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Who Owns the Code? CE Industry’s Dirty Little Secret

When an integration company goes out of business, and customers don't have the programming code for their system, they can be left at the mercy of the bankruptcy courts.


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NOTE: In my original story, as many have pointed out, I was completely unfair to Baumeister, a Chicago integration company that was forced to close its doors after many years of contributions to this industry. I have not heard Baumeister's side of the story. I'm usually much better at giving the benefit of the doubt but in my haste to post this story in advance of the auction (ending today), I took too many liberties. I regret the insensitivity and am currently revising the story to talk about the important issues discussed here, rather than focusing on one of many integrators that has, sadly, gone out of business.

When you install a home control system, who owns the source code when the client is all paid up?

That's a contentious issue in the industry, and no one seems to be talking about it.

The long-brewing issue, however, has become more urgent with the souring economy.

Some once-reputable integrators are going out of business and they're taking their clients' programming with them.

Consumers may be left with a lot of worthless equipment because no one else can take over a job without the source code.

This is a dirty little secret and it's giving our industry a black eye.

What Happens When You Don't have the Code?


Let's say an integrator abruptly goes out of business and takes with it the Crestron code that was customized for each invidivual client.

Without the source code, no other integrator -- not even Crestron itself -- can access a client's system. That means that even the most basic changes to a system -- say, swapping out a DVD player, adding another light switch, or changing a channel icon -- cannot be made without starting from scratch.

Starting from scratch does not mean just programming the system from scratch. It means re-interviewing the clients, determining their preferences, learning how they live, and doing all those invasive things that the homeowner dreads.

Like they really want to go through it a second time?

It also means charting the subsystems, mapping out the wiring, troubleshooting, and so on and so on.

And then comes the programming. Potentially tens of thousands of dollars spent on the original programming could all be for naught.

Dave Haddad, president of Chicago-based Vidacom Corp., is a long-time critic of the "code-as-hostage" practice. He has taken over several jobs from Baumeister AV, an established, high-profile integration company that recently was forced to shut its doors.

Haddad estimates that he would have to charge one of the affected clients $50,000 "just to sort it all out," he says.

And he is not rejoicing at that new-found business.

"Frankly, I'm embarrassed," he says. "I wish I could buy all of that locked-up code and hand it out to the customers who put their faith in this industry."


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Article Topics

News · Business Resources · Home Automation and Control · Home Automation · All topics

About the Author

Julie Jacobson, Editor-at-large, CE Pro
Julie Jacobson is co-founder of EH Publishing and currently spends most of her time writing for CE Pro, mostly in the areas of home automation, networked A/V and the business of home systems integration. She majored in Economics at the University of Michigan, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. Julie is a washed-up Ultimate Frisbee player with the scars to prove it. Follow her on Twitter @juliejacobson.

225 Comments (displayed in order by date/time)

Posted by Joe Calise  on  04/16  at  09:56 AM

Julie - as usual, you do an excellent job of pointing out both sides of the story here.  Although in the end I think you side with the homeowner / end user, let me add a few points to this discussion.

As a guy who started out very small in this industry, I would have completely agreed with you.  After experiencing the years of countless hundred hour + work weeks, I realize just how much goes into a system, and the knowledge it requires to be at this level.

We are now a pretty large Crestron dealer that is very careful on how we take care of the code in house.  Offsite back-ups to our servers is just one way we are sure the clients code is always safe and secure.  In our area, we have experienced the downfall of Harvey’s.  I tried desperately to buy their code before they shut down, but they would not consider it without me taking over their poor lease agreements (which is one reason I believed they shut down to begin with).  We have since taken over some former Harvey clients that needed us to restart from scratch, and were very upset about it.  However, as crazy as this seems, they did not ask me for the code when finished.  We assured them it was safe, and if we ever had any problems in the future, we would turn it over to them.  I also know of other larger than us Crestron firms that have many more systems out there than we do, however when they send programmers to jobs, they don’t have the code anyway since their in house system is so poor!

