Dive Brief:
- Comcast and Alarm.com have announced their acquisition of Icontrol, developer of smart home technologies, in a deal designed to bolster security offerings and bring technology development in-house, Greentech Media reports.
- Comcast will acquire Icontrol’s "Converge" software platform, which powers the Xfinity Home touch-screen panel and back-end servers, while Alarm.com will acquire the company's Connect and Piper businesses.
- Alarm.com said its portion of the deal would cost $140 million; Comcast, already an investor in Icontrol, declined to release deal specifics. The transaction is expected to close later this year.
Dive Insight:
Energy use and efficiency get a lot of ink in the connected-home space, but security is actually the biggest driver right now. Even so, Comcast and Alarm.com's decision to purchase Icontrol is a testament to the the sector's growing pains, and illustrates the difficulty in developing the ideal suite of connected products.
“The consolidation of interactive service providers in the security industry is huge news,” Tom Kerber, director of research with Parks Associates, told Greentech Media. “Alarm.com has considerably strengthened its position in the security channel, and given that the security industry is the leading channel for smart home services, it is now a clear leader in ... a market that includes many new entrants competing for a slice of a rapidly growing pie.”
For Comcast, the deal will bring technology development in-house. The Converge platform (not to be confused with Comverge) powers Xfinity Home's inner working, including managing security, home automation and thermostats.
"We will strategically invest in its technology and technologists, so that we can deliver new features, products and services to both individual Xfinity Home customers and enterprise-level Converge customers, faster than ever before," Comcast said in a statement.
"This acquisition will enhance our research and development scale so that we can continue to deliver long-term value to our partners through innovative technology," Steve Trundle, President and CEO of Alarm.com, said in a separate press release.
Nest, now owned by Alphabet, is probably the best-known connected thermostat on the market, but sales have lagged expectations, highlighting the difficulties in getting homeowners to embrace new devices. The parent company, formerly known as Google, included Nest in its "Other Bets" revenue tranche, which along with several other companies showed revenues of $448 million in 2015. People with knowledge of the matter say that may mean Nest is underperforming.
Google paid $3.2 billion for Nest in 2104. The company currently has three products: its flagship learning thermostat, a security camera and a smoke detector.
