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ADT offers new security products

ADT’s chief innovation officer Arthur Orduña talks into his smartphone to check the security and lights at his home. The ADT app recognizes his voice.

“Security status” he says, receiving confirmation that all is well. “Light status,” he says, learning about the lights on for security reasons.

No competitor has a remote-control system with voice authentication, Orduña said. “We want not just to be at the party, we need to be first to market,” he said.

ADT may be a 140-year-old company, but it is strategizing like a start-up.

The Boca Raton, Fla.-based company, with $3.3 billion in 2013 revenue, is recognized as the industry leader in security for the home and small business. But as it has moved into home-control products, ADT is in direct competition for consumers’ dollars with giant cable, smartphone and technology companies.

Orduña said they may be competitors, but he also sees them as potential partners.

“There’s more of a natural reason for us to work together,” said Orduña, who joined ADT in 2012 after working in the cable industry for Brighthouse Networks. He also was co-founder of Canoe Ventures, a Silicon Valley startup that provides software for interactive advertising to TV networks.

To offer new products, ADT is partnering with incubators in Silicon Valley and New York City.

“While we can come up with some really cool devices and apps, we’ll never out-innovate all of the startups. We want to work with them,” Orduña said.

Earlier this year, ADT invested $25 million for a minority stake in Life360, a San Francisco startup. Through Life360’s Canopy app, customers can set up circles of friends and family who they can let know where they are or are going, as a safety back-up.

ADT has taken the app to another level by offering “Chaperone” service.

A child dropped off by the school bus can check in on the app on a smartphone. An ADT operator stays on the phone with the child for the walk home. When the child safely reaches the door, the operator signs off: “Talk to you tomorrow, do your homework!”

ADT said it is still testing the Chaperone service, which it plans to offer for less than $10 a month.

Digital security is another new product, and revenue stream, for ADT.

In January, ADT announced a partnership with digital security firm McAfee, offering its Live Safe product to existing customers. The current price is $40, a promotional rate to encourage customers to try the service for 12 months.

“Your digital assets are just as important,” Orduña said. “Your PC, laptop, tablets and smartphone now are also secured because of our partnership.”

Live Safe is embedded in electronic devices so if stolen, they will lock and prevent a thief from accessing them. Devices also can be wiped, if need be.

Nicholas Heymann, an analyst for William Blair & Co., said ADT Pulse, its video monitoring product, is selected by 71 percent of ADT’s new residential customers, which is only 14 percent of ADT’s customer base. But he expects ADT’s customers to grow from 6.8 million to 8 million by 2018, with 38 percent buying ADT Pulse.

Heymann said he thinks ADT will expand by partnering with Verizon Wireless, which dropped its home monitoring and control service in February. “If Verizon signs up, AT&T will be right behind them,” he said.