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.

·

Read full article.

9 Comments
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.

9 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.