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What Does the Control4/Pakedge Deal Really Mean?

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Martin Plaehn

After the very positive media reception surrounding this year’s acquisition of Pakedge by Control4, Editor-in-Chief of rAVe Europe, Bob Snyder, decides to dig deeper into the details. Both companies (now one company) were receptive to facing these unanswered questions…and the result is an informative look into how this acquisition might live up to its media hype.

Photo caption: (Left) Control4 CEO Martin Plaehn

Certainly the industry is saying this is the smartest acquisition in home automation. They make a very impressive list of what the two companies have in common. As rAVe EUROPE, we would like to ask a few questions about the few differences...

Control4 is a public company and Pakedge private. How do you expect being in a public company will affect the way Pakedge operates today?

As a newly integrated part of Control4, the legacy Pakedge team continues to support, develop, and invest in its networking solutions, and we continue to brand our networking products under the Pakedge name. Obviously, as part of a public company, some of Pakedge’s internal processes, financial accounting, and management reporting practices will change to be consistent with Control4 policies and the regulatory requirements associated with being public, but we believe this business combination offers increased exposure and opportunities to grow the core Pakedge business that it was pursuing prior to the acquisition. Pakedge is now operating as part of Control4 as follows:

 

  • The Pakedge founders, senior management team and broader organization are joining Control4 as its new Network Solutions group. The Pakedge teams in Huntington Beach and Hayward, California and its independent development office in Belgrade, Serbia, will begin working together with Control4 to create, market, and support industry-leading and networking solutions for the connected smart home and commercial businesses.
  • The network is a core component of every home automation project, and Pakedge continues to support a wide variety of projects through a superior networking experience, which can now be more effectively marketed to Contorl4’s dealers not already using Pakedge products.
  • Control4 intends to fully support the Pakedge product-line for all dealers, regardless of whether they are Control4 certified-dealers or not.
  • Pakedge dealers will continue to order product from the dedicated Pakedge dealer portal while Control4 dealers are now able to order the most popular Pakedge products via the Control4 dealer portal. The list of Pakedge products offered directly by Control4 is quickly expanding, and we anticipate the full Pakedge line will soon be available on the Control4 dealer portal.
  • With additional support from Control4’s team, we continue to build out the Pakedge Connect+ platform solutions. We continue to make Pakedge products compatible with all the automation technologies in the in the residential or commercial industry, including Crestron, Savant, Elan and all other major brands.
  • When dealers have technical support issues with Pakedge products, they continue to be supported through the Pakedge tech support center, and Pakedge Support continues to work with other manufacturers to troubleshoot and resolve issues that cut across brands and manufacturers.

 

Those same critics argue that Control4 is a legacy company selling closed systems and the Big Brands (Google, Apple, Samsung and others) are rolling in to take over. A recent study by a Swiss think-tank in Europe (GDI) predicts 5 major brands will control the connected home in 2030. How do you see the future of home automation playing out?

To date, Control4 integrates with more than 9300 products on the market. We have an open platform that allows for the integration of entire categories of products, including those that are competitive to products produced by Control4, and we continually have third parties request to certify their products with us and licence Control4’s Simple Device Discovery Protocol.

It is reported Pakedge has about 1700 independent dealers, of which 560 are Control4-certified dealers. Control4 has about 3100 dealers in North America, of which 500 are currently Pakedge dealers. Any idea how many dealers you both have in Europe?

We have hundreds of authorized independent dealers in Europe, including direct dealers in UK and Germany and dealers of our distributors in other European countries.

Pakedge is considered a premium networking brand. Control4 is considered a mid-market system for home automation and multi room audio/video distribution. Do you think there is life in the mid-market for Pakedge or do you intend to continue to aim only for the premium? Will Control4 be moving up or Pakedge products coming down in range to provide an end-to-end solution for the full spectrum of dealers?

We believe both Control4 and Pakedge are viewed as premium solutions by our dealers and end users and together they provide a complete infrastructure for high-performance smart homes and businesses.

Pakedge Router

Control4 has an office in northern England. You have your European set-up in Bulgaria. Are there any synergies expected when it comes to Europe? If CEDIA and InfoComm (with their separate organizations in USA), feel compelled to come together in Europe to succeed, do you think while you maintain separate structures in America, there might be different considerations in Europe?

Pakedge’s team in Belgrade is comprised of engineering and tech support, while Control4’s facilities in England are used primarily for sales, support and fulfilment. They are complementary operations with limited overlap. We also plan to open an office and training facility in Germany this year, and will continue to evaluate how best to structure the combined entity’s operations in Europe.

Europe, unlike America's single market, is a chain of markets where distributors are channel kings inside their own countries. If the intention is to provide end-to-end solutions, what implication does that have for the distributors? Can separate Control4 distributors and Pakedge distributors still be part of the new corporate mission?

Control4’s acquisition of Pakedge will enable Control4 to offer end-to-end integrated automation and network solutions to its distributor and dealer channels through a single experience – whether for purchase, marketing, or support. Control4 and Pakedge continue to work with their existing distributors to ensure continuity of service throughout the EU.

To what extent do you think Pakedge's Connect+, your next-generation network platform comprised of wired and wireless networking products that are integrated through advanced software and connected to the cloud, was an important part of Control4's interest?

Control4 has always focused on providing its users with the ability to seamlessly orchestrate a comprehensive home automation experience — spanning entertainment, smart lighting, comfort & convenience, and safety & security. Networking is a key element of Control4 installations. Pakedge Connect+ was a very important part of the acquisition. The ability to connect, monitor, repair, heal, and shape network traffic delivers a superior networking experience and is missing from many networking vendors in the home automation space. The Control4 acquisition now makes it possible to continue to expand the Connect+ platform and more tightly integrate it with Control4’s entertainment and automation capabilities. Developing these integrations, should allow us to deliver a much broader and more differentiated product line to dealers, and more reliable integrated experiences to end customers.

Victor Pak

Do the two clouds have overlapping or complementary cloud visions?

The alignment of our technology and solution visions was a major driver of our agreement to join forces, and we believe that our platforms can be integrated. Although we both sell hardware, we both see ourselves as software companies. We believe that as we continue to develop the software layer of the legacy Control4 and Pakedge systems together, we will be able provide the advanced level of functionality that neither of us could do alone.

Victor Pak has been recorded as saying, "The tipping point came last year when the entire ecosystem of IP and the Internet of Things (IoT) came together and Pakedge had all of the elements in place to virtualize the network." How do you see the Control4/Pakedge combination engaging the nascent Internet of Things industry?”

While there is a lot of interest and enthusiasm around IoT, most solutions today are “point” solutions that are isolated from the complete whole home automation ecosystem, which includes AV, security, communications, energy management, and utility (computers, storage, printing, etc.) systems. The Control4/Pakedge combination enables us to offer a more complete infrastructure platform for the smart home. Control4 provides the automation infrastructure that enables the various smart and IoT devices to integrate and interoperate with the larger whole home automation ecosystem, as well as orchestrate and manage the operation of smart devices within the smart home. Pakedge provides the network foundation that enables the devices to communicate with each other, to be the conduit for command execution, and for the management of the entire network such that it maintains optimal performance and assured connectivity.

Go Victor Pak (Co-founder of Pakedge) and Martin Plaehn (CEO of Control4) Publicly Answer Questions from Dealers in US