Control & Automation

Lennar’s New Home-Automation Paradigm: Embracing Amazon Smart Home Services

Lennar is reportedly shedding traditional IoT products and ‘CEDIA’ installers in favor of wireless DIY home automation systems installed by Amazon Smart Home Services.

Lennar’s New Home-Automation Paradigm: Embracing Amazon Smart Home Services
Instead of its usual home-technology integration partners, Lennar will be using Amazon Smart Home Services to deploy home automation and networking systems including Samsung SmartThings, Amazon Alexa, Ring video doorbells, Honeywell thermostats and Ruckus wireless networking gear.

Julie Jacobson · July 19, 2017

Lennar, the #2 homebuilder in the U.S., is making a dramatic shift in its smart-home strategy, largely eliminating built-in technologies in favor of DIY home-automation systems like Amazon Alexa, Ring, Lutron Caseta, Samsung SmartThings and Sonos.

At the same time, CE Pro has learned from multiple sources, the builder will mostly eliminate traditional home-technology integrators from the equation. Instead, Amazon Smart Home Services – formally launched just a month ago – will deliver, install, configure and service IoT systems nationwide.

The move is bound to disrupt the traditional “CEDIA” channel, which has served production homebuilders for decades. CEDIA is the trade group that represents professional home-technology installers and integrators.

While the group is mostly known for promoting high-end work like glitzy home theaters and completely automated homes, a significant chunk of CEDIA installers provide more modest solutions in high volumes for mainstream clientele.

In the past, most of Lennar’s 25,000+ homes per year have been technologized by local security and home automation pros. That work will likely evaporate in the next one or two years if the Amazon Smart Home thing pans out.

Lennar’s Regional Business & National Mandates

For decades, production homebuilders have tried to launch “national programs” with vendors of structured wiring, home automation and other technologies. But homebuilding has always been a regional business, with area managers tending to stick with installers they know and the brands they trust … despite national “mandates” from corporate.

This time, however, it seems Lennar is sticking to its guns with a directive for local builders to abide by contracts negotiated at the highest levels – with companies such as Samsung (SmartThings and TVs), Sonos (wireless audio) and most importantly Amazon (Echo, Smart Home Services, logistics and other Amazony things).

It’s not just products that Lennar is standardizing nationwide. The builder also is dictating the entire process, like where wires are run (or not), and how customers work with Amazon for product fulfilment and installation.

In the past, Lennar’s regional offices maintained long-standing relationships with local integrators, who helped define technology standards for new communities, equip model homes with high-tech gear, and otherwise aid in the tech-selling process. 


The Warm-upLessons From Amazon’s Smart Home Consultations


The integrator’s contact information would be displayed on the structured-wiring cabinet and elsewhere, and the new-home buyer would contact the company for service, support and upgrades.

Typically, these pros communicate with home buyers before or after move-in to configure products and discuss other technology needs. Access to these customers is critical to the installers, enabling them to sell upgrades at the time, but more importantly establish long-term relationships.

Additionally, during initial consultations with new home buyers, integrators will activate security systems and offer additional interactive services including home automation.

In most cases, it is the alarm monitoring that keeps integrators in the game, willing to make only modest profits on the production work in exchange for the recurring revenue.  

Furthermore, the security monitoring helps integrators maintain those long-term relationships with customers, providing a subtle benefit to builders in the process: ongoing tech support for their buyers.

Because alarm systems and other low-voltage work (structured wiring, networks, audio, video, surveillance, automation) all come under the integrator’s purview, they can serve the Lennar customer with any tech need that arises at move-in … or in the future.

Sources familiar with Lennar’s new strategy say the local pros will no longer own the technology relationship with home buyers. Those “relationships” will fall to Amazon instead.

About Amazon Smart Home Services

According to Amazon:

Amazon Smart Home Services makes sure your new smart home product is installed and set up properly in your home. Whether you’re interested in reducing your carbon footprint or connecting your smart devices, our service providers will create custom solutions and help show you how to get the most out of your products.

Our providers will work with you to figure out the best placement of your smart home device, connect your device to WIFI and make sure it’s functioning properly, demo the device and walk you through key scenarios and provide tips and answer any questions you have.

Specialty Skills

  • Smart Thermostat installation
  • Connecting to other smart home devices
  • Connecting to Alexa
  • Troubleshooting WiFi issues

How Amazon Smart Home Services Might Work

Can Amazon handle it? Certainly not today. The Smart Home Services program is new, and the e-commerce giant has yet to staff up in areas where Lennar is building a whole lot of homes. The program was supposed to launch this summer, but is delayed in at least some regions, according to local integrators who did not want to be identified.

Some of those long-standing integrators are being asked to help out during the transition.

