Control & Automation

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

Bruno Napoli of Krika, the service for device discovery and remote systems management, thinks Google, Amazon, Facebook, Apple (GAFA) and other IoT giants will make traditional 'CEDIA' smart-home installers obsolete ... and soon.

Opinion: GAFA Spells Doom for Traditional A/V and Smart-Home Specialists
Bruno Napoli of Krika says GAFA -- Google, Apple, Facebook, Amazon -- will crush the home-technology installation business as we know it.

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Let’s be honest for just 5 minutes: A good part of A/V and the home-automation business is about to switch from the hands of Home Technologists to the hands of big companies like Google, Amazon, Facebook, and Apple (GAFA). While we are being honest, accept that there is absolutely nothing we can do against it except to try to follow this IoT locomotive, grab all possible opportunities or just be spectators and continue our business model based on moving boxes.

This fantastic new era started the day Amazon exhibited at CEDIA 2016, the trade show for home-technology integrators.

Because it is going to be produced for the mass market, the fancy technologies only a bunch of us could afford are about to land in the homes of everyday people for 1/100 of today’s prices.

The reason home automation systems we see at CEDIA and ISE shows – the two big events for home-technology integrators -- are so expensive today, is because they are produced for a very small market of Home Technologists and their equally small number of clients.

A good part of A/V and the home-automation business is about to switch from the hands of Home Technologists to the hands of big companies like Google, Amazon, Facebook, and Apple (GAFA).

Just as there is no need to hire an expert to install a computer, there will no longer be a need for specialists to install all those new A/V and smart-home systems GAFA are about to produce. Amazon didn’t choose to launch Echo in 2016 by accident. It was just in time for the elimination of analog signals and infrared. It is the definition of an industrial revolution – and it is starting right now.

The market is mature now and, trust me, GAFA are real experts in marketing. They will provide user interfaces and experiences that will be so easy to use that even your grandparents will understand how to use them.

You might be thinking to yourself about how much of an expert programmer you are for Control4 or RTI or any of the other great home-control systems in “our” channel.

But humble yourself and accept the fact that you cannot compete with Apple or Google: they literally rule the world and created technology everyone on earth uses all day long.

You Can’t Compete with GAFA Money

Although this change will not be perfect in the beginning, it will work beautifully in the end because the big players are involved now. In one year, GAFA can invest 10 times as much money in R&D than the whole A/V and home automation industry has in the last 30 years.

It’s inevitable and there must be something wrong with you if you think you can fight against this change.

We must accept the fact that for almost three decades, Home Technologists have been pioneers, the Indiana Jones, that cleared this market with a machete, trying to avoid the poisoned darts of experimental technologies from exotic tribes. GAFA was watching us, pretending they were not interested when … Boom! Coming out from nowhere: Amazon Echo in da house!

Did you know that within a few months of its debut, Amazon Echo conquered more houses than the total number of jobs addressed by Home Technologists worldwide in the past 30 years? It’s not that Home Technologists are useless, but just that they do not have the power of GAFA. Whatever crap GAFA sells, customers will trust them because they have been infused, literally infiltrated for several years now, totally dependent on their free products like Gmail or Facebook.

It would simply be a new button in the Gmail or Facebook UI that will let you remotely turn on/off your “GAFA-Ready” air conditioner.

When GAFA suggests you purchase their “$30 monthly service and maintenance plan” – you know what? Everyone will obey, just as people are doing with AppleCare.

You can bet that within one year all major manufacturers will create 100% compatible GAFA products to get the benefit of this incredible worldwide market opportunity GAFA is creating.

The clock is ticking, CES, CEDIA and ISE shows will soon be renamed: “The International Show of GAFA Partners.”

For three decades Home Technologists were the kings of A/V and home automation, but they must realize that their business model must take their place in history now.

They Laughed at Bill Gates, Too

Today, the entire CEDIA home-technology channel caters to maybe 10,000 Home Technologists in the world. The latest CE Pro 100 report for 2017 says the median number of multi-system projects done by the top 100 integrators in a year is 150.  

GAFA addresses the entire 7 billion human beings on this planet. This is the same type of revolution Bill Gates did back in 1980, promising “A computer on every desk and in every home.” At the time, professionals laughed at him. Thirty-seven years later, if we include mobile phones and tablets, we have 10 computers in each house for 1/10,000 of the price.

