Following AT&T Acquisition, Xanboo Dumps Security Dealers

More than four months after AT&T acquired the home automation developer Xanboo, dealers received their first correspondence from the new owner – a certified letter that “your Agreement shall be terminated” on July 5.

“I have been in this industry for over 20 years and have never seen something so bizarre as what AT&T did with Xanboo,” says Michael Houser of Electronic Eye Security Inc., based in Seal Beach, Calif.

In any case, the move is not surprising.

AT&T certainly did not want to trifle with a bunch of security dealers (Xanboo lists more than 100 on its Web site) who have barely sold any product.

“I was never really able to sell the service so I stopped offering it,” says Steven Twigg of Lighthouse Systems LLC, Monroe, Ct.

Twigg echoes the sentiment of several (former) Xanboo dealers who responded to emails from CE Pro following the AT&T announcement (shown below).

“Some customers that showed a little interest would typically decide against it,” says Drew Johnson of Golden Valley, Minn.-based Homelink Entertainment. “Ultimately, this change won’t affect us because we did not install much of their product. I had a customer recently ask about it and when I called the rep to get some additional info he never called me back.”

As usual, AT&T has no comment about anything related to Xanboo, but a spokesperson assures us, “We’ll make an announcement when we’re ready to discuss our go-to-market strategy.”

What will AT&T do with Xanboo?

In our previous recap of the History of Xanboo, we noted that that company – one of the first to introduce a cloud-based solution for remote monitoring and home control – never stumbled across a business model that worked, despite trying just about all of them.

Xanboo started out as a retail offering – and a decent one at that – back in the early 2000s (the company was founded in 1999).

But consumers just don’t buy this stuff at retail – not then and not now.

SURVEY: Integrators, please answer our very brief survey for the forthcoming Home Security 2.0 supplement to CE Pro.

So then Xanboo, like all the other players, tried to market its platform to mass-market service providers including utilities, telcos and cable operators. AT&T bit, but never went far with the offering.

After that, Xanboo targeted security dealers with an attractive solution that would meld a traditional security system (dealers love that!) with home automation devices (Insteon), surveillance cameras and remote access.

In the end, Xanboo worked with alarm panels from DMP, DSC and Honeywell.

Those security dealers are the ones that might have given Xanboo the traction it needed, if only the company would have invested more heavily in the product and the business – as competitor iControl did before it landed its first customer, ADT.

Alas, the security-dealer model is kaput for Xanboo and AT&T will likely try to mass-market the Xanboo service just like Comcast and Verizon are trying to do. Verizon is using the 4Home platform (now owned by Motorola). Comcast/Xfinity has yet to make a decision on its platform of choice, although it continues to feature iControl on its Xfinity Home Security Web site.

What we do know from AT&T is what general attorney Meredith E. Mays wrote to Xanboo dealers, several of which forwarded the letter to CE Pro.

Mays writes, “At this time, AT&T anticipates modifying or eliminating current Xanboo products and services and winding down its existing processes.”

At least one Xanboo dealer says he was “totally taken aback” by the news.

Andy Johnson of Johnson Systems, Falmouth, Mass., signed up for the Xanboo dealer program in February 2010.

Johnson tells CE Pro that he was “committed to Xanboo,” but his company only has “four or five accounts” signed up for the service.

When he received the notice from AT&T, Johnson contacted Xanboo director of dealer development Terry Gurley. Gurley assured him, he tells CE Pro, that existing customers would not be "shut off."

In any case, he is heartened to learn that DSC is coming out with its own answer to Xanboo, the new Connect24 service, powered by iControl.

AT&T Letter to Xanboo Dealers
Delivered via certified mail

March 31, 2011

Dear xxx:

On December 3, 2010, AT&T Teleholdings, Inc. (“AT&T”) became the owner of Xanboo, Inc. (‘Xanboo”), and AT&T is currently in the process of integrating Xanboo into AT&T’s portfolio of services and affiliated companies. At this time, AT&T anticipates modifying or eliminating current Xanboo products and services and winding down its existing processes. The purpose of this letter is to notify you that your Agreement shall be terminated effective as of midnight, July 5, 2011.

If there may be some mutually beneficial business arrangement for our companies in the future, we will contact you. However, because we cannot predict how or what that arrangement, if any, might look like, this letter serves as notice that you should not market or sell Xanboo service after July 5, 2011. Accordingly we encourage you to transition your service needs from Xanboo to another provider as soon as practicable.

If you have any questions about your existing Xanboo service, you may contact Terry Gurley at xxx-xxx-xxxx.

Sincerely, Meredith E. Mays
[AT&T General Attorney]

SURVEY: Integrators, please answer our very brief survey for the forthcoming Home Security 2.0 supplement to CE Pro.

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