What Happens To Integrators As Product Profits Disappear?

"So you think eliminating a major component of profit and revenue from the integrator profession will make only the hardest working ones stay around?"

Yes, I do, mostly.

Go back to 2001 - 2005 and security integrators were flush with cash, fueled by dealer protected DVRs (which were a massive improvement over VCRs much more than IP cameras were to analog) and by the 9/11 response.

This made it easy for many integrators to be sloppy and stupid, rewarding slick sales types. The money absolutely came from product sales as 16 channel DVRs were ~$10,000 in those days and you would get a 100% markup on them. It's almost absurd to think now that someone could make $5,000 gross profit on a DVR sale.

Because of this, a good salesman, with minimal technical skills or staff could make a killing.

That's no longer the case. So I think it's a positive thing that tighter margins punish the sales types who added no technical value.

"The elated end-user, high after winning their Pyrrhic victory over the fat cats in the middle?"

To that end, I don't think it's a Pyrrhic victory. End users have definitely won by punishing / hurting the old school security integrator who was just pushing boxes.

"Try it with doctors, lawyers, waiters and plumbers.

See who sticks around and works for less."

The old school security integrator was typically not very skilled in computers, networking, IT, etc. The average tech back then had an electronics background and the average sales person not much at all. So those people, in 2015, have little choice as there's no hot industries looking for people with electronic repair skills.

Overall, I think the squeeze is good to push out the integrators who don't know what they are doing, who use their firms as cash cows with little regard to technology and technical skills.

Even with product sales, professionals can still make money though. Accountants, lawyers, consultants, etc. sell nothing but their labor but still manage to have upper middle class or higher lives.

The disappearing margins have no impact on my desire to be or not be an integrator.

Are you motivated by money? When you were an integrator, roughly what part of your income do you think came from margin, either directly or indirectly (higher salary justified thru companies product margin)?

If that had gone away you wouldn't have cared?

Indeed, I do believe that lower margins are flushing out the big talker / relationship salesmen, which is beneficial to my skillset / personality.

So Taps for the Colonel? I can see that.

Do you think that on average that integrators will be making more adjusted income in 2 years?

If you think more, explain where this more money is coming from, (e.g. fewer people charging higher rates)

If less, explain why lowering the average income of a profession raises its average competence?

"Be careful what you wish for, you might get it..."

Much as it might seem, I am no defender of the channel. But I have tempered my view thru exposure to this forum and its members.

Before this site, I was an occasional poster on the control4.com forum, mainly because I was saddled with a system thru no fault of my own.

I remember posting various technical questions and getting the run around, with the ultimate answer usually being "you need to talk to whomever sold you the system". Which was my brother-in-law;

And I had no intention of talking to him about it because I was quite determined to demonstrate how an end-user could easily manage any home entertainment system. Getting forbidden manuals and gaining access to the dealers only site was the fun part; setting up the system optimally was not so easy.

Though I never asked for help, I realized that someone else without the time to burn that I did might be better served by someone like my brother in law, than going it alone.

I also realized the considerable setup time required by one of the systems. Yet I think the typical consumer doesn't. A control4 controller might have cost $2000 back in the day, maybe $1000 was going to the integrator. But if you could have bought the controller for $1000 I think most would try real hard not to spend $1000 to have someone put it in.

I don't know what it is about product costs vs service costs, but there is definitely something psychological going on the gives us less pause when buying a product than the install.

Be that as it may, I don't see it changing, and therefore I see tougher times in general for integrators as the built-in incentive disappears and the consumer will only grudgingly replace by paying directly for labor.

Smart integrators will need to find a way around this conundrum or move into to something else. Which will leave a lot of people doing installs cheaper and cheaper and of poorer quality.

Thats why I feel that it's a mixed bag and not simply a win for consumers like is oft portrayed.

The user has very limited tools to appreciate the value of any particular integrator. What differential benefit or risk will be incurred from choosing integrator "A" over integrator "B"? That's only a hair's breadth away from the next logical step: ...from choosing no integrator at all?

How much value can an extremely proficient integrator offer over a trunk slammer?

How can the customer differentiate between the two?

Honestly, a capable salesman can move coal in Newcastle. What does the buyer wind up with?

I wonder if video surveillance would be more widespread if it were marketed as a commodity than if it were marketed with all this FUD justifying the existence of a high priesthood? FUD often causes one to question one's choices, then delay. With delay, if nothing bad happens, then could it be that maybe we didn't need it in the first place?

Technology and advancement has taken the mystery and complexity out of security sales. Any competitent IT department can do a CCTV install these days. When it comes down to it its just networking, data management, and configuration. I am sure a dedicated integrator could do the job 10% better possibly, but will a customer be willing to pay the premium for that $$ investment. With hardware now a comidity and having seen the writing on the wall a while ago, we have drastically diminished the focus on cctv sales. With Amazon, BH photos and now distributors selling direct, the channel is slowly decaying