The learning curve might not be that steep for the new Amazon techs. Lennar’s shift to wireless DIY solutions – rather than built-in technologies like speakers, surround sound, alarm systems and cameras – will dramatically simplify the installation and integration process.

At the same time, the new approach will eliminate the need for low-voltage installers’ licenses.

Furthermore, with barely any low voltage wiring in the new homes, Amazon will not have to troubleshoot the cables and connectors if some technology goes awry.

Lennar is the first builder to adopt the new Wi-Fi Certified Home Design standard co-developed with the Wi-Fi Alliance, ensuring new homes have high-speed wireless coverage all over, with no dead spots. In the process, the builder has eliminated most other low-voltage wiring, including most Cat 5/6 and coax, and all speaker wire.

Traditional trades including electricians and HVAC contractors would continue to install smart dimmers, door locks and thermostats as usual; Amazon would take care of the rest, simply mounting TVs and configuring a SmartThings hub for the few smart devices included in the new homes.

From Lennar’s own statements, as well as others involved in the new smart-home program, the builder has planned to include the following as standard -- part of its "Everything's Included" program -- in average-sized homes (plans continue to evolve):

  • Structured wiring cabinet – plastic, RF-friendly for mounting wireless gear (possibly supplied by Leviton and/or Primex)
  • Cat 6a cable – to one, two or three ceiling locations for wireless access points; to the front door for powering (PoE) video doorbell; possibly to another location for the SmartThings hub.
  • Coaxial cable – to two TV locations
  • Ruckus networking – enterprise-grade wireless networking system, including router/switch and wireless access points; compliant with Wi-Fi Certified Home Design spec.
  • Lutron Caseta lighting – one smart dimmer and maybe a couple of plug-in modules, integrated with SmartThings via Lutron’s cloud-enabled Smart Bridge gateway.
  • Kwikset door lock – connected to SmartThings via Z-Wave technology
  • Honeywell Lyric thermostat – integrated via Wi-Fi
  • Amazon Echo
  • Ring video doorbell – Communicates vis Wi-Fi; powered by PoE via Cat 6a cable to front door
  • Sonos mutiroom audio
  • Samsung smart TVs

CE Pro’s understanding is that an electrician or traditional low-voltage integrator will install the low-voltage wiring, and Amazon will fulfill the smart devices, including delivery, installation and configuration.

An Amazon Smart Home Services rep would meet with home buyers just before or after move-in to accommodate their tech needs.

Lennar is not yet commenting on the specifics of Amazon service, but some speculate there might be a dedicated e-commerce site for Lennar customers to order gear and schedule installations, possibly allowing Lennar to share in the revenues.

The Big Question: Monitored Security?

The issue of monitored security appears to be in flux. Two dealers tell CE Pro that Lennar is yanking professional security from its home-tech offerings, with one integrator saying, “They don’t believe in monitored security anymore.”

Yet another says Lennar in his region is planning to install Honeywell’s Lyric security system in new homes; however, the installer will not have access to the customer list, nor the (formal) opportunity to meet with buyers, thus removing the single most important benefit for integrators to engage with production builders.

As Amazon currently does not have the requisite licenses to install monitored alarm systems, it will be interesting to see who Lennar might find to install security without the benefit of selling subscriptions. (We are told Amazon would be the official smart-home liaison for new buyers, but that security installers might be welcome to "knock on doors" after customers move in.)

If Lennar is not specifying Honeywell security, perhaps the builder might push a DIY system from Scout, a SmartThings partner. The user-installable system enables professional monitoring, without the need for a licensed security contractor. Lennar and Amazon also escape any local regulations for installing surveillance cameras, as Lennar is not offering that option to home buyers. (Licensed contractors would install the Ring doorbell.)

It is unclear if Lennar will be offering connected smoke and CO detectors that could be tied into a security system for professional monitoring. (The Scout system does not monitor for smoke and CO hazards; emergency services would not be dispatched in the event of a fire or gas leak.)

A Whole Lot of Home Automation Hubs

Lennar is including two, maybe three home-automation “hubs” or "gateways" in its new-builds. First, there’s Amazon Echo, which can integrate a multitude of IP-based products and services via the cloud.

Then there’s Samsung’s SmartThings, which also integrates via IP (some local control, but mostly cloud-to-cloud), as well as ZigBee and Z-Wave. Our understanding is that there is only one Z-Wave device being installed in new Lennar homes – a Kwikset door lock – and no ZigBee devices. So why include it?

If indeed Lennar is installing Honeywell Lyric home security systems, those "hubs" too would integrate with third-party devices – directly via Z-Wave, and indirectly via cloud services (Honeywell’s Total Connect).

