Comcast Buying Part of Icontrol as It Targets Software Platform
Comcast is buying a portion of Icontrol that Alarm.com isn't purchasing in its $140 million deal. Icontrol is the behind-the-scenes platform company powering Comcast’s Xfinity Home service and ADT Pulse, among others.
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Comcast is buying Icontrol Networks, Xfinity General Manager Dan Herscovici said in a blog post Thursday, calling Icontrol “an important technology partner” for Comcast since Xfinity Home launched in 2010. The main attraction for Comcast is Icontrol’s Converge software platform, which powers the Xfinity Home touch-screen panel and back-end servers that manage communication among devices in the home, said Herscovici. Converge is a platform for cable companies.
Parks Associates analyst Tom Kerber told us when the deals are done Alarm.com “gets the biggest prize in the security industry,” referring to ADT and its 1.6 million Pulse connected home subscribers. For Comcast, the company will take "full control of its IoT solutions,” Kerber said. That's “a key strategic area for all cable and telecoms,” he said. Alarm.com is acquiring Icontrol’s Connect business, a solution for security and telecom companies combining Wi-Fi and Z-Wave technologies with security control panels from DSC, Honeywell, 2GIG and Interlogix. Alarm.com is also acquiring Icontrol’s Piper business unit, which makes a security-based smart home hub. The deal is expected to close by year-end, said Alarm.com.
Icontrol’s exit from the connected home space is “considered overdue by some,” after Alarm.com’s “successful IPO” last year, said Kerber. Comcast has an equity position in Icontrol that “likely gave them the inside track on acquisition.” ADT also was an early investor in Icontrol, he said. With the ADT and Comcast smart home offerings powered by different platforms within Icontrol, “dividing the company by the markets served by each solution makes sense,” said Kerber.
Comcast’s spokesman said the deal benefits the buyer, including bringing the core home security technology platform of Xfinity Home in house, “which gives us more control over the strategic direction of the business and the product road map.” It gives Comcast the benefit of Icontrol’s “braintrust” while enabling it to build a “wholesale business that can serve other cable customers looking to get into the IoT and home security space,” he said.
Herscovici said Icontrol has been “innovating around" the IoT since it launched in 2003, and the company built platforms and technologies that support connected home security solutions not just for Xfinity Home, “but for a number of leading" multiple system operators. Comcast plans to continue serving customers using Icontrol’s Converge software platform and to accelerate the development of new services and features, he said. Comcast will “strategically invest in its technology and technologists,” to deliver new features, products and services to individual and enterprise customers, he said.
The Icontrol employees in Austin who are joining Comcast will make up a new Comcast “engineering center of excellence” to work closely with Comcast engineers in Philadelphia and Silicon Valley said Herscovici. He said the engineers will be working to build “simple, elegant and powerful connected-home and connected-home security products.”