What’s the phrase: don’t work hard, work smart?

Late last month, Honeywell Intl. Inc. announced that its smart home devices will be joining the company’s new brand, Resideo, by the end of 2018. It’s part of a spin-off: Resideo will become a stand-alone, independent, publicly traded company, made up of the Honeywell Homes product portfolio and ADI Global Distribution. Honeywell will license its brand to Resideo under a long-term agreement for use in its home comfort, security hardware, and software solutions for all channels. So while the name “Honeywell Home” will be kept on the box, smart home products will exist under Resideo as a separate entity.

“The home is the biggest investment most of us will ever make — the place where we create a lifetime of memories,” said Mike Nefkens, president and CEO of Honeywell Homes and future head of Resideo. “Because the home is a centerpiece of our lives, we expect it to be secure, comfortable, and safe at all times. And because making smart home choices can be truly overwhelming, our mission is to provide consumers with integrated, simple solutions for today’s connected home.”

Resideo’s go-to-market approach and customer base will remain the same, and the company will draw on a network of more than 110,000 contractors — an integral part of Resideo’s strategy, according to Nefkens — as well as more than 3,000 distributors and 1,200 OEMs, major retailers, and online merchants.

“Our goal — to reach homeowners through our professional channel by equipping them with the tools, training, and programs to help them grow their businesses — is a top priority for Resideo going forward,” Nefkens said. “The spun business will have a more targeted focus and strategic decision-making to meet the needs of its customers, including the professional contractors. We’re committed to offering a best-in-class portfolio of solutions that our growing base of independent HVACR residential contractors can utilize to effectively meet the ever-changing needs of the homeowners, with a focus on innovation and partnership.”

The decision to spin off came after a comprehensive review of Honeywell products, according to the company.

“We believe [Resideo] will be a leader in the IoT/smart home space and uniquely positioned due to our installed base in home heating, ventilation, air conditioning controls, home security systems, and offerings, complemented by our ADI Global Distribution business, which will remain as a stand-alone part of the new company,” said Nefkens.

Tom Jackson is CEO at Jackson Systems, a distributor for Honeywell in Indianapolis and part of the new Resideo network. He anticipates the move will lead to innovation across the smart home industry.

“I think it will allow Resideo to be better focused on the residential/light commercial market; they won’t have to worry about all these large divisions, be it aerospace, refrigerants … like they did in the past,” he said. “They’ll be focused on a very specific part of the HVAC industry. With Resideo more focused on residential, it will be another huge player in the market with the Nests of the world and the ecobees, which will help pricing remain in check, making it affordable for homeowners. And it’s gonna stir some innovation from not only Resideo but their competitors as well.”

To Josh Huck, co-owner at Williams Comfort Air in Indianapolis and part of the Resideo pro network, the spin is all about cutting through red tape.

“This change … might introduce more products, less restrictions, so we’re not having to wait for 17 million approvals to get it on the roadmap: faster delivery of a new product, faster response to a problem,” he said.

He’s also looking forward to a closer marriage between home automation and security, something that’s been highlighted in early Resideo marketing as well as in the name itself.

“When we thought about a name for the new company, we knew it had to reflect our strong heritage, the promise of connected technology, and the deep devotion people have for protecting what they hold most dear,” Nefkens said. “Resideo combines the words ‘residence’ — your home — and ‘presidio ’ — your fortress.”

Research by McKinsey & Co. shows that the smart home industry is expected to nearly double in value by 2022 and that the industry is benefiting from growth in residential construction/remodeling; increased emphasis on safety and energy efficiency; and advances in mobile connectivity, the cloud, and data analytics, Honeywell’s website pointed out. Huck is eager for those advances.

“The HVAC side is very new to this whole ‘let’s connect things to the internet’ deal … whereas the security side is on a roll,” he said. “Tearing down the walls between all the different silos can only mean faster responses to problems: more new products working across platforms. I feel like, back in the ’90s, [Honeywell] was very contractor-focused, very innovative … I’m excited because I’ve been a diehard loyalist for over 25 years, and it looks like they want to get back to their roots … because we do know how to innovate; we do know how to deliver innovative solutions.”

Rebranding and new messaging could help strengthen the HVAC contractor’s role in smart home systems, Jackson added.

“We’re focused on building that connection between the HVAC contractor and home automation, so hopefully, some innovative products will play into home automation as it relates to HVAC,” he said.

While direct-to-consumer is one aspect of Resideo’s customer base, Huck doesn’t anticipate a major shift in the way its smart home products will be marketed.

“I don’t think [marketing directly to homeowners] is the major strategy,” he said. “Will the way I do things change? Probably not. I think they want to get back to their roots where their contractor side is much more than the consumer side.”

That said, an uptick in homeowners buying new products could signal more business for contractors.

“I’m one of the rarities: I support retail,” Huck said. “I’ve been dealing with client-controlled equipment my whole life. So when people call up a contractor like ‘I bought a faucet, can you put it in,’ most say no. We say yes. The way we deal with it when homeowners buy the wrong thing is, we have a truck of the right things.

“We will install it, and they can go and return the other one,” he continued. “Smart dealers adapt.”

Todd Washam, director of industry and external relations at ACCA, agreed that the expansion has potential as another opportunity for contractors.

“The connected home market is certainly growing, and we expect to see competition as more consumers rely on their mobile devices,” he said. “ACCA’s contractor members are in a prime position to help their customers connect their homes. Contractors have a seat at the kitchen table helping families make decisions about their comfort and air quality needs, and they can educate consumers about the benefits of a connected home.”

Huck put it more straightforwardly.

“You buy it retail, you need help — we say: ‘here you go,’” he said. “If [Resideo] delivered a ‘Hey, we have 96 million requests for help’ … it might just open up the door for more newcomers.”

Publication date: 8/20/2018

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