There is also Lutron and its Smart Bridge, yet another gateway for cloud-based integration. Considering there seems to be only one built-in Lutron dimmer and a couple of plug-in lamp modules, why wouldn’t Lennar just use SmartThings (Z-Wave or ZigBee) for controlling these devices?

Why the overkill? Quite possibly, Lennar’s agreements with all three big brands – Amazon, Samsung and Honeywell – come with stipulations that their smart-home hubs be included in new homes.

In the case of Honeywell, since they would get a chunk of recurring revenue through Total Connect, maybe they offer the alarm systems for free or at a very low cost. Perhaps they even subsidize installation through authorized Honeywell dealers.

Amazon’s Compelling Value Proposition

We in the home-tech industry can’t imagine that Amazon’s “start-up” smart-home business could possibly provide a positive tech experience for Lennar and its customers, either now or in the long term.

Indeed, the two companies are off to a rocky start, sources say. But somehow Amazon seems to dominate every category it enters, so why should this be different?

Amazon can afford to lose its shirt in any new business venture, and the investment in this one could surely pay off. Owning the smart home – more than 25,000 of them per year in Lennar’s case – could be Amazon’s Holy Grail.

“Home automation has been scary to many because of all the technology components that come together. ... We have taken the guesswork out.
— David Kaiserman
Lennar Ventures

At the very least, Amazon could rope in the homeowners as e-commerce customers (especially if there’s a special Lennar portal), but also collect important data about the home and its occupants.

The only thing Lennar should do today is build closet-sized “drop-off” zones in new homes to accommodate Amazon’s delivery service – cameras and automated door locks for security; refrigerators and freezers for cold foods.

Amazon could own the access to these protected zones with a complete security back-end of its own, including authorization systems for delivery personnel and service providers (e.g., smart-home installers).

Revenue-sharing or subsidies for homebuilders would probably be part of the (future) equation.

We can also imagine a time when Amazon will provide remote monitoring and system support of consumers’ networks and connected devices. They will provide monitored security systems – both physical and digital – with central stations that respond to all manner of emergencies, from medical to cyber.

We pondered earlier: “Will Builders Subsidize Smart Homes in Exchange for IoT Data?

Maybe, just maybe.

Consumers Love ‘Name Brands’ Like Amazon, Google, HomeKit

We might laugh at the idea of “Amazon” as a leading home-automation brand, but the perception among home builders and buyers is exactly that. Actual leading smart-home brands like Lutron, Leviton, Legrand, Control4, 2Gig, Interlogix and Alarm.com don’t mean much to most entry-level home buyers.

And the local dealers who install these products? Who the heck are they?

On the other hand, “Amazon is a brand that excites many consumers,” says David Kaiserman , president of Lennar Ventures, in an interview with CE Pro in June, when the builder announced its Wi-Fi Certified program.

In deciding to provide an “Alexa-driven environment” for new homes, Lennar looked to Amazon as “leaders in their space.” 

These Alexa-driven properties would include smart devices curated by Lennar, giving customers “another good reason to buy new,” rather than used homes.

But if the smart products are all wireless and DIY (Honeywell security excluded), why would consumers care if they were already included in the home?

“Home automation has been scary to many because of all the technology components that come together,” Kaiserman says. “We have taken the guesswork out. … It’s the combination of brand and expertise that makes the difference.”

He adds, “We buy the products, so it take the hassle out.”

Other production builders are following suit, using popular brands to sell their “smart homes.” In particular, several of them are embracing Apple HomeKit and Siri.

In fact, Lennar was set to go the Apple route before moving to Amazon and Samsung just a few months ago.

Brookfield Homes and KB Home are the big wins for HomeKit.

Brookfield continues to prewire its homes with Cat 5/6 (Ethernet), running the cable to at least four locations. Otherwise, like Lennar, the builder appears to be dismissing traditional low-voltage integrators, leaving new homeowners with some Lutron Caseta lighting controls and Serena motorized shades, along with Honeywell Lyric thermostats, and instructions for using HomeKit.

In March of this year, 9t05Mac.com asked its readers: “Would you pay more for a HomeKit-equipped home?”

Of 5,100 respondents, more than two-thirds (66.4%) said they were willing to pay a premium for HomeKit.

This perception that Apple (and Google and Amazon) are leaders in smart-home technology is not lost on device manufacturers. At the International Builders Show earlier this year, Mark Devine of First Alert's Onelink noted that homebuilders are increasingly embracing these brands as the new “standards” home technology.

Onelink: Builders like popular "smart home brands" like Apple Homekit, Google and Amazon Alexa.

Potential Pitfalls of Amazon Smart Home Services

Dealers say the conversion process to Amazon has begun, but it's not off to a smooth start. New products for model homes are in flux, and post-sale support is still a big question mark.

Consumer choice has been removed from the process, says one dealer: "There's no wiring so they can't put TVs where they want. Lennar really can't claim "everything's included." 

