If you’ve read some of my previous pieces on the home security market, you’d know that I and many others see Alarm.com as a pivotal company in the slow-motion reinvention of the home security market. While DIY products like Piper get much of the press, Alarm.com has driven significant change with over 2 million consumers using the company's security and managed smart home offerings through its various partners.
But while Alarm.com is in large part responsible for pioneering a shift away from older non-cloud based central monitoring solutions towards a more modern cloud-based security and smart home market, there are some signs that this ‘phase one’ company could hit some bumps down the road.
The first sign for me of potential trouble was the announcement of Icontrol One, a directly competitive offering from Icontrol aimed at the independent dealers where Alarm.com has thrived. No doubt, with the 2G sunset on the horizon, there is an impending platform battle as Alarm.com and Icontrol (among others) battle for those panels and RMR of about 4 million consumers that need to see their panels transitioned over the next 4 years.
As I thought what Icontrol’s entry might mean to Alarm.com, I started to think about other less obvious market transitions that could impact Alarm.com. The most significant could be moves by large central monitoring and security companies towards bringing more technology in-house.
One example is Vivint. Vivint, one of the country’s fastest growing managed smart security service providers, has built much of its initial success installing panels connected the the Alarm.com cloud. However, the company announced their own Vivint Sky smart home platform in June 2014, which appears to have its own proprietary cloud powering much of the functionality behind a Vivint-designed panel.
And then there’s Monitronics, an early partner of Alarm.com and has been responsible for much of the smart home/security cloud company’s growth. Just in the past month, Monitronics acquired DIY-install/central monitored security company in Livewatch, a sign that the company is clearly thinking about expanding its channel and offerings. While Livewatch isn’t an answer for Alarm.com, it does represent a possible sign that the company is looking at how it can continue to reinvent itself and its offerings over time with infusions of new technology and business models.
Certainly I don’t think every partner of Alarm.com is ready to move on. Frontpoint, continuously ranked among the top security companies in the US, is a dedicated Alarm.com partner, requiring any new customer install to by powered by the platform.
That said, often the natural course of a market evolution is for companies to partner with a technology provider in the initial stages of a market transition and, over time, develop expertise in-house or acquire it.
There's also a strong financial motivation, as a partner of Alarm.com is likely to see a significant percentage of the recurring monthly revenues (RMR) it takes in every month to go out the door in the form of a check to Alarm.com. Of course, such a motivation to explore alternatives is true not just for partners of Alarm.com, but for any company that uses an underlying service-enabling platforms (including customers of Icontrol such as Comcast or ADT).
Will it happen? I can’t say definitively. But given the long term move in home security to own more of the “technology stack” among the big consumer-facing service providers, it’s something to keep an eye on.