Q&A: Seale Moorer, Exceptional Innovation

Exceptional Innovation has taken the custom industry by storm, making huge investments in its Lifeware automation system, the Media Center Edition platform on which it is based, and a dealer network that now numbers more than 240. CEO Seale Moorer founded the company in 2004.

Your most recent experience was in the retail point-of-sale industry. Tell us a little bit about that experience and why you made the shift to residential.

When we got into retail, it was a very similar environment to what you see in home automation today -- there were a lot of proprietary systems and one-stop-shops, but your ability to integrate different peripheral devices -- receipt printers, scanners and so on -- was terribly limited. We were a major part of changing that by steadfastly advocating for standard interfaces to whoever would listen -- standards for everything from peripherals to what constitutes a point-of-sale transaction.

You see, when everything is closed and proprietary, it tends to put a cap on innovation, and in the long run, that hurts an industry. I'm happy to say we led the charge to bring standards-based computing to retails, which in turn spurned innovation, drove sales and the industry benefited greatly.

Now, we didn't do it alone -- some major, major companies saw the benefit and got involved. That's what we're hoping to do with home control devices and the whole idea of converging digital entertainment and automation. And you're seeing those companies seeing the opportunity in the home, seeing the benefit, and getting involved.

There are many similarities between retail and residential computing environments, too. We had to harden systems for 24/7 operation in harsh computing environments -- same for the home. We had to make the systems robust and reliable and able to be easily used by minimum-wage earners with little to no training. And we had to learn to leverage the benefits of distributed computing, which is just now being seen in residential areas.

But everything we learned in retail -- hardening a system, subjecting it to severe and downright cruel testing and documenting every last comma in it -- we apply to home control. It's that kind of effort that is needed to really have this industry successfully transition itself to a new way of building and installing systems.

At least initially, your entire product line and business model is based on Windows Media Center Edition. Considering MCE wasn't fully baked when you launched EI, wasn't this a bit risky?

Sure there was risk. There always is. But I've worked with Microsoft long enough to recognize when they're on the right track with something, and I saw that immediately in MCE. This was the platform we had all been waiting for, and I wanted to be involved and be a part of its development and its maturation.

So while yes, there was some risk, what I truly believed in was the idea driving it all -- the idea of bringing all of your content and control together simply and easily. The idea is just too compelling to hold down, and I saw the emergence of it in the nascent MCE platform.

Are you happy with the progress MCE is making? Will the improvements to Windows Vista markedly enhance the acceptance of Lifeware?

Yes and yes. We'll get an immediate and needed benefit with CableCard being introduced in Vista. Lifeware does a lot of unique things streaming digital content on the network, and we developed those technologies with CableCard in mind.

Vista's new UI [user interface] is impressive, and under the covers, we're seeing Vista as being one of the most stable, secure products Microsoft has ever released. Plus, the fact that the Premium editions of Vista include Media Center means this very compelling and simple way to organize digital content will be in millions and millions of homes -- or, as we tell our dealers -- millions of potential Lifeware customers.

Tell us about Web Services for Devices (WSD) and why it is important to Lifeware.

I wouldn't say WSD is important just to Lifeware. It's important to our industry, for some of the same reasons I mentioned earlier. If we are going to achieve this vision of digital living that we're all talking about and writing white papers about and getting everyone all worked up about, then we have to have a reliable, robust and lightweight protocol to make convergence happen seamlessly, and right now, Web Services for Devices is the only game going.

WSD takes all of the great ideas that informed the creation of Universal Plug and Play (UPnP), but adds in the tremendous benefits of Web Services and five years of their development and refinement.

We could have taken a lot of shortcuts in Lifeware -- hard-coded device drivers and been done with it -- but we didn't. We built an elegant architecture that exposes non-WSD devices to the network as WSD devices. It's faster, much more stable and doesn't take a lot of computing power to get it done. When you see how Lifeware can dynamically discover an entire lighting system, for example, how we just suck in all that system programming and immediately put it to use, it's really amazing when you think about it.