Assuming Amazon’s service group overcomes its growing pains, how will it work as a long-term partner for builders and their customers?

For starters, according to Kaiserman Amazon at this time has no plans to provide remote system monitoring and diagnostics. Unlike traditional integrators, Amazon won’t be able to tap into a user’s network, troubleshoot any issues and fix them on the fly.

Without proper licensing, Amazon won’t be able to install and service low-voltage gear and alarm systems in most jurisdictions.

Who will ensure that the Ruckus networking products, along with all connected devices, stay up-to-date with the latest feature sets, including security provisions?

Furthermore, without proper licensing, Amazon won’t be able to install and service low-voltage gear and alarm systems in most jurisdictions. A specialist will have to be called in for that work, and then Amazon would need to come in afterwards with programming.

We don’t know at this time if Amazon will be able to support customers after they move into their “smart” homes. In the past, they’ve always had their “local guy” who could do most of the work, or subcontract it out to other trades if needed.

Then again, mass-market smart-home providers like Comcast and ADT have managed to do a good job in these areas. There’s no reason Amazon couldn’t get there at some point.

Universal Coverage

Who could blame Lennar for (potentially) shedding their low-voltage partners of the past?

Even with all of the potential benefits noted above, there’s one major advantage of hitching on to a company like Amazon and its nascent Smart Home Services: national coverage.

Kaiserman is right to note that traditional integrators can’t and don’t provide reliable, cookie-cutter installations and services nationwide.

He says Lennar would rather model its support services after Apple’s Genius Bar, “which stands for very high quality” from store to store, around the country.

If Amazon Home Services gains critical mass in the smart home, focusing on a smallish portfolio of connected products, its army of technicians can quickly be dispatched to any household requiring service – potentially on-demand, like calling for Uber.

Lennar: The Ultimate Smart-Home Early Adopter

Lennar is legendary in home-automation lore, adopting smart-home technologies well before peers – dating way back to the 1990s when the production-homebuilder installed Mastervoice’s voice-controlled Butler-in-a-Box system in a new Boca Raton community.

That one didn’t work out so well, but Lennar continued to break new ground and try out new offerings.

In 2006, the builder tested Windows Media Center and the nascent Lifeware home-automation solution from Exceptional Innovation. At the time, Best Buy was launching ConnectedLife.Home, a new offering from Best Buy. The retailer and its partners installed the system in about 150 Lennar homes in Rancho Cordova, near Sacramento, Calif.

Both the initiative and Lifeware itself were short-lived, but Lennar continued to press on with new smart-home opportunities.

It tried Nexia Home, a DIY Z-Wave-based platform from Trane, for a few years. Then the builder said it would move to HomeKit, but finally settled on the "Amazon-driven home" this year.

Between Amazon and the new Wi-Fi Certified standard, Lennar shows it continues break new ground in the smart home.

Related

Lennar’s ‘Wi-Fi Certified’ Homes: Going All-Wireless is ‘Big Disservice’ (2017)

In Defense of Lennar’s Wi-Fi Smart Home Strategy (2017)

Uber for Smart Home Arrives, Powered by Tech-Savvy Neighbors (2017)

Opinion: GAFA Spells Doom for Traditional A/V and Smart-Home Specialists (2017)

GAFA and the Future of Smart-Home Pros: Big IoT Will Make Us Different, Not Worse

A Faustian Bargain: Will Builders Subsidize Smart Homes in Exchange for IoT Data? (2017)

Brookfield Homes to Push Apple HomeKit Home Automation to 47,000 Homes (2017)

The DIY Trend is Starting to Get Scary and it’s Not All about Price (2016)

When Will Home Technology Installs be Uberized? (2016)



  About the Author

Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at [email protected]

Follow Julie on social media:
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Julie also participates in these groups:
LinkedIn · Google+

View Julie Jacobson's complete profile.



  Article Topics


Control & Automation · Automation · Lighting · Whole House Control · Networking & Cables · Networking · Structured Wiring · Audio/Video · News · Products · Amazon · Echo · First Alert · Honeywell · Kwikset · Lennar · All Topics
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Comments

Posted by Jason Knott on July 21, 2017

It is interesting that there appears to be no intention to offer this as a contractual service for homeowners, but only as an on-demand opportunity.  Could that be a potential differentiation that integrators can make?

To cloudbusters—This is just another potential business model to consider. It does not mean the high-end is doomed or going away. CE Pro continues to have plenty of content targeted at high-end market opportunities. But this different business model can work for some companies… I just spoke with a custom integrator who has been in business since 1999. He traditionally did 30 systems per year averaging $50,000 per job. Last year, he transitioned to a “Do It For Me” business model and now does 30 systems per month averaging $5,000 per job. He eliminated his high-wage programmer on staff, and has nearly doubled profits.

