Remote Monitoring and Control Systems Offer Opportunity, Pitfalls for Dealers

The remote monitoring market for custom integrators is gaining traction, according to companies like Panamax/Furman, Nuage Nine and ihiji, which are hoping to build a high-margin service category for integrators increasingly slammed by product discounting. At CEDIA, ihiji, which began its monitoring product in March, unveiled a two-way service said to provide real-time remote systems restart, reboot and repair, and the company expects the market for IP-based remote monitoring to break open in 2011. “There are enough devices out there now that are intelligent and more are coming online every day,” President Stuart Rench told Consumer Electronics Daily.

For remote monitoring contracts to be successful dealers have to overhaul the way they relate to customers, Rench said, and that won’t be an easy transition for dealers used to selling gear. “This is about changing the relationship between the dealer and client and making dealers more of a trusted partner who’s looking out for them in the good and the bad times,” he said.

The biggest hurdles for Rench’s company are to “get dealers beyond the world they have lived in of selling boxes” and to learn how to sell service, he said. In some cases, ihiji needs to teach dealers the value of selling service to clients. “We've come across dealers who have never once charged for a service call,” Rench said. Dealers recognize they're not going to survive with that approach to business any longer, but changing that view “is a process,” he said.

Letting integrators manage systems remotely can save costly service calls. Getting consumers to see the value of a maintenance contract for entertainment systems in a highly discounted industry could be a tough sell. Ihiji encourages its dealers to offer clients a plan comprising twice-a-year service calls to check the status of electronics systems. Rench compared it to a maintenance plan for a luxury vehicle: “Regardless of how things look, you're going to want to change the oil and things like that.”

To speed dealers along the learning curve, ihiji is offering monthly contract webinars discussing what makes a valuable service contract, Rench said. The company also sells a service contract template that ihiji lawyers drew up “so that dealers don’t have to go to their lawyers and spend $2,000-$3,000 to get a contract up and running,” he said.

Rench and his partners came out of the integrator side, where they created a prototype remote management solution for InvoStar, a south Florida integration company. “We needed to find a commercial alternative or create one,” Rench said, so the company devised a user-friendly, GUI-based system that could be managed by various staff members, not just the IT-savvy technicians who developed the system. Unlike most integrators who have an affinity for consumer electronics technology but not computers, Rench said he and his partners have the benefit of IT training and computer science degrees, letting them navigate the IP-based world CE products are moving toward.

Still, Internet-enabled home electronics products aren’t the norm. Electronics have to be able to convey their status for ihiji’s monitoring solution to work. Rench said his company’s library of controllable products is “growing rapidly,” but added, “We are reliant on equipment being self-aware.” Blu-ray players, despite their Ethernet or Wi-Fi connections, are particularly mum about their status, he said. “No matter how hard you squeeze them, there’s nothing useful they can tell you about themselves,” Rench said. Amplifiers and control systems “have a lot of interesting things to say about their health and performance,” he said, but with Blu-ray players, “we can make sure it’s online but can’t tell if there’s an internal error.” The company learned at the recent CEDIA show about a couple of Blu-ray players that might be able to join the library of products that can be monitored and managed, he said.

Ihiji’s monitoring solution is based on the integration of multiple systems into a “one-stop shop” interface, so Rench doesn’t envision dealers carrying multiple monitoring solutions in the way they carry multiple brands of receivers or TVs. That could leave dealers in a vulnerable position relying on a single monitoring and management solution. “There is dependence,” Rench said. Dealers have had questions about that issue “that have to be dealt with,” he said. What happens if the monitoring company goes out of business is a major concern for dealers, he said, but dealers “will have to trust that the company is doing its business properly and secured funding the way it needs to.” Just like any software-based service business, he said, “there is going to be that underlying question.”

On the other side, if a dealer goes out of business, where does that leave a customer? “Dealers could assign other dealers in the area to take over and we would change ownership of the contract,” Rench said. Ihiji wouldn’t take over active monitoring of homeowners’ systems because “we're not able to support them,” he said. “We maintain the interface and all the updates and code required to make the monitoring and troubleshooting happen,” he said, and then the company sends SMS or e-mail notifications of alerts to dealers.

Ihiji has manufacturer integration partnerships with Crestron, Control4 and Netstreams and has custom ihiji monitoring modules for AMX and Panamax/Furman. Rench said additional partnerships will be announced before year-end.