Reduce Your Reliance on Provisioning Servers … Or Suffer

Genetec CEO Pierre Racz explains integrators are in big trouble if they expect to continue relying on revenue generated by server provisioning.

This is not a news flash: The business of systems integration is rapidly evolving. What I find compelling about market disruption and the dynamics of change are the acute effects it all has on business models. Some succeed where others fail.

As I discussed with Genetec CEO Pierre Racz during the company’s recent press summit, there is a natural selection of sorts playing out in the security industry that will surely pare some integrators from the ranks of solvent organizations.

Of course, successfully retooling a business model in today’s security integration world must be a multipronged mission. In particular, however, what Racz explained to me concerns the business of provisioning servers. It’s not long as a money-making practice, folks.

“My mother with her credit card can provision a server room in a matter of minutes,” Racz said, bluntly. “There are some people in the integration business that all they do is provision computers, and they are hoping to continue to make money provisioning servers.”

Simply, a reliance on revenue generated from provisioning servers “is a bad business plan,” Racz expressed, because of margin erosion and other market forces. Instead, integrators need to be transitioning to helping end customers move their data to the Cloud.

“For example, our architecture is a hybrid architecture where you can say ‘this data is sensitive; I want it on premises.’ Or, ‘this data is not sensitive; I will put it where it is cheapest to store.’ They are provisioning it in the Cloud,” he said.

Integrators are well positioned to understand the intricacies of an end customer’s facilities and processes in order to deploy and integrate Cloud computing services within an IT infrastructure. The big takeaway here is Cloud provisioning presents a golden opportunity to deliver value-added work, and thereby deepen the relationship with the client.

Thus, these very services align with a growing number of end users that are embedding a trustable supply chain in their operations.

“These are the integrators that will flourish in the future. Integrators that actually master clearly value-added jobs and can hold the hand of their customer — so they can concentrate on their business — are going to do really well,” Racz said. “And the ones that do jobs that have no value-add — such as provisioning servers — that is going to go away.”

Hiring or attaining the necessary IT skill sets to implement Cloud solutions is a challenging prospect for a good many integrators, Racz acknowledges. But here he recounts an anecdotal suggestion from a speech he said he delivered back in 2004 that remains relevant today:

“I said what you should do is pair and old guy who knows security with a young guy that just came out of university and knows nothing about security, but knows everything about computers. Get this odd couple thing going and that is going to be a winning combination for the future.”

About the Author

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Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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