Advances in technology are making it more favorable than ever before for homeowners to support the automated home via the Internet. This creates an environment where homeowners have greater control over their safety and security; over their comfort and convenience; over their entertainment and leisure; and most of all, over their lifestyle within the home.

It’s now time for homebuilders to take control of the IP-based home themselves. Market research from Parks Associates, www.parksassociates.com, Dallas, Texas, estimates that by 2010 more than 30 million U.S. households will contain a network that bridges multiple consumer products and extends entertainment to multiple rooms in the home. Parks also forecasts the market for home controls to grow steadily throughout the next six years, reaching $6 billion by 2012. Playing a key role in this evolution of sorts will be the Internet.

So why shouldn’t homebuilders get their fair share of this pie? After all, in many instances they play a strong role in linking the homebuyer with product manufacturers already. It’s not an unfair assessment to say companies such as Kohler, www.kohler.com, Kohler, Wis., and Whirlpool, www.whirlpool.com, Benton Harbor, Mich., might not be as successful without the builder facilitating the purchase with the buyer.

In the same manner, as automated home technology names like Microsoft, www.microsoft.com, Redmond, Wash.; Hewlett Packard, www.hp.com, Palo Alto, Calif.; Russound, www.russound.com, Newmarket, N.H.; and Honeywell, www.honeywell.com, Minneapolis, Minn.; among others, try to take their rightful place within the homes of millions of Americans, builders should also be inline to reap their rightful rewards.

While there are many manufacturers offering IP-based automated home technology products, a handful are aggressively targeting builders, helping them directly profit from offering and installing these products. In a way, these programs have the potential to allow homebuilders to get their cut from the hardware components, and in some cases, the software and networking associated with truly offering homeowners the IP-based home.

While the ability to control lights, entertainment, security, and climate via the Internet is highly appealing it begs questions associated with all Internet-based technology, such as reliability and accessibility. While the IP-based home does indeed have its benefits, some in the market advise builders to proceed with some level of caution with regards to these systems.

Strong Support

Typically, IP-based automated home technology systems have been ideal for large-scale custom and luxury homes. Manufacturers such as AMX, www.amx.com, Richardson, Texas, and Control4, www.control4.com, Salt Lake City, Utah, are among those working to provide scalable solutions that can be installed in lower priced custom homes. Yet on the whole, pitching builders on these systems may still be a tough sell.

John Goldenne, president of integration firm Digital Home Technologies, www.adigitalhome.com, Palatine, Ill., has seen some good IP-based systems in the market—he is even trying one out in a few of his homes. Yet he doubts that any of these systems are 100% reliable. For that reason, he is a firm believer in wiring the home for everything and anything, just to be on the safe side.

“You absolutely need that back up (wiring) and I have some builders that would attest to that. They have fired their integration guys and they are still running back to homes they have finished last year because they cannot find anyone that will support them,” says Goldenne. “You want systems that will work continuously, granted there are some product errors here and there, but you don’t want the whole system to always crash. There is a lot of IP out there and many are nice, but the real question is will it work continuously outside of a controlled environment (i.e. tradeshow) six months down the line?”

His suggestion for builders pursuing IP-based systems is to continue wiring homes with basic structured wiring, which can support any level of system. From there he would advise builders to have installers work some level of service into the agreement, just in case of problems that may arise.

Eric Lee, owner of integration company Integrated Control Experts, www.icx-inc.com, Chicago, Ill., believes a lack of training for IP-related issues that arise during the implementation of most of these systems, as well as some hardware issues are the largest issues to consider.

“Most residential applications use inexpensive IT products. Your network will be as strong as the weakest link. If you are using a router, switch, or access point that was purchased at the local office supply store, the potential for system failure is guaranteed,” says Lee. “The type of components used in standard PCs could also be problematic. I find that if you use enterprise-based hardware and manage it properly that IP-based systems will work wonderfully. However, you must strictly manage the network.”

The broad mix of audio/video, lighting, climate, and controller products from Control4 leverage communication via WiFi, Ethernet, and of course IP. The company says it can tailor product packages, starting at around $1,000, for builders. For example, if a builder is looking to promote a green community, a package containing thermostats, light switches, and maybe irrigation control would be appropriate.

According to Will West, CEO of Control4, its network of 850 dealers around the country makes the IP-based home painless for the builder in terms of service.

“You have the preset packages that you can offer to your customers and you will have the service and support no matter where you are,” says West. “And the services and support can be online. A builder can go online after installation and check on status of the house and monitor the home remotely. We found this has been convenient for the builders that are doing a large number of homes.”

Greg Nutt, president of Southampton Homes Inc., www.southamptonhomes.com, St. Charles, Ill., is in the process of building what he calls luxury/oversized townhomes, ranging from 2,400-3,900-sq.ft. and priced between $590,000 and $1 million. He is one builder involved in the recently launched builder program from AMX. A control panel from AMX, along with added security, lighting, and audio control, will be a standard option and be “the icing on the cake” in each of the 61 units.