We're not the only ones talking about WSD, either. Major companies like HP and Microsoft see the benefits, and the fact that it's natively supported in Vista will bump its acceptance significantly.

In our own industry, I can tell you this: When we show someone what we can do with a Lifelink [serial-to-WSD adapter] they want it. They want that functionality on their system. Some may take longer than others, and in some cases the process is quick and simple. But we take calls every single day about WSD. It's no longer a question of "What is this and do I need it?" These calls are about "how do I get it?"

What would you say to dealers still petrified of using MCE as the basis of a customer's entertainment and automation system?

I'd look the dealer in the eye and say, "Look, I live with this stuff. I have lived with it since the beginning. I've lived in homes that had every other system in them you can possibly install for me, and Lifeware is the one that gets it right. It's why I got so involved in CEDIA and why I founded the company. I'm asking you, just try it once, because I know that after your first install is done, you will not want to go back."

Why was it important to make a big splash? Why not tiptoe into this new market?

We don't want to hide the fact that we're talking about a new way for dealers to do business here. Let's be up front about it, find out their concerns and address them. Our campaign was aggressive, but it wasn't about ego. It was about saying, "Hey, we think we have a good system here and a better way for you to make money. Give us a few minutes of your time to check this out."

The response has been tremendous, and our dealers respect the fact that we didn't sneak into the market. If you're going to go for something, go hard, or go home.

How are dealers responding to your unusual pricing model, i.e., paying per subsystem or per controlled device?

Our model evolved quite a bit over the first year, but it was our dealers that really drove that evolution. I've said this before, but we're talking about a new way they are going to do business, and the old models just don't work for it.

In the end, it's pretty simple: The customer pays for exactly what they control. Our dealers like being able to tell their clients that. We like being able to offer it. So yes, it is an unusual model, but one the dealers helped us create to meet the needs of a truly unique solution.

Another novel approach is your call support service model. Tell us about that.

Again, you're seeing the benefit of my experience in the custom channel and our dealers moving to PC-based home control. Our dealers don't want to take the calls for "how do I play a DVD?" or "I can't get into my email." And they shouldn't have to.

We have a world-class Lifesupport team onsite that can handle those calls for the dealers. They make a piece selling the support to their homeowners, we make a piece providing it, and the customer gets the best support available. It's a win-win-win. Plus, we can remotely analyze a customer's system, and if we determine a hardware issue, we can dispatch the dealer to the site.

What were the EI highlights at the Electronic House Expo [Fall 2006, held in November]?

EHX was many dealers' first opportunity to see Lifeware 1.0.2 and all the great new features in it -- scene learning, flexible menus, IR Learning and more, and as always, we rolled out new Lifeware Connected partners, but the most exciting thing was the preview of our Vista product.

We're aligned with Microsoft at a very high level, and have been step-in-step developing Lifeware with an eye towards Vista. For many dealers, this was their first chance to see the new OS, as well as Lifeware and Media Center running on it.

People are confused about your relationship with HP. Can you clarify?

We have a terrific marketing relationship with HP, especially at trade shows. They really see the future direction in our industry, and showing the experience Lifeware provides on their hardware has been very compelling.

There is some confusion as to the extent of our partnership, and we like to address it head on: EI is a completely separate entity, Lifeware is a product we built to be completely hardware-neutral.

Showing the experience on HP DECs [Digital Entertainment Centers] and TVs has been great at trade shows, but dealers should understand that with Lifeware, they are in no way committed to HP products. We think HP products are solid, they've passed our Lifeware Ready certifications with flying colors, but in the end, it's the integrator who needs to make these decisions.

Where do you hope to be by the end of 2007?

If we have not significantly closed the gap between us and AMX and Crestron by then, then we need to take a hard look at our business practices and see what's going on. In terms of product and innovation, we're there. Now we have to capitalize on it.

The technology, the timing, the market and the dealers are all ready, all coming together at this moment. By 2007, we should see the benefits of this opportunity realized.