Remote Monitoring Firm Hopes Lower System Cost Will Broaden Dealer Base
Trying to make the still-novel concept of remote monitoring more attractive to custom installers, cloud-based monitoring company ihiji launched at CEDIA what it bills as the industry’s lowest cost remote appliance. The $200 INV-APP-500 enables integrators to “further reduce remote servicing costs while simultaneously increasing system reliability, earning recurring revenue and maximizing operating efficiencies,” it said. Monthly monitoring costs start at $120, allowing dealers to offer a combined first-year hardware/software package for $320, which, the company said, a dealer can recoup by “avoiding just one truck roll."
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Three-year-old ihiji was started by integrators who developed their own remote monitoring system when they couldn’t find a remote monitoring solution that met their needs. Its first two remote monitoring products were for the top of the custom industry’s pyramid: Crestron and AMX control systems. Last March, ihiji introduced a lower cost version for the less-expensive Control4 system, said Michael Maniscalco, vice president of technical operations. At the same time, the company began developing this lower cost solution for existing IP-based products that also included Zigbee and legacy RS-232 devices. “Now, no matter what size installation dealers are doing, they can include this as a standard service,” Maniscalco said.
Maniscalco said ihiji’s $320 package offsets dealers’ warranty expenses. “It’s paying for itself while creating more reliable systems,” Maniscalco maintained. Anything dealers can do to save a truck roll while the job is under warranty “puts money back in their pockets and increases reliability on the job,” he said. The challenge is that recurrent revenue is still a new concept to dealers and many haven’t developed that aspect of their business. The most successful dealers who offer remote monitoring sell it as part of an overall service package and “not just alarm monitoring and remote monitoring,” he said.
Consumers, “get it” when service packages are presented properly, Maniscalco said. “You don’t get much consumer pushback, especially if you structure the package in a way that you're saving the consumer money in the long run,” he said. With so many different “pieces and parts” to custom home electronics systems today -- and with so many hardware products now being software-based -- monitoring and remote management is no longer a new concept. “Consumers get a notification every time there’s a Blu-ray update, and are familiar with the process,” he said. The company likens its service to OnStar, that’s “always monitoring, always looking.” Cable boxes, which have to be re-booted frequently, have in the past cost dealers truck rolls for a simple restart so that customers can watch TV. A service contract allows consumers to have a remote re-boot with no pricey service call “often without the consumer even knowing that it has been done,” he said.
Ihiji’s biggest selling point is that it’s cloud-based and “the dealer doesn’t have to worry about the headaches” associated with maintaining their own internal servers and systems, Maniscalco said. “We take the heavy lifting away” so a full-time IT guy isn’t required on staff, an expense most small custom integrators can’t readily afford, he said. Having a revenue-producing remote management service “is a big commitment and requires commitment of several people within the organizations,” he said. With downsizing of the economy in the past several years, integrators are busier than they've been, but they haven’t ramped up internal resources to be able to handle all the facets of a recurring-revenue service business, he said. Ihiji hopes to help them establish the structure of that business. But to get their ear in the first place, the system has to be low-cost enough to invest in compared with the system they're monitoring, Maniscalco said. Payback on job warranties is the pitch the company hopes will work with dealers.
Reducing the cost of investment in a remote monitoring program will enable ihiji to grow its installed base, Maniscalco hopes. He estimates that prior to the launch of the Control4 monitoring system last spring, 15-20 percent of integrators offered remote management contracts. The numbers have “gone up steadily since,” following introduction of the lower priced system, he said. Initial first-year cost for the ihiji service for Crestron and AMX systems was $770, including $120 of service, he said, but when putting a $550 monitoring appliance next to a $3,000 Control4 system, “that was pretty expensive,” he said. With the $200 box, “we can provide a lot of value to a customer that’s spending $3,000 on a Control4 system.” Annual monitoring fees have held steady at $120, he said. The category is still very new, he said, and company is still figuring out “where pricing needs to be in the current economy."
As home electronics products continue their transition to the IP world, ihiji will keep tabs on opportunities for the hobbyist, do-it-yourself consumer market, Maniscalco said. Today consumers wouldn’t see the value in such a service because they don’t participate in service calls. “We can save the integrator that time and trouble,” he said. Still, “there’s opportunity out there” on the hobbyist side that would require further development, he said. “It’s a great concept that we have under consideration and we'd love to be the first to break it,” but nothing is in the works currently, he said.