Back in the 1980s, no one would believe that a 3-year-old could learn how to use a tablet (a “computer”) within five minutes –  a tablet that is 100 times more sophisticated and powerful than computers at the time.

The big difference now is the fact that people are used to technology and the UI provided by GAFA for several years. This time it will take less than five years to come into all homes – not 30 years.

Soon the construction industry will partner with GAFA to provide Google or Amazon-ready buildings. Apple will build entire HomeKit – ready districts. GAFA will have their own university to educate electricians. Yes, you heard me: Electricians will be the people who will install all of the new home technologies provided by big players. Even architects will be GAFA certified!

Big players may not want to hire traditional Home Technologists to install their systems. They need fresh blood and they need people with clear minds that will follow their rules. Seems unbelievable? Did Amazon send their own people to end-user’s homes’ for a “Smart Home Consultation” or did they partner with all local Home Technologists?

It’s a new industry that will create thousands of new jobs and could force Home Technologists to change their business model from box movers to service and maintenance providers because GAFA will deliver their gear directly to end users.

Old Jobs Will Disappear, New Ones Created

Like in all industrial revolutions, when big companies are on the field, all the little ones disappear.

Don’t get me wrong: this is not a punishment, this is not bad, Home Technologists didn’t screw up, and I’m not pessimistic. It is the way it is. It’s inevitable and there must be something wrong with you if you think you can fight against this change.

Many industries have transformed in the past and many jobs have disappeared, but many new opportunities were created. When Henry Ford launched the Model T, hundreds of thousands of craftsman jobs disappeared in the horse-and-stagecoach business. Who is going to complain about it today? Home Technologists of today are what stagecoach craftsmen were before the Model T arrived.


RELATEDRelated: Krika’s IoT Remote Monitoring Platform Helps Dealers Help Each Other


The mass market will never buy any of the brands Home Technologist use today because – except in our “little industry” – no one is aware of them. The mass market will want the stuff they see the ads on TV and only GAFA can afford to play ads on TV.

They’ll buy whatever new fashionable gadget GAFA will command them to buy. One day every Android telephone will have a pre-installed “Google Home app” that will natively talk with all devices you already have in your house. Do I have to mention Apple, Microsoft or Samsung? Can’t you see what’s going to happen soon? You have all the pieces of the puzzle to see the big picture now.

GAFA are expelling Home Technologists from the residential market, leaving them just the very high-end jobs for wealthy clients. Rich people are ready to pay a lot for exclusive technologies that no one else can afford, but what will we sell them when anyone can purchase a 4K 75” TV for $700 at their local Best Buy?

Any kind of exotic home automation system we attempt to sell them would be for naught as nothing would “work better than the Apple home stuff.” Clients left and right will be demanding: “I want an Apple Home Kit system because it’s free on my cellphone, it’s simple, and it is guaranteed to work by Apple!

In less than one year, every time you try to sell a home automation system, your client will tell you: “Sorry, we already have an Amazon Echo at home.”

So, what can Home Technologist do now? 

Even though the fact that this revolution will deeply change the way we are working now, there are still incredible opportunities for people with open and flexible minds. You might have been the stagecoach craftsmen of horse-and-carriage ages, but you have the chance to thrive in all the new jobs created by the Model T era. Be sure you don’t miss that train!

A good start would be to add this sentence on your website and your truck: “We won’t let you down with technology. We offer service, maintenance plans and remote supervision.”

What do you think? Let’s share this article to everyone, let’s have this open discussion about this incredible and exciting new technological revolution.


Bruno Napoli is principal of Krika, a developer of device-discovery and remote systems management. This blog originally appeared on the get-krika.com site, and has been republished here (with edits and slight modifications) with Krika's permission to generate a broad discussion of the changing Home Technology channel.

NEXT KRIKA BLOG: RMR & Remote Supervision: Rebooting the industry




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Comments

Posted by Hagai Feiner / Access Networks on May 5, 2017

Dear Bruno,

I would write a synopsis on the situation, but Outofsight has already done this work and there is no need to repeat. Let’s go back to basics: What do we (as clients, end users) want? We want to be happy. Client happiness, in our field (and with a growing amount of connected devices), is associated with trust, peace of mind and relative privacy. The integrator, in my opinion, is better suited at providing these parameters than GAFA.

