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The July 9, 2002 Issue Provided by System Dynamics Inc.
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Builder Technology Conference: An Upbeat Industry

The building of new homes is one of the bright notes in the US economy. Headlines in June said "Home Building Up 11.6% in May". Reuters reported that U.S. housing starts surged last month at the fastest rate in nearly seven years.

We were delighted that the publishers at Hanley-Wood gave us the opportunity to address people from this booming industry at the Builder Technology Conference in Washington DC. The goal of our talk "Tomorrow's Home Technology: Separating Fact From Fantasy" was to help this group understand how some of the new technologies will impact their business and how to avoid getting burned by undeliverable promises.

Our messages to people associated with home building were:

  • Broadband both TO and WITHIN the home are increasingly important to your buyers.
  • Broadband access is the foundation for much of what’s changing in home technologies. Although its starting point is the high penetration of computers (and multiple computers) in US homes, broadband is about much more than computers and sharing the broadband connection.
  • The worlds of the PC, home entertainment and telephones are starting to overlap and merge. Each of these areas is being impacted by the change of technology from analog to digital. The implication is that they should NOT be treated as independent, unrelated and unconnected systems.
  • More and more consumers are spending their time and money on buying and using “this digital technology-enabled stuff” -- although they think about it in very different words: "taking pictures and sharing them" or "listening to my MP3's anywhere in the house". The consumer electronics industry has its efforts and money behind promoting networked digital devices and it's working. Once they get these devices, people need the networking to connect them. (For more on the transition to digital, see "Goodbye to Analog: Our Digital Destiny" below. )
  • Structured wiring is the enabling plumbing within the home. You do your buyers a disservice if you don't help them understand its value.
  • Builders have proven that a well-structured sales effort will convince most home buyers to pay for the structured wiring.
  • Availability of broadband services will increasingly impact the “sale-ability” of homes you build. You control what goes IN your homes, but can’t control whether telcos or cable ops offer broadband TO them. Big developers and builders can take control of their own destiny and provide broadband services if the incumbents won't.

Our "Home Movie"

Opening of our ''home movie'' --> Click for larger pictureSince our presentation was late in the day, we had some fun illustrating our points, using our own home to demonstrate what we were talking about.

  • We find real value in the many applications of broadband within our home. We are delighted that we put in structured wiring including 3 Cat 5 cables to each room to provide the "plumbing" for these applications.
  • One of the clear applications is networking our PCs and sharing our broadband Internet connection, but there is much more.
  • Our home has lots of today's usual consumer electronic toys, like a digital camera and digital camcorder. We edit and share pictures and home videos with friends and family thru our Web site. It's as simple as connecting either of these devices to the PC, editing and emailing or posting to the Web.
  • Our daughter in California does the same with her digital camera and camcorder, which lets us keep up with our grandson as he grows.
  • Our ReplayTV 4000 PVR is also connnected to our local network, so we can take digital pictures, connect in the camera and have a slide show of our pictures on our entertainment center big screen.
  • Another great consumer electronics device (the Audiotron digital networked music player) allows us to play all the MP3 digital music we have on our PCs in our bedroom, where we can select by artist, title, genre,etc.
  • This isn't limited to "techies" like us. It's also being done by "real people" like our assistant Mary Ann. She has a broadband connection, 2 (and soon to be 3) PCs, a digital camcorder, is about to put in a home network, and is getting ready to share her videos with her parents in Indiana. She, her husband and her kids all view this as part of their everyday lives.

Centex Homes

Randy Luther of Centex Homes --> Click for larger pictureWe had a great lead-in to our talk since we were preceded by Kurt Scherf from Parks Associates and Randy Luther, VP of Construction at Centex Homes. Since we've written several articles on "broadband plumbers", Randy made us smile when he told the group to "think about installing category 5 wire just like you think about installing plumbing". His messages were very congruent with ours:

  • Future proof your homes by installing structured wire networks
  • A quality integrator is extremely important. Centex is searching for larger integrator partners.
  • Centex discourages its divisions from entering long-term commitments with service providers.
  • Their goal for 2004 is a basic structured wire network in in every home they build.

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Please visit ( ) to view or download our presentation and "home movie".