Security-Net President Joe Ligouri Shares 2012 Predictions

In this online exclusive, Security-Net President Joe Liguori shares his thoughts on where the security technology is headed in 2012.

What does 2012 hold in store for your business and the industry? Find out with the many insights offered in SSI‘s annual Industry Forecast,  which is featured in our January issue. This year, more than 25 of the industry’s most prominent research firms, trade associations, business and finance specialists, systems integrators, manufacturers,  consultants, and alarm companies rendered a deep and sweeping portrait of the impending security landscape. The participants addressed the most significant changes, challenges and opportunities they anticipate taking place during the next 12 months in seven critical areas. They are: security technology; security markets; security industry; business and operations; politics and legislation; risks and threats; and ongoing challenges. With the boundaries of print being too constrained to present all of the fascinating and valuable assessments, each of the respondents’ complete, edited interviews are being offered exclusively online. Happy New Year!

Joe Liguori
Security-Net Inc.
Executive Vice President
Access Control Technologies

Security Technology

Joe Liguori: There has been a shift toward nonconventional methodology to accomplishing conventional tasks. Access control is finding applications for wireless products and conventional access control card credentials will soon be provided with the plausibility of a licensing credential that can be installed on a smartphone as an app. Technology is changing the way we view security solutions, and in many cases making the solution more cost-effective. One challenge is trying to stay in front of the video software curve. With the growing advent of IP video, virtualization software is emerging as an important application in managing video integration. There are a number of very prominent products in this arena and it is difficult to identify and align to the companies that will eventually become leaders as this market continues to emerge. Opportunity-wise, identifying end-user companies that are interested in taking the leap from conventional security technology application toward utilization of new technology that affords enhanced integration capabilities is a challenge with a significant upside. Technology also presents a vehicle toward efficiency providing enhanced informational content that allows for better analysis of processes in use and the opportunity for improvement.

Security Markets

Liguori: Security markets have been traditionally driven by features, functions and need for fulfillment. With the global recession of the past few years, pricing in many cases has become a more important qualification for security applications. Taking a point from the initial question, technological innovations will hopefully bridge the gap between functionality and cost efficiency. Recognition of those parameters and transferring that recognition to the appropriate security market entities will be both the challenge and the opportunity.

Security Business and Operations

Liguori: The business model has changed dramatically in that everyone has to find a way to accomplish more with fewer resources. That is simply the reality of trying to survive in a price-sensitive world. To that end the opportunity lies in identifying cost efficiency strategies without affecting the quality of the product or service. We look at it as doing more with less and hopefully doing it as well, if not better. As an example; if you have eight service vehicles supporting an existing client base is it possible to provide the same quality of service with seven trucks by enhancing the tools and training provided to the service technician? If so, where do the inefficiencies lie, or what technology can you utilize to enhance the efficiency quotient? The challenge is trying to understand what is required and the opportunity is finding a mechanism to accomplish it.

Security Industry

Liguori: The industry is more fragmented from a solutions perspective than it has been in the past. There are simply more suppliers, more distributors, more products, and more integrators, translating into many more choices and the propensity to make more mistakes. Industry consolidation is slowly changing the offerings available to end users and the end result will be fewer choices but hopefully better ones. There is also a progression toward single point of contact application. Customers prefer to utilize fewer vendors for more applications simplifying the go-to person. This jack-of-all-trade mentality has expanded to the national level where the larger customers have abandoned the regionalized concept of multiple best-of-breed solutions for a standardized, one-company solution approach. The challenge here is to maintain the same core level of competency through a more expansive geographical territory. Moreover, it becomes a question of attempting to differentiate your company from the competition. Many companies have significantly expanded their product mix in the hope that more offerings will expand the market for opportunities but in so doing have diluted the proficiency level.

Politics and Legislation

Liguori: Government intervention has the duality of inflicting a positive effect upon the industry through the introduction of a measure of standards that protects the integrity and professionalism of the industry. One such example is the requirement that in order to perform security work in a particular city you must be licensed by that city. While enforcement is always dubious, this action implies a certification of sorts that the work being performed is being done by a qualified entity.

Risks and Threats

Ligouri: The security industry is far less complex than one might think. It is essentially based upon the premise of providing one or two core products, such as access control and video, and expanding upon that product mix. While there are a multitude of different security products available, the security integrator essentially performs two functions; we provide the mechanism to grant or deny access and we record activity through video. The means utilized to achieve that end result is versatile, due to the vast number of products available and the desire to sometimes make the process seem much more sophisticated, but the end result is still related to the age old premise of keeping it simple.

Ongoing Challenges

Ligouri: Quality standards need to be enforced to ensure integrators are selling the products they are qualified to sell. Enforcement of standards leads to higher quality work, which translates to satisfied customers. Our organization, Security-Net, frequently gets calls from customers who have installed systems that do not perform to the standards of their expectations. Inspection of these client sites usually implies that the installer was either not trained or not fully versed on the proper installation of the product. It’s a costly and painful lesson.

Projecting 2012

Ligouri: Forecasting in the security industry has always been a very difficult aspect with the best expectation being the recognition that any insight is mostly guesswork. Having made that quali
fication, my speculation is based on Security-Net’s network of 19 security integrators who are interspersed across the country and meet four times per year. We have found that while there are still geographical pockets of weakness and some areas of stronger demand, overall there appears to be an increase in the quantity of business opportunities. However, there is still a broad-based increase in the level of competition and a downward pressure on gross profit margins. This pressure has a spiraling effect as the client exerts pricing pressure upon the integrator through the evidence of enhances in the competition. The integrator, in turn, applies pressure toward the distribution supplier or the manufacturer to provide pricing discounts to increase the probability that the project will be won. Since bottom-line profitability is the measure of success or failure, there is unfortunately a greater need to sell more products in attempt to make up the difference in volume. This further enhances the need to be more competitive lowering the gross profit margin, which increases the need to sell.



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About the Author


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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