Security Sales & Integration September 2022 - 34

EXCLUSIVE!
Executive Interview
Alarm.com
Connects the Dots
margins have gone down. It's been a different
environment, but not a debilitating one at this
point. Fortunately, it hasn't had a substantive
impact on the growth of our business. In terms
of the inflation, it's still a bit too early to tell.
Everybody's worried about it, but it's not had
a direct impact where we can say we've seen
things slow down. Everything I've seen so far is
worriedness rather than actual impact.
Engineering
and technology
are at the core of
what we do.
Backed now by
Alarm.com, we are
placing a high
priority on quality,
innovation and
dependability.
- Rich Onofrio
Rick Sheppard: For OpenEye, the supply
chain was definitely a significant challenge that
needed to be managed through. For us, that
culminated with average product lead times
hitting an all-time high in the fourth quarter
of 2021 with a peak of around 30 days. Anticipating
this challenge, we worked with our
finance partners at corporate to go all in on
inventory so we could continue to heroically
serve our partner base. Even with that enormous
inventory investment, it took over 18
months to fully catch up.
I'm very pleased with the progress we've
made. Our average lead time is back down to
sub one week. I'm also really pleased with our
new quick ship program where our channel
partners have access to preconfigured inventory
that's ready to ship on a same- or nextday
basis. This is quite exciting to a number
of partners who have really struggled with fulfillment
issues that have delayed and delayed
projects they need to deploy.
Now we're blowing the doors off with record
sales. It is so important to now have the financial
resources of an Alarm.com. Prior to the acquisition,
we would not have been able to make
such a big long-term, call it 18- to 24-month,
commitment, forecasting giant rates of growth
on inventory. In today's supply chain environment,
being able to make those commitments
one, two years out is essential to being first in
line when those chips become available.
Have you observed these factors
affecting the businesses of your dealer
customer base?
Sheppard: As it relates to cost, of course. No
one expects the cost of technology, especially
hardware, to increase with time. We've all become
accustomed to things continually getting
better at the same or a lower price point. Early
this year we had to pass along a cost adjustment,
which we delayed as long as possible. We
took a considerable margin hit and absorbed it
internally for a long period of time hoping the
supply chain would course correct on its own.
Eventually it became clear some of this was going
to be baked in on a permanent basis. From
everything I've heard, our channel partners and
users have been understanding of their need to
pass those cost adjustments along.
Bedell: That's similar to the business across the
board. We have tried to delay passing along the
cost increases we're experiencing and it's put
real margin pressures on our hardware sales.
Ultimately, we have had to make some price
adjustments on particular products. No one is
jumping up and down and super excited when
we tell them we have to do it, but they're seeing
the reality of the market and they then have to
come to terms on how they pass that along to
their customers.
The acquisition of Shooter Detection Systems
(SDS) expanded Alarm.com's commercial solutions
to help partners offer gunshot detection.
34
Security Sales & Integration SEPTEMBER 2022
What are some other technology and/or
service offerings you are very bullish on
right now and why?
Lohse: On the access control front, we recently
launched mobile credentials, the ability to use
your phone instead of a traditional card. That's
been coming for a long time but it's good to see
its adoption kicking up. You imagine your typical
small office might have 30, 40, 50 people
using their phone as their credential. It's certainly
exciting for the end user in the sense that
mostly from an administration standpoint, it's
easy. It's super simple relative to having to give
out keys or even just manage physical access
cards. From the partner standpoint, it's a new
RMR opportunity.
We're starting to see some applications.
We just had one that's a corporate dog park.
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Security Sales & Integration September 2022

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