PSA-TEC State of the Industry Panel Confronts Security Market Dynamics
PSA Security’s Bill Bozeman moderated a captivating dialogue with industry leaders, covering a range of market trends and challenges facing security and A/V integrators.
DENVER — The most compelling industry panel discussions sometimes work almost like a Venn diagram. Individual panelists who skew to specific viewpoints based on their work within the security ecosystem, for example, help to compare and contrast relevant topics for an audience. The best of these dialogues weed out clutter and illustrate the essence of, say, particular marketplace trends and challenges.
Such was the case with the State of the Industry panel conducted during PSA Security’s TEC 2018, a premiere education and networking event held here March 12-16.
Moderated by PSA Security President and CEO Bill Bozeman, panelists from across the security landscape addressed matters related to cybersecurity, artificial intelligence and DIY, along with examining the importance and relevance of the systems integrator channel going forward. These industry leaders included Matt Barnette, president, Mercury Security; Don Erickson, CEO, Security Industry Association (SIA); David Labuskes, CEO, AVIXA; and Tim Palmquist, vice president Americas, Milestone.
Ahead, we’ll take an abridged view of the panel’s responses to each of the aforementioned topics.
Erickson was first to take up the topic of cybersecurity and its impact on the industry. In his role, Erickson has observed a definitive change in how stakeholders are deliberating and approaching the topic. Up until this year, he said, the conversation was always about impending threats. Now talk has shifted to focusing on marketplace opportunities, including new streams of recurring revenue.
For integrators, in particular, the role as trusted advisor can now encompass defining what represents good cyber hygiene. How do you determine vulnerabilities and identify them within certain security systems? How do you prevent cyber threats from even occurring? Erickson urged integrators to become familiar with the voluntary NIST Cybersecurity Framework, which consists of standards, guidelines and best practices to manage cybersecurity-related risk.
“There is going to be an update to the cyber framework in May that’s talking about crossing the bridge between physical and cybersecurity,” Erickson said. “That is something I would like to call your attention to. I’m sure PSA will provide some great education around that.”
Palmquist has also observed evolving conversations around cybersecurity. Large end users, for instance, are increasingly conducting product evaluations to identify dependencies of a given product to exist on their network. The goal is to ferret out potential vulnerabilities. Not just for, say Milestone’s VMS, but what other products that VMS may be dependent upon to be deployed.
“For example, .NET Framework or Microsoft Elements and other products. It might be a dependency on open source building blocks. Or open source distribution of Linux. There is a different profile around all of these. Those dependency discussions with end users will lead you to different manufacturers in the way they approach their product line. And how they line up in terms of where their vulnerabilities are,” he said.
Labuskes next explained how A/V integrators traditionally designed and deployed standalone systems, then later moved into controlled systems — neither of which were part of the client’s IT infrastructure. That has changed significantly in past five to 10 years.
“[W]e have needed to elevate our sensitivity to the fact that our systems are additional nodes on those networks, and not only potentially introduce vulnerabilities to the A/V system but to the entire network,” he said.
The integration community’s skillsets are necessarily expanding every day, Labuskes continued. Integrators are layering not only the understanding of how the network and technology works — understanding the risks that are introduced when components are networked — but then introducing those components and connecting human beings with them.
“That is really where the A/V industry excels is at the creation of experiences and integrating experiences. But recognizing that we can’t do that without being part of the broader corporate networks or home networks,” he said. “That is one of the most obvious reasons why this type of gathering [PSA-TEC] is important and why the alignment of A/V and security integrators makes sense.”
As Barnette dished on the cybersecurity topic, he provided a pair of brief anecdotes to drive home the reality that the industry has undeniably shifted to account for cyber maleficence and dangers posed to organizations. He first noted Mercury’s recent consultative event in Miami. Fifty consultants were in attendance. Mostly, what they all wanted to discuss centered on cybersecurity concerns. Why? Because that is what their customers are asking them about.
His second explanation: “I was talking to some lawyers recently and they said cybersecurity is going to be their slip-and-fall for the next generation. So they are making a lot of money on what they perceive to be lawsuits surrounding cybersecurity. That is something any business owner should be concerned about.”
