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Thursday, April 23, 2015

Rather than going in so many different directions, what if there were more standard procedures for how CI companies manage their businesses?

By Steve Firszt

A reader recently took issue with my assertion that the CI industry is made up of 10,000 different companies doing the same thing 10,000 different ways. The response was, “I believe the analogy of 10,000 custom integrators doing the same work is false.… I have only done 2 installs that were exactly alike in over 20 years…”

Sorry. I must have been unclear.

This is not about one-offs vs. repeatable installations – or brands, or control systems, or price points. I’m talking about the business of CI and how there is not a single standard for how CI companies manage their businesses. They do not recognize revenues the same way, they do not calculate gross profits the same way, they do not define labor costs the same way. Mainly because, there isn’t a standard “way.”

The three issues just mentioned are part a management fundamental I call “counting the money.” This is the starting point for companies being able to report results in a way that is truly comparable. If we could do that, we could then look at how the companies with the best results, do what they do. Then, we could adopt their practices and measure our improvement, always being able to reference where we succeed, and where we still fall short.

The entire industry would be stronger as a result.

Related: The Evolution of Custom – 30 Years Later, Still No Scale

Consider labor cost. Is it the wages you pay a tech while s/he is working on a project, with non-billable hours being charged to overhead? Or is…

Posted by Steve Firszt on 04/23 at 09:33 AM
Blogs, Business Resources, (0) Comments, Permalink

Wednesday, April 08, 2015

Smart home technology was examined in a recent ABC ‘Nightline’ segment

By Jason Knott

[Updated to reflect the fact that the homeowner is former Gigaom IoT reporter Stacey Higginbotham ... and again to indicate that Nightline is doing the bashing, not Higginbotham. - Julie Jacobson]

It’s tough to swim upstream. Now that the custom electronics industry and smart home technology are gaining momentum and recognition, it is time to spring out the negative press in the general media.

A recent ABC Nightline segment might be the first salvo. In the eight-minute piece, reporter Neal Karlinsky visited a smart home in Austin, Texas and ran it through its paces with the homeowner—Stacey Higginbotham, the preeminent IoT reporter for the now-defunct Website Gigaom.

Oddly, she wears a sweatshirt emblazoned with the GigaOm logo and has a GigaOm mouse pad strategically placed on the kitchen counter, suggesting the segment was filmed before the abrupt closure of that esteemed media company. (Higginbotham continues her able smart-home reporting for Fortune.)

The home has a Roomba, smart bulbs, voice control, automatic locks, touchscreen control, motorized shades and more. Not surprisingly, several of the items don’t seem to work properly—most notably the not-ready-for-primetime devices that have only just launched. Among them, Ubi and Amazon’s Echo for voice control, and Ringly for control via a smart ring, which isn’t so smart in the Nightline segment,.

The report uses terms like “weird,” “rude awakening,” and “requires patience” in describing having a smart home. The homeowner, who is called “abnormally patient,” even admits she spends one hour per week doing nothing but troubleshooting problems. Ugh!

Meanwhile, every time Higginbotham shows off a piece of technology, a giant price tag zooms into the screen,…

Monday, April 06, 2015

How do you think industry standards can impact businesses? Share in the comments below.

By Steve Firszt

Last week we brought you Part I: The Evolution of Custom – 30 Years Later, Still No Scale. Part II examines factors that could hinder custom installation’s growth prospects and the need for industry standards.

Absent a change to a more scalable CI model and the emergence of branded national distribution, most customers will have no known options beyond the low-cost and/or DIY offerings of non-CI companies such as Apple, ADT, Xfinity, and Sonos (to name just a few).

Standards go far beyond how an installation is performed or a control system programmed. In fact, it is my view that one of the most significant missing standards is how CI companies are organized.

What does a project manager do, exactly? Ask this question of 10 CE pros and you’ll get 10 different answers. Even bigger questions are, ‘What’s it take to become a PM?’ And, ‘What is the next level of advancement beyond project manager?’

The challenge of finding and developing good people has been sited frequently of late, as the smart home market enters what looks to be a boom era over the next five-to-six years. But until our industry begins to define the roles in its organizations, it will continue to be difficult to attract and develop employees.

Likewise, there are no financial standards. Company-to-company differences in revenue recognition, inventory accounting, labor productivity measures, and customer deposit accounting (to name a few) stand as huge barriers to a consistent view of financial health among CIs.

Even the widely-accepted standard of $200,000 annual revenue-per-employee is subject to differences in how revenue is recognized and…

Posted by Steve Firszt on 04/06 at 08:00 AM
News, Blogs, Business Resources, (1) Comments, Permalink

Friday, April 03, 2015

Can you create a “robust production engine” with factory-programmed home automation systems, sold for self-installation?

By Julie Jacobson

There’s an emerging business model in the security industry that is starting to pay big dividends: Systems that are DIY-installed and professionally monitored.

It goes like this: A consumer wants a “real” security system that is monitored by a legitimate central station, but they can’t be bothered to let a security dealer in the home and they’re savvy enough to stick a few sensors on the wall and call it a day.

