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Home Networking: Challenge or Opportunity?

Do dealers who started their businesses before the year 2000 have trouble grasping wireless home networking technologies vs. their more youthful peers?

Victor Pak (left) and Dusan Jankov in 2003 in the Menlo Park, Calif. garage where Pakedge Devices started. Pak says convergence is still a difficult challenge for many integrators, especially those with A/V roots.
Jason Knott · July 27, 2012

Is the development of wireless home networks the uniting or dividing technology that will define the future of the custom electronics industry? It just might be, according to Victor Pak, president of Pakedge Device & Software, who spoke with CE Pro about the state of the networking industry.

“I think there are two classes of integrators: ones who have been in business before the convergence and ones who started their business after,” says Pak. “The integrators who started their business within the past 10 years have always been very comfortable with networking; however, they are not the majority. I think the attitude of custom integrators who were around 10 years ago have changed a bit, however not to the point where they have embraced it and made networking a core part of their business.”

Pak believes this dividing line of convergence is reflected in whether dealers think about home network as a challenge or an opportunity.

“I think of those who survived during this IP transition, they know networking is an opportunity and they have either hired someone to manage the networking part of the business, and/or are going with outside IT consultants to handle their networking portion of the business. Rarely, have I met a custom integrator, say an owner who’s been in business a long time, who is passionate about networking. I just don’t hear the energy when I speak to them about networking. If I change the topic to two-channel analog audio, for example, their energy level goes exponentially higher,” he says.

“I think a good sign that attitudes have changed, where everyone fully embrace networking, understand networking and are educated in networking is when all the economic inefficiencies are flushed out in our industry market. For example, I see too many IT consulting companies buying off-the-shelf networking products and then charging a crazy markup to configure them and reselling them to custom installers. I can’t see why these custom integrators won’t do it themselves.”

Auto Discovery Is Most Important Development
Pak’s views on the market have been conceived over the past nine years, when along with his friend Dusan Jankov and cousin Mike Kwak, he decided to start a home networking hardware company in a garage in Menlo Park, Calif. Little did they know the dramatic technological developments that would occur in the category, not to mention what’s on the horizon in terms of cloud-based technology. Over that time, Pak sees Networking Auto Discovery/Configuration as the most important development.

“Auto Discovery technologies make it really easy for devices to find each other on the network and facilitate communication between these devices. Think of your Apple TV and iTunes automatically finding each other to share music and other content. A very simple concept and people without deep networking knowledge are not afraid of buying it, installing it, and using it.

“Personally, I don’t think people give Auto Discovery development enough credit,” he continues. “The Internet for example, and all the associated protocols, opened the ability to connect computers outside the scope of the local area network or WAN. However, Auto Discovery and the associated protocols opened up the ability to easily connect and network devices within a home (LAN).  Essentially, this allowed people with minimum networking knowledge to connect devices within a home resulting in a tremendous growth of devices for the home. Some homes now have over 100 devices. Wow! We would have never seen that 10 years ago. 

Of course, Pak adds that there’s a downside to Auto Discovery and Configuration. “Virtually all Auto Discovery and configuration technologies have some type of broadcast or multicast techniques which can flood or pollute the network and take up a lot bandwidth in worst case scenarios. We have seen the dark side in a very large home network where there is so much traffic, it is practically unusable,” he notes.

Dealers Fear Selling Expensive Networks
Besides the generational issue, what is holding back custom integrators from reaping money from this category?

Pak thinks the answer lies in their equipment choices and hesitancy to sell expensive home networks. He says home networking would be the center of every dealers’ business if it was so simple that they simply had to plug in devices and their instantaneously worked. But that is not the case.

If the network is large, it needs more processing power and therefore costs more, which then becomes a more difficult sale. If the network has a lot of devices, dealers need to separate the it into sub networks and for that they will need a router with IEEE802.1q capabilities.  Unfortunately, these routers are pretty much over $500 and the really good ones can go much higher. Finally, if homeowners want a wireless network where they can continuously stream video files without any drops as they move from WAP-to-WAP, it requires a different kind of technology that costs many times more than the standard WAP.

  About the Author

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

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