RMR from Home Automation and its Awesome Implications for Market Penetration & Valuation
2011 is the first year security giant ADT applied for the CE Pro 100, and they debuted at #1 with more than $50 million in custom revenue. In the first months of the launch of ADT’s Pulse program, their interactive services play that includes basic home control and energy management, they poured millions of dollars into advertising home automation in an effort that is lifting the prospects for all players in the market.
What ADT and other security based integrators like Guardian (#2 on the CE Pro 100) and Vivint (formerly APX Alarm and now #27 on the CE Pro 100) also bring to the party, is recurring revenue know-how. These companies are engineering powerful recurring monthly revenue (RMR) platforms around their residential offers. Other industry players need to take notice and follow suit with their own RMR plays. Why? The price structure broadens the market for home system offers, but, most important, it offers custom integrators the opportunity to dramatically increase the value of their companies when it comes time to exit, merge with another company or seek aggressive financing for organic expansion. In this session, we hear from both the players and expert observers about this game-changing development.
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