I believe as an industry we have a moral responsibility to at least make customers aware if we are closing down, or at least be responsible enough to offer our client list/code for sale before closing up shop.  It has to be handled in a way fair to both parties, but how is the magic question.  I like the idea of an escrow service when the client requests it.

However, in this crazy economic times, we also have to look at the whole picture here.  Look at the guys who are closing down, and the vendors that are also struggling.  There must be good reason why strong dealers of Manufacturers like Crestron are still doing well.  A product with this type of programming protects US in the end.  This is probably a good reason why there are so few good Crestron programmers out there to begin with.  If anyone could just get the code, and scan it to see some of the things that took me years to create, well that would just once again saturate another area of our industry.  Not to mention they would be stealing what I have created. 

If you are not fully aware of companies like Crestron, and how it all works, it is very easy to form an opinion in the light of the consumer.  I look at it as I am not holding anything back from them, or trying to hold them at ransom, I am just protecting my systems from becoming cookie cutter for the next guy who just decided to become an integrator because he set up his brother in laws home network and thought “this is pretty cool, I can get into this computer stuff”.  Or how about the Security guy who thinks he can just undercut my pricing and take over my territory?

Years ago I never understood why so many Crestron dealers were so passionate (or some even arrogant) about the product.  Now that I am a dealer in my 6th year, I completely understand.  It is only a Dirty Little Secret if you have plans on not doing the right thing for the client.  It would not be right to force all of us to change a format that has been successful for so many, because of poor judgement made by others.

Posted by Julie Jacobson  on  04/16  at  10:00 AM

Why not, as part of your monthly/quarterly maintenance fee, include escrow/backup services?

Posted by David Thompson  on  04/16  at  10:04 AM

A solution to this problem would be for Creston to hold the programming code in a data bank.  If a company goes out of business and there is no other way for the customer to secure the code the customer could petition Creston for the code. 

This would protect the initial programmers that developed the code from being stolen by another company that downloads the entire code when swapping out a DVD player. 

This would be one way that would protect consumers and would also protect the programmers.  Creston should strongly encourage this because their reputation is also being hurt by the negative publicity and reaction of existing and future customers.

Posted by Dallas Dingle  on  04/16  at  10:23 AM

There is incentive for the original dealer to control the programming. Handing it over to a customer, allows for easy access for other dealers.

Posted by Here we go again...  on  04/16  at  10:34 AM

Quote - Julie Jacobson:
“great point, SEcurityGuy—not to mention that the software enables the third party to tap into all those systems remotely. Yikes”

Maybe you should really figure out what you’re talking about before making all of these statements.  Having the source codes in NO WAY, SHAPE, OR FORM, gives anyone the means of connecting to a system remotely.  Not all systems are configured for remote support, and those that are usually have some sort of security measures in place.  Also, the person with the code would also need to know the WAN address (or domain) of the property they plan to connect to as well as the ports configured for that property.  You really should apply for a job at the National Enquirer with this garbage you spew.

Posted by mike  on  04/16  at  10:43 AM

Bigger issue than who owns the code is why would an industry that is supposed to be delivering high tech to the affluent be using such an ancient technology as custom code.  Any integrator who thinks crestron is high tech is defrauding their customer.  The real issue is that software should be enterprise based and that every house should have the same code base, like an ipod.  Then you add your content and apps and make it custom to the user like Apple.  I recently retired my crestron system due to that fact that the lowsy programmer had to come by every week and the programming cost more than the value.  Crestron and its dealers are the MADOFF of the electronics world. And I know all of you will have 110 excuses as to why crestron is relevant, but the reality is simnple, 90% of your customers are unhappy and to emberassed to tell the world they were let down, versus bragging about having a crestron system that does nothing but irritate them.  (AMX is the same boat, not personal to crestron)

Posted by Joe Calise  on  04/16  at  10:49 AM

Mike:

Sounds like you did not have a very good programmer.  An iPod CANNOT do everything, and is in a totally different world.

I don’t know where you get your stats from, and just because you did not have a good experience, that is no reason to try and classify us with a convicted criminal.

Posted by Here We Don't Go Again  on  04/16  at  11:05 AM

I am responding to the comments from “Here we go again”.  It is quite reasonable to assume that there is a good possibility that the company purchasing the “assets” will indeed be receiving files that will allow them to connect to a system remotely, among other things.

I’m quite sure you have heard of an XPanel, Crestron Toolbox and perhaps even a thing called spreadsheets, all of which could store information such as IP addresses and passwords.  And I think it is safe to say that they are receiving the master password for any server they are purchasing that contains the information, or perhaps you think they are paying 55K for a pile of bricks?

It seems therefore that you may wish to investigate that job at the National Enquirer yourself.

Posted by David Haddad  on  04/16  at  11:21 AM

Joe Calise said:

Although in the end I think you side with the homeowner / end user…

Joe,

Those of us who believe the code should be provided to the end user, or that at a minimum the end user should be protected with escrow etc., don’t see it as “siding with” anyone.  We do it because we believe it is the professional thing to do and is in BOTH of our best interests and is a win/win for everyone.  It’s NOT “us versus them” and in my opinion people who look at it that way may need to reevaluate their business model.

Posted by Julie Jacobson  on  04/16  at  11:25 AM

HEre we go ... I’m pretty sure my trusted Crestron integrator has all the files necessary to tap into my system, as I have always allowed him to do as he sees fits.

Posted by Joe Calise  on  04/16  at  11:29 AM

David,

I agree with you, I was just pointing out there are two sides here, and it seemed as if Julie was “siding” with the end user, and we were hiding a “dirtly little secret” - as the article is named.  I was defending the fact it is not a secret, nor are we trying to hide anything from anyone (at least in my company).  I agree it is not an “us versus them” evaluation, but more of a “legitimate dealer vs the guy trying to steal what we worked so hard to create”  I think we are in agreement in principal here, but you might have taken my words out of context.  No worries.

Posted by mike  on  04/16  at  11:47 AM

Why would anyone wealthy enough to afford a crestron systems give two hoots about your crestron code that is worthless from a value standpoint other than making their house work?  And you talk about homeowners like they are evil, these are the people that fund your companies.  Julie deserves a nobel prize for doing the right thing.

Posted by Julie Jacobson  on  04/16  at  11:54 AM

Joe—am I the “you” you are referring to here?

If you are not fully aware of companies like Crestron, and how it all works, it is very easy to form an opinion in the light of the consumer.

Yes, indeed I champion the consumer because ultimately they’re the ones that fuel this industry.

But I have the highest regard for GOOD integrators and the effort that goes into a well-programmed CRestron, AMX or other high-end system.

Perhaps I didn’t make that clear enough.

Sounds like Mike had a bad experience, and that’s unfortunate. He certainly isn’t the first.

It’s difficult to convey to consumers why some of these leading home-control manufacturers do things “the old fashioned way” and why they continue to be the most successful companies in the business.

The paradigm is shifting (as it has been doing for the past 6 years or so) but not as quickly as in the commercial world.

I’ve known plenty of die-hard IT-standards folks that have tried to do it their own way and then went to Crestron or AMX. Microsoft itself uses crestron throughout the facility to operate board rooms, manage facilities, etc.

The stuff just works ... that is, if you have a skilled integrator.

Posted by Joe Calise  on  04/16  at  12:01 PM

Julie:

No, it was a general statement.  I understand your position, and I enjoy your work. 

I thought my opinion would be interesting since I used to feel similiar to “mike” until I truly understood.  I too think he had a bad experience, and he also does not understand - we know the client can give a hoot about our program code.  They could not even open it.  It is the unexperienced (and sometimes experienced) who we are trying to protect our work from. 

It is a simple definition of CUSTOM, and this debate will always be neverending.

Posted by kevinmikelonis  on  04/16  at  12:02 PM

Quoting Mike:
“the reality is simnple, 90% of your customers are unhappy and too embarassed to tell the world they were let down, versus bragging about having a crestron system that does nothing but irritate them”

Keywords in Mike’s response = Embarrassed

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