Posted by kipoca on May 3, 2017

Do you still work with carpenters, or is it now framers, fabricators and cabinet makers? Things, change, and we may have been the “AV guy” in the past, but we became low voltage integrators. And then the iPad came out and we tepidly started using that platform. There are still problems where the clients insist the iPhone and iPad is all they need and 6 months later are buying dedicated touchpanels and remotes. But, as more awareness comes we need to embrace parts of it where it’s suitable to the high standard of living our customers expect.

Posted by Bruno Napoli on May 1, 2017

Dear Outofsight,

I am very impressed and touched by the energy that you spend to answer me. Admit that you’ve been all stung by the subject of the article maybe because deep into your heart you can see the danger here. So, ok, I understand that you are all a very professional industry, and the difference between you and all the others is your background and your experience. Point taken.

Now, a question to all of you.
Please be super honest with me and let’s see if you are consistent:
Compare to any construction company, any plumber, any electrician, any HVAC or security company, are you offering ALL your client a service & maintenance contract?
(I even don’t ask if you systematically use any remote supervision system to be proactive)
(I even don’t ask if some of you use a service like One Vision Resources from Joseph Kolchinsky)

Don’t you all think that this is one of the biggest problem that this industry have?
GAFA… when they’ll decide that it’s time, they can hire as many people they want and create their own team and they will – with no shame at all – sell maintenance contract… What can we do today against this?

Do you see where I’m going now?
I would love to meet you all and have a beer while talking about this and try to see what we can do to give credit to our industry.

Peace…

Posted by Outofsight on May 1, 2017

I get what you are saying but this has been the case for some time now.  You can’t make compare technology that is compartmentalized into one chassis that fits into the palm of your hand to a large home with technology spread throughout.  Bruno we are actually building the computer into the home Not a laptop chassis.  I partially understand your argument but it is even more reason for our industry to do a better job with QC.

This is exactly why manufacturers should have been properly vetting their dealer base for the past 5 years!  You have every Tom,Dick & harry security & electrician hack becoming C4/Crestron /Savant & RTI dealers what would we possibly expect the outcome to be? 

Here in Fl we have sprawling communities with homes ranging between 3,000 & 6,000 sq”. Most likely a security company or even service providers here in Fl have access to all of our home automation brands.  When we get service calls in these neighborhoods or have to take over jobs I am painfully reminded why our manufacturers need to vetting their dealer base.  Do you think these people who own homes will ever spend that kind of money again on integration?  You know the answer to that. Companies performing shit installations that were poorly designed to begin with is going to be the biggest downfall of our industry not GAFA. If I was a guy who just spent 30K on a system that was overpriced and underperforming I would never spend that kind of money again.  Maybe in the short term manufacturers think it is a good idea to sell to everybody with a builder relationship but in the long run we will all suffer.

Posted by Bruno Napoli on May 1, 2017

Gentlemen, thank you once again for all your great comments.

Here is a question: Let’s do a technological and market comparison with telephone and computers. A rich and a poor have the same iPhone, the same IOS on their MacBook, the same MacBook by the way, the same Samsung laptop with the same version of Windows 10. It’s the same stuff inside provided by GAFA, everyone knows it, they deal with it it and theyr don’t complain about it because it is working. What I mean is: Regarding technology, rich and poor want something that is simple and that is working. And If the GAFA and all their industrial partners are the only ones to provide a “peace of mind solution” that is working like they did with phone for example, everyone’s on earth will buy it.
Rich people will comfort their frustration to have the same iPhone as their lawnmower man by having it gold plated. In the end, the only difference is the guidance, the service and the maintenance they can buy from any external company. Technology can be a pain in the ass, we tested a lot of exotic technology with our rich clients those 30 last years, they’ve been really patient with the unknown brand only our little Home Technologist are aware about, and now that GAFA will come with good marketing, I’m sure they’ll all want it and say “God, why did it take you so long!!!”

Last thing: there will not be enough Home Technologist on earth to provide service and guidance to all those people that will need it. This is why I think there will be thousands of new “service based” job created.

What do you think?

