With their ability to communicate in data format over the Internet, alarm transmitters that use the Internet protocol (IP) represent the beginning of a future in security signaling, many people within the security industry say. By using IP communication, these transmitters have the potential to generate significant operational savings for alarm companies and their customers through potentially less costly monitoring and by enabling faster downloading of programming and program changes.

Most agree, though, that IP transmitters cannot fully replace conventional transmitters yet. The additional cost entailed today – both in equipment and labor – is still too high, except in certain situations, experts say. Some also are concerned about Internet reliability.

Among commercial accounts, IP transmitters are most often sold either for high security or for accounts with multiple locations who want easier system administration. In both the residential and commercial market, there is also a market to IP transmitters for customers who have replaced their traditional phone line with voice over Internet protocol (VoIP) service, which communicates over a broadband data link such as a cable modem or DSL connection.

So what are the keys to a successful IP transmitter sale?

Michael Surabian (left) and John Cronin (right), both technical advisors at American Alarm, explain the benefits of IP alarm transmitters to a customer. Cronin, a licensed systems contractor, and Surabian, a licensed journeyman electrician (both licensed under the Board of Electricians in Massachusetts), handle customer service sales of add-ons, change orders, etc.

THE VOIP CONUNDRUM

There are two kinds of IP transmitter sales involving VoIP: the kind where the customer is thinking about replacing his traditional phone line with VoIP and the kind where the customer already has done that, for example, where the customer already has an alarm system and is now experiencing problems with his alarm communications. The second type of sale is more like a service call than a sales call — and it isn’t much fun for the salesperson.

“Many people think they can just kill their phone line and save $50 a month,” says Mark Norris, Center of Excellence manager for Interface Security Systems of Earth City, Mo. “The reality is that we’ve found all kinds of problems with that. VoIP lines are digital and they’re doing load sharing of the audio. And while that may be good enough for a phone conversation, it also means that most of the time you try to hook up an alarm, it’s going to crash and burn. You can test a system 10 times and get six or eight or nine good transmissions, but there will be one where the system mangles it. The customer thinks we’re bad guys because the system doesn’t work with VOIP.”

To address this situation, Interface sells the customer an IP transmitter from Honeywell Security, which runs about $400 and costs a bit more on a monthly basis to monitor. Customers ultimately may save money on their monthly phone bill, but not for nearly a year because it will take them that long to recoup the money spent on the alarm system upgrade. “They resent us a bit for it,” Norris says, adding that some customers in that situation may even decide to give up their alarm system.

The best way to sell an IP transmitter for VoIP applications is to already have firm groundwork in place. “The solution that works best is when we proactively send out mailers or put inserts in bills that say: Reminder, if you’re considering eliminating your phone service, before you do, consult with Interface,” Norris relates. “By being proactive, you have a better success rate in doing conversions.”

It’s also important for alarm salespeople to ask about VoIP when selling to residential and commercial customers who do not currently have an alarm system. If there is a possibility that the customer may want to replace his traditional phone with VoIP in the future, the salesperson should explain the potential incompatibilities and recommend that the customer install an IP transmitter-equipped system now. Some manufacturers offer alarm panels with IP transmission built on, which are more economical than buying a traditional alarm panel plus a separate IP transmitter, as long as the decision is made upfront. Currently, built-in IP transmitters may be available only on commercial-grade panels, but that availability is likely to expand in the future.

Alarm dealers note that a few technology-savvy customers may ask about IP alarm transmitters and may be willing to make the additional investment in IP as a means of future-proofing their system. Interestingly, these sales most often seem to be “pulled” by the customer rather than “pushed” by the dealer.

The reason? In order to install an IP transmitter, the alarm company typically has to make adjustments to the customer’s broadband router. As Wells Sampson, president of American Alarm of Arlington, Mass. explains, “In a residential or commercial installation where the customer doesn’t have an IT person, we own the network and get caught in a morass of back and forth. You don’t want to own the network and be responsible for servicing a network that you supposedly wrecked when it was actually the customer’s kid who fouled up the ports.”

