The electronic security industry is so over convergence. The first generation of the phenomenon that is. No longer an overhyped buzzword, the term convergence has quieted to a more straightforward connotation that infers, in a broad brush stroke, that the merging of physical and logical security is bearing necessary and marketable fruit. Years-long waves of overstated expectations are being replaced by tangible possibilities, if not outright practical and sought-after integrated applications.
Welcome to the next generation … call it Convergence 2.0.
At some point in the progression of convergence, while marketing machines were still overly boastful rather than selling market-driven applications, the conversation began to turn more candid. Technological advances and various marketplace drivers placed the security industry on the verge of shifting from traditional analog installations to providing tightly integrated IP-based solutions.
Although the waters have been choppy along the way for stakeholders, this evolution is ushering in solutions that provide newfound organizational efficiencies and cost savings. Ingenuity will drive future affordable business processes and recurring monthly revenue models will flourish, to name just a couple of highlights. Self-inflicted barriers (a dearth of open standards, for example) and others uncontrollable (the economy) will have to be negotiated.
Economy Can’t Halt Momentum
As the economy has deteriorated during the past two years its effects on the electronic security industry, and specifically the pace of convergence adoption, have manifested in multiple ways — both negative and positive. For starters, the sales conversation is oftentimes greatly lengthened by end users who painstakingly dissect return on investment (ROI) in order to justify a converged solution rather than extending their existing security infrastructure.
“I have received more calls from people wanting to have white papers on the return-on-investment projection from going analog to digital in the past six months than I have in the six years I have been with Pelco,” says Rob Morello, a senior product marketing manager for the video surveillance systems manufacturer who recently assumed the newly created position of Pelco Partnering and Strategic Alliances.
Many analog customers have reached a point in time where they soon will or already have maxed out their existing switch and are confronted with a critical decision that will force them to choose one of two possible paths: 1) a hybrid solution to leverage existing infrastructure, allowing for a migration to digital over time; or 2) the proverbial forklift upgrade to an entirely networked IP backbone.
“Those are very clear directions that end users are taking when it comes to this process. What we have seen happening, the deals that are taking place in this soft economic climate aren’t going way; the sale cycle is just getting really long and big,” Morello says.
The badly stressed economy is actually stoking the next generation of convergence as well, such as pushing forward the adoption of physical and logical security to not only increase security but, for instance, productivity to reduce the amount of manual efforts in labor.
The consequence is systems integrators and end users alike are being faced with diversifying their businesses. For the integrator, the imperative is to develop the skills to provide the tools that can demonstrate ROI in both security and nonsecurity applications. For the end user, the emphasis is to diversify the use of a physical security system in order to share the cost with other departments that benefit from leveraging the capacity of the security solutions to perform additional tasks.
“A difficult economy causes us to take a closer look at making our systems more useable for multiple users,” says Steve Surfaro, business development manager for network camera manufacturer Axis Communications. “If you are an end user, you’re using video for other purposes such as safety operations management. Perhaps you are collecting video content and doing some analysis of that and relating it to other different parameters and getting some business intelligence out of it.”
In March, SECURITY SALES & INTEGRATION surveyed readers to gain a general understanding of how they view the progress of convergence. When asked what impact the recession is having on the speed of convergence, more than one in two (60 percent) said its progress was delayed by at least a year.
Indeed, the economic outlook remains dour for the time being. As losses in the financial and job markets take their toll, the recession will continue in the near term while a return to strong growth is not anticipated until next year, according to the New York City-based Conference Board, a private research group.
The group’s closely watched index of leading economic indicators fell 0.4 percent in February, following a downwardly revised gain of 0.1 percent in January. The index is designed to forecast economic activity six to nine months ahead. For February (the latest report available at press time), six of the 10 indicators rose, and four fell.
Bleak though it may be at the moment, the U.S. economy will turn for the better as history has proven time and again. Despite the chinks in its ostensibly recession-proof armor, the electronic security industry remains loaded with commercial optimism and vitality. One only needs to observe the forces that are driving the convergence of physical and logical security to appreciate the vast potential that resides on the near horizon.