Hardware manufacturers and software developers who have invested in IP systems and in the growth of the market for them would have you believe that the alternate spell-out of this acronym beyond its primary meaning of “Internet Protocol” is “Infinite Possibilities.” And those custom integrators who were among the earliest adopters of the many viable approaches to IP that have come down the pike in the past few years tend to agree with that interpretation.

The statistics certainly prove them right. ABI Research data cited at a recent trade show presentation by Specialty Electronics Nationwide executive Jeannette Howe show the worldwide home automation category, including IP-centered content distribution, presently a $14 billion revenue-generating business, growing to $85 billion in just four years.

But while IP’s momentum as a means to whole-home content and appliance accessibility and control is approaching full steam in many corners of the industry, it isn’t merely affecting technology change. It is also stimulating necessary changes in training courses, in personnel hiring decisions and—perhaps a bit more slowly in some quarters than others—in installer attitude. Adoption has been a seamless switch for many with a good measure of experience on the IT side, and an easy enough buy-in for residential CI novices who are open to nearly any great new idea; but not so, for all industry factions. Just how do integrators and suppliers of IP systems and products see the market shaping up for 2008, and how are they making the case for IP to skeptics on both the consumer and integrator fronts?

Supply-Side Views

“Three years ago,” recalls Petro Shimonishi, vice president of marketing and product management for the IP company NetStreams, “if I were to compare and contrast versus where we are today, there was quite a lot of interest, but the idea of IP as a protocol was still very much kind of a pipe dream in our industry. A lot of people intellectually said, ‘Oh, yeah, that’s nice, that’s great, I know that people want to be able to integrate their home PC network with their home A/V network. But is that going to happen very soon? No.’ Three years ago, NetStreams was viewed as a rogue innovator.” That attitude has changed, she says. “The thing that’s had the biggest impact on IP entertainment has been the sources. If you want to know where an industry is headed, you always follow the sources. For most end consumers, it’s not about dropping a screen or all these great technical things we can do. More consumers have music on their PCs than ever before and want to integrate it with their audio systems. At the end of the day, what they want is to be able to listen to their music anytime, anywhere and see their video from any source anywhere in the home. Frankly, an analog approach just doesn’t cut it any more because you won’t be able to deliver that value proposition. So IP now, as a protocol, has quickly become the standard for audio/video distribution. And it will be moving forward, as all these sources morph from old-fashioned analog or old-fashioned digital form factors. People are going to want to be able to listen and watch over their network.”

Al Baron, product line manager for Polk Audio, one of the first traditional audio speaker companies to embrace the IP philosophy with the introduction three years ago of high-performance IP-enabled speakers that worked with NetStreams technology, says his company was quick to grasp the upsides of IP. “It was clear early on that IP made perfect sense to transport control and music and soon-to-be video information around, because of the performance benefits of real-time high-performance audio and video. So our first interest was that you were no longer burdened by sending an analog signal around a house, dependent upon long speaker lengths running between pieces of equipment. When you’re IP, you’re sending it via Ethernet and Cat-5, and just like a computer signal there are no losses over long distance, and very wide bandwidth capability. The other part of it is, just as IP is a de facto standard for sending data around, it makes absolutely perfect sense for being the absolute de facto standard for sending audio and soon video signals because everybody has, or will have, a data structure within their homes.”

Polk will soon begin shipping second-generation IP-ready speakers that are about one-fifth the cost of the precursors because, instead of having IP intelligence on board, they will include both standard speaker wires to accommodate legacy systems in addition to euro-style connector inputs for IP use. Baron says that the new generation overcomes one hurdle to IP product adoption: price.

Another hurdle, at least for some of the more traditional A/V hybrid dealer/installers, is the hesitancy to make the move into IP for fear of the new and unknown. “An IP infrastructure,” says Baron, “is really a miniature computer system, and you’re asking people who are either security- or audio-based individuals to make that leap to grasp the troubleshooting and have some portion of understanding of what is basically a computer network system. It’s not as complicated as developing a computer network system, but there are some portions where the knowledge has to be there.

“It’s the same sort of technology fear as existed with Media Center,” he continues. “People are getting into the multi-room audio business and the home theater built-in technology business now who are coming from the IT side of the industry, which is a growing portion of the new crop of integrators. Those guys get it. They got it years ago at the trade shows, and they know it makes perfect sense. The reality of it is it is a more sophisticated installation and a more expensive installation, and until it becomes more plug and play and comes down in price, you’ll still see some resistance to the growth that it deserves.”

