Who’s afraid of Google?

Smart resi providers should take Google’s move into home security seriously, but could wind up benefitting from it
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Wednesday, April 1, 2015

YARMOUTH, Maine—Google’s venture into home security and automation may turn out to be a very good thing for traditional resi companies, according to providers interviewed by Security Systems News.

That’s not to say it won’t pose challenges, maybe even some big ones, but any sound company that has solid customer service and stays on its technological toes shouldn’t fear Google’s foray, they said. Monitoring companies could stand to benefit, too.

“I love it,” Select Security’s president Steve Firestone (photo on left) told SSN. 

Google was awarded a patent last month for “Security Scoring in a Smart-Sensored Home.”  It includes “security scores” to alert customers about incorrect use of their systems, smart doorknobs and doorbells, smart window- and door-entry detectors and a community tie-in that would alert if there was a break-in in progress at a neighbor’s home. It’s still not known how and when Google intends to put this technology into play.

A company with Google’s brand power can reach a wider audience and educate consumers about security and home automation to the benefit of all companies in the business, Firestone said.

“Our industry has been at a 20 percent penetration rate of homes in America for last 20 to 30 years because the consumer marketplace has never really understood the value of residential security,” he said.

The penetration rate is “going up faster now because of the connected home and companies advertising that,” he said. Google’s marketing would cause even more gains, said Firestone, whose company is based in Lancaster, Pa.

John Cerasuolo (photo on left), president and CEO of ADS, based in Nashville, agrees. 

“There very well could be ways this could be positive for the industry in the exposure it would give, the promotions they would do to highlight the value of these services,” he said.

Google’s plan is to become a data repository for everything, Firestone said. Collecting data on consumer purchases is not something a security company does, and Google is not a security company. That’s what security dealers need to focus on and make sure their customers know.

“As a service provider, we have feet on the streets, we roll trucks, we have relationships with our customers that Google will never have,” Firestone said. “We provide multiple products and support and monitor those services through a single service provider.” 

“It’s our job to leverage that,” he said.

The approach Google takes and the fact that it is “arguably the most powerful company in America” will be factors in its impact on the industry, said Bob Ryan (photo on left), CMO of ASG in Beltsville, Md., who added that many unanswered questions remain.

It’s unlikely Google will take a traditional approach, he said. Ryan believes Google will go with DIY. “They won’t have a bunch of guys running around and [service] trucks with the Google logo on them. But will it be more of the same or earth-shattering? Will it be disruptive and hard for traditional players to contend with?”

Google’s dominance in the information realm puts it at a significant advantage, Ryan said.

“Google knows everything about everyone and they have deep pockets, and that’s what we’re going to have to contend with," he said.

Jeff Kahn (photo on left), COO of Wayne Alarm in Lynn, Mass., agrees with Firestone and Cerasuolo that any marketing by Google would be helpful for his company. “When Comcast got into remote access to home security systems via smartphones, it was good for Wayne Alarm,” he said.

Google’s products are smart and technologically sound, Kahn said. “They’ll tell the homeowner about the situation, but what will the homeowner do with that information? [If it’s DIY,] it’s driven directly to the consumer as opposed to going through a central station,” he said.

If it goes the DIY route, Google eventually would have to get involved with a professional monitoring company, according to Jeff Kessler (photo below), managing director of Imperial Capital. DIY in general is increasing pressure on police, fire and healthcare first responders. Once they become overwhelmed with requests, Kessler believes that those responders will opt to work with monitoring companies over answering calls from individuals who have detected an intruder or other problem through a DIY system.

“If Google pushes the DIY button big-time, they’re going to have to buy a monitoring company or create one on their own, although I doubt they’d do that, or they’ll have to make some arrangement with a third-party monitoring company,” Kessler predicted.

Like Ryan, Cerasuolo warned that traditional security companies need to take Google’s move seriously.

It could pose a big challenge “if they find a way to upend us, if they take a disruptive kind of approach. We’re always at risk of someone coming along and reinventing the market. And that certainly is a threat from Google,” Cerasuolo said.

Google’s ubiquity is a factor. “Everyone that writes us a check each month, Google has access to every single one of them because they do Google searches, use Google apps and services. They’re in position to get between us and the customer if we don’t defend ourselves,” he said.

“To succeed we have to show we offer a better value. Good companies that stay up with technology and service and support their customers very well will have the ability to react to whatever Google does and survive and prosper,” Cerasuolo said.

He added, “This is what makes America great and makes capitalism wonderful. It’s not great to be in an industry where there’s no innovation.”

Everyone in the industry “thought the sky was falling” when Verizon, Time Warner, ATT and other huge names moved into security, Ryan said. 

“But the sky is not falling. There’s enough out there for everyone,” he said.

Security providers are used to taking on corporate giants, including new players in the industry, Kahn said.

“It always comes down to us, we’ve been up against the ADTs and the Comcasts and others for a while now. If you have the right attitude you are able to [continue to] be successful,” he said.

“Google will sell bazillions of these things, and we’re not even a blip on their radar screen. But we’re a company that can get it all done. If we’re doing our job right, making our presence known, letting people know we are a one-stop shop, we’ll be OK,” Kahn said.

Firestone agrees and is ready for the challenges Google may present.

“With our customers in our trade area, we’ll take on Google,” he said.

Google did not respond to inquiries from Security Systems News

Comments

Historically their patents foretell their market direction.  Google's history is to buy someone in the target industry and leverage that purchase with their deep pockets.  It will be a battle.

The industrys view of the world will need to change.

It makes perfect sense to talk about better value but what does that really mean?

From my perception, once a company (dealer or monitoring) brings a customer on, they prefer to keep quiet and not "rock the boat".

I suggest being proactive and reaching out to customers and building relationships. There's a variety of tactics that can be employed, but to date I've not seen one actually being done.

Separately... "DIY in general is increasing pressure on police, fire and healthcare first responders. Once they become overwhelmed with requests, Kessler believes that those responders will opt to work with monitoring companies over answering calls from individuals who have detected an intruder or other problem through a DIY system."

From my perspective the responders would embrace individuals who report issues. From their perspective the call would be real and not another "false alarm" that drains resources. Currently the false alarms in the industry are the dirty little secret that could eventually destroy the monitiring business as we know it.

So in my opinion, having legitamite request come from "whom ever" would be welcomed, not seen as a problem.

The world is changing...

Kickstarter and other crowd funding platforms are making it easier for people to start companies, create or leverage new technology, and eventually  create disruptive technology, business models or methodology that will change the face of the industry...

Might not happen tomarrow, but rest assured it's coming.

All is not lost tho'. Get a firm understanding of who your customer is, (target a goal and develop a strategy to get to that goal) listen, test (try new things), and make the changes you need to accomodate them (your customers).

At the end of the day, it's all about your customers.