The Internet of Things has made our world increasingly automated and connected. Everything from watches and telephones to large appliances and home thermostats can be connected to the Internet and adjusted and tracked through the use of smart technology. But while the Internet of Things is new and all the technological advances that have come with it are exciting and innovative, this evolution in our society has posed a challenge for many traditional security and alarm companies.
Some companies, particularly companies looking to increase their recurring monthly revenue, are embracing the challenge presented by the Internet of Things. The IoT revolution has provided security companies who are willing to invest in upgrading with numerous new sources of RMR, including remote monitoring services, automated features and add-ons.
But for company owners who are unsure if they will see a return on the investment made to accommodate the Internet of Things, the time to sell your alarm company is now.
Why Is Now A Good Time To Consider Selling Your Alarm or Security Company?
Here are three good reasons why alarm companies should sell during the Internet of Things revolution:
1. Technological Upgrades
When seeking home security systems, consumers now expect a high level of connectedness and automation. Many want to be able to remotely monitor and control their alarm systems, along with other home features such as thermostats and door locks. As mentioned previously, most traditional alarm companies are not equipped to provide this level of service and automation to their clients without making a significant investment in technological upgrades. If you’re not confident you’ll see a return on this investment, it’s likely time to consider selling your alarm company.
2. “Do It Yourself” Competition
DIY alarm and security systems have become incredibly popular in the past few years, a trend that has gone hand in hand with the IoT revolution. A recent article about home automation on MainStreet.com perhaps explains the relationship between the two best: “As technology advances, it reverses the characteristics of every situation again and again. The age of automation is going to be the age of ‘do it yourself’.”
Many consumers now favor DIY security systems that they can install and regulate themselves over traditional alarm systems that typically require yearly contracts, service charges and high up-front installation costs. And this doesn’t seem to be a trend that’s fading away. Consumer behavior has shown that those investing in security systems are embracing the age of automation and the age of do it yourself wholeheartedly, spending money on systems like Korner, Canary and other DIY home security devices instead of with traditional security alarm companies.
3. Market Saturation
Traditional home security companies have hovered around 20% market penetration for many years, catering to the approximately 1 in 5 American households who choose to pay for home security monitoring and struggling to expand beyond that. While it may seem that there is significant potential for expansion in today’s market, the opposite is more likely the case.
Currently, competition in the alarm security market is at an all time high. Phone and Internet providers are merging into the home security industry, offering packages that bundle home security and home management services alongside telephone and cable. This combined with the popularity of DIY home security systems has resulted in a home security market more saturated than ever before. As a result, the opportunities for traditional alarm companies to expand and convert new customers are limited.
The Time to Sell or Upgrade is Now.
Contact Rory Russell, Owner of Acquisition and Funding Services, on his cell phone at (800) 354-3863 for a no obligation business valuation and to find out which next step is the right one for your alarm business.
Interested in learning more about the Internet of Things’ impact on the security alarm industry? The following articles are a good place to start: