Credibility at Issue as Colorado vNet Attempts Another Market Return

The future is apparently now, just two months later. “We are back,” Porritt said. Since its December decision Colorado vNet has had “overwhelming feedback” from dealers and reps that “there is no other product out there in the marketplace that fills this need.” When we asked Porritt what had changed between now and December, and whether they had gotten dealer feedback when they made the decision to pull the plug, Porritt skirted the question and said, “We had talked to the dealers but we did not close operations. We had moved it more to R&D status so we could make more headway with products.” He said the company has made “substantial headway” on a “couple large projects” including an audio app for the iPad and a media streaming product that it will deliver to the market in May.

It remains unclear why the company didn’t gauge dealer interest when it made the decision to shut sales operations late last year. “I don’t know what kind of research they did with dealers,” said Brett Phelps, principal with River City Sales, a rep firm Colorado vNet brought on board last November. Phelps said the limited-distribution line is “very much needed” and the decision to return to market was welcomed by his 20 dealers. “It fills a slot,” he said, noting that “not everyone is a Crestron dealer” and Control4 “stacks dealer on top of dealer.” With Savant being “the only other [control system] that’s “a little more limited,” he said, “our dealers were really bummed out when vNet went under because they felt it offered an opportunity to make money and not have to compete with wholesale distributors."

When asked how Colorado vNet’s pendulum swing on being in market and out of market might play with consumers, Phelps said, “The customer is buying the dealer as much as he’s buying the brand name.” He added that the product is “extremely reliable.” If the dealer is “selling himself and his service, I don’t think there will be an issue,” he said.

"Which time?” said Jon Winn, owner of Home Automation Electronics in Seattle, when asked his reaction to Colorado vNet’s announced return to market. The company exited previously before being bought by Russound in 2009. Winn said the product “is so good I had a hard time seeing it go away so I'm glad it’s back.” At the same time, he said, “I can understand if they lose dealer faith and dealers altogether over that. They handled this very poorly and it should give a bit of worry to what might lie down the road.” Winn, an integrator who has installed four vNet systems including a $250,000 project and is a consultant to other installers, said some dealers he’s worked with “have jumped ship” because “they don’t have any confidence in it.” Moving forward the company will have “an uphill battle to rebuild confidence,” he said.

Regarding regaining trust, Porritt told journalists credibility “is a concern.” In his Feb. 16 letter to dealers, Porritt encouraged them to order products and “show the letter to prospective clients and assure them that product availability, service and support shall continue.”

Winn believes dealers who “understand” the product will take it on again because of simplicity in design and programming, which translates to reduced design time per job. “You can do a humongous home with many touchpanels and lots of control and you don’t need an engineer to get it programmed,” he said. “You won’t be married to that job for the rest of your life.” He said integrators can design a large-scale lighting control project in a “couple of hours.” The design process “opens the door to lighting design” to dealers not currently in that area because of the simplicity, he said. He said interior designers have “warmed up to it” because of the design flexibility, which helps integrators navigate those relationships, traditionally a “rocky one” between the two trades.

David Rybski of David Rybski & Associates in Nevada City, Calif., is another rep signed late last fall. Rybski hadn’t been contacted by Colorado vNet as of Wednesday and wouldn’t comment on the company’s decision to re-enter the market.

Regarding future products, Porritt said, “We don’t want to dive too deep into a product roadmap” and instead “shore up the products we had.” He said the new iPad app initially will have audio functionality only. Phase two will control subsystems and lighting and phase three will operate home theater functions, he said. Phase two and three apps are due out later in the year. There’s currently no iPad app for the Russound multi-room audio system, which can be controlled by the iPhone and iPod Touch, but one is in the works, Porritt said.

Porritt said he didn’t have the exact number of vNet dealers. The company said in December it had “roughly 450.” The overlap with Russound dealers is a “handful … a small percentage” moving into systems integration, he said.

R&D will continue at the company’s Loveland, Colo., facility, Porritt said, with brand operations shifting to Russound headquarters in Newmarket, N.H. In December, Petro Shimonishi, vice president of sales and marketing for Colorado vNet, said the move to shut sales and marketing operations would “affect the majority of employees.” Porritt wouldn’t commit to the number of employees ultimately affected. He said a “handful” of employees were “transitioned” to N.H. from Colorado. He said “it’s too early to tell” if additional employees would be hired as the company comes back to market.