Posted by Gerrard on July 20, 2017

Julie, you nailed it.  The CI paradigm is definitely changing.  This reminds me of the parallels in the book “Who Moved My Cheese”, the story of two little mice, “Sniff and Scurry” and two little people, “Hem and Haw”.  After years of mining the cheese, one day, the cheese pile dwindled, it was no surprise to the mice but the tiny humans were in trouble for their lack of foresight and preparation.

I know many CI companies who are evaluating and making plans to alter their business models based on new, easier, cheaper and ubiquitous technologies while others think their current business model, like the pile of cheese, will go on forever.

Posted by sjm mycloudbusters.com on July 20, 2017

Julie, to your comment, “Amazon Smart Home Services has no intention of running wires or installing thermostats or door locks (at this time). Skilled trades would do those jobs.” I have seen it dozens of time already and have been contacted at a minimum 4 times that. I just went on there services site and for $109.39 you can have a so-called Pro install it. However their requirement for a ‘so-called’ pro is filling out a qualification self proclaiming your status. To install a wall mounted TV these so called ‘pro’s’ are lowering their cost by simply running the cable through the wall over using a Power Bridge with a in-wall Cable Management System that is UL approved. And the clients shared that these installs are from ‘Amazon Pro’s’. The most common reason we are called is due to a discolored or dead screen issue because the ‘pro’ used a cheap HDMI cable for a 4K or UHD application which may also require HDCP. And these are the certified “Pro’s” you are referring to.

Posted by Julie Jacobson on July 20, 2017

Mycloudbusters—Thank you for taking the time to share your thoughts. We certainly agree that “traditional” home technology integrators comprise an important audience for CE Pro, which is why most of our content is geared toward that market.

We also believe, however, that it is important to play close attention to the major forces at work in the smart-home world. Writing about these forces is in no way an endorsement or glorification of DIY or mass-market deployment from inexperienced groups. I think we highlighted here how Amazon (and Lennar) is in for a very challenging ride.

In any case most CE Pros do not cater to high-end clientele—that is quite a small market that we nevertheless cover extensively. Most integrators serve more mainstream and even mass-market customers, where the most disruption is likely to occur.

As for some specifics mentioned in your comments—Amazon Smart Home Services has no intention of running wires or installing thermostats or door locks (at this time). Skilled trades would do those jobs.

We hope our readers continue to follow broad smart-home trends, rather than focusing solely on their niche market.

Thank you again for providing feedback.

Posted by sjm mycloudbusters.com on July 20, 2017

I find it interesting in that CE Pro is always looking for a path to disenfranchise their largest audience with what they feel is big news. They promote this new mode of business operation to professional integrators as the new frontier when in reality it is opening windows to DIY hacks that feel they can step in on this market.

When Amazon first initiated its services arm we thought we would give it a go to see what happens? And what happened? Completely unqualified technical morons stepped in and started selling the poorest quality junk for installation and not even closely following any electrical code for any of their installations. We have serviced numerous “post-Amazon” installs only to find out that someone ran an extension cord behind the wall for a wall mounted TV and bought some substandard articulating mount from ebay at probably $10 per mount. Not to mention the numerous defective NEST installs that we have ran across.

We stopped with Amazon altogether as no real professional business would deliver such poor quality or try to compete at the pants dropping price that these jamokes are selling at. Then Amazon started calling us trying to tell us that we needed to take an order and perform some service work for them at some ridiculous price because these unqualified idiots are okay with making $25-$30 off a 2 hour project. We actually had to have them quit calling us and walk away from both Amazon & Nest.

It will be interesting to see what happens when these homes burn down due to shotty wiring practices. Who will eventually get sued? The poor DIY schmuck? Or the huge company with deeper pockets? At some point people will have to wake up to the fact that disruptive technology is great for low value tangible products. However for true professional installation services people will start to wake up to the fact that buying crap on line is exactly what you get. Crap.

In the meantime CEPro will continue to create dark clouds of despair over their audience attempting to tell them the sky-is-falling on the businesses they have created and unless they learn to become a DIY integrator their future is limited at best?

Instead they could shed some light on the fact that a large number of the home/office automation integrator businesses are growing rapidly and focus in on the values that they are bringing into the market space that their networked referral business is bringing to them.

I think every integrator in the world is in touch with the fact that the marketplace is in a constant flow of dynamic change. But do not abandon hope, we are in the midst of crossing a huge chasm where the DIY’ers have tried the widgets and are embracing the concept of widespread automation, and those that are technically incapable of any level of integration will equally want to adapt to this IoT futuristic world of SMART home/office automation. When that critical mass takes off the biggest challenge will be one that we all face today. Finding qualified candidates to support the level of business that is pounding down our doors.   

