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Who Owns the Code? CE Industry’s Dirty Little Secret

When an integration company goes out of business, and customers don't have the programming code for their system, they can be left at the mercy of the bankruptcy courts.


Julie Jacobson · April 16, 2009

When you install a home control system, who owns the source code when the client is all paid up?

That’s a contentious issue in the industry, and no one seems to be talking about it.

The long-brewing issue, however, has become more urgent with the souring economy.

Some once-reputable integrators are going out of business and they’re taking their clients’ programming with them.

Consumers may be left with a lot of worthless equipment because no one else can take over a job without the source code.

This is a dirty little secret and it’s giving our industry a black eye.

What Happens When You Don’t have the Code?

Let’s say an integrator abruptly goes out of business and takes with it the Crestron code that was customized for each invidivual client.

Without the source code, no other integrator—not even Crestron itself—can access a client’s system. That means that even the most basic changes to a system—say, swapping out a DVD player, adding another light switch, or changing a channel icon—cannot be made without starting from scratch.

Starting from scratch does not mean just programming the system from scratch. It means re-interviewing the clients, determining their preferences, learning how they live, and doing all those invasive things that the homeowner dreads.

Like they really want to go through it a second time?

It also means charting the subsystems, mapping out the wiring, troubleshooting, and so on and so on.

And then comes the programming. Potentially tens of thousands of dollars spent on the original programming could all be for naught.

Dave Haddad, president of Chicago-based Vidacom Corp., is a long-time critic of the “code-as-hostage” practice. He has taken over several jobs from Baumeister AV, an established, high-profile integration company that recently was forced to shut its doors.

Haddad estimates that he would have to charge one of the affected clients $50,000 “just to sort it all out,” he says.

And he is not rejoicing at that new-found business.

“Frankly, I’m embarrassed,” he says. “I wish I could buy all of that locked-up code and hand it out to the customers who put their faith in this industry.”


  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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