American Alarm expects an IP transmitter from Honeywell Security that uses existing open ports to help address this situation. But other concerns also may cause some alarm companies to think twice before pushing IP transmitters. As H.B. “Trey” West, vice president of operations for Knight Security of Dallas, Texas, points out, many low-cost routers lack an uninterruptible power supply, meaning that the alarm system would be inoperative during a power outage.

When selling IP transmitters, another key factor is to make sure that the job is priced correctly. On other types of installations, American Alarm triples the equipment cost to arrive at the end user’s price. Materials represent a third of the cost of a job, while labor is another third, and sales commission and overhead represent another third. But Sampson questions whether the market will bear IP transmitters with a threefold markup. “There won’t be much profit,” Sampson notes. “It’s not a moneymaker, just a necessity.”

Correctly pricing IP transmission for commercial jobs can be particularly tricky, West notes. “The price point is driven by parts and the technical burden we’re taking on to sort out their network,” he says. Estimating labor upfront is particularly challenging. “You can’t throw an hour or two at it and be done,” West explains. “You may have to sit with their IT department. The reality is that there’s a lot of uncertainty and you can spend a day there. Today we would put four hours in and keep our fingers crossed that that would cover it.”

At the secure operations center (SOC) of Interface Security Systems, Earth City, Mo., IP transmitters from Honeywell Security are used to monitor alarms employing voice over Internet protocol (VoIP) systems.

COMMERCIAL OPPORTUNITIES

Despite these challenges, some companies — including American Alarm and Interface — actively try to sell IP transmitters for some commercial customers. One of the reasons is that the fast downloading provided by IP transmitters could bring substantial operational benefits for alarm dealers and for their customers. When IP is used for downloading, Sampson says, “It frees up a logjam in the tech support area.”

IP transmission is particularly appealing to commercial accounts that have multiple geographically dispersed locations, says Jim Cullity, integrated systems consultant for American Alarm. He adds that some brand new accounts are willing to spend the extra $200 to $500 for an IP-capable panel to future-proof their system, even if they don’t plan to use that capability immediately.

When commercial customers have their own information technology department, it’s a mixed blessing for alarm dealers. On the one hand, an experienced IT staff can minimize the time the alarm company has to spend on IT-related issues and eliminate the need for the alarm company to take ownership of the network. On the other hand, if they’re not sold on the idea of IP alarm monitoring, some IT departments can block a sale.

But in certain circumstances, Norris recommends that salespeople work primarily with the facilities manager. Sometimes, he says, “The IT guy has an empire and spends every day working to build his empire — to harden, protect and guard it. Sometimes you can show evidence of how secure and reliable your solutions are and some IT guys will sit and say, ‘I don’t care.’ But when you make a presentation to the facilities manager, he’s concerned about getting security under control. If you can address those concerns and give him a package that includes network connectivity, then give in writing an explanation of how it works and the safeguards that are in place, then when he brings IT in, he tells the IT guy, ‘You will do this.’”

Ultimately, the benefits of having an IT department with which to work may outweigh the challenges. American Alarm, for example, is considering selling IP transmitters to commercial accounts only when the account has its own IT staff. “We haven’t come up with a firm policy,” Sampson says. “Right now we’re willing to get into the complexity because we’re still in the R&D phase.”

HIGH-SECURITY INSTALLATIONS

One other opportunity for IP transmission is for high-security applications, where it allows an economical means of providing periodic polling to ensure that the communications link is functional. The hitch is that, depending on the Internet service provider and the class of data service involved, the Internet communications may experience momentary service interruptions more frequently than other communication methods, generating time-consuming nuisance alarms. For that reason, anyone selling VoIP for high-security applications should also sell another type of technology, such as a conventional phone line, cellular or long-range radio, as a backup. Indeed, two technologies are a requirement for certain types of high-security listings, such as some UL listings.

In order to obtain faster download speeds, however, the alarm panel often has to be paired with the appropriate IP transmitter. Sometimes this means using the same manufacturer for both the panel and the transmitter. But in some cases, the only viable solution may be to replace the panel — at a significantly higher cost. That can be a deal breaker for some customers. But for high-security customers that are ready to upgrade their panels, converting to a system that uses IP transmission should be an easy sell.