Posted by Chuck Schneider on July 19, 2017

Wow! I’ll bet right now this is a Top 10 story come December.  Maybe even, long term, more important than that.         

Let’s see…Amazon buys Whole Foods? National headline news & Blue Apron becomes a virtual penny stock like the day after their IPO.

Amazon hints at getting into the prescription drug business? Congress clamors for possible new anti-trust legislation while CVS and Walgreen stocks take dives.

Amazon (via Lennar) wants Alexa and her friends in every new home Lennar builds using only Amazon crews sticking a shiv between the shoulder blades of our—relatively—little cottage industry? Crickets. 

Look, I know it’s the middle of summer, but just ONE comment after another explosive and well researched Julie piece? You are all whistling past the graveyard.

When, not if, the dominoes fall and Pulte, KB, Toll Brothers and the rest fall in line we will be almost solely a retrofit industry with occasional new construction opportunities from local and specialty builders.

Many MANY people have gone broke underestimating Bezos. The ONLY thing that will hold Amazon Custom Home Services back is what plagues us all—qualified personnel.

“Alexa, call Dennis Jaques.”

Posted by CDMI INC on July 19, 2017

Being a professional

A professional plumber does not show up with Liquid Plumber
A Professional exterminator does not show up with a can of Raid
A professional hair stylist does not use a Flowbee
A professional installer does not use products sold at Amazon, Walmart and Target.

Are you getting professional advice from a professional or amateur advice?

Are you proposing professional solutions for your clients or amateur solutions?

Posted by Seth_J on July 19, 2017

Great article and great first comment antoniohardeman! Will be talking about both tonight on the HomeTech Podcast for sure!

These companies aren’t dumb. This will work well for them.

Posted by antoniohardeman on July 19, 2017

Hi Julie.  I always enjoy reading your columns.  I just have few things that I’d like to point out.

Nexia Home is owned by Ingersoll Rand, which also owns Trane. 


Contrary to what a number of home integrators have said in the comments on this topic and on certain podcasts, Lennar homes are not cheap home for the “everyday man”.  Sure, for integrators that are use to working on multi-million homes and clients in the 1%, a Lennar home is “cheap”.  But has any one seen the price of a new home?  In Florida, I would say that the average price of a Lennar home in my metro is about $245k, and that’s without any options and it can go past >$400k.  In states like Colorado and Arizona the starting price for a Lennar home is somewhere around $350k.  I wouldn’t consider those prices “cheap” for middle and upper middle income people.  Lennar builds a nice but relatively pricey home.   


About the low voltage wiring, Lennar still runs coax to all bedroom and living/family rooms.  It sounds like in the future they’re only going to do two runs.  Here’s the thing:  if you’ve looked for a new home recently at a builder such as David Weekly, Meritage and others, they only run 2 coax per plan and if you want more that’s a extra cost.  If Lennar does only run 2 in the future they would in line with what some of the other production builders currently do.  I’m not saying that’s a good or bad thing, but I can understand it.  If the buyer wants more bedrooms covered, I’m sure Lennar would be more than have to let the customer pay for it as a upgrade.


When Lennar offered Nexia, and they still do in most of their developments, Lennar only included the Trane Z-wave thermostat, Schlage Z-wave lock on the front door and one Z-wave appliance module.  It appears that what they’re going to offer with their new smart home package is as bare-bones as what they offered with Nexia.  I don’t see Lennar out fitting every home with all of the necessary Z-wave or Lutron light switches.  That’s never been their thing.  Lennar’s Homekit homes are still going to be built but it was always limited to certain areas in California and I believe Denver and not nationwide. 


As far as the low voltage wiring for the alarm system, do you we know for a fact that Lennar will not install it?  As it stands right now, Lennar has a low voltage contractor that does the alarm wiring; if you have a two story home they only do the 1st floor.  As a customer I didn’t call the integrator that ran the alarm wiring when my home was built.  I saw the integrator’s sticker on the wall plate but I went with another company based on research.  I wish we had numbers that would clue us in on how many new home buyers contact the integrator that installed the alarm wiring to actually install the new alarm system.


It seems like the Lennar and Amazon connection is stumbling right now.  But I wouldn’t assume that Amazon Smart Home services couldn’t ramp up in 3-5 years to the point where they do a good job and they service is available in all major metro areas.  It too early to say that Amazon will not do as good of a job versus a traditional integrator.

Posted by antoniohardeman on July 19, 2017

Hi Julie.  I always enjoy reading your columns.  I just have few things that I’d like to point out.

Nexia Home is owned by Ingersoll Rand, which also owns Trane. 


