Working with DIYers can provide another source of revenue, and make sure the job is done right
- By Robert Ogle
- Mar 01, 2016
The industry is starting to see a growing connection between existing
home security and home automation providers and their
DIY counterparts. Major security companies who have spent
years building their brands are beginning to grow their businesses
by acquiring or partnering with DIY providers and products.
At first, it seems counterintuitive that established “incumbent” companies
would seek DIY acquisitions or partnerships. Along with powerful
non-security players like Google, Samsung and Amazon, DIYers have
traditionally set their sights on disrupting the security industry, offering
security and smart-home solutions to customers who, for whatever reason,
have traditionally been unwilling or unable to work with existing providers.
TALKING ABOUT DEALS
A number of deals in recent months show that existing security companies
are firmly entertaining the notion that offering or integrating DIY alternatives
can help grow their customer base and RMR. Monitronics Security
was one of the first to recognize the trend with its purchase of LiveWatch
in March 2015.
As a standalone subsidiary of Monitronics, LiveWatch sells a variety of
wireless security and smart-home products direct to consumers under its
Plug & Protect brand. The systems are ordered online, preconfigured, and
sent to the customers. They “install” and activate the systems, and Live-
Watch is available for support and advice.
Unlike many other DIY systems, LiveWatch offers live around-the-clock
monitoring as well as self-monitoring alerts to mobile devices and emergency
contacts using its proprietary ASAPer service.
Jeffery Gardner took the reins as CEO of Monitronics in September
2015, and quickly understood the importance of LiveWatch as part of a
broad spectrum of customer options. On one hand, Monitronics has always
had a robust dealer program in which integrators can offer products and
services from a wide selection of well-known brands. LiveWatch covers the
other side: People who want protection and home automation without going
through a traditional dealer.
“It’s a good time to be in that space,” Gardner said. “Our industry is
evolving so fast that there’s not a lot of time to ride the status quo. Live-
Watch gives us a foothold and a strong engine for growth in the DIY market,
and it’s always better to be the disruptor than the disrupted. We have to
be able to lead change in the industry instead of just reacting to it.”
LiveWatch is separate from Monitronics’ dealer network, and Gardner is
quick to underscore the network’s importance.
“As things evolve, I’m very committed to our dealer program,” he said.
“Regardless of anything we do to change Monitronics, it’s not going to get in
the way of building a stronger dealer program. That’s been the foundation
of this company for a long time, and we’re not going to lose sight of that as
we plan for the future.”
Another game-changer for security industry incumbents has been the
evolution of DIY technology as well as the involvement of larger companies
who are getting involved. DIY had been largely available through a couple
of big box chains and a scattered selection of devices and ideas, financed
either through venture capital or through crowdfunding websites like Kickstarter
Google’s purchase of Nest in January 2014 for $3.2 billion marked a huge
turning point in that paradigm, increasing the sense of urgency for other
major brands to keep up. Now we’re seeing all sorts of strategic alliances,
most recently between alarm.com and Apple; alarm.com and Amazon;
Samsung and LG (which is going heavily into the DIY market), Panasonic
and Honeywell, and (of course) Nest with a growing list of new partners
and distributors, including energy companies.
Now the word is out: Whether it’s established security providers or huge
companies that are competing for the high ground in home automation
and security, ignore the DIY concept at your own peril.
“Monitronics is a good business, and it’s easy to say that we shouldn’t
change things and that everything’s fine,” Gardner said. “But you have to
be innovative and you have to adapt to the marketplace. That’s why the best
companies today are very good about constantly evolving faster than the
competitive environment that’s evolving around them.”
This article originally appeared in the March 2016 issue of Security Today.