Josh is a professionally installed home automation system, and we are happy to be partnered with forward-thinking and tech savvy integrators across the country. As a PRO product that integrates with custom installed systems, we also work with other manufacturers, sales reps, and trade organizations that help to keep our industry moving forward.
The custom integration channel is a large community made up of both public and private companies that are large and small. There are manufacturers, buying groups, distributers, integrators, journalists and dozens of trade shows. Yet, even though the custom channel is spread around the world, the community is actually fairly tight-knit. Here is an overview of the custom integration industry.
Integrators
The home technology professional, or integrator, is the person that essentially is the gatekeeper to the end-user. The integrator chooses which technology to introduce to the client, and is also the one to install and support all the technology in the home. Integration companies can be large operations with staff upwards of 100 or much smaller at around 5 to 10. One thing to note, though, is that the size of the company does not always dictate the amount of revenue that is generated. Many times, the job size as well as rates charged depend on location and strength of word-of-mouth references.
By far, the two most important factors to a client are the reliability of the installed systems and the quality of support offered over the course of the relationship. Most clients already understand that they are paying top dollar for a home outfitted with high quality AV equipment, a lighting system, and an automation system. Exceptional service is what sets the best integrators apart.
Many integrators pledge their allegiance to one control system, maybe a lighting system (if the control system doesn’t provide a lighting solution), and usually a variety of audio / video equipment. That being said, each control system and hardware has its own set of nuances and learning curve, and so asking an integrator to add another brand to the roster is most always a tough sell. Each integration company has its own recipe on how to sell, install, and support the technology.
At the end of the day, integrators will most definitely go above and beyond to make their clients happy, which ultimately leads to a good referral. Integrators spend time perfecting their sales pitch and creating the ideal showroom to showcase their products.
Manufacturers
Starting at the top, we have companies such as Lutron, Crestron, and Control4 that dominate the trade shows and have numerous dealers around the world. Manufacturers are either loved or hated by the integrators, and it all comes down to reliability. When typical install job sizes average in the five to six figures, integrators expect all installed products to be 100% functional. There is little tolerance for failure.
Maybe because of the requirement for high reliability, or maybe because the sales cycle in the CI industry is typically long, but many manufacturers have been slow to innovate and introduce new technology. For example, although IP control has been a standard for many devices in the home for years, only recently have TV manufacturers started to introduce IP controllable TVs that integrators have started to embrace.
Buying Groups
Buying groups are member-driven organizations made up of integrators that band together to strike deals with manufacturers in the channel. The main buying groups for integrators in our industry are Azione Unlimited, HTSA, and ProSource. By joining together under the umbrella of the buying group, integrators are able to get discounts on many of the major products on the market.
The buying groups have two main incentives. First, they offer protection against price gouging from manufacturers. Second, they allow integrators to avoid distributors, and therefore a higher cost, since they are buying direct from the manufacturer.
Distributors
The distributors allow for common brands such as Sony, Lutron, and Denon to make it to the hands of integrators at a slightly higher mark-up than buying groups. Yet, integrators can buy smaller quantities without having to sit on too much inventory. Moreover, distributors also help smaller, high-end niche products make it to market and provide a sort of representation in the market.
Between distributors and buying groups, integrators are able to pick and choose what buying structure suits their business best. They key here is that integrators are looking for the best price from either source to be able to sell the product at a decent mark-up that makes sense for them and the client.
Sometimes, a client will request hardware that the integrator doesn’t officially represent. For fear of losing the client, the integrator takes the plunge to a install this new product. This is where distributors comes in, because they are able to provide hardware at lower quantities without the integrator having to become an official partner of a brand.
Industry Press
As in many tech industries, the media takes an active role in educating and informing the industry about general news and exciting innovations. Among the more popular publications are CE Pro and Residential Systems. These publications highlight integrators in different regions for specific note worthy jobs as well as interviews with industry leaders and product reviews.
In addition to traditional publications, there are also other media outlets that speak to our industry. Some examples include Jason Griffing and Seth Johnson’s HomeTech.fm weekly podcast as well as rAVe’s AV Insider with Johhny Mota. These podcasts offer an in-depth look at trends and developments relevant to the CI industry, both residential and commercial.
Trade Shows
There a few trade shows throughout the year that specialize in the different sectors of the custom integration market. On the residential side, CEDIA is the biggest one that brings the industry together in the United States. If you’re interested in commercial projects, InfoComm is the trade show to attend.
Some conferences are held every year in the same location while others rotate between different cities and venues. Many of these trade shows offer the opportunity to network and meet new people, as well as take training courses that allow attendees to broaden their knowledge and sharpen their technical skills.
When looking at the custom integration industry, we see that there are a lot of players that provide many different types of functions. In many cases, we have seen that the custom integration industry in general has been slow to adopt new cutting-edge technology. However, as clients get more exposure to the growing trend in connected devices and voice control related products, innovation within manufacturers and integrators will steadily increase to keep the industry at the forefront of great technology experiences.
This post was written by Benji at Josh.ai. Benji is on the Business Development team. Prior to joining, Benji worked in product strategy for Sonos. Outside of work you can find Benji eating at new restaurants, cycling throughout Los Angeles, and woodworking. Benji graduated from UCSB in 2016.
Josh.ai is an artificial intelligence agent for your home. If you’re interested in learning more, visit us at https://josh.ai.
