George De Marco Lays Bare His Security Industry Perspective for 2021
In a wide-ranging discussion, the esteemed industry subject matter expert elucidates on meeting the challenges of a disrupted marketplace.
Let’s get your thoughts on specific stakeholder segments and what you anticipate performance wise in 2021, starting with alarm dealers.
In the residential sector, competition from well-funded DIY companies, rising customer acquisition costs, looming 3G sunset, and downward pressures on RMR multiples are causing traditional companies to rethink their go-to-market and operational strategies.
Last year, DIY offerings became a defensive move for certain alarm companies as homeowners were hesitant to have field staff enter their homes. For 2021, I believe homeowners will be more at ease in letting installation and service staff reenter their homes. However, I do think it’s incumbent on the alarm company to set and follow cleaning procedures for their employees to follow when interfacing with end users.
Prior to COVID-19, a segment of alarm companies already began shifting their attention to focus on the commercial sector, choosing to compete less in the residential space because of significant and disruptive players impacting the space. However, aggressive home security companies are finding huge success by leading with what consumers really want – cameras, whether a video doorbell or outside cameras for a first line of defense. These practical devices are resonating with end users.
In the commercial marketplace, cameras and access control are meaningful and useful technologies for end users. Although the jury is still out on cameras being used in the workplace for thermal screening devices, video is a strong offering that addresses security, safety and operational functions, especially coupled with access control systems.
I believe the commercial marketplace will have a robust year for those security companies geared for growth in sectors not hindered by the pandemic or an industry-specific downturn, including new business models being created as a result of the pandemic. Dealers and integrators with financial strength will be in great position to offer subscription-based SaaS models, which are gaining acceptance among business clients. For 2021, competition will be fiercer as more security providers compete for market share.
Cyber threats will continue to be top of mind for 2021, especially how remote work will evolve and affect organizations operationally. From a product and service perspective, it reaffirms the need for industry manufacturers and service providers to take the necessary steps to harden security and life safety systems from cyberattacks.
Where might systems integrators find success in the New Year?
In 2021, well-positioned integrators that retained their technical staff should experience a resurgence of growth as delayed projects open. The key driver for these integrators will be based on the segments of the commercial markets that are not being impacted by the pandemic. Specializing in a sector that remains underwater will greatly impact revenues for 2021 and possibly into the future. For those companies with a diverse customer base, they should see a significant revenue bump based on a pent-up demand for new technologies and services.
Integrators most likely to gain the greatest success have a deep technical bench that brings security and business intelligence solutions for their clients. Another important consideration is cyber-attacks on our critical infrastructure, banking systems, healthcare facilities, etc., which may be threatened through the ever-increasing exposure from our integrated product and service offerings. The industry needs to take great care in hardening our systems to lessen the risk of cybercrimes.
Integrators will need to become steep in security solutions across many different disciplines as businesses look to blend many vendors and contracts under one provider. End users are looking for a single point of accountability that can manage, interpret, and integrate technologies for a frictionless and seamless security and operational experience.
In what significant ways are monitoring service providers having to evolve to meet the challenges and opportunities of tomorrow?
Progressive wholesale and proprietary monitoring centers have made sizable investments in their technology infrastructures. These technology enhancements are not only to handle traditional burglary, medical and fire emergency signals, but also the exponential growth in monitoring of IoT connected devices for security breaches, predictive maintenance, data processing, business transactions, network security and tracking, including proactive video monitoring and alarm verification of fixed-location cameras and drones.
Monitoring centers are huge depositories of data that need efficient and effective processing of signal traffic and data management, based on specific use cases for homes, businesses, government facilities, vehicles, machinery, people, pets and assets. Each use case and desired outcome can vary greatly based on what’s important to the end user. As technology in AI and automation advances, monitoring centers will adopt them to play a bigger role in the processing and delivery of their services to multiple stakeholders, such as end users, dealers and integrators, and first responders.
As critical monitoring events expand beyond the traditional perimeter and signal type, monitoring centers will play an essential role in delivering proactive solutions for securing, managing, and understanding. With advanced technology monitoring services, next-gen monitoring will only be limited by one’s imagination.
In addition, during the pandemic, monitoring centers reassigned their workforce to operate from home. Will this remain a viable solution? On the surface, it seems counterintuitive to security professionals who believe that monitoring from home has too many pitfalls and vulnerabilities to overcome.
Radical as it may seem, it does present unique opportunities that need to be considered, such as lower infrastructure costs, larger access to employment pool, and possibly a more engaged employee. Although the challenges may outweigh the benefits in the short term for a distributed workforce, it does present a reimagining of the delivery of monitoring services over the longer term.
As a result of the rapid and evolving world of monitoring, there will be a continued consolidation of wholesale monitoring centers as the cost of keeping pace with the latest technology accelerates. For those alarm dealers and integrators with proprietary monitoring facilities, they are weighing the pros and cons of remaining independent or outsourcing to wholesale monitoring centers.
What new demands are being placed on manufacturers and distributors in the current climate?
The pandemic caught manufactures off-guard as production and supply chain vulnerabilities became exposed, including the impact from the trade war with China. It was adversely felt by dealers and integrators from their preferred manufacturers that relied on lean manufacturing strategies to deliver product on a timely basis for the distribution channel.
As a result, many manufacturers are rethinking their supply chain logistics so they can meet the demands of the marketplace, while reducing its exposure to China, where applicable. The challenge will be to make the supply chain more resilient yet remain competitive and affordable in the process.
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About the Author
Scott Goldfine
Scott Goldfine is the marketing director for Elite Interactive Solutions. He is the former editor-in-chief and associate publisher of Security Sales & Integration. He can be reached at [email protected].
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