Like meteorologists carefully monitoring an approaching storm, industry professionals have been keeping close tabs on the impending collision of information technology (IT) and physical security. And much like a tropical depression swiftly turns into a Category 5 hurricane of devastating ferocity, what was once just a blip on the electronic security industry’s radar screen has set off waves of what looks to be a tsunami of philosophical, technological and economic change. 

The name of this perfect storm: Convergence. Indeed, the physical security and IT industries are bumping up against each other like a pair of mammoth rain clouds, with the resultant thunder and lightning manifesting as radical breakthroughs in video surveillance, access control and intrusion systems. 

Not to fear, as this phenomenon does not have to mean disaster for electronic security manufacturers, distributors, consultants, systems integrators or end users. Quite the contrary; it could signify the greatest opportunity the industry has ever seen. However, it’s critical to remember that whether in nature or business, those who are best prepared and of the proper mindset have the highest probability of survival. 

To help you navigate this turbulent sea change, Security Sales & Integration has tapped into the thought and action leadership from some of the companies operating within the eye of the convergence storm. Networking and computer leaders Cisco Systems and IBM explain how and why IT is crossing over into physical security, while access control products manufacturer ASSA ABLOY and systems integrator Adesta disclose strategies for smoothly sailing through the choppy waters. 

Cisco
Cisco has dabbled in physical security for some time, but beginning in 2006 it seems to have gotten more serious about this market. Why is that? 

Steve Collen: We basically are looking for expansion from areas we have not seen before, so we created a unit called the Emerging Technology Group to go after nontraditional markets that would help drive our infrastructure network products. This has led to the creation of four new business units, including physical security. We have another unit looking at radio communication services for first responders and one focusing on digital signage. 

The goal is to make these units profitable, high-growth expansion areas for Cisco and, over the course of time, link these products together to provide a much more holistic offering. 

Can you tell me about Cisco’s partnership with ASSA ABLOY? 

Rick Geiger: ASSA ABLOY is one of the largest pure-play physical security manufacturers in the market and has worldwide coverage of door hardware, locksets, readers, etc. HID, for example, has an 80-percent market share of cards and readers. We are approaching it from a network services standpoint and ASSA ABLOY makes a great fit with our network approach to security as they control the door. 

What attracted Cisco to SyPixx and how is it being integrated into the business? 

Collen: We spent a couple of years researching the physical security marketplace, looking at potential partners and acquisitions. We went for them specifically because not only did it give us a network-based solution but also one that worked with legacy CCTV environments, allowing us to preserve customers’ investments and progressively move them toward new solutions. 

We are presently shipping a range of video products, including encoders and decoders, which we call IT gateways, and they connect up to systems, cameras, keyboards, monitors, etc., that connect them to the network specifically. We also offer network and digital video recorders as well as multiterabyte video storage. 

So far, the markets we have found success in are gaming and retail, especially department stores. You will see us make significant announcements at ISC West with a lot of introductions in the surveillance area. 

Does Cisco believe it needs to reach out to obtain the physical security know-how it may lack coming from an IT base?

Collen: We have a Cisco Partner Development Program, or CPDP, in which we try to slot technology partners, with interoperability being important. An example would be video storage, where we work with companies such as HP that have storage solutions in place. IP cameras, such as those from Panasonic, would be another, as would video analytics such as Object Video. 

As far as reaching out for physical security expertise, we definitely have had to go through a learning curve. Even with my background in networking, I was surprised about the differences in how companies work together at the technology level, but the partners we have helped us a lot, as have people on staff such as Rick [Geiger]. 

We also put together a sales team with physical security industry knowledge. We definitely have had to pick up the knowledge and continue to do so. We are also building a consultant program for physical security, and those involved have been instrumental in helping educate us. By the same token, we have to educate physical security folks about IT.

What do the terms “integrated” and “converged” mean to you and Cisco? 

Geiger: It means there is now the opportunity to have a common infrastructure to leverage IT system processes and the Ethernet wiring infrastructure to implement physical security systems. And the IT folks can take advantage of the information capabilities of physical security systems to do things they previously were unable to do, such as relating network or application log-on privileges to a physical location. 

