cyberManor: No Fear of Networking
cyberManor's revenues increased 43% in 2008, and it maintains a one-year backlog by focusing on IP-based jobs.
Ever since the introduction of IP-based home control systems, integrators have been seeking a workable business model that relies on labor revenues rather than equipment mark-ups.
Gordon van Zuiden, president of cyberManor, has not only discovered that model, but is also using it to differentiate his company.
The nine-year-old company, based in Los Gatos, Calif., is one of the few integrators to have successfully patterned its business around integrated IP-based audio/video and data/control installations based on Microsoft’s Media Center platform. cyberManor recently won Microsoft’s 2008 Windows Media Center Ultimate Install Contest.
Maybe it’s because van Zuiden and his team started out selling home data networking solutions back in 1999 that he is comfortable with jobs that routinely last as long as three years and run into six figures in terms of cost.
With that type of necessary long-term commitment to an individual client, it’s important for the company to have operational efficiencies in place for payment schedules, service and equipment upgrades.
The proof is in the pudding — the company’s revenue grew 43 percent in 2008, and it has a one-year project backlog.
Finding Margin in IP Systems
While some dealers shy away from handling PC networks in the home, cyberManor has data networking as its roots. van Zuiden expanded into integrated audio/video and control solutions in 2001, seeing a need for local area network expertise in the home as an adjunct to always-on, high-speed broadband Internet.
cyberManor inched in that direction by teaming with an established A/V company called Silicon Valley Installation. That combination of A/V and data skills has made the company a formidable integrator.
- Location: Los Gatos, Calif.
- Web: http://www.cybermanor.com
- Principals: Gordon van Zuiden, president; Jim Kohl, project manager; Rick Kalm, lead programmer and lighting control expert; Chris Rosiak, lead installer
- Years in Business: 10
- Number of Employees: 8
- Revenues: $1.4 million (2007); $2 million (estimated 2008)
- Specialty: Whole-house integration of audio, video, data and control systems
- Top 5 Brands: Control4, SpeakerCraft, Lutron, Universal Remote Control, Russound
But being the “in-house” networking specialist for clients requires a commitment to handling change orders caused by hardware and software upgrades that commonly occur between the time a job is spec’d and the time of the installation. And, networking expertise also means offering ongoing service.
“Probably the greatest challenge in this market is the time that these projects take to complete from start to finish — sometimes as long as three years [not continuously, but with gaps as long as seven months in some instances],” says van Zuiden.
“Over that period of time, technology evolves and changes, and we need to actively monitor and understand these changes to provide the best suite of product solutions when the homeowner finally moves into their new home — one that not only meets their current needs, but scales in the direction that new technology products and solutions are headed.”
Because of the nature of its sophisticated niche, cyberManor tends to focus on high-end new custom homes, on projects that allow it to more easily install and deploy a full range of products and services (whole house audio, distributed media rooms, data networks, and whole-house controls) as compared to the retrofit market.
“Our knowledge of network-based solutions for the home has always helped to differentiate our products and services from our competition,” van Zuiden explains. He doesn’t just want to keep up with new technologies, but he also wants to provide leading-edge IP-based audio/video, data and control solutions.
He touts cyberManor as one of the first companies to sell, install and support Kaleidescape, Sonos, Control4 and Lifeware among others. All those products rely on residential networking infrastructures as their backbone.
While cyberManor focuses on large six-figure jobs, its average job is between $30,000 and $40,000, with most jobs coming from referrals among its 500 or so previous customers.
“Believe it or not, large jobs offer more flexibility than small jobs,” he says, explaining that clients want “small jobs” done right away. Those small jobs, which are primarily retrofit work (adding a Sonos system is a biggie these days), do not provide cyberManor with a lot of margin.
“If there is any complexity to the installation, it erodes the profitability,” he says.
Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at email@example.com
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