Is it time for home automation?

DSC, Honeywell, GE all urge dealers to get beyond security
Tuesday, May 1, 2007

LAS VEGAS--Here at ISC West, home automation's allure was impossible to ignore. A portion of the show floor was, for the first time, dedicated to "Smart Home." Occupying its traditional front right-hand corner on the show floor, DSC reserved significant space to showcase its home automation collaboration with Exceptional Innovation, the manufacturer of Life|ware software that allows consumers to control devices through their television remotes.
Honeywell announced that its Internet Connection Module, which allows lighting and HVAC units to be connected to the Web, is now compatible with its VISTA alarm panels. GE Security announced the launch of SmartCom, a residential intercom and entertainment system that blends multi-room audio and intercom capabilities with security, HVAC and other house systems.
Clearly, the major security manufacturers all agree with DSC manager of new business development Bryan Watts: "A large part of what DSC does is protect homes around the world. With all of the technology convergence happening now, and the reduction of the cost on sub-systems, everything in the home is becoming interoperable. It's part of our commitment to bring our dealers into this world."
"It's a great opportunity for the installer to expand their business," said Daren Orth, president of In2 Networks, which makes the Internet Connection Module for Honeywell. They can "make more dollars per door and differentiate themselves with the new services they can bring."
Watts said the barrier to entry into home automation for most dealers has been the high cost and the difficulty of installation. "We formed a strategic partnership with Life|ware and put the technology into a bundle," said Watts, to solve that problem. Dealers will be offered a $7200 package that features a television, Hewlett-Packard media center computer, eight zones of security and two zones of lighting.
"Life|ware has a dealer program as well," said Bret Fitzgerald, director of operations at Exceptional Innovation, "but it's in the CEDIA [consumer electronics] channel. The security market is in the home much more often, so that dealer channel is very important to us."
The question remains as to whether there is a market for home automation installation. "By 2010," said Fitzgerald, "30 million people will have this type of network in their home." But he acknowledges, "Only about three million in the United States right now even understand that this exists. It's a small market that we're tapping at the moment. The security line will create awareness and opportunities for us."
GE Security president Louis Parker thinks opportunity will be driven by need: "Owners of new homes are faced with a growing number of increasingly essential home systems, from heating and air conditioning, to security, to lighting, to communications and entertainment. Not only do these systems create a clutter of various controllers, they also are virtually completely un-integrated, denying the homeowner the ability to conveniently and efficiently manage the operation of their homes." That's where he hopes SmartCom is a smart buy.
Is that a big enough opportunity? "We're embracing it," said Todd Guerrero, president of Reference: Audio/Video Experts, "but I think it's a fair question." He said his company began in the custom A/V market in 1991, runs two (and soon a third) retail A/V locations, and entered the security market in the last three years. Mostly, his company gets into home automation "if we do any lighting control, if we do any kind of theater install, many times [customers] have a security system that they want tied in with that."
There's a "slow but obvious integration of these technologies," he said, but "we need people out there that know how to do it."
This attitude is reflected in an informal NewsPoll conducted by Security Systems News that found only 33 percent of residential installers are currently offering home automation technology. Of those 33 percent, 78 percent said less than 20 percent of their customer base was using home automation technology.
Dwayne Payne, owner of Southern AZ Alarms, might be indicative of this group. Is he installing home automation products? "Not at all, because I don't want to deal with it." Nor does he report being asked about it by his customers in the Phoenix area.
However, nearly 50 percent of respondents said they see home automation as a profit driver for their company going forward and 60 percent said demand for home automation is increasing.
As with any business opportunity, Guerrero said, "there's great automation and technology, but you want to make sure you're applying it for the right reasons. It's the thought that just because something's possible, doesn't necessarily mean that it's beneficial. You have to make sure that what you're doing has a benefit for the customer."
Martha Entwistle and Elisabeth Wilkins contributed to this report.