Shimonishi agrees that there is still some convincing needed among more traditional A/V dealers. “It’s not so much a problem of their understanding as it is just a reluctance for change. We see that amongst people who have more established businesses and have been doing the same thing over and over for the past 20 years with a bit of change, such as maybe integrated lighting control with their traditional businesses. It’s just like anything; once humans get in the habit of doing something, they don’t like change.

“We find that guys who are coming into the business or have been in the business only a short while are more aggressive and more open to thinking about things in a different way, and want to learn as much as they can about the technology,” she says. “At NetStreams, we chose to architect our system the same way the Internet is architected, with no central point of control and no central point of failure. So although an IP system with distributed control and distributed intelligence is extremely modular, it means the installer has to change his thinking, because he’s used to putting all these big black boxes in a rack and putting the rack in some huge, ventilated closet or rack room. The thought process for it is very different. We also distribute the amplification, so that takes another big, centralized thing out of a rack. Now, does it mean you can’t use a centralized multi-channel amplifier with our system? No. You can. But the benefits of going decentralized are tremendous. It makes the system much more expandable, more modular and makes performance better because now you’ve got the amplifier sitting right at the speakers. But it also changes the way these guys have been installing for years and years.”

Of course, IP companies are all over the training issue. Shimonishi says that NetStreams, for one, offers free training at its online ‘university,’ www.netstreamsu.com, for any dealer—even those who aren’t carrying NetStreams, because, she says, “for everybody’s businesses, this is something that people are going to have to know and be able to implement within the next two or three years or, frankly, the survival of their business is at stake.”

Integrator Views

IP technology isn’t really news to Dennis Erskine, president of Marietta, Ga.-based Design Cinema. He jokes that he has been an installer for 15 years, and has been working with IP “since [the Defense Department’s] ARPANET, before the Internet was invented. I’m sure there are a lot of smoke-and-mirrors reasons for having some sort of IP technology,” he says. “But it’s largely driven by the fact that although it’s not entirely plug and play, once you plug something into your system you can access, manage and control this equipment from any place in your house. Just step back and look at RS-232, which is a one-to-one situation with one port on my control system and one port on the back of the equipment. If there are 20 pieces of equipment, I have to have 20 RS-232 ports. In the world of IP, I don’t need to do that. I need to connect my controller, if you will, to the Internet network in the house and each device gets connected to it, and they all can talk to each other. With IP technology, what’s cool is the receiver can go out there and say, ‘I know you’re an amplifier, but what kind are you?’ By and large, a driving factor for IP in custom installation is, if your control system, whatever it is, and all your electronics are IP, it’s very easy to connect stuff up. Nobody needs to use RS-232 for this one, an IR for this one and IP for the other one.”

Erskine, who is based in the Atlanta area but does installs all around the country using IP, says he can easily support any such installation remotely. “If someone has a problem or wants a change, we don’t have to diagnose it by putting someone on an airplane to make the code change or software update. We can do these diagnostics before we leave the office. If I were to put it in a local context, for a custom installer who works mostly within a 25-mile radius of his office, industrywide, to go out in your service truck, turn on the engine and back it out of the driveway costs you 90 bucks. That becomes expensive, particularly if it’s warranty work. And you have to take somebody off a revenue-producing job, have him drive across town, find out what’s wrong, say, ‘Oh, I need Part X,’ drive across town, get it, drive back, fix it and go on his way. With IP, if someone calls and says his surround processor isn’t working, we can get into his system controller and also get into his IP-addressable surround receiver and diagnose remotely. When we roll a truck out there, we know exactly what’s wrong and what part we need and how long it will take to fix. And from the consumer’s perspective, they’re not frustrated because it’s taken you all day to solve a problem that was fixed by a 25-cent part.”

Erskine says the training aspect of IP “is really pretty minimal. We’re not asking people to decode the ones and zeros as they fall out the end of the wire! They already know how to properly terminate the wires and plug them in for IP. It takes some training but not a lot, and most of it is on the job. By that I mean the installers on site say, ‘OK, now I have to get my lighting control panel to talk to my home automation controller. What do I do to do that?’ The IT expert at the office responds, ‘You have to find out the address of the lighting controller. Here’s how. Cut and paste it in. And if the customer has a firewall, here’s what you have to do.’

“People don’t need to be the world’s greatest experts on IP to install these things,” he says. “They’ve simply got to know enough so that one component can talk to another, and, if we’re accessing the system through the firewall, how to set that up so that it can be done in a secure manner.”

