SCOTTSDALE, Ariz. — Under the thematic banner “Explore New Dimensions,” members of Honeywell’s First Alert Professional dealer network assembled here from around the nation and Latin America for an annual convention focused on innovative technologies and services to meet the demands of a fast-evolving marketplace.
Held Nov. 10-13 at the posh Westin Kierland Resort & Spa, the 22nd annual event provided more than 700 attendees a full agenda of educational sessions, networking and entertainment, a new products showcase, sales awards and other related activities.
The conference officially kicked off with a general session presided over by JoAnna Sohovich, president, Honeywell Security & Communications. Each year the elaborately produced general session features a handful of Honeywell executives presenting new product information as well as appraisals of important market trends, opportunities and challenges.
IP-based technologies and remote services that allow users to stay connected to their homes and businesses were especially emphasized.
Scott Harkins, president and general manager of Honeywell Systems, discussed products and services — such as the NetAXS-123 Web-based access control solution — that will help dealers expand their recurring revenue base and grow their businesses. Particular weight was placed on the expanding IP video market, which Harkins said is growing in the mid to upper 30-percent range year over year.
“I predict that by the end of 2013, maybe the end of 2014, the predominant piece of the surveillance business — more than 50 percent — will be IP solutions. It is happening in our business right now,” he said. “There is a very good chance with the current success of our new products that it will be more than 50 percent of our business next year. It is happening across the entire industry.”
During his presentation, Harkins took a moment to inform dealers about the continuing disaster in Thailand where deadly floods have also wreaked havoc on the country’s industrial centers. In particular, a prolonged disruption to the hard disk drive (HDD) supply chain can be expected after multiple HDD factories suffered major flood damage. Price increases and supply shortages are being felt across the electronic security industry and beyond, Harkins said.
“Some hard drives have gone up as much as four times the cost from two weeks ago. We expect that continue. But I am truly not worried about the cost; I’m worried about availability for DVRs,” he said. “In early Q1, come the February/March timeframe, DVRs could — it’s not definite yet — become very hard to find in the marketplace. You should be preparing your business for that. There is no escaping it. It could be a very difficult first few months of 2012 in the DVR market.”
Among Honeywell’s upcoming entries to the marketplace is Tuxedo Touch, a 7-inch touchscreen that works with the manufacturer’s Vista line of technology. The product provides centralized control of security systems, cameras, Z-Wave-enabled thermostats, lights, door locks and more. Sohovich explained the product also acts as a Web server that allows users to access home controls from any Internet-enabled device. The imperative for dealers is to meet consumers’ rising expectations for multiuse functionality.
“There is a war being waged where lines have been drawn and on one side of the line people say we have to have bigger and better touchscreens on the walls, and on the other side the visionaries are saying, ‘People have their own [mobile] devices, why would they want to pay for something that is on the wall?’ I think we are in a transition period. I am here to say they want both. People want to be able to access their controls and their automation, their lifestyle functions, through whatever device is closest to them at that moment in time,” Sohovich said.
Ron Rothman, president of Honeywell Security Group, also addressed the assemblage. He highlighted the torrid pace of change the electronic security has experienced during the previous five years, including: telco lines going away and being replaced by VoIP and the vulnerabilities that it represented; the sunset of the AMPS network and the transition to GSM; and cell phone saturation, which has allowed for new forms of communication, social media and consumer expectations for mobile connectivity to their homes.
Broadband connection, which has reached about 70 percent of the U.S. households, and the concurrent high adoption rate of smartphones is altering the business landscape in profound ways, Rothman said. And although the changing landscape is creating new business opportunities, he admonished dealers that their business models must evolve as well or risk being a casualty to hungry competitors.
“The hard work has been done because the cable companies and the cell carriers have given us all the tools. They deployed the network and they deployed the smartphone. They have actually made it easy for us, but we haven’t taken advantage of it yet,” Rothman said.
Rotham said the telco and cable operators have recognized the same fact the security industry has long identified: Out of 100 million homes in the U.S., roughly 15 percent are equipped with a radio that goes beyond a digital dialer.
“Why do you think the cable guys are so interested? There are 100 million homes that, essentially, no one has sold the new technology to. We as an industry tend not to go back to our customers. Well you had better ... because if you don’t then somebody else is going to because the technology is here,” he said.
To bring home his point, Rothman told dealers to strongly consider that a time will soon come when the value of their businesses will be based on two categories: RMR that is generated by digital dialers, and RMR that is generated by remote services.
“Across the board in general it is a fabulous time, it is the best time to be in this industry. The sky is the limit. But I would also suggest there are other people that have all noticed too. That is why you see quad-plays from cable and telco and why you continue to see new entrants into this business.”
Rodney Bosch is managing editor for SECURITY SALES & INTEGRATION. He can be reached at (310) 533-2426.