So they go online to a hybrid DIY/Pro service provider, answer a few questions like how many doors they have and what those doors should be called (front, rear, garage, etc.). They leave a credit card and a few days letter the system arrives, completely pre-programmed and ready for installation.

They take the door contact marked “front door” and install it at the … front door. They take the motion sensor and sticky-tape it high up in family room. They place the flood detector on the floor by the washing machine. And so on and so on. They give the service provider a call. The provider goes, “Yup, we’re seeing the system and all the sensors,” and then the provider collects $20 or $30 or $65 per month for professional security monitoring and interactive home automation services.

LiveWatch Fetches 74x RMR

One company that does this very thing, LiveWatch, was just acquired by the giant central monitoring station Monitronics, a subsidiary of Ascent Capital Group, for $67 million. With $900,000 in recurring monthly revenue (RMR), that puts the valuation of LiveWatch at 74x RMR, which is a huge multiple in the traditional security business. Typically,…

Posted by Julie Jacobson on 04/03 at 12:03 PM
Blogs, Business Resources, (16) Comments, Permalink

Thursday, April 02, 2015

CI companies today face an evolutionary challenge.

By Steve Firszt

You can trace the evolution of the custom integration industry back to the “hi-fi shops” of the 1970s. Having flirted with quadrophonic surround sound in the mid-70s (a bust), these stereo-centric retailers went on to add car audio, video (TVs, VCRs, camcorders, LD players), portable audio, digital audio, digital satellite, and digital video. Out of this polyglot grew a thing called “home theater.” Many added a “custom installation” department.

Along the way competitors such as Circuit City and Best Buy commoditized many of the specialty offerings, lowering price points and margins in the process. Specialty retailers responded by enhancing services, dropping categories that were no longer profitable and adding new categories until those, too, became prey to the big box competition.

As one of those retailers, I regarded this evolution as “scrambling to higher ground.” It was challenging to learn and sell the new categories, but that was the only way to stay ahead of the profit erosion of the old categories.

“The harder it is, the better,” I used to tell my team. “As soon as it’s easy, we’re done.”

Of course, most all the electronics retailers are done now. If they haven’t yet evolved to Internet sales and/or CI, the remaining few wait futilely for customers to visit their stores.

Related: Choosing Not to Grow Your Custom Business Is a Bad Option

CI companies today face a similar evolutionary challenge, one that began to take shape soon after HDTV became mainstream. Many CI disciplines (see: home theater, multi-room audio, touchpanel control) have been commoditized and are now available from numerous non-CI sources. Savvy…

Posted by Steve Firszt on 04/02 at 07:44 AM
Blogs, Business Resources, (16) Comments, Permalink

Tuesday, March 31, 2015

CEDIA: ‘The association does not support discrimination of any kind’

By Julie Jacobson

Indiana governor Mike Pence signed the “Religious Freedom Restoration Act” (RFRA) into law last week, igniting a firestorm of criticism over a law that could potentially allow business owners to discriminate against LGBT customers and other groups on religious grounds.

The law was not lost on CE Pros, as the industry trade association CEDIA is headquartered in Indianapolis and often holds the annual Expo there.

An industry friend posted on my Facebook timeline: “Hey Julie Jacobson, I think you should do a column on what the implication of legalized LGBT discrimination on CEDIA expo will be if they schedule it in Indy again.”

CEDIA beat me to the punch with this memo they sent out yesterday:

As some CEDIA members have become aware, on March 26, 2015 Mike Pence, Governor of Indiana, signed Indiana’s Religious Freedom Restoration Act into a law.

We would like to take the opportunity to say CEDIA is sincerely committed to providing an inclusive environment for all of our encounters with members, customers, attendees, and industry professionals through all of our events and offerings both within the state of Indiana and beyond.

The association does not support discrimination of any kind and will take care going forward to ensure our members and customers are not negatively impacted by Indiana’s Religious Freedom Restoration Act.

We appreciate your continued support of CEDIA.

Posted by Julie Jacobson on 03/31 at 09:42 AM
News, Blogs, (16) Comments, Permalink

Thursday, March 26, 2015

The rapid evolution of the A/V, security and automation markets now require dealers to have some level of basic networking knowledge.

By Robert Archer

For traditional A/V-based integration companies, the evolution from analog and traditional residential technologies to digital IT-based technologies is profoundly affecting the skills and services they offer in the field.

Installers are now being forced to learn on the fly what should be taught in a controlled classroom environment. Compounding the situation is the action—or lack of action from some of the tech sector’s biggest names—Comcast, Verizon, AT&T and others that are driving these changes and taking little responsibility in ensuring the public fully understands the products they offer.

These major Internet service providers (ISPs) are some of the most well known corporations in the tech sector, and they are at the forefront of home entertainment’s new era of streaming media. Unfortunately, they are holding back the mass adoption of high tech products and services they are trying sell through their lack of communication.