As for consumer acceptance, Erskine says if you tell a client something’s IP-connected, their eyes glaze over. “But if I say, ‘it’s all Internet-connected, and it will lower your installation costs and can be automatically upgraded when software improvements come out, so when you call me at 2 a.m. and don’t know how to change the channels, I can log in and show you and not have to come to your house,’ that’s when the light bulb goes on.”

Newer to the residential custom game but a seasoned veteran in IT by virtue of his partial ownership in a company that installs such systems for the restaurant/hospitality business, John Prince, president of Atlantic Home Technologies, Jacksonville, Fla., is a self-described “middle-early-majority guy. I’m not at the bleeding edge of things, or an innovator.” But he says that familiarity with IP from the commercial side spurred his interest in using it for the residential business he entered five years ago, especially “when Microsoft really began to make a play for entrance into the residential market a few years ago at CES—a big digital home display. I view the Xbox as Bill Gates’ Trojan horse to get into the living rooms. And other companies have leveraged and expanded on that. IP had been the standard for commercial business systems for years, and it only made sense it would find its way into the home.” Prince says his exposure to residential IP has been through Exceptional Innovation, whose approach touting easy programming, installation and consumer use, and “the fact that it does use industry standards” was key in his decision.

Staff training was “a piece of cake,” he says, because he hired away a few employees from his other company who had the desire to move. It was a smooth transition, he explains, “because they’ve done commercial networking systems, it’s very easy for them to pick up. And for the people who haven’t, the manufacturers and developers we work with have made it easy for them to learn. If they don’t have experience, I’ve found it’s not a steep learning curve.”

Like Erskine, he says that consumer awareness of the technology is “low. They need evangelists and companies like ours to spread the word.” But when they are eventually exposed, they are “blown away.” Prince recently invited around 100 of his best clients along with a group of interior designers and architects to a grand opening where they were shown what could be done, and he says they were duly impressed. “They were not aware that these systems are available and reasonably affordable. What else is neat, and what they like, is that it’s really an overlay. I can still walk over to a dimmer control and press it, or use ‘goodbye’ script through the TV to dim lights and alarm my system. It doesn’t give away that individual sub-system control. ”

David Rodrigue, owner of Portland, Maine’s Smart Systems of Maine, believes that the “wow!” factor will go hand in hand in the future with the “fun” factor in accelerating the propagation of IP technology in the home. And the fun won’t be limited to A/V, lighting and environmental control, either, he says. He is a proponent of the NetStreams DigiLinX system, which he says is very third-party-product-friendly, so that “no one is excluded from playing on the IP team.”

In business since 1994, Rodrigue started installation life in home automation handling security, lighting, heating control and audio. “I’ve been in it long enough that I was able to run with the bell curve and follow along with the industry as it changed,” but up until about four years ago, he says, “it had all been proprietary control systems by different companies.” The lure of open protocol made the case for him, as did the fact that the learning curve “was pretty straightforward. But once you got into it, you realized it was good to have an IP-computer-configuring background”—which his business associate did. “He is the IT person for us. An IT person really grasps it. To them, it’s no different than talking to a printer or talking to another peripheral device. It’s just a lot of devices, as opposed to a regular home network, where you’ve got a couple of PCs. Here, you’ve got 20, 30, 50 separate IP addresses to manage. That’s where your IT skill sets come in.

“I think that those who are not skilled enough should stay away from it,” Rodrigue says—or find someone who is. “The skill sets necessary are first, understanding networks and second, understanding audio and control systems. Those issues are wrapped up under IP control. It’s not just networking; you need to know about audio amplifiers because you’re dealing with them and audio configurations. You need to be able to explain to your customer the control options.”

Once that is achieved, he says, customers will have taken their first steps on the path to the truly “smart house”—and that includes appliance control and feedback.

“Being a married man,” he says, “my wife’s always on my case about the laundry. [It would be great] if my Bosch washer and dryer could just have that flag that if I’m watching a program I’d get a little blip across the screen that says the load is done…I have a three-year-old, and you want to spend a lot of time with your child and less time running to check if the laundry’s finished. Can you imagine simple things like that—just like Caller ID on the screen when watching a movie? Consumers aren’t completely aware yet. They think what we can do is cool, but I don’t think they realize they can control their audio system with their Web browser. And they don’t realize the impact it will have on appliances—and on the true definition of controlling a ‘smart home.’ I think that’s coming. And that’s the fun stuff.” CR