When many of the large cable and telco firms entered the security space several years back, the response from many established companies and executives within the industry was largely the same: “been there, done that.” The prevailing wisdom was that some of these companies had already tried to make a go of it in security years before but the economics of the business – high customer acquisition costs and attrition – presented a barrier to entry that had forced many of them to abandon their plans before they were barely able to get them off the ground.
However, unlike before, the re-entry of these companies coincided with another important evolution in the industry: the shift from traditional burglar and fire alarm systems to smart home technology, which forced everyone to rethink their approach to the market. With the ability to offer connected home solutions on top of their traditional service offerings and bundle them together in a single bill, cable and telcos are now legitimate competitors in the home and light commercial security business.
One company that has achieved tremendous success since entering the market is Comcast. In just five years since launching Xfinity Home, the company’s flagship home security and automation service, Comcast has attained over one million subscribers. The company was recently honored with the 2017 North America Frost & Sullivan Company of the Year Award in the Home Automation & Security Services category due to their success with the Xfinity Home platform.
Daniel Herscovici, senior vice president and general manager of Comcast's Xfinity Home, attributes their rise in the marketplace to Comcast’s ability to build and support new businesses within such a large enterprise.
“Our success comes down to focus and execution and the support that Comcast gives us along the way,” he explains. “If you can imagine our size and scale, Comcast has 28 million consumer relationships. We’re a $100 billion market cap company, we have 100,000-plus employees, one of the largest video platforms, and we’re the largest ISP, so a company of that size and scale trying to found and support a new business – it’s actually quite challenging but at a company like Comcast, we encourage our startup groups and new business innovation.”
Rather than just seeing security as another add-on service; however, the company has invested heavily in research and development to pioneer new technology for the market. Last year, Comcast purchased Icontrol Network’s “Converge” software platform which it uses to power the Xfinity Home touchscreen panel and back-end servers. The acquisition essentially gave Comcast the ability to control its product roadmap moving forward and as well as establish an “IoT Center of Excellence” in Austin, Texas, which serves as a hub for the company’s engineers and developers to design new technology to support their various IoT businesses. In fact, shortly after the deal was announced, the company rolled out its own line of connected home products.
“Internally, the fact that we control our own destiny, our own product innovation roadmap, I think is a powerful tool. Every day we gain deep insights into what the customer values, requires and we can prioritize our R&D accordingly,” Herscovici says. “Even more so, I can tap into the larger innovation machine here at Comcast, so when we have an army of engineers working on the next-generation voice interface or we have an army or engineers working on machine learning and artificial intelligence, I can tap into that core capability and bring that back and innovate on the home security front.”
The acquisition of Icontrol also opened a new wholesale line of business for Comcast, which further deepens their roots in the industry. “As we complete the integration and get our legs underneath us, we intend to be a strong competitor and supply the platform to others to win both in the U.S. and perhaps globally,” he adds. “The only way we could do that is if we controlled our own technology platform, but even more so, because not only do we control our own technology but we kind of eat our own dog food. Because we have to live and breathe the product ourselves in our own business, I think we ultimately create a better product for other dealers and wholesalers because we are sensitive to time spent in the home install and the cost of equipment we might be giving our resellers as we also have our own business to run.”
While many may have viewed their market entrance with skepticism in the beginning, Herscovici says Comcast has now earned the respect of their fellow competitors within the security industry.
“I have to admit that when we initially entered the market, we were probably greeted with a bit of cynicism – not sure whether we were going to last or continue to invest,” he says. “I’ve spent some time recently at ESX as well as some other security conferences and purposely attended panel (discussions) with the audience filled with other security dealers and I think that I was able to garner their respect and make them understand we treat the regulatory, licensing and compliance environment of the home security landscape seriously. We’ve hired and built industry veterans into our organization in order to comply with rules, regulations, requirements, and take customer safety and experience very seriously and I think the size and scale of our business that we’ve grown has garnered that respect.”
Additionally, while there were also some initial fears that Comcast would somehow damage the market or poach customers away from other dealers, Herscovici believes the company has helped to grow the overall market.
“I’ve said this a bunch of times: a rising tide lifts all boats,” he adds. “As we talk about connected home security and the benefits of a connected solution, I think the whole market has benefitted and I think everyone has found it easier to have complex conversations with customers because they understand the service in a deeper way because we’ve taken to the time to educate them as a company.”
Despite the success they’ve already found in the market, Herscovici believes there is still room for Comcast to grow and increase the market penetration of connected home security systems overall. “We will continue to evolve what it means to be a home security solution and think about ways to reinvent the user experience,” he says. “There’s lots of growth in home security and I think there is additional growth in kind of peace of mind solutions with cameras and recording as an anchor. And I think our position in digital homes, having a meaningful place in connecting all of the devices in the home with an envelope of Wi-Fi places us squarely in the heart of that.”
