ADT: "Hate That Company" Loses Billion On Amazon Ring Deal

By John Honovich, Published Mar 02, 2018, 10:19am EST

It has not been a good 2018 for ADT.

And this week has been even worse.

In the aftermath of Amazon acquiring Ring for a billion plus, ADT's market valuation dropped a billion, as investors fear Amazon beating ADT.

Indeed, on CNBC, investor Jason Calacanis declared ADT not only the big loser of the deal but that people 'absolutely hate that company', as shown in the video embedded below:

Is Calacanis just hot air? Does he hate ADT as much as many security professionals do?

First, on the positive side for ADT.

Positive ADT - Local Trucks and People

*** *** ************ ******** for ***, ******** ** Amazon ** ******, ***., is **** *** *** a ******* ******* ** trucks *** ***** ****** who *** ** ** a ********'* ****. **** is ** ***** ** terms ** ***** *** fixing ***** ** **** as ********* ****-**-****-*******. ** the ****** **** *** can ***** **** *****, in ***** ** ****** quality *** **** *********** for *********, *** **** companies **** ** ** a ************.

Risks *** *** - ***** ********* *** ********** ****** *******

***** *** ***** *** ADT. *** *******, *** did *** *** *** nicknames ********* '****** **** Twice' *** '******* **** Technician' *** *******. ** fairness, **** ** * 'new' *** *** *** has ****** ******** ********** in *** **** *** focused ** ********* *********.

*** ***** ***** ** how **** ******* *** ** done ********. *** **** 'DIY' ****** *** **** home ******** **** ****** online ******* *** *** rest, *** **** ********** they ***** **.

Amazon *******?

****** *** **** ******* up ***** *** ************ services ******* *** *******, ** ******* ****** is *** *** **** from ***** **** ** run ***** *** ************ services *** ******** *******. Amazon ***** ** '********' but ** ** *** clear ******* **** **** to ***** ** **** time *** ****** ** have ***** *** (** extensive *************) ***** ******** for ****.

ADT ***** **** ** ******** ******** ** **** *********

** ********** ** *** tech *********, *** ******* weakness ** ****** ***'* ***** and ********* *****. ***, like ****** *** *********** security ******* *********, ***** a **** *********** ********** of ***** ***** ** sales *** ********* (*.*., see *** ******** *********** **** Economics). *** *******, ** a ******** ** ****** $40 *** *****, $** - $** ** ****** going ** ***** *** marketing ********.

**** ** ***** *** tech ********* ***** ** able ** ** **** better. ******, *** *******, already *** *** ******* Prime *******, **** ************* with * **** ****** of *********. **** ***** ****** in **** ***** ***** costs *** ******** **** ADT, ******** ** ***** much ***** *******.

 

Will ******?

******** ****** *** ******** on **** ********** ******** systems *** ******* ** that *********. *******, **** Amazon ****** ****** ** being * **** ******** provider? *** **** ****, along **** ******'* ************** in ** **** ***** result ** ****-***** ****** against ****? ** ******* to ** ****.

** *** ********, *** pressure ********* ** ***** on *** ******* ***.

**** ** *** ***** the ****** ***** *** ADT?

Comments (24)

Also working against ADT is the trend of residential security products becoming very DIY and simple to install. Even for cases where the homeowner does not want to do the installation (or is incapable), the products can be installed by dozens of local handymen, A/V guys, geeky neighbor kid, or the CEO's daughter.

That army of local trucks and people may shift from being a benefit to becoming a liability.

 

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Remember the last time the Bell Telephone Man came to your house to install a brand new mint green Bakelite phone at your house?  Me neither.

Telephones used to be wizardry that only a trained professional would touch, but times have changed.  Home security is following the same route.  I would not want to be banking my future on residential or small business security.

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The bad blood is not new here, either. Earlier this year, settlement was made where ADT sued Ring.  The case claimed Ring used intellectual property for their new intrusion system that ADT had paid $36 million to develop.  

