Integrator Roundtable: Assessing, Adapting & Adjusting During COVID
Three security integrator leaders tell how they’re holding up amid the pressures of a pandemic, lending insights on staffing, customer service, new technologies, cybersecurity and managed services.
Let’s move on to some other topics, like cybersecurity. How involved is your company on the cyber side and how do you see that evolving? And how is the industry progressing in that regard?
Schwab: Our clients are definitely demanding much more cybersecurity. Fortunately, the manufacturers we work with are taking it seriously. We have a large cybersecurity insurance policy that we have to carry working with very regulated environments, like utilities and healthcare. As a government contractor, having a GSA schedule, that binds us even more strictly to make sure we’re abiding by those policies and only using manufacturers that are approved.
Meridith: Every customer’s taking cybersecurity very seriously. This is a fitting conversation today because we dealt with a barrage of phishing emails this morning. Fortunately, we do a lot of training with our staff so no one fell for it. It’s just ongoing and never ending. Customers are demanding insurance policies. They want to know your procedures and everything you do. That will continue to be just a part of the future.
Shah: Interestingly enough, we do a bunch of hospitals and they have come out with a very stringent, very good policy. That has made them change a whole bunch of legacy equipment to the latest and greatest so that it meets all their cybersecurity requirements. They’ve set the level, where anytime we deploy a new piece of equipment, they first check and make sure it will comply with their regulations. It used to be a big challenge, now it’s getting easier and easier. As a DoD-certified integrator, we were early in learning the do’s and don’ts as cybersecurity relates to the products and systems we install. We get regularly audited every year to make sure we’re complying with all their requirements.
We also have to regularly train our employees because if you don’t keep reminding them they may forget and something could fall through the cracks. Our industry is now taking it very seriously and addressing a lot of the needs that weren’t there 18 months ago. We have partnered with a local network security company, because our in-house cybersecurity knowledge is limited. Once in a while a customer who has our system deployed is looking to improve their network security. So we recommend this partner to do a survey and tell them what needs to be improved. Cybersecurity lends itself to a managed services model.
“Every customer’s taking cybersecurity very seriously. This is a fitting conversation today because we dealt with a barrage of phishing emails this morning,” says Mike Meridith.
Let’s continue along that line pertaining to access control and video surveillance as a service. To what extent are each of you involved with that, and where do you see it heading?
Schwab: We don’t do a lot of managed services. We see it a little bit for smaller companies, but most of our clients are larger national or critical infrastructure. They have their own GSOCs [global security operations centers]. They have their own security team. They often have their own private Cloud. They have their own IT departments that prefer to host and manage their systems for control, cybersecurity and budget reasons. That said, in terms of recurring revenue, we have cultivated some healthy streams via our service and software maintenance agreements with those clients.
Meridith: Managed access is huge for us, we’ve been doing it for a long time. It’s part of our past, present and future. We are not an installation company, we are a service provider. As far as I am concerned with every customer, we’re servicing them and need to get some recurring revenue out of them. Whether we’re monitoring their fire alarm, burglar alarm, managing their access, doing health monitoring on their video, pulling video for them, doing video guard tours, you name it, we’re doing it for them for that critical recurring revenue. I would highly recommend all providers do likewise. I wouldn’t give up any recurring revenue, ever. The more you continue to talk to that customer and be that service provider, the bigger and better you’ll be.
Shah: Most of our recurring income comes from managed services, service contracts and software maintenance. However, the biggest portion we are seeing increase is managed services. We have a lot of customers who give us the system to manage, right down to entering new users. We input that, get it ready for them, assign them whatever needs to be assigned for time zones and all that stuff, and get it back to them. That’s been working very nicely. That model has worked for a lot of customers who have multiple locations, where they seem to struggle with managing that.
In the healthcare industry, one of the things they are exploring that may bring a lot of revenue to our industry is changing the password of every single device on a quarterly basis. There are hospitals with more than a thousand devices. That’s going to be a hefty recurring bill every quarter. We wouldn’t necessarily physically go there, but go into their system and change all those passwords. We just quoted that and it’s going to be a big boost for us. We also sell a lot of those products to appropriate customers, where it’s Cloud-based and we generate recurring revenue from that too.
Have the effects of the pandemic caused you to emphasize recurring revenue more, or are you going to stick with the business mix you’ve had?
Schwab: Recurring is a very important part of our revenue strategy, just not the hosted piece of it. We just signed a million-dollar recurring license agreement. The hosted side is not where we see it because most of the larger entities have capital budgets and that’s how they spend their money. Hosted sits on their OPEX [operating expense] budget and they don’t have as much there.
Shah: Last year, we made a decision that recurring revenue is a very important part of our business and focused on reinforcing and trying to sell it. It’s all about training the salespeople to think differently. COVID didn’t change our mind. It just further stressed how the recurring revenue model helps secure your future. In our percentage of revenue, it’s very small at 10%. Our goal is to get to up to 20% by early next year.
Meridith: It’s already the lifeblood of what we do as an organization, so I will continue to emphasize it as much as possible.
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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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