When Nutt decided to go ahead with the AMX technology he stressed that it be easy to use and that his installation company ORAT, www.orat.net, St. Charles, Ill., provide continuous service and support.

“I have spent a lot of money on building the Southampton name over the past 20 years—and a big part of that is taking care of my customers on call backs,” explains Nutt.

“We are installing the basic package in the homes. But if the homeowner moves in and wants to tie in other components, they will need to have ORAT come out and train them. That is all part of the service. ORAT is a strong partner of ours, so they will make sure that they take care of that customer.”

Another Innovation

Exceptional Innovation (EI), www.exceptionalinnovation.com, Westerville, Ohio, strongly believes in the IP-based home and is looking to help builders share in the enthusiasm.

At the heart of the company’s offering is Life|ware, a software program that works with a Microsoft Windows XP Media Center. A media center is essentially the hub for controlling climate, lighting, security, and entertainment systems through the television. While EI provides the software, partners such as Russound; HP; Sony, www.sony.com, Tokyo, Japan; Honeywell; Lutron, www.lutron.com, Coopersburg, Pa.; and GE, www.ge.com, Fairfield, Conn., among others, provide components.

Mike Seamons, vice president of marketing with Exceptional Innovation, says builders should look at Life|ware as the glue that allows them to sell a range of connected components to the homebuyer.

“Builders have been putting in structured wiring for years. It is not a real sexy thing to put in the home—it is infrastructure,” says Seamons, who encourages builders to run CAT5 and RG6 to every room. “What Life|ware does is it brings the infrastructural investments to life into a TV and connects different infrastructure pieces (via) an on-screen entertainment experience.”

EI has positioned Life|ware as the main component among a group of products builders can offer. The offerings are broken down into five builder program packages. The lowest is a one-room media center with each subsequent package essentially adding to the total number of rooms a builder will offer technology in.

Satisfying service nightmares some have encountered with IP-based systems, Seamons says the builder gets connected with a Life|ware certified dealer, who facilitates and supplies all of the equipment and does the installation.

He explains, “On the front end of the program are builders out there with a premarketed package of entertainment and automation. On the backend are Life|ware dealers that have been approved to be a part of the builder program so that when a builder sells package ‘x’ there is a dealer present to facilitate that, both from product installation and support.”

For example, one package encompasses one media center, a DVD changer, an A/V (audio/video) receiver, a 50” Plasma display and wall mount, three front speakers, two rear speakers, a subwoofer, six lighting control zones, a power/UPS conditioner, a universal remote, an A/V rack, and the Life|ware software. EI suggests a total retail price to homebuyers of $31,000, which includes installation and one-year of service, with a builder incentive of $2,500.

Seamons says when partnered with a Life|ware certified dealer, the $31,000 paid by the homeowner goes to the builder. From there, the builder pays the Life|ware installer, either deducting the $2,500 off of the $31,000, or if the installer is selling to the builder, the builder gets a credit.

“If the builder is driving the solution—meaning they have made it a part of their marketing campaign for homes—then obviously all upgrades would go through the builder and go past to the dealer,” adds Seamons. “There is the possibility for the builder to then work out upgrade packages with the dealer to continue to grow on current packages.”

Life|support is a call center support system, which is a monthly recurring service that customers subscribe to via Life|ware. While Seamons says the plan is currently only sold through dealers he expects to evolve this as an option for builders to sell, which could help them amass long-term profits from automated home technology.

EI officially launched its builder program at the Intl. Builders Show in Orlando, Fla. in early February with Custom Builders USA, www.cbusa.us, Vienna, Va. As a management company representing roughly 350 custom and small volume builders in 12 markets across the country, CBUSA helps these builders utilize their collective buying power when it comes to construction materials and supplies.

It recently added EI to its Partners in Quality program, which is a list of preferred distributors and installers that it believes are effective for custom and small volume builders. While there are many automated home technology products in the market, Lee Odess, chief operating officer with CBUSA, says EI was selected because it has embraced the builder, compiling easily digestible packages that show how much money they can make.

“What EI has done more than anyone else in the custom market is they did not come in and start talking about gigabytes and HDMI; stuff builders could care less about,” says Odess. “Instead, they have (worked with us) to determine what it takes to make this work. They are working with builders and asking questions.”

Another strong factor is that EI presents a mix-and-match approach to automated home technology. He says, “Frankly, the name brands are strong within the consumer electronics world but not in the builder world. We did a survey of our builders that asked what they believe is the number-one brand in consumer electronics and the majority response was ‘I don’t know.’”

He believes not embracing the builder is slowly having a detrimental effect on the custom installation market.

“I have walked jobs with builders and they have taken me into basements to show me (automated home technology) jobs that have gotten done; ones in which they have not made any money on,” he says. “I can tell you that integrator will never get work (with that particular builder) again.”

He adds, “It is very hard for a builder building small custom homes to be able to take the time to learn and understand things like lighting and audio alone. With EI, it pulls all of those things together in a nice package and has answered a real simple question for the builder about how much it costs as opposed to a vendor saying ‘let me put something together and get back to you.’”