CRN Interview: CEDIA President Sees Changes Afoot In Home Tech Arena

Home integrators can expect more new networking and cost-effective home control and entertainment gear at the CEDIA Expo, one of the nation's largest home-tech trade shows. The event is being held Sept. 13 to 17 at the Colorado Convention Center in Denver.

Andy Willcox, president of CEDIA (Custom Electronic Design and Installation Association) and president of ProLine Integrated Systems, Highland Park, Ill., took some time out from planning the show to talk with CRN Emerging Industries Editor Jeff O'Heir about industry trends and challenges and how CEDIA and the expo will address them.

CRN: What's the biggest change CEDIA integrators and installers have faced or undergone over the last year?

WILLCOX: There are a couple of constants, such as the migration of the big-box companies into our space. They are looking strategically to figure out what their next step is, because there are so many changes in content delivery and the necessity for [professional] services instead of do-it-yourself. They still realize the average consumer can't go out and buy a plasma [display] and install it themselves successfully. They need help doing it right.

The other thing is there are people in the commercial audio/video industry that are looking at our market, realizing there's a profitability differential here: You can make more money in residential than you can in commercial. And certainly electrical contractors are looking at the space, because they are being called upon by the general contractors and architects to provide services like structured wiring, distributed audio and distributed video wiring, as well as the products that go along with it.

CRN: How much have the big-box retailers and online operators cut into business?

WILLCOX: It's a gradual process. Look at Best Buy's acquisition of Magnolia [which deals with higher-end home entertainment products and services]. They're rolling out that brand. It's going to take time to do it, but it's not going to take forever. And when you have liquid assets of over $3 billion, you can do whatever you want. They're going to start moving into this space, and they're going to start gathering products that make sense.

And they are going to start chipping away at some of what our members do. There is going to be some attrition, no question about it. Some of these people are going to go out of business, or they are going to get absorbed and become a part of a larger entity. It's natural; it happens in every industry. Any one of our members that is blind to it or not aware of it -- or at least putting together a strategy and a short-term plan to survive -- is being a bit myopic.

CRN: What's CEDIA doing to help its members compete more effectively?

WILLCOX: We're trying to teach people to do business better from a comprehensive perspective, by designing and crafting CEDIA University to provide a range of skill sets across the board so people can run a successful business. I don't mean just from an installation side, but from the design side, the project management side, the business administration side, and the sales and marketing side.

We have to eventually get these people to understand how to run a small business, how to deal with cash, operating capital, [as well as] understand what work in progress means, what pipeline means and then be able to forecast successfully for the future and figure out where trends are going so if there's a slowdown or a buildup in the marketplace, they can compensate for it. CRN: Have you seen increased interest from CEDIA members to install more mid-level products to the sweet spot of the mass market?

WILLCOX: I think so, on some levels. We had an entry to the marketplace, for example, by Control4 [a developer of low-cost home control solutions] three years ago. But like every other product of its type, they weren't able to deliver a complete product offering that had been completely beta-tested. But now they are delivering, and there are people selling it and doing quite well, from what I understand.

That's just scratching the surface of the marketplace. When you start getting those types of rollouts, you're going to start to see migration in the marketplace of low-cost, turnkey integration products that will handle the average home. Some of those products will fit into [the high-end] space as well. Anyone who doesn't see this is fooling themselves. I can't stress how important it is to raise the level of your sales acumen and your customer service.

CRN: The number of dealer/installer members within CEDIA grew by about 600 this year to 2,500. Has the face of that membership changed?

WILLCOX: There are a lot of new faces. We're starting to get a percentage of IT, a small percentage of electrical contractors and a constant migration from security companies.

CRN: How will the show reflect the needs of those new members?

WILLCOX: There are new vendors coming in [more than 600 in all]. There's a growth in distribution presence; a lot of new products coming into play; a lot of new, lower-cost ,mass-market integration types of systems; more media player products; and a huge presence from Exceptional Innovation [makers of Lifeware Windows XP-based home control platform] and other companies like that. There are a lot more products covering different wireless technologies, new lighting control products, IP-based and powerline communication technologies. It's all there.

CRN: Have any of the new products or technologies that emerged over the past year started to take hold?

WILLCOX: I think [Microsoft Windows] Media Center is going to become a force. I still think it's a product that not's quite there, but it's going to get there. Also, low-cost integration systems like Exceptional Innovation. They're building their platform around the Media Center server. What they have are low-cost integration modules that work in conjunction with IP-based platforms, so you can do your lights, air conditioning and your window treatments and everything with a Media Center [PC] as a central portion of the system. We're also going to see a larger presence of wireless technologies, which are going to affect retrofit homes in a big way. It opens new doors.

CRN: Education has always been a focal point of the expo. Any changes there?

WILLCOX: We're having more entry-level and gateway courses to allow people easier access to our channel. We're going out of our way not to be exclusionary in any way, shape or form. We truly believe the only way this industry is going to succeed is to raise the level of performance and service of everyone who is a part of it. The only way to do that is by not excluding but inviting them into our space and providing the education they need.

CRN: You mentioned trying to make this year's show accessible to different generations. Why is that important?

WILLCOX: When we started this association 20 years ago, it was a small group of people all in their late 20s and early 30s. A lot of us are now in our 50s, and some even in their 60s. But you have a lot of young people who are coming into the industry on a career path. When you look at the spread in generations, it's quite a change. There's an evolution going on, so we want to make sure that we engage everyone coming to the show and share concepts and ideas.