What does Cisco offer that competitors cannot? 

Collen: In terms of video, Cisco offers legacy system integration that no one else can deliver, with a multitude of vendors and the ability to build best-of-breed products. Also, we make video available anywhere at anytime, and to make that effective and secure requires active cooperation between network and video devices. Because Cisco has such a high market share of networks, we are the only one that can deliver those elements working together. 

Are there plans to expand beyond video and access control? 

Collen: IP cameras are something we might look at, especially since we already produce cameras for other uses. Geiger: We take a very holistic view to physical security that includes intrusion detection, asset management, building controls and other physical security systems that have the potential to generate a lot of useful business information to assist management. All of these things are on our planning horizon. 

How does Cisco handle functions such as sales, distribution, system design, installation, training, maintenance, service, upgrading and management for physical security? 

Collen: The requirements of this marketplace are very specific and demanded physical security knowledge. Thus, we have hired dedicated salespeople and also created a dedicated channel organization called Authorized Technology Partners, or ATP. In time, we want to train more Cisco networking partners to be able to deliver our products, but right now it makes more sense to go through physical security partners and get them up to speed on IT. 

To become an ATP, there is a formal certification process a systems integrator would have to get plugged into. They would need to go through a certain amount of network training, commit to certain revenue level, etc. It is not too arduous, but there certainly are sign
ificant requirements. We are looking to build up that infrastructure.

Who will ultimately envision controlling the enterprise network, security or IT management?

Collen: It will differ among customers. I have seen some convergence, with about 10 percent to 20 percent of enterprises deferring to titles such as CSO or CIO. I would guess one of those types would end up controlling it. This conflict occurred in the past with systems such as telephony. However, for at least the next five years, physical security and IT personnel will share responsibilities.

The reconciliation of this question is a long way off. Physical security personnel possess such specialized knowledge and skill sets that they will be holding their own in this discussion for some time to come. Besides, in general, IT is not keen on learning all the physical security skills and knowledge. They are busy enough with their own tasks and, for the most part, do not care to learn the particulars about cameras, matrix switches, loss prevention, risk management, etc.

How does Cisco view physical security product manufacturers such as Honeywell, GE, Pelco, etc.? Are they the competition, potential partners?

Collen: They certainly want to talk to us, especially since the SyPixx acquisition. We have had meetings with most of them and I think they all want to develop their IP surveillance product lines. We have a very open mind about partnerships. The market is so fragmented that opportunities are still wide open, which makes security products manufacturers want to talk to us to gain an advantage.

In what substantial ways does the physical security industry differ from the IT industry?

Geiger: Installations in physical security tend to have a much longer service life than IT, 10 years as opposed to three-year cycles of depreciation. This makes system adoption slower. But as these systems become more computer based, physical security is running into problems trying to maintain and operate systems more than three or four years old. So, I believe the pace of the industry is picking up.

How much resources does Cisco intend to dedicate to this market?

Collen:We will use as much muscle as it takes to succeed in the marketplace. It is a large market with great potential, and it is growing at a healthy rate. In video surveillance, most of the systems out there run across local-area networks rather than wide-area networks [WAN]. But as broadband becomes more widely available, we will see a trend toward WAN-based surveillance implementation, which is certainly something we are aggressively going after.

IBM

Why has IBM recently increased its efforts in the physical security realm?

Sam Docknevich: Client demand and new technology has brought about a greater corporate commitment to aggressively pursue the physical security sector. We are looking to make it more than ‘our little physical security secret.’ Part of that will be the large presence we will have at ISC West.

The corporate world has been turning to video for a multitude of uses and we have the technology and people in place to focus on and solve these issues. Today, there are more cameras collecting content and digitizing information than ever, and users are looking for uncoupled, open solutions so they can use the same infrastructure for enterprise processes as well as video software management and analytics.

Can you tell me about the company’s Digital Video Surveillance (DVS) product and the Smart Surveillance System (S3)?

Docknevich: S3 sits on top of a currently deployed analog or digital video system, or if one is not present we can provide it, and uses algorithms to index objects based on user-defined attributes. It can be used to set automated alerts.

