The answer is consolidate. Normally industries go through cycles of expansion and consolidation. Sounds to me like several alarm dealers need to consolidate and exit. I don’t think the answer is commercial where consolidation is also happening.
I predict DIY will continue to really hurt the residential market. Millennials entering the residential market are tech-savvy and don't need an integrator to rig up their house with expensive monitoring services.
John Mack summarized in 5 words… a message that would take paragraph(s) for most of us. "Good Market, Bad Business Models". We agree, and share some thoughts, without brevity. The residential market is huge, and fragmented, and global, and easy to get lost in the toybox or shiny new toys. I generally focus on the Subscription Models (recurring revenue), which generally means remote-monitoring. The “bad” part of existing RMR residential models is the assumption that local law enforcement is your silent partner, and available on-demand for site inspections when requested by private monitoring firms. That message is communicated to the customer, but not true, and deceptive…. cause of much attrition and liability; and will not survive going forward. Future site-response could still be local police if remote-witness a threat; or via drone, or UBER, or community patrol, neighbor, private guard, or?? get creative. New business models like SimpliSafe is simpli-more-of-the-same, with skilled marketing, and limited life expectancy when disclosure is required. Much of the smart home deterrent security will be same priority as your vehicle alarm. Big, Big market…still waiting. Source: Lee Jones; Support Services Group
The residential market is global and huge, it has limited usage scenarios, mostly RMR with a very little upfront cost. I think no traditional( I mean commercial solutions) are simple enough.
To enter the market, you need to have a huge investment(to make cheap hardware) comparable to some traditional players' valuation( tens of millions). So you do not make money in the hardware, just on potential RMR.
I think the residential market eventually will be shared by a few big companies such as google or amazon as a part of their bigger home automation game.
Traditional players can only temporarily try to play on the market: