This past week Stacey Higginbotham had a good piece about the possible sale of IControl to Comcast and Alarm.com The rumors of IControl getting acquired or split up have been floating around since early spring, and what I read in the piece echoed much of what I've heard in what appears to be an imminent transaction.
A few more details of what will likely happen:
- Comcast would buy the Zigbee-related platforms targeted around smart home automation and security for cable providers. This includes the Converge (monitored) and Touchstone (self-installed, self-monitored) platforms that powers security and smart home services sold by cable providers under their own brand.
- Comcast would also likely get the bulk of the patents IControl owns which, as one of the first cloud-platforms for smart home and consumer IoT services, is quite a few. Comcast would also apparently get the corporate entity of IControl.
- Alarm.com would get the Z-Wave platform (IControl Connect) and 11 of the patents. They will also, as Stacey reported, get the Piper security appliance.
Of course, this deal is even more intriguing given the long legal wrangling between Alarm.com and IControl. The years-long court battle resulted in a fairly disappointing result for Alarm.com in September of last year, when the US Patent Office invalidated some key patents of Alarm.com and, as Julie Jacobson wrote over at CEPro, awarded priority of those cancelled claims to IControl.
With the loss of some of the key foundational IP claims, it now looks like Alarm.com decided to resolve this issue by buying patents and IP from beleaguered IControl. Hey, if you can't beat them, buy them.
So How Did It Come To This?
Over the past two years, IControl has witnessed increased competition from both competing smart home platform providers and its own customers. While Comcast has continued to use the IControl platform, last year the cable company announced a certification platform for smart home and IoT devices, something it had previously left to IControl. As part of the same announcement, Comcast discussed its intentions to create a more unified end-user experience using Comcast developed technology.
On the home security side - the other primary market served by IControl's technology - ADT began to work with other partners to develop new DIY smart home powered security products based around its own security as-a-service platform. IControl was conspicuously left out of these new projects, which has been be speculated to be one of the main motivations for the litigation against Zonoff.
Adding further uncertainty for IControl was the fate of ADT itself. In February, it was announced ADT would be acquired by private equity firm Apollo Global, who planned to merge the company with Protection 1. While the press release announcing the deal played lip service to Pulse, ADT's smart home service (which IControl powers), it's been somewhat unclear since the announcement as to how committed the new company, with the Protection1 management team running the show, is committed to the smart home.
At the same time, the broader trend in the space is for larger service providers to begin to transition to their own platforms. One such company is Vivint, who left Alarm.com a few year ago and developed its own cloud platform and devices to power its security and smart home offerings. Since the move, Vivint has been one of the fastest growing security and smart home companies, which has led to more investment to fuel that growth. Many of IControl's existing customers are watching what Vivint and others have done and are examining their own strategies as competition for managed smart home, security and IoT services have increased.
Bottom line: With more competition from newer and more modern offerings, and more service providers looking at building their own platform as a way to differentiate their offerings, IControl, one of the pioneers in the smart home platform market, may be nearing its final days as an independent company.
Michael Wolf is the Chief Analyst for NextMarket Insights, where he advises smart home, home security and IoT companies on business models and strategy. Subscribe to his newsletter to get posts like this in your inbox. Also, check out theSmart Kitchen Summit.