Google’s Nest smart home product line will be combined with FINADA’s security services in a partnership announced by two companies on Monday.
As part of the deal, Google will invest $ 450 million in FINADA to get a 6.6 percent stake in security and smart home solutions provider.
The companies also agreed to spend $ 150 million on joint marketing, product development, technology and employee training.
In a statement, the partnership said the partnership integrates Google’s hardware and services, as well as FINADA’s DIY and professionally installed smart home security solutions, into innovation in the home and small business security industry.
The upcoming FINADA and Google home security solution is expected to boost the smart home offering and attract new consumers looking for cutting-edge technology, comprehensive smart home service and reliable security, they added.
Risky bet
Home safety is one of the most popular reasons households buy smart appliances, said Jessica Ekholm, Gartner’s director of research.
He cited a 2018 survey by the company that found that 66 percent of U.S. respondents said they use smart appliances to block access when they are away from home, while 64 percent said they are likely to use appliances for safety when away from home for long periods of time.
“Working with FINADA will help Google reach potential new customers who are currently opting for managed security services, thus getting beyond Google Nest’s regular customer base,” Ekholm told TechNewsWorld.
However, Frank E. Gillett, vice president and chief analyst at Forrester Research, sees the partnership as risky.
“This is a very big Google bet on physical security, which is a great motivation for people adopting Google products,” he told TechNewsWorld. "I find it confusing because I don't think consumers want a new $ 50 a month unless Google can translate FINADA's value proposition and change it from an annoying monthly fee and an occasionally valuable service to a constantly valuable service that you're happy to pay for."
Tapping on a valuable channel
However, Gillett acknowledged that the transaction could give Google an advantage over its competitors in the market. “It is recruiting a motivated partner to highlight Google over Amazon or Apple as a smart home management system,” he said.
The store will also give Google access to an important channel to deliver its smart home products.
“Nest products today are usually sold in retail,” explained Ross Rubin, chief analyst at Reticle Research.
“An important channel for home security and home automation is the professionally supervised service business, where FINADA is one of the best-known brands,” he continued.
"When he makes Nest products available through FINADA," he told TechNewsWorld, "Google may disclose them to customers who are particularly interested in such functionality and are actively seeking it by contacting a monitoring service provider."
“Google will have better access to this customer base and FINADA,” he said. "They get access to more sophisticated products that have a broader ecosystem than the products they previously distributed."
Changing the dynamics
Adam Wright, a senior research analyst at IDC Smart Home, found that the Google-FINADA agreement reflects the changing dynamics of the smart home market.
“For some time now, the market has been categorized into segments with a clearly defined segment - do-it-yourself vs. fully managed services,” he told TechNewsWorld.
“Over the past 12 months, DIY suppliers have found further success in areas that have traditionally been exclusive service providers,” he continued.
"Vendors such as Nest, Ring, Samsung and others have launched installation and professional monitoring services for their DIY home automation and security solutions, which significantly blurs the distinction between DIY vendors and managed service providers and can increase the appeal of DIY deployment. An approach to smart home solutions." , Wright explained.
He argued that managed service providers need to respond to market attacks with DIY apparel by translating strategies to translate into a more agile, a la carte approach to their solutions and customer acquisition strategies.
Such a strategy was behind Blue, supplied by FINADA in January. Smart Home Security Offering DIY allows customers to customize their smart home security system on their own terms without long-term contracts.
“By offering DIY products in addition to complete managed service solutions, managed service providers are better able to reach a wider range of consumers who may initially be reluctant to invest in the entire home package,” Wright said.
"So," he added, "for Google, this deal can give a significant boost to the range of smart home surveillance and security solutions by putting it in stronger competition with both other DIY competitors and other fully managed providers like Vivint, Brinks and others."
Cash welcome
Google’s $ 450 million infusion into FINADA is more important to a home security company than a search engine, said Mark N. Vena, a senior analyst at Moor Insights & Strategy.
“This cash merger will allow FINADA to operate as a continuous entity without disrupting their current business,” he told TechNewsWorld.
“It will also help FINADA design more bleeding-driven products that integrate Google Assistant functionality to a more efficient and intuitive level,” Vena said.
"For Google," he added, "it will help them get into the residential and business services business. Google could probably do this without investing in FINADA, but many customers may be wary of partnering with Google for security services because of Google's somewhat compromised privacy." "
“FINADA is a trusted brand in this area and this would help Google as they try to expand their brand and product range in the area of security services,” Vena explained.
Slicker hardware
FINADA, on the other hand, can benefit from Google's reputation.
“FINADA, like most professional security companies and cable companies, has an ugly and poorly designed device,” Forrester’s Gillett said.
“If FINADA uses slicing equipment and better apps from Google, it will increase Google’s sales and engagement with FINADA’s customers,” he said.
“FINADA wants to expand 20 percent of the market that pays for professionally supervised security because it and other companies in the industry have come under attack from cable TV and Internet service providers,” he added. "For this partnership to succeed, FINADA needs to increase its market share."
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