Alarm.com traditionally has focused its business on working with thousands of independent home security dealers, but the company plans to move more aggressively with a strategy centered on partnerships with cable operators and other ISPs now that it has sealed up a deal for a piece of Icontrol.
“We think we’ll be a very relevant party for the MSO channel and the telecom channel,” Dan Kerzner, Alarm.com’s chief product officer, said.
Comcast acquired Icontrol’s ZigBee-based “Converge” platform, already used for Xfinity Home and for some smart home and security services used by several other cable operators. Alarm.com bought Icontrol’s Z-wave-facing Connect platform, which is used by home security giant ADT and a wide range of dealers. Alarm.com also bought Piper, the Ottawa, Canada-based piece of Icontrol that makes and sells a retail do-it-yourself smart home platform.
Alarm.com, which works with about 6,000 dealers, had about 2.6 million properties using its service/platform at the end of 2015, and ADT’s web site currently says it has 6.5 million total customers. Alarm.com plans to announced a revised, combined number when it reports quarterly results on Wednesday (March 15).
Alarm.com isn’t new to the MSO/ISP sector, as it does count Suddenlink (now part of Altice USA) among its known cable operator partners, but does plan to apply more resources to that market now that it has the Icontrol deal wrapped up.
“We're in active discussions with a variety of them [cable operators],” Kerzner said.
He and Alarm.com will have plenty of competition.
AT&T and Verizon already have their own home security and home automation products. Comcast, meanwhile, has already signaled that it will offer wholesale services to new customers in the U.S. and abroad.
Cox Communications, Rogers Communications, and the systems formerly with Time Warner Cable and Bright House already base their respective smart home offerings on the piece of Icontrol that Comcast acquired. Among them, Rogers has already announced that, in addition to licensing X1 for a new IPTV service, it will also adopt Comcast’s new “Digital Home” product. Cox is also licensing X1 for its new Contour video service.
Charter has not announced a formal going-forward product plan with respect to home security and home automation. Charter is still supporting TWC and Bright House customers that use the legacy platform, but said last June that it was assessing that part of its business.
The overall market is small but growing. The penetration of smart home systems will reach 3% of global households by 2018, and 7% by 2025, according to a recent forecast from IHS Markit, which also sees professionally monitored smart homes exceeding non-connected, traditionally monitored security systems in 2023.
Kerzner said Alarm.com’s acquisition will enable it to scale its platform and the R&D behind it, as it will combine development teams in Virginia, Denver, Florida and Boston, along with a presence in Silicon Valley.
According to this SEC filing, Alarm.com’s total cash consideration for its piece of Icontrol was $148.5 million.
The filing also disclosed that Alarm.com and Honeywell International had entered an agreement to settle a lawsuit filed against Alarm.com last month that tried to block the proposed deal, alleging that it violated antitrust law because the combined company would hold a 70% share of the “market for the provision of Remote Services for dealer installed security systems.” Terms of the settlement, which took effect after the closing of the Icontrol deal, were not disclosed.
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