You hear about managed access and the terms get thrown around pretty interchangeably. There’s “hosted,” “remote,” “cloud,” “managed.” etc. What are the differences and how do you make it clear to the end user?
Robison: Managed access control is kind of a hybrid between hosting where the software resides on servers that are remote. You can hear all these terms interchangeably, where it’s remote from the customer’s location, but when they need changes made they’re requesting they be made by the managed service provider, us. Hosted, in my mind, means we simply have the software on our servers and our customer, the end user, has a Web interface to logon to our servers to manage their own system. Cloud simply means data is being held on remote servers, for whatever purpose it may be. It may be for backup, could be to easily access data remotely or it could be for data retrieval.
What we’re calling hybrid simply means a crossover between a fully managed system and a hosted system to where there are certain services that we will do for them. In my mind, it’s more high level stuff. Some customers, I believe, should not be doing the heavy lifting in their system, meaning they shouldn’t be creating access levels and schedules and so forth. If you read your clients well you can tell that’s not the right thing for them. With a hybrid system they can just request the changes, and their day-to-day is adding and deleting cards, that sort of thing.
Penson: There is a lot of confusion surrounding the terminology. A lot of people say they are providing cloud-based, access control management when they’re really faking it by having a computer onsite with some type of VPN or remote client connecting to it. The reality is that if that onsite PC goes down, they’re down. Our services are up, they’re remote, they’re outside that facility. With the outsourcing world we live in now — outsourcing HR, IT, payroll — outsourcing security is not a lot to ask when you’re protecting people and business.
Let’s talk about growth. What level are you seeing? What is realistic?
Brown: We’ve doubled in the past year the number of readers we have on the system. Projecting forward, I have a really tough time saying double in another year. But the growth is there; it’s probably going to be 50%. We’re at the point now where we need almost a full-time person just to administer our managed access clients.
Sharp: We’ve probably seen about 20-25% growth a year. I don’t think we’ve seen as much as we should have, and a lot of that’s been our own deficiencies as far as how we’re trying to market it. We’ve realized that and I think the future’s bright for the product. We’re focusing more and more of our efforts, as far as shifting our business in that direction.
We’ve also used it as an opportunity to bundle services and maintenance and service contracts. We’ve been proactive. When a battery runs low on a panel, we’ll call the customer and say, “We’re going to have a tech stop by there and replace that battery. We’re going to replace it before it is a problem for you.” I think that’s part of adding value and trust. There’s a lot of positive energy and momentum that can be gained with the product.
Penson: There’s growth and then there’s attrition. There’s continued growth, which is fantastic. On the attrition side, it’s zero. Those are amazing metrics. You look at the burg side of things, there are a lot of guys in our industry just sustaining business because there’s so much attrition in it. Those metrics to me are important because now you’re providing them with a tailored service they need. It’s providing a solution for them and there’s a relationship. There’s continuity and we’re there, we’re in touch with them. There’s going to be an abundance of growth.
Robison: As far as growth, I can’t put a doubling or any type of phraseology to that. Because of the amount of time we’ve been doing this, which is since 2000, we’ve got approximately 138 commercial clients right now that we manage and/or host. I would say our growth over the past year has been about 20%. I can’t say there hasn’t been any attrition because companies sometimes go out of business. But the attrition rate is extremely low in this business, particularly if you offer good aftercare, ongoing support and excellent service.
Let’s talk markets. What are some of the strongest verticals and prospects for managed services?
Robison: We’re seeing a real good opportunity in multitenant commercial facilities, property management particularly. The biomed industry is big in San Diego. There is an organization we do about 10 accounts for that manages huge biomed facilities. I see more and more growth there, particularly because when you get into a building like that and you’re able to manage the perimeter of the building, these property management organizations can actually resell the card access to the tenants within the building. There is also a huge military presence here in San Diego and we have systems on several bases. The new level of encryption capabilities will allow us to better meet military specs, which should give us a better chance to win more jobs.
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Managed Access Roundtable
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