 

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Try getting paid on time by ADT. I no longer sell anything to them but back when I did I'd always add a 10% surcharge to cover the hassle of collecting.

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I'd always add a 10% surcharge to cover the hassle of collecting.

+10/0, Net never

;)

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I may be wrong (it's happened before) but doesn't ADT have some astronomical figure of employee turnover?  Like 70% every 60 days or something crazy like that (again - could be waaaay off).  Constantly replacing, training and sending out new reps has got to be expensive.

I would imagine that a large portion of their "marketing" is spent on the continuous revolving door of door-knocking employees they employ.  IF that is the case, then it would make sense that a product with lower cost, higher dependability and ease of purchase without a contract would make the ringer a smart purchase.

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#4, turnover has certainly been a problem. Even googling for ADT employee turnover has many results over the years. I checked ADT's S1 filing from last year and while they make general references to reducing turnover as a priority, I did not find any stats. It's a good question / point. I just don't know enough to shed any light on how big an issue it remains (or is not).

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The company that I left had over 60% turn-over in their sales force in 2017 and they are 300 or so employees in a half dozen states. ADT is who they wanna' be despite all their verbiage about being a great place to work and customers know better...

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This all seems to be about residential stuff.  What about the larger customers...  Not the same thing, is it?

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Rodney, this (Amazon/Ring) is definitely residential related. As for larger customers, that's what we were recently discussing with ADT's 'merger' with ASG.

It's a little head spinning since historically all the alarm guys lived and died by RMR and now they are trying to diversify into system integration, a historically extremely low RMR business.

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ADT seems to have upped their marketing campaign, lately...free camera, Family Locator service,  etc.  Just wonder how uninformed the average buyer is, or are the DIY set savvy enough to check out on-line comments?

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Ring doesn't use central station monitoring does it? 

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Not with their doorbells and security cameras, although that may change once they release their intrusion alarm system: Ring Indoor Security System

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Got ya. I think this would be bad news for simplisafe as well.

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All things being what they are, my mother-in-law has one of the "ring" devices at her house.....

It's totally useless....NOT because it's a bad product, but in her case, because it notifies the user that someone has rung the doorbell via smartphone app.....and guess what happens when you turn the ringer off on your smart phone.....(rolling eyes).

No technology is idiot-proof.

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If you turn off the ringer on your phone, it vibrates. It also works as a regular doorbell if you have the wiring. Or in the case of your MIL, she can add an AC doorbell chime.

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Wasn't ADT the beginning of "Race to the Bottom"?

I recall in the late 80's early 90's they were the ones that offered "Free" Systems.

I also recall that they lobbied Virginia State Legislature for over burdening State imposed regulations (DCJS) to squash the small guys.

Took this long for Karma reaction I guess....

 

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I believe the company that started the free alarms was Brinks. ADT acquired them after Brinks rebranded their alarm division to Broadview. Acquisition was $2B May 12, 2010.

Anyone know what the RMR and Annual Product Sales for Simplysafe? They DIY providers keep their cards close to their chest. I had heard their RMR was 5~10M. Selling 10K systems per month. 20% of their product sales are returned when the DIY realizes they can't install it. High attrition rate +12%  

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Anyone know what the RMR and Annual Product Sales for Simplysafe?

Robert, from last year's Barnes conference, Michael Barnes indicated SimpliSafe's RMR was $10M and that they were doing terrific financially, see: Simplisafe is 'Blowing The Doors Off'

Did you hear anything different or new from this year's Barnes conference?

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This year there was a lot more DIY and Telco analysis. I will locate and upload a sheet from the presentation. However, it was consolidated for that sector.

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Thanks Robert, did you find it?

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Yes I have it but can't seem to figure out how to upload documents, pictures, or videos to this site.

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I am happy to help.  Email me at: brian@ipvm.com and I'll upload and post it here.

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Robert Baxter forwarded these slides to me from this year's Barnes Buchanon conference:

Barnes Buchanon Slides - MSO and DIY Threats

 

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