What do you do when demand for your product is slipping as new technology emerges to replace it, you build a compulsary click revenue subscription model.
Struggling custom install Company Snap One who own Control 4,claim that they want to shake up the custom install industry, however their move to launch a ‘Software-as-a-Service subscription program’ is being viewed by some in the CI industry as a move that could end up with the US business getting hold of integrators customers with no guarantees that they won’t start offering products direct in the future.
The program if adopted by CI installers delivers the manufacturer direct access to end users of every Control4-based system sold by an installer, on the basis that they are the only ones who can deliver support and software upgrades in the future.
The program is said to include a revenue share for its dealers but as one Control 4 CI dealer in Sydney said “What’s to stop them selling into my customer base direct. All I get is a few dollars for a software update and a click of the ticket when they are getting the bulk of the revenue for support calls”.
The new programs are called Control4 Connect, Control4 Assist, and Control4 Assist Premium that Snap One claim allows for direct-to-consumer support by Snap One controlled installers.
The new service is set to become mandatory when a Control 4 system is installed.
This is despite the fact that new homes in the future won’t need a Control 4 system and will be able to control over Wi Fi, AI and a new generation of system technology that is considerably cheaper than a control 4 system.
What Snap One are trying to do is take control of the support revenue streams because the Control 4 offering is a proprietary system Vs several new open AI systems that were shown at the recent CES show in Las Vegas, that are half the cost of a Control 4 system with multi-layer capability spanning entertainment, heating and cooling, security, lighting and overall management of a home.
Snap One claim that Integrators can benefit from improved customer relationships, profitability, and simplified business operations.
Management at the US Company claim that they now have an advisory panel consisting of geographically dispersed integrators of differing sizes and serving different market segments.
They claim that what they are doing by introducing the program is “expanding the ability of the Custom Integration industry.”
Snap One management in announcing the new business model claim that the recent acquisition Parasol, a 24/7 remote support service provider for integrators is a key part of their new offering.
The company says it already has 100,000 4Sight subscribers and “thousands” of Parasol customers.
US web site Stra Gee claims that Snap One’s argument is that our industry has made an incredible evolution over the years, from proprietary, mostly free-standing hard-wired matrix systems to IP-based network connected, cloud-enabled, wired, and wireless solutions with foundational operating systems – the game has changed.
Much of the user experience, as well as system operations, security, and system health, is driven by manufacturer-developed software delivered by the cloud. Support needs have increased commensurately with system sophistication, often demanding a type of support not always easy for the busy integrator to be in a position to provide.
Snap One’s CEO John Heyman claims that today’s increasingly sophisticated systems (Snap Ones Control 4 System) require a higher level of support and constant updates of drivers, which is why Snap One wants to charge consumers simple updates that are free with other home automation providers.
Microsoft with Windows, Apple with their iOS Google with their home network and mobile phone providers such as Samsung and Motorola all have sophisticated operating systems that need as many driver updates as the Control 4 network. The big difference is their updates are free along with the availability of free driver updates.
Snap One management privately believe that integrators do a poor job of keeping on top of system updates, at a recent media briefing management claimed that worldwide 200,000 Control4 installations are running its OS2 operating system, even though the company transitioned to a new OS3 operating system with a much-upgraded design, features, and security improvements four years ago.
This is the equivalent of a consumer still using a notebook with an older version of Windows because nothing is broken, and the notebook is working perfectly.
The marketing spin is based on the Company claiming that they are delivering greater support and safety for the customer, when in reality they are simply building out a new services revenue model because sales on Control 4 systems are declining.
They claim that revenues will be shared with integrators on a monthly basis.
Beginning April 23, 2024, connect will be mandatory on all Control4 installations.
Snap One Holdings had revenue of $1.06B in the twelve months ending September 29, 2023, down -5.69% year-over-year.
Revenue in the quarter ending September 29, 2023, was $270.14M, a -3.94% decrease year-over-year. In the year 2022.