Bozeman next tabled artificial intelligence (AI) and asked the panelists to gauge its impact on the industry. Palmquist was quick to make what he said was a bold statement that not everybody will agree on:
“I believe when we look back through the lens of history in just a handful of years we will be able to agree that machine learning and AI are going to be as big a disruptor in our industry as the invention of the IP camera. I believe it is that big of a deal.”
Consider just 12 to 18 months ago there was much discussion throughout the industry about a lack of innovation. AI wipes out the whole stagnation concern, he said.
“If we look at the way systems are being deployed today there are a lot of cameras, but there are a lot of non-camera devices. And the evolution of connected devices that are non-camera is increasing very fast,” Palmquist said. “You will see that non-camera connected devices rival what we see as cameras today.”
As those myriad devices aggregate tremendous amounts of data, automation will be needed to digest and make sense of it all. It’s already happening. Palmquist explained that eight Nvidia V100 GPU cards in one computer can analyze 7,000 video frames per second. The real benefit arrives when we augment security personnel with all that information. Now the addressable market around security can be expanded, allowing systems integrators to touch opportunities that would not traditionally be available, Palmquist said.
“Taken together, as we have unique new devices hitting the network, we automate that through AI and we augment the human experience, AI will serve as the building block to literally change our industry,” he said. “Our best days are in front of us when you talk about AI in the security industry.”
Palmquist also suggested future security applications will need to be viewed from the mindset of a platform, not product-centric. Machine learning and AI will usher in new innovations from manufacturers outside the traditional security space that will prove attractive. “We can assimilate that if we think in the context of platform. Then we can bring all of that to bear,” he said.
In the short term, Barnette sees AI having its biggest impact in the video sector, with benefits in access control coming eventually. For example, when data is consolidated in a central server or even a Cloud service, the information will be leveraged to be more predictive about what’s going on within a facility or across an end customer’s organization.
Barnette also shed light on ways AI is going to affect systems integrators’ own businesses, including back office operations. During a recent Microsoft presentation he attended, Barnette learned that the computer software giant will be adding an AI plug-in to its Excel spreadsheet.
“You will be using this type of technology just to run reports on your business and bring out data like what are your most profitable products. Where are the holes in your business? They are building these things into a common platform,” he explained. “So instead of looking at it from a purely manufacturing standpoint, you will be using these tools to actually run your business in a few years, which I think will be a great benefit.”
Erickson offered a cautionary point about the rise of AI: Any time there is a lot of excitement around new technology in the security industry, regulators start to pay attention.
“One of the issues that has not gone away in the security industry is the issue of privacy. Here is another emerging technology with application in security that is going to raise the eye of regulators at some point in time,” he said. “We see it with IoT where IoT in certain states’ procurements are now being condition upon being certified. I think the same thing could happen with AI. All the more reason to be proactive to adopt privacy-enabling techniques and benefits with these types of applications.”
Labuskes also submitted a cautionary note, this one from a competitive perspective: Ignore AI at your risk. He contrasted the application of AI in the security industry vs the pro A/V world. The processing of massive amounts of data and finding insights from that data is less about defense and more about offense.
Data utilization is a key part of marketing as well as the retail experience. He told attendees to expect adoption of AI in the digital signage vertical. Expect to see it leveraged to align guest experiences in the hospitality industry. Expect to see it in refining messaging and differentiation in sports and entertainment venues, among similar deployments.
“We are just at the outset of it. I don’t think anybody has really been able to visualize how far we are going to be able to extend the connection of human beings through AI,” Labuskes said.
In broaching the DIY topic, Bozeman asked the panelists to approach the subject from the position of whether or not self-installed products are a threat to the systems integration community.
“Two years ago it would have been a ridiculous question to ask. It’s no longer ridiculous,” Bozeman said. “I think it is something that needs to be discussed.”
Palmquist suggested integrators are not threatened so long as they are willing to be flexible and adapt to change. He related a bygone era with the rise of the personal computer when systems integrators made hefty margins from selling PCs to customers and helping them assimilate the new technology. Eventually, the consumer got smarter and the products got more approachable, he said.
“The same thing is happening here with video and other elements of security. The consumers are smarter, more tech savvy and the products are more approachable,” Palmquist said. “We need to adapt and change and go add value where we can add value. And there are a lot of opportunities to do that.”