Posted by ritchut on April 30, 2017

“Deja Vu all over again”.  I don’t have the time or patience to explain why the people with skills and knowledge will be around for awhile.  However, while I wait to be put out of business, I will be entertained watching “GAFA” try to put each other out of business in a quest for dominance of their particular (incompatible) ecosystem.
And when the dust settles, the end user will probably be bailed out by…....(oh no)....a Systems Integrator

Posted by Outofsight on April 30, 2017

Bruno Napoli to be honest I get nervous at the prospect of technological stagnation. Nothing has ever stayed the same- that is a major driver in our industry.  But lets be honest here. The title of your piece is “GAFA Spells Doom for Traditional A/V and Smart-Home Specialists”  Why head off the article with such a provocative title???  If I was just a surface dweller I wouldn’t even bother getting to the meat of your opinions as this is all too common with CE Pro.  How about this for a title “GAFA opening up massive opportunities for the custom integration channel”. After all you did end the article on a good note. I think
My opinion is your article is very one dimensional and incomplete.  There are many layers and complexities to our industry how could you possibly say that are doomed? Perhaps cookie cutter security contractors who pretend to sell home automation will be doomed but until there is a way GAFA can become a true technological concierge service to people who DEMAND personalized service I doubt we are doomed.  I believe our industry is getting ready to explode. With powerful tools like Krika, OVRC & Bakpak at our disposal we are finally able to capitalize on R&R and systems are becoming more stable.  Why must you associate technological change with Doom for our industry?  Speak for yourself

Posted by sjm mycloudbusters.com on April 30, 2017

But Bruno, you stated Doom, shedding a cloud of gloom. Their is no gloom. If anything it is great news to the integrator. The best! Even the GAFA people know this and they are trying to get a piece of it. As is a million other companies that will fade to the wayside in the, “I want to 800 pound gorilla” owning the Connected Home market.

GAFA is what Nokia was to digital, which displaced Motorola. What Blackberry was to Nokia, iPhone to Blackberry, and Android to iPhone who is the predominant leader for today.  GAFA will have a piece. But they won’t dominate, or take over the world. They may have moments that is true. But there is a huge gap between the GUI and the endpoint that has to be integrated regardless of the great minds of GAFA.

Even the comment GAFA is extremely myopic. It insinuates that Microsoft, Samsung, Lenovo, GE, Honeywell, Siemens, and other huge automation gorillas are sitting on their perches simply eating bananas. Nothing could be further from the truth. And all of these will want to own their own “best-in-class” GUI, dominate all wired and wireless protocol as the next-best-thing,and own all the stack security layers of home and office automation which will always remain disparate due to no single standardized approach.With the goal to create dominance with the Consumer Electronics world. It is too big financially for them to miss. It will be the single biggest technology wave in global history. Far too big for any technology company to ignore.

You know the funniest part. All of those companies leverage their greatest strength for their commercial automation against the backs of the system integrators of those technologies today.

The A/V and SMART Home will change. But more so for the better of the integrator. It will be in unbelievable growth and field services. The brains that seen the vision of this market will adapt to what is needed to follow the path of greatness.

There is no “doom” only the flower of opportunity about beginning to “Bloom” for the integrator.

Posted by Bruno Napoli on April 30, 2017

Dear Outofsight,
Do you expect your job can be today - and in the future - the same as it was 10 years ago?
GAFA are about to change a lot of things on the market and as I said before, it’s a huge opportunity for our industry. There will be new needs, new jobs, new products, and for the moment we are the best qualified to do this. This “anticipation” article is just here to make people think about the future and be sure we don’t miss a thing.

 

Posted by Outofsight on April 30, 2017

4 years ago it was dwindling margins because of Amazon, then it was service providers taking over home automation, now GAFA.  Here is what my reality has been- Margins have never been better, service providers still do one hell of a job F$%^&ng; everything up “which is great for service calls”, and GAFA has done nothing but bolster our bottom line.  If I actually took these articles seriously I would have never started our company 10 years.  I’m sure I will catch hell for writing this but who cares

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Posted by Charlie heritageavs.com on April 27, 2017

Shutting my doors now. Thanks for the warning Bruno. CEPRO kinda reminds me of what ESPN is going through, no clue who their viewers are. I literally log in every morning and hope there is a cool article on CI channel business practices or installs and all I see is spin away from CI.

Posted by Julie Jacobson on April 27, 2017

Charlie—This opinion piece has generated some excellent discussions in the CEDIA community. We have found that our “viewers” like to be challenged about these issues, which are debated at all of the buying group and CEDIA conferences. Bruno’s views are extreme, for sure, but I think the piece is thought-provoking. In any case, we appreciate your feedback. Thanks for chiming in.

Posted by antoniohardeman on April 27, 2017

This article is a wake-up call for those that are willing to see the bigger picture.  This industry is being disrupted just like other industries are.  Homekit, Amazon Echo, Smart Things and Nexia products are already being installed in a few of the larger home builders new homes.  The change is already here.  You have to be flexible and able to adapt to change if you’re going to survive the onslaught.  Also, don’t look down on the potential customer that doesn’t want the super expensive system but instead wants something like Homekit.  Establish the relationship and they’ll trust in the future for other needs.

