Robin Ford is Global CachÃ©’s Vice President of Business Development and a co-founder. Ford brings more that 25 years experience in IT, including executive level sales, marketing, public relations, investor relations, and management, and 5 years in the control and automation market. Ford was previously with GraphOn Corporation, where she was a co-founder and worked in various management positions, including sitting on the Board of Directors, Vice President of Sales and Marketing, and Executive Vice President of Investor Relations. She was responsible for directing activities related to going public and the company’s listing on The NASDAQ Stock Market.
Control4 Home Automation
1. What do you think is driving the widespread convergence of Information Technology (IT), A/V, and residential technology?
An important factor driving convergence is availability. Products for the home, based on open IT standards have become more readily available in the last few years. Homes are utilizing wired and wireless networks not just to connect PCs and printers, but to connect entertainment centers, lighting, and security systems. Products are now available to connect entertainment systems to other components in a home, and control those systems using a simple handheld or remote control. Home controls no longer need to be high priced proprietary systems meant only for the very wealthy. Today, controllers can consist of a PC, software, a remote control, a network, and a way to connect household devices to the network. These products are readily available and not just cheap imitations of the high priced gear. They can be as powerful and leading edge as any proprietary system. The beauty of using products that are based on technology the IT industry embraced long ago is that these products promote competition, providing choices, driving prices down and availability up. This expands the market dramatically by making it available to a much broader audience.
Another important factor contributing to convergence is the attention being given to this market by large IT companies. After having conquered corporate America, companies like Microsoft and Cisco consider the residential market the next new frontier. All companies must grow, and the big guys are no exception. Although we don’t see a lot of activity today from them, as the market progresses expect to see traditional IT companies become more involved in our industry. This can be a very good thing as more money flows into the industry, providing opportunities for those with experience and the ability to take advantage of it.
2. What repercussions do you think convergence will have on the control/automation and A/V industry?
Parks Associates and Electronic Home predict that revenues in the residential market will grow from $9.8B this year to $17.4B five years from now. That’s some amazing growth. I believe that convergence is a very important factor in the expected growth of this market. Proprietary systems like AMX and Crestron have restricted the ability for this industry to grow to its potential. The complexity of their systems, their high price, and their domination of the installer channel has limited the market by serving only the upper financial echelon. Don’t get me wrong, they have great products, and I think they do serve a purpose, but they clearly don’t address the needs of the broader, more financially sensitive market. Employing open standards promotes innovation and encourages competition, delivering higher performance at a competitive price. The IT world experienced a similar shift in the late 80s to mid 90s, with a move from centralized computing to computing on the desktop. Billion dollar companies (like Digital Equipment Corporation) that refused to move their proprietary systems to open systems disappeared. Others (like Hewlett-Packard) embraced the shift and experienced huge growth. The shift from proprietary systems to open systems propelled the computing industry forward, driving prices downward and making computing affordable for the mass market.
3. What are some of the challenges facing automation and control dealers and installers as IT becomes an important part of the solution?
I’ll break up the dealer/installer into two types of organizations. There are the organizations that have invested heavily in proprietary systems. They are dependent on the revenue generated by the sales and service of these systems. Then, there are the smaller dealers that are not doing much in terms of control and automation. They are focused primarily on installing “islands” of technology such as security or entertainment systems that don’t require a high-end proprietary system or networking technology.
To take advantage of the forecasted growth, both groups of installers must educate themselves on networking. This is essential. Not just for the advent of open systems, as even proprietary systems are moving to TCP/IP (standard networking protocol), but because this is the direction the world is going. Dealers and installers must also become familiar with PC technology. The dealer/installer of the higher-end proprietary system faces the biggest challenge as they will have to time an expansion into open systems without disrupting their bread and butter business generated by sales of Crestron and/or AMX. This can be tricky, but can be done as we witnessed in the shift of the high tech market of the early 1990s. Timing is everything. A dealer who has not begun educating himself on networking and PC technology runs a very real risk of being left behind.
4. What are some of the benefits customers will receive with these emerging trends?
Customers will have choices. They will be able to purchase a system that fits their needs, not the needs of the manufacturer to make a lot of money. Installations will be tailored to the particular requirements of that installation, and can be added to (and subtracted from) very easily as the environment of the customers change. The end-user will not be trapped into one particular vendor and any exorbitant price that vendor wants to charge them. Also, innovation will blossom as new product providers vie for the attention of the consumer. Competition is a wonderful thing for the end-user and I believe we will see this market explode as we are able to address the mass market with powerful and innovative products driven by simplicity and cost-effective pricing.
5. Can you give us some examples of how the convergence you talk about works in an automated home?
One of the biggest advantages of convergence is the flexibility that open and cost-effective products provide. There are so many applications it’s amazing. The company I work for, Global Cache’, manufactures a low-cost network adapter that connects almost any household device to a network. It is definitely a “convergence product”. We have dealers that use our products in all kinds of installations, proprietary and everything else. We enable the proprietary guys to be competitive and flexible. They can add an additional entertainment system to their Crestron or AMX install without dropping wire into the back bedroom(s) or buying another controller. Many of our dealers use our products with PC based software in all sorts of applications, like connecting a doorbell to the control system so a picture can pop up in your TV or security display when the doorbell rings, or connecting the pool house to the main house system, or just connecting all your entertainment devices so that you only need one remote control. If you can think of it, you can probably do it. No longer are we constrained by what proprietary systems can or can’t do, not to mention the cost.
We received a call just this morning from a gentleman who is putting together a system for a 10 year old child with cerebral palsy. She is unable to move her hands and legs, but using a puff and sniff device he is creating a system that will allow her to turn her TV on and off. She will be able to control an entertainment system that is designed with a PC, some simple software, and networked using our network adapter to her TV. Now that’s cool. We see and hear about these kinds of applications all the time. This is something that couldn’t have been done before, but now is becoming quite common.
6. What is the opportunity for the dealer channel?
The opportunity is for expansion and growth. The market is about to change dramatically, and the good news is that the dealer/installer is going to be needed more than ever. People will need help understanding what their choices are and will need installation services. They will need help understanding the operation of their systems (training), and they will need maintenance support. That’s a lot of business opportunity. The model for the dealer will change as prices erode and the volume of installations rises. Services, including training and maintenance will be great ways to generate revenue. Employing networking technology, dealers will be able to troubleshoot and maintain systems online, without truck rolls. It will be a different world and dealers should be exploring these new technologies and services for their future growth.
7. Do you have any advice on the steps an installer should take to take advantage of convergence?
Start educating yourself on the new open systems and technologies. Networking, networking, networking. If you can afford it, hire from the IT market to add that knowledge and experience to your business.
8. How do you see this playing out over the next 5 years?
Like I said, the numbers are projected to go from $9.8B this year to $17.4B in five years. This will be driven by our ability to serve a new lower-cost mass market. There are those that will be the Digital Equipments of the world and die holding on to their old proprietary ways, and there will be the incredibly successful HP’s of the world, adapting as they go. In the end, it’s the consumer that will tell us how it plays out.