Bright Ideas: CEOs Keep Their Eye on the Prize
If you want your security business to be more successful then you’ve come to the right place. In a relaxed but frank forum, four of the industry’s top independent integrator company executives come clean on what’s behind their winning ways.
Budinoff: We’ve actually been doing managed access for 15 or 18 years. I’m a burglar alarm guy out of the box, and everything has to have recurring revenue. We always looked at it that way. Trying to teach someone that has four or five doors of access control how to manage their system was like banging your head against the wall. So we said, “For X dollars a month, we’ll do it for you. And we’ll host it on our server so you don’t have to worry. You don’t have to buy a server or whatever, give us a modem and phone line and we’re good to go.”
We sold a lot of it. The interesting thing is we sold it for big money back then. Today, I get 10% of what I was getting back then. I think our first one was like six or eight doors and I was getting $150 a month. I was like, “Yee-haw, this is great!” The most interesting part was multitenant buildings where every time a new tenant would move in they’d be, “Oh, can you do our door too?” So then I’m getting another little piece from this guy, and they’re all running on the same system. It’s all one system throughout the building and we were killing them with it.
Now we’ve taken the position that unless someone absolutely wants to have the software, we’re going to manage it for them. The majority of the access control systems we sell today are managed. It’s great because we spend less time on the phone supporting customers with, “How do I add a card?” or “Mary left and we hired Suzie, can you teach her how to do this?” You have four-door access control, are you crazy? Pay me a few bucks a month and we’ll do it for you. It’s so easy to sell that way that we’ve been very successful.
Nunberg: It’s easier now too with the Internet. You’re not dealing with dial-up modems.
Budinoff: You’re right, it’s easier with the Internet, but most of the time we’re still using modems. I’ll tell you why. When they’re online with your server 24/7, they’re just chewing up your bandwidth when you don’t need to be connected to them. We find that 90% of the time we’ll do them with modems because unless the thing’s generating an alarm or you need a card downloaded or something, there’s no reason to be talking to it.
Oetjen: Is the margin going down in New York now? Are you seeing price pressures?
Budinoff: Yeah, from the managed side, we’re seeing price pressure, but not terrible. I still think we’re getting a fair number for it.
Nunberg: Today a lot of the managed access products give your end user the ability to log in through a Web interface and add and delete cards. I’ve talked to different guys that are doing this because some guys say they want to have control and want the end user coming to them. Other guys say I want to make the same $15 a month per reader and let them do the work. How do you look at that?
Oetjen: We call that hosted. If we give you an interface but you do it yourself, we’re just hosting it for you. Personally, we don’t like that. We want them coming to us. We want that constant contact, building that long-term relationship. Some people are trying to go hosted because it’s a little cheaper. For us, managed is the direction we try to go.
Budinoff: I agree 100% with you Ron, I want them calling us and touching us. The more contact we have with them, they remember we’re there and we’re doing good things for them, and they’re paying us to do it. It’s good.
Lanning: Most of my clients have their own operations centers for handling their alarms and their own dispatch. Some of these, like campuses, do not do it well. There’s opportunity there so last year we took all of our IT stuff and put it into its own datacenter. The guy’s pretty sharp there so I’m thinking about going out and hosting some access control next. It’s something we’ve got to do, probably with Lenel since it has been our main platform the past decade. I’m not sure yet about the video side. They’re still paying a fortune for T1s and things like that down there [in Hawaii], so how I would provide storage and those types of things are different. You could leave it in the camera now, but they shoot the cameras in the bad areas. So that might not be too effective.
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