Another telco ready to eat your RMR?
It piqued my interest and I traded cards with Ms. Verizon. My first blogging on Verizon’s seeming security/PERS forays sparked some interest from readers in the form of comments and a LinkedIn Group discussion initiated by IPAlarms‘ Steve Nutt. After reading through those comments and the discussion I reached out to Alana again and heard back from her not too long after.
Hi Dan. Not able to share any information with you right now unfortunately. I’ll keep you in my Contacts though. Thanks.
Hmmm… That sounds to me like when you ask someone if a rumor is true and they say they can’t comment… almost always means the rumor is true. Sounds like they’re definitely moving in. It only remains to be seen in what capacity.
Here’s some of what transpired in the LinkedIn discussion:
I just read about this on Security Systems News and although it is a big WAKE UP call, I feel more disappointment than surprise. Alarm & PERS dealers should have this sewn up so tight that outsiders looking in would see zero opportunity.
Sadly that’s not the case and it is looking increasingly like many alarm dealers will sit back and watch as their customers unplug their landlines and send in their cancellation notices.
If you do the math, we are already at the stage where it is no longer possible for the number of technical people employed in our industry to migrate each and every analog system to IP/GSM before the telco’s pull the PSTN plug.
Interesting… You see where this is going… Telco’s control the old infrastructure and have branched out into the new infrastructure… The government ultimately will mandate when the PSTN no longer needs to be maintained, but the telcos have sway.
Steve continues, pointing out telco’s ability to neatly invade the space.
Approx 1 million new systems are installed each year in North America and the industry bases their number of employees around that figure. How then, if we allow 5 years for a POTS sunset, can these guys also upgrade 30 million analog systems at a rate of 6 million a year?
They can’t. Verizon know that. Other tech companies know that. The difference is, they have the people to carry out those upgrades, and unlike the alarm industry, they understand IP.
Steve discusses the amount of money we’re dealing with here and points out that there may not be time to sit around getting comfortable with IP.
I speak to Central Station staff every day of the week and I know for sure that less than 1% of today’s monitored subscriber base is using IP. It’s almost like IP just popped up a couple of months back and with it being so new, the industry is keeping an eye on it for a while before deciding whether or not they should use it.
The Geek Squad have no such fears of IP. Do you know how easy it is for those guys to go into a home, unplug the panel from the POTS line, plug an RJ11 cable into an IP Alarm device, plug into a router and walk away with your RMR?
They don’t even need to look at the alarm panel or concern themselves with what phone number it dials or what protocol it transmits. The IP device handles all of that and sends the signal to where it needs to go.
The way I see it (and apparently the way Verizon and others see it) is that even when you take existing lock-in contracts into account, there is US$600 million worth of alarm monitoring RMR up for grabs over the next five years ($20 average RMR times 30 million accounts). Even my wife doesn’t spend that much on her credit card, so it’s not to be sniffed at.
Steve’s initial post prompted a reply and a discussion was born.
Simon Cross from Becatech in the UK said the UK was already ahead of the IP curve. He points out that the industry’s main weakness is that they don’t own the entire communication path, don’t control the end-to-end-solution. I spoke with Mike Sherman over AES Intellinet about that very thing a while back.
We have gone down this route in the UK already. Seize the initiative and use a Webway, Chiron, Emizon or one of Steve’s devices to convert the existing panel to IP. Then do a deal with an ISP to resell network. Then you will manage the end to end solution and get recurring revenues, or at worst sit on the customers exisiting broadband line, which will be fine for an alarm but may be stretched if CCTV depending on the bandwidth required ie number of cameras on line at any one time. Remember CCTV is reliant on the upload speed not the download.
Steve replied, pointing out that there’s lots of opportunity there, if US security guys are willing to learn and embrace change.
Now there’s a good suggestion Simon. Rather than allow the IT guys to come in and pinch monitoring RMR, tech savvy Alarm Companies could expand on their knowledge of alarm and camera systems to go in and take part of the RMR for the Internet connection itself - and things that go with it like VoIP and IPTV.
Is anyone doing that in the UK ? - I’ve not heard of anyone doing it in the US.