On Tuesday this week, a previously announced program being offered by Snap One – now Resideo – has begun. This program, called Control4 Connect, is a mandatory program that requires all integrators to connect all new client installations of Control4 products directly to Snap One’s central station for future software updates and data collection.
It is a new kind of transactional connection that establishes a direct relationship with the client for direct-to-user system updates and base-level client support supplied – not by the local integrator – but by Control4 support.
See more on this new industry scheme
In January, Snap One (newly acquired by security company Resideo) announced that it wanted to “change the industry business model” by introducing a series of new customer support programs that would directly connect the national office of the company to all U.S. clients. Three programs were created, Control4 Connect, Control4 Assist, and Control4 Assist Premium. While the Assist and Assist Premium programs are optional, Connect is mandatory.
A New RMR Program That Largely Benefits Snap One
Snap One will have a direct transactional billing, marketing, and support relationship with the client, who will pay them the ongoing annual fee for any or all of these programs. The fee will be shared on a split basis with integrators which will offer them a piece of this new recurring monthly revenue (RMR) program. Because Snap One will be actually providing the support, they will take the lion’s share of the revenues these new programs generate, but they note that integrators will benefit from the [small] passive revenue stream these programs create for them as well.
The program was met with substantial pushback from many Control4 dealers who were upset at various aspects of the program. Many of them took to social media to express their anger, confusion, and surprise at this step taken by a previously valuable partner.
Snap One CEO, Everybody Thinks the Program is Great
In the introduction of this program to the media, Snap One CEO John Heyman noted that the company had consulted with a dealer advisory panel made up of 23 Control4 dealers who had direct input into the structure of the program. Sensing controversy, I questioned Heyman as to how many of these 23 dealers pushed back on the program, which redefines the relationship between the client, the integrator, and the manufacturer.
He told me, improbably, that not a single one pushed back – everyone, he suggested, thought it was a great program. I then asked for the list of those on the advisory panel so I could reach out to learn their perspective – a request that Heyman called “…a reasonable ask.” But the company ultimately declined to provide that list to me, and instead arranged a press presentation with just 5 members of the advisory panel to answer media questions.
By Expanding My Survey, the Range of Responses Expanded Considerably
These dealers did, in fact, appear to be satisfied with the program. One or two even bristled a little when I questioned them on how they felt about turning their clients over to Control4 for service and support.
Since this time, over the last few months, I’ve had the opportunity to speak with several more Control4 integrators, and the range of responses has expanded considerably. Yes, there were those who did see the Control4 Connect program as a helping hand. These were typically smaller firms who found it challenging enough to stay on top of ongoing installations, let alone hassling with maintenance/security/driver updates on past installations. If Control4 can handle this better than me, they said, then it will help to keep that customer happy…and I get paid too!
A Dangerous Interference in the Relationship with the Client
However, I did speak with several who saw this move by Control4 as a dangerous interference in the relationship with their client. As I mentioned above, some integrators suggested, like Ed Gillmore of Gilmore Sound Advice in NYC, that this small, Control4 Connect driver update program seems “extremely benign.” But others pointed out that there are no assurances that this program will stay at this small, entry-level offer. There’s nothing to stop Snap One from expanding the mandatory elements of a broader program in the future.
This fact has sounded alarm bells with other integrators. Some saw this as an attempt to diminish the role of the integrator in the smart home business. More than one of them said things to me like, “I know my clients really well. I know how to approach them with, for example, system updates that they need to pay for.” They would also add comments like, “I can’t risk some Level 1 tech from the other side of the country who doesn’t know my client at all blowing an important relationship for me.”
Integrators Selling High Net Worth Clients are Particularly Alarmed
Those integrators who service the high-end of the market spectrum are particularly alarmed. High net worth clients can be particularly sensitive about how they wish to be dealt with, integrators tell me. Each one of them needs to be approached in a different manner, something no central call station with its shifting staffing, can possibly maintain…they said.
While some of these integrators have told me they may begin shifting some of their Control4 business to other brands, others are feeling a bit lost. “What can I do? More and more of the industry seems to be switching to this software-as-a-service model.” Others say things like, “I’m in too deep with Control4, it’s not easy to change brands overnight.” Yet more would lament, “What can I do? They are much bigger than I am!”
Some Integrators Vow to Begin Shifting Installations to Other Brands
At this time, existing installations are not part of the Control4 Connect mandate. At some time in the future, Snap One may demand it, but for now, the program is only being rolled out as part of new installations from Tuesday forward.
Currently, in the control space, only Control4 and Savant have gone to a SaaS program. A source at Crestron tells me they have no plans to go to this model, “We recognize the value of a local integrator servicing the needs of their client,” he said. Also, Nice (Elan) has released a public statement asserting that it intends to support clients ONLY via its integration partners. To my knowledge, neither AMX nor RTI have any kind of an SaaS program.
Many integrators sell and service more than one control brand, so they likely have an option to shift to another solution – should they choose to invoke it.
Is This the ‘Real’ Industry Model Change that Snap One is Pursuing?
Other integrators are adopting a wait-and-see approach. It is not clear what will happen with Snap One management now that the company has been acquired by security giant Resideo. Of course, it hasn’t escaped the notice of many that Resideo largely plays in the commercial and residential security space. That industry has a different business model than the residential A/V automation space. For the most part, residential A/V automation or smart home is a relatively low volume, high margin business.
However, security dealers tell me that the residential security system space is a high-volume, low-margin business. Security kingpins like ADT generally offer hardware in relatively inexpensive packages that can be quickly installed. Dealers tell me those hardware and installation packages are low-margin. The goal is to get another monthly monitoring program started with the end user, as this is where the ongoing profit truly lies.
Perhaps this is the new industry model that Snap One envisions for the smart home industry, as well.
It Didn’t Have to Be This Way
At the end of the day, the way that Snap One designed their programs – to be directly connected to your clients electronically (with a direct Control4 account) – was not required to achieve a push distribution of driver updates. They deliberately chose this path for the ability to directly address their dealers’ clients and to benefit themselves financially.
It will be interesting to see where they go from here with this SaaS program.
Then There’s This…
Finally, when Snap One announced this Control4 program changes in January, they said the mandatory changes would take place on April 23, 2024. It was an oddly specific date. When I asked about this, they said it was to allow time for dealers to digest the changed program. Okay…so why not May 1 (I thought to myself)?
Then, just one week before that April 23rd deadline, on April 15 the company announced it had been acquired by Resideo.
Coincidence? I don’t think so…
Learn more about Snap One by visiting snapone.com.
Leave a Reply