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Control & Automation

Remote Network Monitoring: RMR or Just the Cost of Doing Business?

Integrators struggle to generate recurring revenues (RMR) for remote network monitoring; should they chalk it up to the cost of doing business?

Remote Network Monitoring: RMR or Just the Cost of Doing Business?
Krika users can press the “Help Me” button from a client’s dashboard to diagnose problems and help other dealers who have implemented similar product combinations. Is this troubleshooting aid just a cost of doing business?

Julie Jacobson · December 15, 2016

Back in the day, when Ihiji was just launching its network-monitoring solutions (with very hefty monthly fees at the time), the company tried to pitch it to dealers as a cost of doing business. Don't think about the recurring monthly revenue (RMR) opportunities it can generate, they suggested. Just absorb the cost like you would a CRM system or project-design software.

The products and services would save integrators countless truck rolls, which would save them money, and even make them money by providing a better user experience for their clients.

That particular model didn't fly at the time. The price for Ihiji and others was too hard for dealers to swallow.

Fast forward to today, though, and the wholesale monthly fees for remote network monitoring have dropped dramatically, both for Ihiji and its now-plentiful rivals. At the same time, the dialog has shifted to RMR: How much can we charge customers for remotely monitoring their home networking and automation systems ... even if they see little value in it?

Dealers have struggled to recoup or (better yet) profit from such services, even though pricing has dropped and services from vendors have improved. Today, for example, you can monitor not just the network, but the smart devices attached to it, which is a very important function.

By aggregating all of that data from multiple households, these companies can provide valuable trouble-shooting tools for integrators — warning them of toxic product combinations, for example.

If a client’s light switch doesn’t work, the dealer must know if there is an issue with the Z-Wave mesh, for example, or the IP network. The more dealers know about the whole house, the fewer trucks they need to roll, the more money they save and the more likely they would be to chalk up remote services to the cost of doing business.

So now, I wonder: Is it time to reconsider remote-network monitoring simply as a cost of doing business? It's difficult to imagine the old days of rolling a truck whenever a customer's network goes down ... inevitably in the middle of the Super Bowl. No doubt these systems save dealers money. Most weren't charging for the truck rolls anyway.

But there are other compelling reasons for dealers to consider remote access as an operational expense rather than (necessarily) an RMR machine.

Consider companies like Ihiji, Krika, Domotz (with Fing), Pakedge (Control4), SnapAV, Luxul, Greenlight Control, DIY newcomers like Eero, and home automation companies themselves, which not only provide hooks to home automation, but also visibility into the way products and services interact with each other.

Related: RMR for Remote Networking Monitoring: Are We There Yet?

By aggregating all of that data from multiple households, these companies can provide valuable troubleshooting tools for integrators — warning them of toxic product combinations, for example, or helping them interact with other dealers in the same boat.

Say a dealer is having issues with a system that includes a TiVo Bolt and an Onkyo receiver. Wouldn’t it be nice to have immediate support from other integrators who are installing the exact same combo of products … down to the firmware version?

If you’re a Krika user, you can do this by simply pressing the “Help Me” button from the client’s dashboard and describing the issue.

Through its new WHEOSE service, Krika dispatches the SOS to other dealers who are installing these two products. Krika dealers who opt into the program will receive the help call and can respond at their leisure.

Eventually, dealers could offer a subscription service that provides them with key insights like this — a service that won’t necessarily fetch more revenues but could indeed save time and money.

Krika principal Bruno Napoli isn't happy about the language we use around RMR these days. The conversation, he says, needs to be reframed.

"RMR is not here to make custom installers rich or to save custom installers from shrinking margins," he says. "The very first purpose of RMR for custom installers is to be able to give better service to clients."

Calling the term "unproductive," Napoli says it is "almost never associated with 'benefit for end users.'"



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  About the Author

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at julie.jacobson@emeraldexpo.com

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  Article Topics


Control & Automation · Networking & Cables · Networking · Business · Service & Recurring Revenue · News · Blogs · Products · · Domotz · Ihiji · Krika · Remote Monitoring · All Topics
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Comments

Posted by Joseph Kolchinsky on January 4, 2017

Julie - I appreciate the question that was raised here but think this is only half the answer.  I penned a response here: http://www.cepro.com/article/why_you_should_not_absorb_rsm_as_a_cost_of_doing_business

Posted by Bruno Napoli on December 16, 2016

Thank you, Julie, for mentioning me.

I think we took the challenge from the wrong side since the beginning. Even before we explain how much money RMR can give to a custom installer with nice Excels sheet and pie charts, even before we blame them to let too much money on the table (I include me in this), we just forgot to help them to sell it to end users.

How can we sell something to a client if we don’t know how to clearly describe it a sexy way and make him dream about it? What is the benefit to end user? How it will enhance his life?  What problem it will solve?

Once our industry will found out how to clearly explain the benefit to end users, you’ll see every professional starting to invoice it like crazy just because it will be a demand FROM the end user. I’m working on a document for this… Stay tuned grin

Posted by Bruno Napoli on December 16, 2016

Thank you, Julie, for mentioning me.

I think we took the challenge from the wrong side since the beginning. Even before we explain how much money RMR can give to a custom installer with nice Excels sheet and pie charts, even before we blame them to let too much money on the table (I include me in this), we just forgot to help them to sell it to end users.

How can we sell something to a client if we don’t know how to clearly describe it a sexy way and make him dream about it? What is the benefit to end user? How it will enhance his life?  What problem it will solve?

Once our industry will found out how to clearly explain the benefit to end users, you’ll see every professional starting to invoice it like crazy just because it will be a demand FROM the end user. I’m working on a document for this… Stay tuned grin

Posted by Joseph Kolchinsky on January 4, 2017

Julie - I appreciate the question that was raised here but think this is only half the answer.  I penned a response here: http://www.cepro.com/article/why_you_should_not_absorb_rsm_as_a_cost_of_doing_business