The Self-Contained Market
Were the ‘good old days’ really as good as we remember them?
When most people refer to the “good old days” they’re
usually trying to fondly recall a period when things
were far simpler, worries were not as rampant and daily
life went on virtually unimpeded.
So that begs the question: Was there ever really such
a thing as the good old days in the home security products industry?
It’s a fair question. That’s because back in the good old days -- or the bad old
days, depending on how you look at it -- security was an island unto itself in
the home. In other words, it did two things: secure a home or building against
intruders and detect fire, and it was judged only in terms of those things. In a
best-case scenario from the customer’s perspective, it amounted to an insurance
policy that one hoped would never be needed.
A lot has changed since those days. One of the major changes in the last
several years has been security technology in general breaking out of its silo
and becoming associated with more value-added services, making it a bigger
part of daily life. Naturally, this expansion has led to increased business opportunities
for security dealers and integrators.
Self-contained systems -- all-in-one systems that include the panel, advanced
communication and keypad -- have played a key role in driving this
change. This is largely because many advanced technological capabilities have
increasingly been incorporated into these systems, which has made it more
cost-effective for dealers to offer these capabilities and increase their adoption
rates. Today, device manufacturers are seeing many growth opportunities in
the self-contained market as more of these capabilities -- such as integrating
security with HVAC, lighting and other home automation systems -- are continuing
to be plugged into self-contained systems.
This isn’t to say that the self-contained market hasn’t posed some challenges
to installers. New advances in touchscreen technologies and other areas,
however, could very well be just what the market needs to further embrace
this trend and bring the added value and recurring monthly revenue (RMR)
to dealer accounts.
The Secret of Self-contained’s Success
Since their inception in the early 1990s, self-contained alarm systems have
been built around three core guidelines that have set them apart from the rest
of the security market:
1. They needed to be as easy to sell as possible. Features that offer more
than just security were added to help increase closing ratios and provide the
ability for these devices to become high volume.
2. Their platforms had to be able to generate and maintain RMR. This led
to the inclusion of features such as two-way voice and other value-added services
from a monitoring position.
3. They had to be very fast and simple to install. The faster the dealer can
install the system, the more installations he can complete in a day.
The end result was consumers getting features that offered a much higher
level of value than some standard security systems. Examples of these features
included two-way voice, voice prompting, family message centers and others.
In addition to benefiting consumers, this also provided great value to dealers
because these systems were capable of generating additional RMR and more
sales, thus growing their businesses more effectively.
The key enabling technology for the self-contained market came with
the emergence and subsequent proliferation of reliable wireless. Since dealers
and integrators didn’t have to worry about installing wires, they put
up sensors quickly and easily without the installation time and expertise
needed for installing hardwired sensors. This also benefited the end users
who didn’t have to worry about installers drilling holes into their walls and
damaging any aesthetics.
In short, all of these types of benefits were geared toward helping the
dealer lower the cost of acquiring and keeping new customers, and maximizing
Today, manufacturers who make self-contained systems are still focused
on tackling the three objectives, only now at a much higher level.
Catering to Dealers and Installers
Over the years, numerous technological advancements have been added to
security systems to help improve the end-user experience. Manufacturers’
motivation for doing this was the prospect of helping their dealers increase
sales and reduce attrition. As a logical progression, though, manufacturers
are taking these steps a bit further by using them to improve the installation
process for the dealer.
In the self-contained market, a bigger proliferation in touchscreen displays
is one example of this trend. For consumers, it represents an example of hightech
devices that they have grown increasingly comfortable with (not to mention
have come to expect). These technologies add to the sophistication factor
yet manage to simplify operation.
Because older system enhancements were geared toward consumers,
though, the installers were often left to fend for themselves. Examples of this
include linear programming methods that sometimes kept installers on site
for inordinate amounts of time. Forced to memorize cryptic codes and program
the system using a small, dim, text-based display, additional installation
time was required.
By contrast, today’s self-contained systems such as Honeywell’s new LYNX
Touch offer features that help the installer complete his job faster. Using
touchscreen interfaces, for example, brings just as much value to the installer
as it does the end user. Not only do the graphics simplify the overall setup,
they also can drastically reduce installation errors, which can turn into a big
money saver for the dealer.
Consider this: When programming the system, installers typically must
set up zones and specify the type of protection within that zone. Setting
up these zones usually involves working through a set of questions. In the
bad old days, programmers were simply forced to work through one question
at a time, whether it was actually relevant or not. Then, there was the
process of remembering what each cryptic code stood for and entering it
into the system.
Today, though, each of these questions is on one screen and allows the
programmer to more easily navigate, literally with the touch of a finger.
Drop-down menus and graphic boxes have helped to add more context to
programming functions, making for a more intuitive process. If an installer
is programming a zone for a carbon monoxide (CO) detector, for example,
the display will provide programming options for only an appropriate CO
detector, reducing the likelihood of a manual error on the part of the installer.
Another side benefit of this technology is the ability to more effectively
train staff. It’s much easier, for example, to bring a new installer up to speed
with a graphic touchscreen keypad than having him sift through pages of
manuals to learn proper coding. Of course, this also means it’s much easier
for the dealer to train the end user as well.
Finally, today’s self-contained systems manufacturers are taking a valuable,
physical lesson from the PC: room for growth. For example, LYNX Touch features
designed expansion slots inside the plastic enclosure that provide the
ability to plug in additional modules as needs change. This means that when
new technology debuts, it’s far easier to replace the board than the entire unit.
It’s a subtle point, but it is also a distinctive innovation of the modern selfcontained
system that allows vendors to add further enhancements without
having to replace the product already hanging on the wall.
The Path Forward
If there’s one key self-contained system guideline that has strongly resonated
through the rest of the security industry, it’s the concept of providing features
that go above and beyond just offering security, per se.
One of the hottest trends in this space is energy management. That is, by
integrating security with home automation, homeowners can very well realize
savings that make up for the cost of the overall system.
A homeowner, for instance, can program an automated system to lower
the thermostat whenever he or she arms the security panel upon leaving the
house every day. Or, if the homeowner can access the system using a Webenabled
device, he or she also can control lighting, locks and surveillance as
These are functions that certainly appeal to the modern, tech-savvy homeowner.
But they also speak to a bigger picture: the self-contained space has
done a good job of not locking itself into a particular technology -- in this
In general, this has been a good strategy because technology is constantly
changing, and the market has put itself in a position that allows it to grow and
evolve with consumer needs. This gives the dealer the ability to add what he
needs to acquire and retain customers.
This is an important concept because security is inevitably going to need
to interact with other intelligent functions within the home such as HVAC,
lighting, locks, etc. And it will need to do so in a way that is simple for both
the installer to install and configure, and the homeowner to use if it’s to be
successful. For an installer, this means the ability to set up the system without
needing an engineer involved in the process.
As a result of all of this, today’s security dealer must be able to talk about
the security system in the home as a value-added service similar to what the
homeowner has grown accustomed to in other areas of his/her life.
Today’s homeowners are accustomed to having their information delivered
when and how they want it. Security technology, therefore, must also
meet this demand. When it does, it will become far more than an insurance
policy that may never get used.
Those remote services solutions that control security systems and provide
event notification via e-mail are here today, and they will continue to provide
value to the end user while they lower attrition rates for dealers.
The good news is that today’s successful security dealers understand and
are embracing this concept. By adding value-added remote services to their
portfolios, they increase the likelihood that a homeowner will consistently
use the system on a daily basis. That improves the overall value of the account
for the dealer.
Before too long, maybe then we’ll officially be able to remember this time
as the good old days.
This article originally appeared in the May 2011 issue of Security Today.