There are other packages on the market that come with very predefined routines, which do have some value. But our approach has been to provide a solution that is more open and programmable so the customer can do exactly what they want, rather easily. The other advantage is we can integrate sensor input from almost anything – chemical, POS, etc. When used for management applications, this can also bring a nice return on investment as well.

People need to understand what analytics really are: They are not some science fiction-like technology, but merely rules you set up to achieve a particular purpose. We are seeing two markets emerge, one is focused on increasing public safety and security, and the other is geared toward improving operational management efficiencies.

Is IBM reaching outward to obtain physical security know-how?

Docknevich: So far, we have grown our business through partnerships with companies such as ADT because they have physical security expertise and a lot of feet on the street. As far as risk assessment, loss prevention, etc., we have skills inside of IBM to deal with these issues. One of the advantages of being a company of our size is that we don’t lack for subject matter experts.

What do the terms “integrated” and “converged” mean to you and IBM?

Docknevich: Integrated means doing one thing very well and integrating different products or technology to accomplish the intent. Converged is when you are using one network or one technology to achieve multiple objectives. An example would be many different functions all running over the data network.

Does IBM have plans to delve into other physical security?

Docknevich:We are actually involved in some currently, like when we set up and relocate data centers we have to deal with access control, intrusion, etc. This is an area where we leverage partners and expertise. It will also be an area where we invest more within IBM, especially as access control gets more integrated and data network-centric.

Can you describe the typical IBM security solution customer?

Docknevich: Our typical customer is one with a vision that they want to get more value from video than they are currently getting. They know they can’t just keep building out their video infrastructure as it is; they need scalability, they need analytics.

Who will ultimately control the enterprise network,security or IT management?

Docknevich: From an application perspective, you are going to continue having physical security deciding that. And IT has another customer – its own physical security personnel. IT will always have control of the network, so it is critical for physical security to forge the partnership.

Where does IBM fit in among security product manufacturers such as Honeywell, GE, Pelco, etc.? What about IT firms like Cisco?

Docknevich:We partner with most of those companies, but we also compete with them. It is an interesting relationship that way. You have to define clear rules of engagement. As for Cisco, my group is Cisco’s largest reseller in the world.

ASSA ABLOY

Can you tell me about ASSA ABLOY’s partnership with Cisco?

Bret Tobey: Deploying Hi-O, or Highly Intelligent Openings, is the focus of the partnership. ASSA ABLOY has worked aggressively to drive more intelligence into each opening and the market has been asking us to put those openings on the network. When you’re talking networks, Cisco is never far from the conversation. It’s important to remember this relationship isn’t exclusive for either party. We expect other companies, competitors of both ASSA ABLOY and Cisco, to adopt the Hi-O architecture.

Do IT firms such as Cisco need to reach outward to obtain the physical security know-how they may lack?

Tobey: Absolutely, but IT-focused firms already know how to l
earn and move fast. Early on, there will be some movement from more traditional players, but over time the talent pool will grow with both sides learning more about the other. The type of skills needed to design, implement and manage access control systems is growing dramatically. Low-voltage knowledge is still needed, but so are networking skills.

What do the terms “integrated” and “converged” mean to you?

Tobey: Integration is about driving real-time data vs. raw electrical connections, and convergence is really about having a more coherent security footprint. Both of those play very well into our efforts to drive intelligence into as many openings as possible.

What do IT companies like Cisco offer the electronic security industry?

Tobey: They bring new perspectives, new methodologies and new revenue streams. I’ve seen both IT and physical security projects go well and poorly. The difference is the overall complexity of IT creates a need for more robust deployments.

The cutthroat nature and extremely high rate of technology change means IT players are always looking for the next product opportunity at the same customer site. That’s a mindshift from many players that are about expanding the installed base and collecting service revenues while offering pretty much the same thing.

Many installing systems integrators are willing and properly prepared to embrace and deploy these new converged solutions. But the real question is what part of the revenue stream from a project will they see? Some will be acquired, some will expand, some will become subs and others will fade away.

Who will ultimately control the enterprise network, security or IT management? Will they even share the same network?