Contrary to what a number of home integrators have said in the comments on this topic and on certain podcasts, Lennar homes are not cheap home for the “everyday man”.  Sure, for integrators that are use to working on multi-million homes and clients in the 1%, a Lennar home is “cheap”.  But has any one seen the price of a new home?  In Florida, I would say that the average price of a Lennar home in my metro is about $245k, and that’s without any options and it can go past >$400k.  In states like Colorado and Arizona the starting price for a Lennar home is somewhere around $350k.  I wouldn’t consider those prices “cheap” for middle and upper middle income people.  Lennar builds a nice but relatively pricey home.   


About the low voltage wiring, Lennar still runs coax to all bedroom and living/family rooms.  It sounds like in the future they’re only going to do two runs.  Here’s the thing:  if you’ve looked for a new home recently at a builder such as David Weekly, Meritage and others, they only run 2 coax per plan and if you want more that’s a extra cost.  If Lennar does only run 2 in the future they would in line with what some of the other production builders currently do.  I’m not saying that’s a good or bad thing, but I can understand it.  If the buyer wants more bedrooms covered, I’m sure Lennar would be more than have to let the customer pay for it as a upgrade.


When Lennar offered Nexia, and they still do in most of their developments, Lennar only included the Trane Z-wave thermostat, Schlage Z-wave lock on the front door and one Z-wave appliance module.  It appears that what they’re going to offer with their new smart home package is as bare-bones as what they offered with Nexia.  I don’t see Lennar out fitting every home with all of the necessary Z-wave or Lutron light switches.  That’s never been their thing.  Lennar’s Homekit homes are still going to be built but it was always limited to certain areas in California and I believe Denver and not nationwide. 


As far as the low voltage wiring for the alarm system, do you we know for a fact that Lennar will not install it?  As it stands right now, Lennar has a low voltage contractor that does the alarm wiring; if you have a two story home they only do the 1st floor.  As a customer I didn’t call the integrator that ran the alarm wiring when my home was built.  I saw the integrator’s sticker on the wall plate but I went with another company based on research.  I wish we had numbers that would clue us in on how many new home buyers contact the integrator that installed the alarm wiring to actually install the new alarm system.


It seems like the Lennar and Amazon connection is stumbling right now.  But I wouldn’t assume that Amazon Smart Home services couldn’t ramp up in 3-5 years to the point where they do a good job and they service is available in all major metro areas.  It too early to say that Amazon will not do as good of a job versus a traditional integrator.

Posted by Seth_J on July 19, 2017

Great article and great first comment antoniohardeman! Will be talking about both tonight on the HomeTech Podcast for sure!

These companies aren’t dumb. This will work well for them.

Posted by CDMI INC on July 19, 2017

Being a professional

A professional plumber does not show up with Liquid Plumber
A Professional exterminator does not show up with a can of Raid
A professional hair stylist does not use a Flowbee
A professional installer does not use products sold at Amazon, Walmart and Target.

Are you getting professional advice from a professional or amateur advice?

Are you proposing professional solutions for your clients or amateur solutions?

Posted by Chuck Schneider on July 19, 2017

Wow! I’ll bet right now this is a Top 10 story come December.  Maybe even, long term, more important than that.         

Let’s see…Amazon buys Whole Foods? National headline news & Blue Apron becomes a virtual penny stock like the day after their IPO.

Amazon hints at getting into the prescription drug business? Congress clamors for possible new anti-trust legislation while CVS and Walgreen stocks take dives.

Amazon (via Lennar) wants Alexa and her friends in every new home Lennar builds using only Amazon crews sticking a shiv between the shoulder blades of our—relatively—little cottage industry? Crickets. 

Look, I know it’s the middle of summer, but just ONE comment after another explosive and well researched Julie piece? You are all whistling past the graveyard.

When, not if, the dominoes fall and Pulte, KB, Toll Brothers and the rest fall in line we will be almost solely a retrofit industry with occasional new construction opportunities from local and specialty builders.

Many MANY people have gone broke underestimating Bezos. The ONLY thing that will hold Amazon Custom Home Services back is what plagues us all—qualified personnel.

“Alexa, call Dennis Jaques.”

Posted by sjm mycloudbusters.com on July 20, 2017

I find it interesting in that CE Pro is always looking for a path to disenfranchise their largest audience with what they feel is big news. They promote this new mode of business operation to professional integrators as the new frontier when in reality it is opening windows to DIY hacks that feel they can step in on this market.

When Amazon first initiated its services arm we thought we would give it a go to see what happens? And what happened? Completely unqualified technical morons stepped in and started selling the poorest quality junk for installation and not even closely following any electrical code for any of their installations. We have serviced numerous “post-Amazon” installs only to find out that someone ran an extension cord behind the wall for a wall mounted TV and bought some substandard articulating mount from ebay at probably $10 per mount. Not to mention the numerous defective NEST installs that we have ran across.

