How close are we to the surveillance business model changing to the extent that the hardware does not have an upfront cost for some applications? What are the benefits/pitfalls of such a concept for the installer or the distributor?
This type of business model is not something new and manufacturers have been utilising its commercial benefits for some time. The annuity model breaks down the upfront cost which can potentially spoil a customer’s initial commitment. This model has then been replicated as businesses continue to introduce new products and services into the sector – often enabling them to prevent encroachment by companies from other industries. Asking Installers, both small and large, to part with a substantial amount of money at the start of a project can be limiting so it is important to do whatever is possible to help them get the product on the wall. There is some element of risk here for the manufacturer, but with most installations having at least a 7-year lifespan, there is plenty of scope to estimate the necessary annual or monthly costs required to ensure the product is viable for a business.
In the future this could be replicated across other areas of the market or within solutions. The way that hardware has morphed into software through SIMs is particularly interesting. If all the smart technology is on the independent SIM then, in theory, you can negotiate with Mobile Network Operators on their tariffs to ensure your business gets the best deal. This would have been unthinkable years ago, but it now reveals a new business stream that will ultimately drive reliability and value for the end-user.
Rob Evans, Sales Director, CSL