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What Went Wrong with Colorado vNet

Rep suggests "there must be a deeper, darker story here," but we don't think there's anything sinister about the (second) collapse of home automation maker Colorado vNet.


Julie Jacobson · December 30, 2010

Our condolences go out to employees and customers of Colorado vNet, which apparently has died its final death.

It’s a real pity.

The maker of multiroom audio, home automation and lighting control systems showed some promise, especially when it unveiled one of the most elegant in-wall touchscreens the home-control industry had ever seen back in 2006. I call it the floater.

The floating-glass design (below) was discontinued this month in favor of new touchscreens with the customer’s choice of plastic bezels that “match any décor.”

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Colorado vNet floating glass-bezel touchscreen, 2006

But that’s not why vNet failed. In fact, the new design probably did find favor among certain interior decorators.

I honestly believe that Russound, which bought the vNet assets in 2009 just as founder Bill Beierwaltes was shuttering the company for good, simply gave up. I mean, vNet wasn’t making enough money and Russound wasn’t prepared to invest any more in the organization.

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Not that there’s anything wrong with that. Continuing to feed scarce resources into vNet during a time of economic uncertainty would be a scary proposition.

I believe (former) vNet VP sales and marketing Petro Shimonishi when she told me there was no “single smoking gun” that crippled vNet.

The products were fine—nice lighting controls, a good multiroom audio system, pretty touchscreens, and integration with a small array of popular subsystems. The GUI was boring, but that’s OK. Dealers tell us the system is simple to program and very stable.

But Russound began its vNet journey at a severe disadvantage.

First, the company did after all close. It’s hard to win back dealer (and consumer) trust after something like that.

As Shimonishi told CE Pro, “Turning around a company after such an abrupt closure is difficult work.”

Second, an early batch of RF lighting controls failed miserably and the original vNet did not make good on promises to many stranded dealers.

Miraculously, however, vNet dealers did return, and even more signed on. They seemed to be happy with the products and thrilled with the new vNet team.

We heard from several dealers and reps after posting our story about the vNet closure yesterday. Ordinarily during times like this, we hear nothing but trash talk about the doomed company, but not in this case.

Colorado vNet signed up some excellent manufacturers’ reps over the past several months.

Here’s what one of them told me in an email:

What a shame, I was getting really strong response to it and had already started signing up dealers.

I talked to some other vNet reps this morning and they all said the same thing—that they were doing well with the line, that it was going to be one of their biggest income producers in 2011, that it had a strong and loyal following, and they were completely mystified by the move.”

Similarly, in the CEPro.com comments, “Dave” writes:

I’m more than a bit perplexed by this announcement. 

The sales, marketing & product development seemed to get back on track with Petro running that part of the business. They did hire a really good rep in our territory who called on us and we got regular updates as to development of new products and tools for the dealers.  The regional sales manager was good but stretched way too thin for the amount of territory he had to cover, but the rep filled in.  We got back on the bandwagon and did some jobs with them and have more specified in. 

We have several more jobs spec’d in for 2011 and now I am working to switch my jobs over to another solution. …

Our business with vNet would have expanded in 2011, and we were excited.


As yet another rep told me, “I have to think this is a move forced by finances and it’s too bad somebody in a better position didn’t buy vNet a year ago.”

Indeed, Russound has been battered by the economy, just like similar companies that rely so heavily on new construction. The company’s retrofit savior, the powerline-based Collage multiroom audio system, is catching on, but slowly.

vNet was positioned at the high end of the home-control market, and Russound apparently didn’t have the stomach (i.e., the finances) to fight in that tenuous space.

One rep suggested to me, “Considering how well all the reps and dealers I talked to said they were doing with the line, there must be a deeper, darker story here.”

I don’t think there’s anything more sinister than a company just retrenching to focus on its core business.

I wish I had a juicier tale to tell.

Will Colorado vNet be rescued again?
I doubt it. Russound wouldn’t get much for it, particularly while it is embroiled in legal issues with the vNet hometown of Loveland, Colo. It seems Russound would indeed be better off just exploiting the decent portfolio of vNet patents.

Russound badly needs to get out of its analog rut, as CEO Charlie Porritt told me yesterday: “We need to move away from the old analog mix and move to digital.”

vNet does digital. Interestingly, Shimonishi does too. She spent a huge chunk of her career at Netstreams, a leader in multiroom audio over IP.

Will Shimonishi usher Russound into the digital era as the recently appointed VP marketing for the company?

We shall see.



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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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