We stopped with Amazon altogether as no real professional business would deliver such poor quality or try to compete at the pants dropping price that these jamokes are selling at. Then Amazon started calling us trying to tell us that we needed to take an order and perform some service work for them at some ridiculous price because these unqualified idiots are okay with making $25-$30 off a 2 hour project. We actually had to have them quit calling us and walk away from both Amazon & Nest.

It will be interesting to see what happens when these homes burn down due to shotty wiring practices. Who will eventually get sued? The poor DIY schmuck? Or the huge company with deeper pockets? At some point people will have to wake up to the fact that disruptive technology is great for low value tangible products. However for true professional installation services people will start to wake up to the fact that buying crap on line is exactly what you get. Crap.

In the meantime CEPro will continue to create dark clouds of despair over their audience attempting to tell them the sky-is-falling on the businesses they have created and unless they learn to become a DIY integrator their future is limited at best?

Instead they could shed some light on the fact that a large number of the home/office automation integrator businesses are growing rapidly and focus in on the values that they are bringing into the market space that their networked referral business is bringing to them.

I think every integrator in the world is in touch with the fact that the marketplace is in a constant flow of dynamic change. But do not abandon hope, we are in the midst of crossing a huge chasm where the DIY’ers have tried the widgets and are embracing the concept of widespread automation, and those that are technically incapable of any level of integration will equally want to adapt to this IoT futuristic world of SMART home/office automation. When that critical mass takes off the biggest challenge will be one that we all face today. Finding qualified candidates to support the level of business that is pounding down our doors.   

Posted by Julie Jacobson on July 20, 2017

Mycloudbusters—Thank you for taking the time to share your thoughts. We certainly agree that “traditional” home technology integrators comprise an important audience for CE Pro, which is why most of our content is geared toward that market.

We also believe, however, that it is important to play close attention to the major forces at work in the smart-home world. Writing about these forces is in no way an endorsement or glorification of DIY or mass-market deployment from inexperienced groups. I think we highlighted here how Amazon (and Lennar) is in for a very challenging ride.

In any case most CE Pros do not cater to high-end clientele—that is quite a small market that we nevertheless cover extensively. Most integrators serve more mainstream and even mass-market customers, where the most disruption is likely to occur.

As for some specifics mentioned in your comments—Amazon Smart Home Services has no intention of running wires or installing thermostats or door locks (at this time). Skilled trades would do those jobs.

We hope our readers continue to follow broad smart-home trends, rather than focusing solely on their niche market.

Thank you again for providing feedback.

Posted by sjm mycloudbusters.com on July 20, 2017

Julie, to your comment, “Amazon Smart Home Services has no intention of running wires or installing thermostats or door locks (at this time). Skilled trades would do those jobs.” I have seen it dozens of time already and have been contacted at a minimum 4 times that. I just went on there services site and for $109.39 you can have a so-called Pro install it. However their requirement for a ‘so-called’ pro is filling out a qualification self proclaiming your status. To install a wall mounted TV these so called ‘pro’s’ are lowering their cost by simply running the cable through the wall over using a Power Bridge with a in-wall Cable Management System that is UL approved. And the clients shared that these installs are from ‘Amazon Pro’s’. The most common reason we are called is due to a discolored or dead screen issue because the ‘pro’ used a cheap HDMI cable for a 4K or UHD application which may also require HDCP. And these are the certified “Pro’s” you are referring to.

Posted by Gerrard on July 20, 2017

Julie, you nailed it.  The CI paradigm is definitely changing.  This reminds me of the parallels in the book “Who Moved My Cheese”, the story of two little mice, “Sniff and Scurry” and two little people, “Hem and Haw”.  After years of mining the cheese, one day, the cheese pile dwindled, it was no surprise to the mice but the tiny humans were in trouble for their lack of foresight and preparation.

I know many CI companies who are evaluating and making plans to alter their business models based on new, easier, cheaper and ubiquitous technologies while others think their current business model, like the pile of cheese, will go on forever.

Posted by Jason Knott on July 21, 2017

It is interesting that there appears to be no intention to offer this as a contractual service for homeowners, but only as an on-demand opportunity.  Could that be a potential differentiation that integrators can make?

To cloudbusters—This is just another potential business model to consider. It does not mean the high-end is doomed or going away. CE Pro continues to have plenty of content targeted at high-end market opportunities. But this different business model can work for some companies… I just spoke with a custom integrator who has been in business since 1999. He traditionally did 30 systems per year averaging $50,000 per job. Last year, he transitioned to a “Do It For Me” business model and now does 30 systems per month averaging $5,000 per job. He eliminated his high-wage programmer on staff, and has nearly doubled profits.