Business Roundtable: Hurdles Aplenty, and Optimistic All the While
In an exclusive roundtable, executives from four installing security firms reflect on the current state of the industry as well as their respective regional markets. Find out which technologies excite them, the challenges that keep them awake at night, and how they are positioning their companies for success in 2014.
Held at the recent Honeywell Connect 2013 convention, SSI conducted a roundtable interview with four executives from leading installing contractors. From left: John Campau (Comtronics), Kevin Stone (Doyle Security), Ronnie Whiddon (Custom Security Systems), and Joseph Menke (Electronic Security Concepts).
What specific vertical or market niche excites you?
Campau: A vertical market for us would be bank security. We are really focused on getting more bank customers. We are doing managed access and managed video for several large banks now with 300 to 500 locations apiece. We are working more and more with the Honeywell cloud-based services. We manage the customer’s cards. We manage all their codes, we change add-delete. That is a big part of what I believe is going to be our future.
To prepare for this we are building a strong IT department. We have one now. We just had a woman who graduated from college joining us who majored in IT. We have four people on staff and that is all they do. Our customers like that because when we do a system, maybe they don’t have the support we do. We provide that as a part of our managed services. We charge RMR; it is a good deal for both parties. We come out with the product and the service and they get the benefit of turnkey.
We have a banking customer that has 700 branches. They used to monitor their own systems. They outsourced it to us after a very difficult bidding process with 15 different bidders. We won the contract back in 1999. That really was the beginning of what I identified as a market that needs our services. It is desirable to them to have what I sell. They are going to pay their bill timely. It is a fun industry; I really enjoy working with banks.
Stone: A couple years ago we launched a managed access control program and it is really poised for significant growth. We think the fact that we have a central station that can make changes for customers 24 hours a day is a huge advantage. Companies are downsizing, they don’t have the wherewithal to take these systems on. It used to be they were managed by a security director — and they still are in some of the bigger places — but access control has become much more affordable for the smaller companies. We can manage it for them for a small monthly fee. That business has been ramping up for us significantly for about three years now. We think it is going to continue to grow significantly.
We also started a medical monitoring division a couple years ago. It started out as a PERS business. It has had significant growth; in fact, from an RMR perspective it is the fastest growing piece of our business. There is a lot of opportunity out there for a lot of reasons. No. 1, people want to stay at home. The cost of going [to an elder care facility] is very expensive. From our perspective, in upstate New York at least, there are very few demographics that are growing. The aging population is one of the few. We are going to try and take advantage of that.
Kevin, can you explain how the medical monitoring division operates?
You have to focus on the right customer. If you take a retail approach it can be a tough business. If you focus on [health-care] providers, such as nursing services, and you almost become the backbone for those providers, they in effect become your sales force. The health-care providers are out there every day taking care of the seniors.
There are a lot of reasons to approach it from that angle. For a long time we stayed out of it because the life expectancy was about 20 months. That is just not enough to recover your investment to make any money. Now people are getting the systems earlier so they are keeping them longer. So, that number has bounced up pretty significantly. Again, because of our model and the way we sell to the health-care customers we are the backbone for, we will sign multiyear contracts with them. It can limit your attrition.
Whiddon: I see the potential in 2014 for more the growth of the IP camera world. All these existing analog camera systems are out there. The customers are already sold on the idea that they need a camera system. Their analo
g system has benefitted them for years and now you can come in and give them better detail and more features and some real usable information. I see that as a real strong business in 2014. It is about approaching existing customers and showing them the new technology and how affordable it is. With the hybrid system, they don’t have to rip and replace their existing system. You can make a few key changes and some parts and let them grow as the other cameras go out. They can make a switch into the IP world and never be sorry.
Especially for the small business owners, everything they have is wrapped up in that business. It allows them to stay connected to their livelihood. I see it as a very strong market. Think about something you have loved for years and now I am going to come in and show you how I can make it better for you. You are going to see more detail, record more information. When someone can afford it there is a lot of rip and replace. But it’s not for everybody. So we do a lot of getting them started in the IP world with a hybrid system and then you see it progress real fast. Our company is mostly 80% residential, 20% commercial overall. Most of our IP camera success is in the retail market.
Menke: Education is really big. I have worked with the Arizona School Facilities Board on actually producing the lockdown and the emergency notification. We are concentrating more on that with school districts. I think that money is going to be there for Arizona for our neck of the woods. We feel very comfortable in that market.
On the government end, a lot of FIPS-201 and CJIS [Criminal Justice Information Services] regulations were put on hold for a while and now those are coming back up. In September 2014, [government facilities] are going to have to be compliant for those, so logical access is coming back into play. We are going to try and push the logical access control more. Logical access is using credentials, fingerprints to access law enforcement tablets, Toughbooks, computers at their desks and squad rooms, and especially in their squad cars. We’re hoping with the CJIS regulations coming back that [end customers] will have to comply or risk lose their funding. We think it is going to drive some of that business. We have a big investment in that already so our technicians are trained and we are going to be pushing it.
FIPS-201, HSPD-12, Homeland security initiatives, that all fell off because no one had the funding. Everyone said, “We’re glad to be onboard, but give us the money for it,” and then of course no one had the money. We’ll see if those grants and other money is available in 2014 like they say it’s going to be.
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About the Author
Rodney Bosch, Senior Editor
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.
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