To paraphrase Alanis Morissette, it’s ironic these telecoms aren’t communicating with their customers.

Dealing with Common Networking Issues

Fulfilling the promise of the custom install market, network products and services companies such as Pakedge, Luxul and Access Network are stepping up to provide support services to installers and their clients that are dealing with changes made by ISPs.

Brett Canter, CTO of Access Networks, says installers are forced to deal with just about any possible scenario out in the field. He notes that when dealers enter clients’ homes for the purpose of upgrading their networks to perform at enterprise-grade levels, they often have to overcome several major hurdles.

“The primary challenge that integrators face is getting the ISPs’ modems set up correctly. The modem has to be set up…

Posted by Robert Archer on 03/26 at 07:41 AM
Blogs, Networking, Wireless A/V, Permalink

Tuesday, March 17, 2015

What is the difference between an electronic signature and a physical signature?

By Jason Knott

Whatever happened to the integrity of a handshake? Those days are long gone, I am afraid. You have to get a signed contract. But is a customer’s electronic signature the same as a physical signature? Maybe, maybe not.

At least one security company finds itself embroiled in several sticky situations with clients who opt not to honor their own electronic signatures. Indeed, these customers have allegedly figured out that certain free or homemade “e-sign” software programs do not have the “legal integrity” to hold the signer responsible, so they don’t have to pay.

According to Arthur Fucetola, president of ECCO Safety Services in Blairstown, N.J., he has been burned several times by clients who realized that their e-signatures on contracts could not be held against them. Indeed, it gave them the opening to refuse to pay for services rendered.

As reported by legal expert Ken Kirschenbaum of Kirschenbaum & Kirschenbaum, who writes for Security Sales & Integration, CE Pro‘s sister publication, an integrator that accepts electronic signatures that do not have “legal integrity” are not worth the virtual paper they were written on, despite the passage of the ESIGN Act that became federal law in 2000 and establishes a federal safety net to ensure that electronic contracts would be legal for interstate and global consumers.

The ESIGN Act, which is law across all 50 states, confirms that electronic signatures have the same legal standing as pen-and-paper signatures, and a contract or record of transactions may not be denied legal effect or ruled unenforceable simply because it is in electronic form.

There is also the Electronic Signatures…

Posted by Jason Knott on 03/17 at 09:28 AM
Blogs, Business Resources, Legal, Permalink

Monday, March 16, 2015

Seeking Alpha errs in recent analysis of Control4’s (Nasdaq: CTRL) home automation business.

By Julie Jacobson

Seeking Alpha is a reputable stock-market analysis firm that follows, among others, Control4 (Nasdaq: CTRL), a prominent provider of mainstream home automation products and services. (Correction: Seeking Alpha is a “crowdsourced investment analysis site, not a stock analysis firm.”)

I follow SA’s coverage regularly because of its smart insights, but analyst Howie Man gets a lot of things wrong in his piece, “Control4: No Control Of Its Destiny.”

The major flaw in Man’s analysis is his premise that professionally-installed proprietary smart-home systems are doomed; however, it’s the little details in his report that make him seem a little misinformed.

For example, Man touts Revolv as a viable $299 DIY system that would put Control4 out of business.

Revolv failed miserably and was sold last year to Nest for what we can only assume was pennies.

Man’s naiveté shines elsewhere in the piece, for example, when he hypes Microsoft’s relationship with Insteon as a threat, when the deal is little more than Microsoft scrambling to do something in this space and picking Insteon as a product to sell in its stores.

Control4, be very scared.

Another example of a Control4-crushing competitor, according to Man, is Verizon, which like ADT and Comcast “began cross-selling automation products to its existing customers.”

RELATED: What Went Wrong with Revolv? Theories on Home Automation Hubs

Here again, he cites a failed initiative. Verizon was the only one of the service providers (AT&T Digital Life, Xfinity and the other cable…

Friday, March 06, 2015

SecurityMan’s DUMCAM uses solar power to make the dummy cam seem smart.

By Julie Jacobson

We’ve seem some pretty dumb burglar-deterrent products from SecurityMan before, but this dummy cam looks kinda smart.

The DUMCAM-SLM is “easy to install and is completely maintenance free,” according to SecurityMan. Because it doesn’t actually DO anything except for sit there and look scary.

Actually, that’s not true. The $46 product shines a 110-lumen light when motion is detected after sunset, making it a “cost effective theft deterrent device used to purposely deter intruders and solicitors with just a fraction of the cost of a real security camera.”

Solicitors. Nice touch.

To power the light and built-in PIR, the faux camera has a solar panel that charges internal batteries (included) during the day.

To make the “professionally designed” camera look particularly authentic, there’s a cable to nowhere coming out of the housing, and labeling that says, “Color Outdoor Camera.”

It’s dumb alright, but I kind of want one. I wonder what my product review might look like: It works! No burglars yet!

See more stories filed under SLOW NEWS DAY.


Posted by Julie Jacobson on 03/06 at 12:47 PM
Blogs, Home Automation and Control, Security, Permalink

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