Arthur Orduña, ADT’s chief innovation officer, talks into his smartphone to check the security and lights at his home. The ADT app recognizes his voice.
“Security status,” he says, receiving confirmation that all is well. “Light status,” he says, learning about the lights on for security reasons.
No competitor has a remote-control system with voice authentication, Orduña says. “We want not just to be at the party, we need to be first to market,” he says.
ADT may be a 140-year-old company, but it is strategizing like a startup.
The Boca Raton, Fla.-based company, with $3.3 billion in 2013 revenue, is recognized as the industry leader in security for the home and small business. But as it has moved into home-control products, ADT is in direct competition for consumers’ dollars with giant cable, smartphone and technology companies.
Orduña says they may be competitors, but he also sees them as potential partners.
“There’s more of a natural reason for us to work together,” says Orduña, who joined ADT in 2012 after working in the cable industry for Brighthouse Networks. He also was co-founder of Canoe Ventures, a Silicon Valley startup that provides interactive-advertising software.
To offer new products, ADT is partnering with incubators in Silicon Valley and New York City, and has plans to similarly reach out to startups in South Florida.
“While we can come up with some really cool devices and apps, we’ll never out-innovate all of the startups. We want to work with them,” Orduña says.
Earlier this year, ADT invested $25 million for a minority stake in Life360, a San Francisco startup. Through Life360’s Canopy app, customers can set up circles of friends and family who they can let know where they are or are going, as a safety backup.
ADT has taken the app to another level by offering “Chaperone” service.
A child dropped off by the school bus can check in on the app on a smartphone. An ADT operator stays on the phone with the child for the walk home. When the child safely reaches the door, the operator signs off: “Talk to you tomorrow; do your homework!”
ADT said it is still testing the Chaperone service, which it plans to offer for less than $10 a month.
Digital security is another new product, and revenue stream, for ADT.
In January, ADT announced a partnership with digital-security firm McAfee, offering its Live Safe product to existing customers. The current price is $40, a promotional rate to encourage customers to try the service for 12 months.
“Your digital assets are just as important,” Orduña said. “Your PC, laptop, tablets and smartphone now are also secured because of our partnership.”
Live Safe is embedded in electronic devices, so if stolen, they would lock and prevent a thief from accessing them. Devices also can be wiped, if need be.
Nicholas Heymann, an analyst for William Blair & Co., said ADT Pulse, its video-monitoring product, is selected by 71 percent of ADT’s new residential customers, which is only 14 percent of ADT’s customer base. But he expects ADT’s customers to grow from 6.8 million to 8 million by 2018, with 38 percent buying ADT Pulse.
Heymann said he thinks ADT will expand by partnering with Verizon Wireless, which dropped its home-monitoring and -control service in February. “If Verizon signs up, AT&T will be right behind them,” he said.
Consumers will want home automation when they realize how it makes their lives easier, Heymann said. The products “give you a lot of flexibility you didn’t have. You start doing this, and suddenly, you can’t live without this,” he said.
Costs can be difficult to compare, as packages include different service options, ever-changing prices, and may include discounts with bundling.
ADT Pulse costs range from $47.99 to $57.99 a month for monitoring, the company said. There is no set price for installation — each system is configured based on the customer’s needs, spokesman Jason Shockley said.
Comcast Xfinity, a cable-industry player that entered the security and home-control market about two years ago in Florida, has two products that offer monitoring with home automation: Secure 300 and Secure 350.
Secure 300, which offers remote access through any device, costs $39.95 per month with a $99 installation charge, said Thomas Zemaitis, vice president of sales and marketing for the Florida region. Secure 350 adds a thermostat controller via any device and two indoor/outdoor cameras, and two lighting/appliance controllers, and has a $399 installation charge.
Customers can get a discount on the security and control services when they bundle with Xfinity cable service. “I think it gives us an advantage with consumers. Instead of paying separate companies, it’s much simpler,” Zemaitis said.
Product reviews are another avenue for consumers checking new products.
ADT points to its ADT Pulse Voice recently being named one of the “top 5 smart-home innovations” by CNET.
At the same time, ADT settled in June with the Federal Trade Commission on complaints that it misrepresented paid endorsements from safety and technology experts as independent reviews on media news programs, on blogs and elsewhere online.
ADT spokesman Shockley said the matter was resolved amicably and the company now has a tough disclosure policy that follows FTC guidelines.
The company also sees more opportunity in expanding its monitoring services to renters and the do-it-yourself market. Only 20 percent of North American households have security systems, according to industry estimates.
“We want to start addressing that 80 percent,” Orduña said.