Posted by Seth_J on April 27, 2017

This industry is following the *exact* path of the IT industry. Look who owns that space now. Is it mom and pop, boutique shops that cater only to a few rich clients or is the industry defined by what GAFA is doing?

Posted by Julie Jacobson on April 27, 2017

I’m curious what readers think of this piece about how Realtors could become obsolete if they don’t learn to “cannibalize themselves” http://www.cepro.com/article/realtors_becoming_obsolete_without_smart_home_tech_for_on_demand_home_buyer

Posted by Bruno Napoli on April 27, 2017

Thank you, Julie to publish my blog.

So, it’s just a vision of the future with the clues and facts that we have today. It might not happen exactly like what I describe, but changes are coming. Driven by GAFA, the global AV and Home Automation market will grow exponentially the next five years and the whole planet will spend billions for this. In a way, we should see GAFA as the biggest opportunity for our industry, and if we are able to jump into this, there are much much more money to make compare to our actual business model. It’s just a matter understanding this new music score and not be afraid of changing the way we dance.

I know that Home Technologists deals with super Hi End fancy gears and don’t like to be compared to the construction industry because it’s “dirty”. But it’s time to realize that we are not an “industry” aside another. We must embrace the construction industry once for all because this is where the big money will be soon. Since we left our nice shop to drill holes on walls, we’ve been part of the construction industry, so let’s deal with it.

If I would like to create my Home Technology company today, I’ll start first to create an electrical company, then 2 or 3 years later, once I’ll have a good listing of customers, I’ll create an AV & Home Automation department ->  Jackpot! The construction industry need us because we have 30 years of background, we need them because they have money, process, wisdom and they know how to sell service and maintenance.

Posted by jhamill1 on April 27, 2017

We have heard the “sky is falling, so you need to buy our crap” pitches before. Seems rooted in the remote monitoring and device discovery market becoming much more competitive.

Posted by Cliffjahrmarkt on April 28, 2017

Bruno,

You obviously don’t understand the CEDIA model. Most if not all serve the 1%ers. I don’t see the doctors, attorneys and successful business owners installing their own light switches, motorized shads, Alarm systems and central lighting systems in their off time. I don’t see our customers who have the 25k square foot homes putting their own TV’s on the wall. Now, will there be technology disruption. Yes. But the customer who has the 300k-500k home isn’t my customer anyways. Your blog is maybe inline with the guy going to Walmart for their Tv. Our customers want service. That’s what we provide so they can spend their time doing fun things, family time and activities. I think you are drinking GAFA coolaid. Oh yeah Mark Zuckerberg has a Crestron system. Then there is the licensing and contracting part that you don’t seem to understand. What about the Mega Yachts. I don’t see the owners as Tommy Tinkertons. If you didn’t realize this is a service model. The black boxes aren’t as important as the knowledge we provide. What about the networks and how to optimize them for Data and Media. I don’t see the average customer setting up V-LANs. I could continue on and on why the model will continue to thrive. Agreed it will change but the cream will always rise to the top. Good luck GAFA. Wonder if Amazon is a contractor in every State. If you sell labor on a item or device that requires licensing you are by default acting as a licenses contractor. If Amazon sells labor on devices that normally requires licensing to be installed? For example a light switches, a thermostat, a water bug, they are implying that they are a licensed contractor. Not just Electrical either. HVAC for thermostats, Locksmith for automatic door locks, plumbers for the water bugs. This is a fact.

Posted by ctsohiomike gmail.com on April 28, 2017

Eveeeennnntualllly one of these bloggers will be correct.  I do however welcome the advertising from the big guys, just like I welcome the advertising from Best Buy.  Great article to get us talking but almost not worth posting.

Posted by Hagai Feiner / Access Networks on April 28, 2017

I’m with Cliffjahrmarkt. All GAFA is doing is priming your future integration clients. You fail to see there is no replacement for my home integrator. I use Signals AV at my home. With all of GAFA’s might, GAFA cannot do what Signals does. Personalized service, long term relationship, trust, on time delivery, customized experience down to location of touch panels and automating my TV lift to drop in front of my fireplace.

I am sorry Bruno. you are simply wrong on this one.

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