Tobey: Economics dictate it will all be on the same network and IT will control it. Look at how fast voice over IP is supplanting traditional copper for telephone service. That doesn’t mean that the IT group will control security. Both networks and physical security are just support infrastructure for whatever is an organization’s core competency.

In most instances where it does clash, it will come down to knowledge and politics. If a systems integrator doesn’t have the knowledge to address both sides, they lose.

How do you think IT leaders like Cisco and IBM view physical security product manufacturers such as ASSA ABLOY, Honeywell,Tyco,Pelco, etc.? Are they competitors or potential partners?

Tobey: They probably see physical security players as both. If you do software or services, there will be overlap as the IT players expand. However, IT doesn’t look at competition the way our market does. Take IBM, they probably see more contribution to their bottom line from the services associated with software than the actual software sale. I wouldn’t be surprised to see some IT players aligning with players that sell competing solutions.

Do these firms tend to look down their nose at electronic security companies with a degree of smugness? Yes and no. They know they can run rings around the physical security channel and probably have a more nimble business model. But the smart ones also know this market will be tough.

How does the physical security industry principally differ from the IT industry?

Tobey: In IT, technology changes overnight and that makes those players more comfortable with risks. Some of them will fail spectacularly moving into physical security, but a few will make the right bets and be added to the list of dominant players.

ADESTA

What do the terms “integrated” and “converged” systems mean to you?

Robert Hile: An integrated system means you have two or more independent systems residing on one graphical user interface, workstation or server. I will take it a step further and add that for the systems to be truly integrated, all of the independent systems must be fully programmable from the headend and truly function as one system from the user’s perspective.

What tangible, concrete effects are these trends having on the physical security industry?

Hile: Convergence is making our industry more intelligent as a whole. In the past, traditional physical security business development people could survive by utilizing good sales skills and being able to ‘talk the talk’ so to speak. Today, you better know what you are talking about in regard to utilization of the customer’s network for communication and how network traffic will affect bandwidth, or the customer will dismiss you and your company and find someone else.

Our customers are totally different than in the past. You might be selling to the IT director and his staff instead of the physical security department, and in most cases today, the IT department will be involved at some level, so you better be ready.

On the operational side of the house, engineering and installation of IPcentric systems require a higher level of expertise and understanding than traditional independent physical security components.

What do physical security players have to do to maintain leadership roles amid this changing landscape?

Hile: The bottom line here is that all of us must evolve. Manufacturers and integrators alike need to change the way

they go about their daily business lives. Old business practices like keeping the customer captive by installing proprietary systems and technology are rapidly disappearing. You are either going to lead the way in this new converged world or you are going to get run over.

What roll will IT-based manufacturers such as Cisco and IBM and IT-centric VARs play in the physical security space?

Hile: One word: Huge! We are currently at the tail end of our application process to become one of the first Advanced Technology Partners with Cisco. We believe this partnership will help solidify our position as one of the truly diverse and dynamic IT-centric physical security integrators. By sharing expertise and sales leads in an effort to develop and close IP-based physical security opportunities, we are truly stronger than we could be on our own.

What do you believe the IT industry finds attractive about physical security and vice versa?

Hile: From the physical security side, IT-based technology will enable us to provide superior service and support to the customer. Our ability to service a customer remotely utilizing the network will enable us to provide almost instantaneous response. Adding additional service options for IP-based video or access control will be relatively easy when the time comes.

From the IT side, I believe the attraction to the physical security market stems from the money that has and will continue to flow into the economy to protect our country from potential terrorist activities.

What does physical security really need to learn from IT and vice versa?

Hile: On the physical security side, we need to learn that technology convergence is not the end of the world. We also need to learn that partnering is not such a bad thing if you choose the right partners. Physical security manufacturers and integrators need to wake up and realize that convergence is going to happen, with or without them.

One major lesson IT needs to learn from physical security is that there is still a large part of securing a facility that has to be done manually. There still has to be a huge amount of common sense applied to most physical security challenges. When it comes right down to it, you still might have mechanical systems that need to work in conjunction with IT-based messaging to physically protect assets.

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