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Adam Bannister is a contributor to IFSEC Global, having been in the role of Editor from 2014 through to November 2019. Adam also had stints as a journalist at cybersecurity publication, The Daily Swig, and as Managing Editor at Dynamis Online Media Group.
April 24, 2015

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Home Automation: CSL Dualcom’s Simon Banks urges caution on New Installer Revenue Stream

The UK home automation market – encompassing the installation of sensors, actuators, cameras and so on – will grow 98% by 2019, an AMA Research report has predicted.

With the traditional B2B security market still grappling with profound change and an influx of IT-orientated businesses, security installers could be forgiven for pondering the idea of diversifying into this virgin territory.

One need only glance at a Maplin’s storefront – surveillance cameras dominate – to recognise that the residential CCTV market is moving beyond affluent, gated communities.

Now the much-hyped ‘internet of things’ has raised the possibility of connecting cameras not just with laptops, iPads and smartphones, but also with heating, air conditioning, lighting, stereo – you name it – systems.

But of course the bulk of home automation will surely happen without the help of professional installation companies, with the more extensive, technical integrations being done by high income households.

One of the security industry’s most prominent figures has urged installation companies to tread with caution. Simon Banks, CSL Dualcom’s group managing director, believes the market certainly offers a potentially exciting new revenue stream – but it shouldn’t be embraced to the detriment of installers’ core business.

amx home automation panel“Be realistic”

“Many installers are looking at new verticals to sustain and grow,” he says. “The security industry has to move with social trends but also has to be realistic. Generic security systems and recurring income streams fund overheads.”

Dazzled by the technical possibilities commentators often forget to ask a key question of new technology: what problem is it actually solving? (New technology also, of course, often has unforeseen applications that completely take people by surprise). Are we really that irritated by having to turn light switches on and off via the switch on the wall?

“Home Automation is still a luxury item – some might say a gimmick,” says Banks. “Not every home has a Range Rover on the drive and not every home needs home automation.”

Then again, if energy costs continue to rise as expected then the merits of a system that adjusts the thermostat according to occupancy and room temperature will become more compelling.

Nevertheless, Banks preaches a cautious approach.

“If genuine savings can be sought through energy efficiency and time management then the return on investment will make it more commonplace. I would advise an installer not to ‘bet the farm’ on this solely as a viable business stream, but more a background task.”

With the industry evolving at dizzying speed, it’s understandable if some practitioners feel a little anxious about staying agile enough to survive and thrive.

Understandable, but often unwarranted, argues Banks.

“It’s also true that other industries are threatening our marketplace. Electrical contractors and IT professionals are looking to occupy vacuums left by our industry’s motivation to explore new concepts.

“But let’s not panic. Were not fast-moving consumer goods and we are highly regulated.”

“Inertia”

Banks says there’s an “inertia” inherent in the use of security maintenance services that gives well established companies a reliable source of repeat business.

“Health, home automation and cinema are all considered [as new revenue streams] but the core value of an installer is in the premium security estate,”continues Banks.

He cites the example of “two [installation] companies sold since January. One had an estate of 4,000 premises on contract, with 200 signalling systems – it sold for £200,000.

“Another sold a month later – also with 4,000 premises, and with 800 signalling systems – for £1m. The value is in the signalling – I would say that – but it also happens to be true!”

Installers should be careful not to squander such precious ongoing revenues in the – entirely reasonable – pursuit of fresh revenue streams, believes Banks. “Be aware and carefully blend new ideas into your existing business practices.”

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