?
This was posted by “Matt” in a different thread
From our vNet Sales Manager:
I regret to inform you that due to an unforeseen financial complication, Colorado vNet will be discontinuing operations in the very near future. Because of this, I am no longer employed by Colorado vNet. But because of our relationship I wanted to make you aware of the process that vNet will be following as they close up the business.
I know you may have projects quoted or in the middle of installation or that you want to support in the long term so Colorado vNet is establishing a process to allow you to acquire the materials you need before they cease operations.
That process is:
Orders on the books and scheduled in the next 30 days will be shipped as soon as the material is available. The terms of these orders will be credit card or wire transfer only. Colorado vNet will no longer be able to extend credit to customers.
Additional orders placed in the next week will be manufactured as soon as possible. The terms for these orders will be credit card at time of order entry or wire transfer only.
All future orders will need to be placed online on vNet Manager, there will be no one to place orders that are phoned or faxed in to the factory.
As of today there will be no longer be any technical support available for free over the phone. If you need support you can contract for blocks of support time (payable by credit card or wire transfer in advance) by contacting Colorado vNet at 970-203-3700.
Once again I am very sorry to be the bearer of such news. I have enjoyed representing Colorado vNet and working with you and your company. As I network and seek a new job, please keep me in mind if you hear about any good opportunities.