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Verizon's home security cards revealed--Commentary from a security industry luminary

Verizon's home security cards revealed--Commentary from a security industry luminary

I have been following Verizon's nudgings around the security industry since I met one of the company's marketing folks at ESX in June. And now that they've unveiled their new Verizon Home Monitoring and Control solution at CES in Vegas, I've got the story on that as well (just take a look at our top story on today's newswire).

In my research on the solution and in my interviews of the key players and industry commentators, I turned to security industry mainstay, George DeMarco who is the chairman of ESX.

George assured me he'd been talking about this kind of thing for quite a while and promised to get back to me as soon as he'd had a chance to do a little looking around of his own. As promised, George got back to me in an email at midnight of Jan. 6, the day CES dawned in Vegas. As luck would have it, I just happened to be going through my work email at the time (George and I are THAT devoted to security!) I've included select portions of George's remarks in my general Verizon story, but I felt that his response--more than just a simple few remarks--constituted a cogent and thought-provoking look at the way the winds are blowing. So compelling was George's response that I've decided to include it in its entirety below. Please enjoy George DeMarco's take on the changing state of the security industry, and what we should all be thinking about.

The electronic security industry has been going through a metamorphosis for some time. This is a result, in my opinion, of the advent of Fortune 500, multi-national and large, well-funded companies over the last ten years. Recently, we had Ascent Media, a content provider for media and entertainment services, entering the security monitoring business in a huge way. Now we have Verizon, with a market cap of $106 billion, announcing their official entrance into the "connected home" arena, offering cameras, motion sensors, smart door and window locks and energy efficient devices.

What we are witnessing is the evolution of the industry, being driven by new players focused on penetrating a very large market opportunity or increasing their customer share. Energy savings and remote access into the home will become a huge driver for homeowners in their buying decisions and Verizon recognizes this value proposition for their customer base. It is fast becoming a race to capture the attention of customers interested in convenience, savings and security, and consequently capturing the recurring revenues associated with these services.

ESX chariman George DeMarco

Technology is allowing suppliers and service providers the ability to deliver more desirable products and services that offer more powerful solutions for end-users. I believe these newest non-traditional players are "thinking on the fringes" of the box and are ready to storm the castle so to speak. The question is can companies, such as Verizon, deliver that personal touch expected by so many end-users. And, of course, from a regulatory aspect, is Verizon prepared to go it alone or will they be partnering with the industry. The industry says past history has proved that these companies have failed miserably; however, past history is no guarantee of future performance. From my viewpoint, I think competition is a good thing ... just don't underestimate your competition.

Think about this ... Verizon has 93 million customers nationwide. This number is extremely compelling as they develop their go-to-market strategy and uncover their execution results. How many of their customers own homes? How much will it cost them for lead generation? How effective will they be penetrating their own customer base? What is their current bundling strategy? What is the percentage of customers that choose all their available services in a bundled offering?

This is where I offer words of caution ... be careful, be very careful. At some point, they will get it right and many alarm dealers and integrators will simply say what the heck happened. The current business environment offers a great opportunity for long-time industry professionals to reevaluate their game plans and consider writing new play books to effectively compete at a higher level, no matter who your competition is, today or tomorrow.

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