Bozeman next asked Labuskes if a mid-level corporate A/V director can today make online product purchases and install the gear themselves — and, if so, does he consider it a threat? His answer was an emphatic yes to both. Labuskes then went on to explain how integrators should be positioning their companies by building upon Palmquist’s value-add insights.
“It’s about, what are you selling? What is your customer hiring you for? If you define your value to that customer as putting a display on the wall, then DIY is a threat. But if you define your value to that customer as enhancing customer engagement or enabling strategic discussions in the board room with employees that are scattered across the globe, then you can’t go buy that at Best Buy. And you can’t order and have it shipped to you same day by Amazon. That requires expertise.”
Adaption is paramount, he continued.
“If we try to protect a business model that was based on a marketplace of 10 or 15 years ago, then we are at threat. If we recognize the fact there is shifting opportunities, new opportunities emerging every day, then DIY is actually an opportunity,” he said. “I suspect there are a number of integrators in the room that have made a lot of money fixing the cheap installation that was put in by the CEO’s nephew who could do it for less.”
DIY may not ever pose a competitive threat to enterprise access control deployments, but Barnette envisions a time when it most assuredly will creep into light commercial and go up from there.
“It is definitely on the radar. The short answer is it is something we are paying attention to. We have had end users who have wanted to buy direct for years and years and self-install,” he said.
He said Mercury is concentrating on making products easier to install, but especially focusing on the value that integrators bring and adapting to the new business model. “But we’ve all got to get better at how we manage these products. Right now the tools to do it are really lacking in the business so we are focusing how to manage them remotely better.”
Systems Integrator Relevance
With the final question, Bozeman seeded the dialogue by asking the panelists to comment on the notion that “manufacturers sometimes get a little frustrated with the integrators, and they debate their importance.” What then, he asked, is the integrator community’s importance and relevance going forward?
Some of the panelists responses may have been expectedly diplomatic, but no less telling: The state of the systems integration channel is very strong.
“I don’t think any of the major manufacturers that are in this room and around this industry are talking about going around the integrators to the end users,” Barnette said. “That would be the death spiral of the entire industry. Even though Mercury doesn’t sell through the channel directly, we only work with OEMs that honor that integration channel because that is the channel to market.”
Erickson invoked “trusted partner” to describe the integrator’s importance to the marketplace. And though it may be an overly used expression it surely is not a cliché, he said.
“The example I will cite goes back to the compliance issues. Look at every single vertical. Every one of them to some degree has compliance issues,” Erickson said. “The integrator is essential to the end user in understanding what the risk is — identifying the risk — and identifying the appropriate solution to those compliance issues. That may or may not start with technology.”
Per discussions during SIA board meetings, as well as during SIA standards committee meetings, Erickson said integrators are also viewed as central in the security ecosystem for explaining the direction of technology. “Those things are not going to change. Those things help integrators stand apart.”
Labuskes then addressed the question from the pro A/V perspective, building upon Erickson’s sentiments while spotlighting a particular channel deficiency that manufacturers are trying to fulfill themselves.
“Don’t for a second forget that you are also a trusted advisor to the manufacturer and to the upstream part of the supply chain. I haven’t met a single manufacturer that wants to bypass the supply channel as it exists now,” he said. “What I have met is a ton of manufacturers who are frustrated they are not getting good information back from the street on what ultimately the end users need.”
Manufacturers crave to know what outcomes end users are actually trying to put into place. Given the dearth of available information from the integration channel, they instead are creating pathways to receive feedback directly from enterprise decision-makers.
“You create as much value for the manufacturer by providing that trusted advice, helping them with envisioning their strategy, their technology roadmap as you create value for the end user and ensuring they get the outcomes [they are looking for],” Labuskes said. “The only risk is not acknowledging the market forces, market trends and adjusting your business model to continue to be relevant.”
Palmquist was succinct in providing final comments to conclude the State of the Industry session, saying from Milestone’s perspective quality systems integrators “are the edge of the business and we can’t exist without [them].”
“I think the future looks really good,” he continued. “Echoing what’s already been said, if you are willing to adjust, be flexible, adapt and add value, then we have a great partnership moving forward.”
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