Allegion Plc, which has its North American headquarters in Carmel, this week made an acquisition of a small Colorado-based company that at first glance appears fairly mundane.
After all, an 11,000-employee company buying a 25-employee specialty firm is hardly considered big news.
But Vince Wenos, Allegion’s senior vice president and chief technology officer, told IBJ there’s more to the acquisition of Yonomi than meets the eye. And he said it will have a significant impact on Allegion’s future direction as well as its operations globally and in Indiana, where the firm has 1,300 workers.
Financial terms of the acquisition were not disclosed.
Yonomi has been widely acclaimed as an innovation leader in internet of things—or IoT—cloud platforms since it was founded in 2013 by building automation and enterprise cloud computing experts. Yonomi was the first company to create an agnostic smart-home ecosystem that automatically discovers and coordinates devices, regardless of their brands. Today, Yonomi solutions are used in more than 150 countries, and millions of IoT devices—including things like vacuum cleaners, garage doors, door locks, sound systems and lights—are connected to its platforms.
In the simplest terms, Yonomi’s software acts a bit like the universal remote you have in your living room. But instead of controlling everything that is plugged into your television, Yonomi’s app can control everything—and there’s a fast-growing list—that is connected to the internet.
Significantly, Yonomi is the first “pure software-only company” Allegion has acquired, Wenos explained. “This is the first time we’ve gone out and purchased a company that is all about software.”
Allegion traces its roots back to 1908, when it concentrated on decidedly non-tech hardware including door exit bars and locks. But more recently, the company has integrated cutting-edge and smart technology in a whole host of its products.
Wenos talked with IBJ on Wednesday to explain why this acquisition is so significant, and how the Yonomi division—which will remain in Boulder, Colorado, and Austin, Texas, but work under the guidance of Allegion officials in central Indiana—will help the company expand and grow.
Why is this an important acquisition for Allegion?
This acquisition is critically important because it supports our vision of seamless access. These types of platforms allow us to make people’s lives more frictionless or seamless as they go through their day. It’s all about making people’s lives better and more productive.
What impact will it have on the company as a whole and its central Indiana operation?
The platform we’re developing with them … is initially in our Americas business but will have technical abilities to support our global businesses. It will be leveraged across all of Allegion. Though the company sits in Austin and Boulder, it will be assisted by our engineering technical center in Indianapolis—where we have 120 engineers—as well as our software development center in Golden, Colorado.
How exactly will this acquisition impact Allegion’s software development capabilities?
We do have a fair number of software developers in the company. But the unique skill sets [Yonomi staffers] bring—around cloud native development and architecture—we were very thin on. This acquisition helps us fill out our software capabilities in an important way from a global point of view. They really bring a skill set we need for that seamless access.
How does this acquisition open avenues for integration with leaders in home and enterprise solutions for the IoT?
Our residential business has been traditionally focused on the lock. When you are looking at the Yonomi platform, … it could control the stereo or how I want to control certain lights in certain rooms. As a consumer, I want those things to happen automatically. Those are the types of integrations that are possible. That’s what allows us to provide the better and seamless experiences. It gives you the feeling all this technology is working for you and not working against you.
So this is a potentially big diversification and expansion for Allegion?
Yes. Very big.
Will the Yonomi name remain?
Yonomi will be a wholly owned subsidiary of Allegion, but the brand will continue. How we use it is up for discussion. It presents a tremendous opportunity for us. It’s important to note that the values of the two companies are almost perfectly aligned. We won’t crush Yonomi’s culture.
Do you expect the Yonomi division to grow under Allegion?
We certainly do. We bring scale and capital to a small company of very bright people. It will also allow our other divisions to leverage Yonomi’s technology. We believe the capabilities we bring, platforms and partnerships, will grow within Allegion and it will grow Allegion. It really is a very powerful combination, residential and non-residential.
Will the Yonomi platform under Allegion grow beyond just the devices Allegion makes?
It absolutely will. It will allow us to think of ourselves as a software business. With the software app and the data it provides … we will start to see our migration. We have this vision of seamless access. Some of that will be solved by software. If we want to provide that, we have to become a software company. And that goes beyond just making software. That comes down to marketing and selling software and monetizing around the data that comes from the software itself. We certainly will be viewed as a company beyond the value of a device.
How big will Yonomi become?
We have an excellent foundation on which to build. It will grow from there.
Will any of that growth happen in central Indiana?
There certainly will be a part of the company here. We will continue to hire technical talent that will support this.