Home Control Monitoring Marks New Era in Residential Custom Electronics

"We're going through a transition in the industry,” said Petraglia, who spent six years in design and sales for an electronics systems integrator after working in computer networking. When control systems were analog, Petraglia said, the service model was simple, straightforward and self-contained. “You installed a system, tinkered with it and left it alone until a component broke down and you replaced it. You didn’t have issues revolving around software and firmware.” Today’s digital systems are rife with software failures in the form of images freezing on TV and glitches that require a reboot, he said, saying even AV receivers are “computers inside with different software.” The computers in most home entertainment and control products today suffer the same software hiccups as computers used in businesses where there’s an IT department to maintain the systems. Nuage wants to be a remote IT department for custom installers.

On the homeowner end, the Nuage system is a Linux-based black box that resides on the home network. During setup, the box identifies everything it can see, “almost all of the electronic equipment in home,” Petraglia said. Using various protocols to query electronics on the network, the Nuage system builds a database of each endpoint to identify each box, its manufacturer, model number and any other designations. Petraglia said companies including Crestron and AMX already support the preferred Simple Network Management Protocol (SNMP), and the protocol is being implemented widely through the control system end of the electronics industry.

Some products will take longer to adopt the protocols, Petraglia said, saying first-generation Internet TVs have incorporated a walled-garden approach to connectivity for security reasons. “But we're already seeing that start to change,” he said, “and we expect full support for SNMP.” He said the company has already seen “a huge difference” from a year ago in how much ID information AV products contain. Without SNMP, the Nuage system can only tell whether a TV is on or off, and if it’s on, whether it’s working, he said. Add SNMP and Nuage knows “a plethora of information, down to what the internal temperature is, which software system is running on it and whether it’s operating properly,” he said. The box collects data and creates a database for household electronics, then ships the file to the company’s central system for monitoring, he said.

Nuage plans to sell the boxes and service through standard CEDIA channels, Petraglia said. Prices will depend on the configuration of each home’s system. The charges will run $900-$2,000 for the black box, with a “few hundred dollars’ installation fee” and a monthly service fee of $100-$150, he said. Dealers will make “similar margins on our products or services as they do any AV or home control type equipment,” he said.

The custom industry knows it has to move to a maintenance and service model to be profitable, but getting there won’t be easy, Petraglia conceded. At a time when consumers are presenting Best Buy ads to get a better deal on flat-panel TV prices, dealers have been hard-pressed to find a way to build in value, especially in a tough economy. Adding $100-$150 to subscription charges for cable, satellite, Internet music services and TiVo, could prompt pushback by fee-weary clients. “We have to make an educational sell to consumers,” Petraglia said. “Individual components aren’t the problem. They're very reliable.” Instead, he said, the subtle interactions between software, hardware and other components on the network are where problems occur. “The TV is rock solid, but when a customer streams Netflix, his movie starts getting a little jittery because one of the kids decided to download a movie over the Internet and overloaded the gateway to the house. We can sense those things."

Nuage is hoping that knowledge is power, or at least an effective sales tool, Petraglia said. Where today consumers may not understand why a Netflix image froze, “we'd explain what was going on,” he said. Readings showing that bandwidth had exceeded a preset level would be sent to the dealer’s smartphone, and the dealer could explain to the consumer what happened. “He can then call the client and talk about the load on the network and decide whether to not do those kinds of activities simultaneously or get a higher speed connection from the ISP,” he said.

It may take a while for consumers to see the benefit of monitoring, but the value to the dealer is readily evident, Petraglia said. Remote monitoring and control can save an installation company time and money on service calls. “With our information, an integrator can see a problem and typically take care of it remotely before a customer even knows about it,” he said. “We can do lot of diagnostics, so if they do have to roll a truck they'll know what’s wrong and have the right person and parts on hand for the job."

There has been some suggestion that dealers might subsidize monthly service fees because of the benefits to them, if they can’t get enough consumers to buy in, Petraglia said. And the recurring revenue from maintenance contracts brings dependable monthly income to an unpredictable market, he said. Although consumers will resist the monthly service model initially, he said, “we are going to have to go to a model in this industry -- and customers are going to resist it for awhile -- where integrators, in order to survive, have to make the money where they add the most value.” That’s in design, installation, programming and services, he said. “We used to sell flat panel TVs for $7,000 and make good margins,” he said. “We can’t do that anymore because price erosion will continue. “If we rely mostly on profit from hardware sales we won’t be able to stay in business, because there’s no profit.”