2020 Security Industry Hot Topics: 10 Subject Matter Experts
Gain insights from subject matter experts who discuss market drivers, regulations, technology, consolidation, valuations and more.
FRAMINGHAM, Mass. — Security Sales & Integration consulted with numerous security industry stakeholders from throughout the ecosystem to gather their expert insights on a range of topics expected to disrupt the marketplace in 2020.
Read on as these subject matter experts touch on market drivers, regulations, technology, consolidation, valuations and more.
Paul Boucherle, Principal, Matterhorn Consulting
Business & Operation
Security integration business models across the ecosystem need to be objectively re-examined from a long-term perspective that is sustainable. Often, the over-hyping of different trends creates paralysis in many business owners who are not sure what direction to lead their company. Second generation owners are often the catalyst to successfully break through this barrier, make some tough choices, retool and then grow.
Anne Ferguson, V.P. of Marketing, Alarm.com
Markets
Small and medium business [SMB] is an underserved segment due to perceived lack of stability with many small businesses and the smaller historical revenue opportunity vs. larger commercial opportunities. Now with Cloud/SaaS offerings, there’s a lucrative RMR opportunity in the SMB space, which has the highest volume of business properties. These business owners often have smart security systems, automation, and cameras with analytics in their home, so they’re expecting this technology in their business as well.
The greatest challenge with SMBs is with short term cash flow. It can be tricky to get them to think about investing in tools that will create long term efficiency/ productivity gains when they are focused on the bottom-line each month. Progressive security dealers are considering new financing and service packaging models to help address these concerns so they can tap into this significant market.
Celia Besore, E.D., The Monitoring Association (TMA)
Regulations
The potential impact of regulatory and legislative changes on the delivery of professional monitoring services, such as legislation related to robocalls blocking alarm company’s calls. While these issues have been raised with lawmakers, the adoption and implementation of new laws will take time. In the case of robocalls, the technology and methodology available are not sophisticated enough to distinguish between calls from monitoring centers and from robocallers.
Daniel Gundlach, V.P. of Security, FLIR Systems
Technology
The way that the industry thinks about security technology is changing. There is a substantial shift away from reactive solutions that primarily capture evidence after the fact. Security customers are expressing greater interest in security ecosystems that leverage proactive sensors that identify threats, disseminate real-time intelligence, and connect law enforcement, security officers, and medical teams with command centers. By deploying intelligent, connected systems, first responders are increasingly able to intervene as an event progresses to positively affect the outcome of a scenario.
IoT-enabled mobile sensors with data streaming features, intelligent traffic systems with vehicle-to-everything (V2X) data sharing capabilities, and surveillance solutions with predictive analytics are all driving this movement forward.
Fredrik Nilsson, V.P. of the Americas, Axis Communications
Consolidation
Current low interest rates and increasing complexity of technology are driving higher M&A activity. Today’s top 10 security players are very different from a decade ago. Large players have swallowed up smaller ones, major players have changed ownership and still other players have divested themselves of their surveillance business to pursue other opportunities. Today the top 10 players in the video surveillance industry control about 50% of the market share. That consolidation is likely to accelerate in the coming year, increasing the market share of the top-tier players.
Peter Giacalone, Principal, Giacalone Associates
Valuations
With the lenders pulling back and some private equity players moving away from residential-based investments we will likely experience a real adjustment in valuations. Some areas have become more attractive leaving a possible void in the residential market. This typically transitions into a future opportunity, but in the short term may cause some discomfort in the channel.
It is unfortunate that we have seen too many large deals go sideways publicly, which has enflamed this contraction. I believe that although we have experienced adjustments before, this one may last a bit longer to get back on the tracks.
Kirk MacDowell, President, MacGuard Security Advisors
Manufacturer Partnerships
Dealers and integrators will need to watch manufactures carefully and only chose a manufacturer that will be a true partner. Manufacturers will be tempted to enter the installation area and compete with the dealers. One could argue that this secures their products to be specified as well as they then own the entire supply chain models: manufacturing, distribution, delivery, installation, set up, service and monitoring. We’ll see this first in enterprise, then small and medium business [SMB], and eventually in residential. Watch your partners carefully.
Chuck Wilson, E.D., National Systems Contractors Association (NSCA)
Identify a reason why the security industry is better off today.
Sadly there is a high demand for what we do as the world becomes more vulnerable to large-scale incidents. Schools, for example, used to be the safest buildings in our communities and now they are in constant fear of attack. That drives opportunity but in a very sad and disturbing fashion. I’m also deeply concerned that integrators de-value the mission critical work we do by competing primarily on price.
I also find too often that manufacturers are tempted to sell products direct to end users, which is never a good strategy. The channel works and it is far and away the best way to provide great value and exceptional services to the end users.
Tracey Boucher Brown, VP, Networking & Security, ScanSource
Market Changes & Challenges
Changes: In my opinion, I don’t really see the markets themselves changing. I often challenge our own sales team to bring me a market that does not have a need for a physical security solution. I have yet to have one be able to do it. What I do think will change is the end-user’s wants and needs. Now more than ever, the physical security channel is going to have to really understand the complete wants and needs of end users in these markets. For example, the wants/needs of a school have evolved even from a year ago. The channel needs to be prepared to ask a lot of questions, as the solutions and technology have become far more vast than ever before.
Challenges: Budgets and network evolution could be challenging in the next year. During an election year, budgets prove to be slower to approve, which could affect buying power at the end-user level. Additionally, the networks that the physical security solution relies on are entering into a new phase with Wifi6 and 5G. It is unknown if this will have any effect on physical security solutions, however, budgets could be allocated to update networks, rather than technology solutions themselves.
Joe Byron, V.P. of Sales, Americas, MOBOTIX
Systems Integrators
As the security market continues to evolve, no one will feel it more than systems integrators. Cybersecurity will continue to be a top concern for many commercial organizations, meaning that integrators will have to adapt to these changing demands. Not only will integrators need to seek out device manufacturers who focus on cybersecurity, but they will have the opportunity to sell add-on services, like penetration testing, to meet the ever-evolving challenges presented by digital threats.
With all that artificial intelligence [AI], IoT, and analytics/data have to offer the physical security industry, integrators have the chance to evolve alongside it and become experts in these complex solutions. An understanding of IT will become increasingly important to the integrators looking to service accounts that want their video surveillance to be able to speak to other devices on their network, while not bogging down bandwidth. This will also place extreme importance on training and certifications.
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