EXECUTIVE MANAGEMENT – Hot New Fire Markets Set to Ignite Profits

Published: December 31, 2004

A quartet of industry experts exposes current and future trends in the fire/life-safety market. Enterprising security contractors looking for new areas in which to diversify will find plenty to be excited about in voice evacuation, sprinklers personal emergency response systems and more.

Life-safety systems are one of the most important investments a corporation or homeowner will make. Protecting a structure against theft is one thing, but saving people’s lives from a potential raging fire is another.

How important is fire detection in the United States? Important enough for fire departments nationwide in 2003 to respond to more than 1.5 million fire calls. Yet, nearly 4,000 civilians lost their lives due to fire. That equates to one fire death every 134 minutes, according to the National Fire Protection Association (NFPA) of Quincy, Mass.
Because society has become so intensely conscious of fire safety during the past 20 years, the potential monetary gains associated with implementing life-safety systems has been quite good. Like any market, it pays to stay one step ahead of the curve and knowing what lies ahead is important to dealers who intend to be around until retirement.

In order to spot current and future trends in life-safety, Security Sales & Integration asked four industry professionals what the future has in store. They are Keith Ladd, president of The Protection Bureau of Exton, Pa.; David Bitton, COO with Supreme Security Systems in Union, N.J.; Ray Dotts, alarm department manager with TVA Fire and Life Safety of Farmington Hills, Mich.; and Nick Markowitz, owner of Markowitz Electric Protection of Verona, Pa.

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Opportunities Growing in Public Schools and Church Buildings

“Schools are a major opportunity. With the growth in school-age population, there are a lot of schools being built and/or remodeled. It’s a large market with major opportunities,” Ladd says. “Churches and places of religious worship as well as congregations are growing again with lots of new church buildings being build.”

Many school systems across the nation are looking at either major capital improvements or building new facilities.

“Schools are a growing benefit and will become an even larger market for the life-safety specialist,” continues Ladd. “If you can get your products specified, that reduces competition.”

Schools are aging, as many of the existing buildings were built when the baby boomer generation passed through public education. There is no accommodation for high-speed communication. Local school systems are working to fix the problem in a variety of ways.

Response Systems Offer Recurring Revenue Opportunities

Another area that professional security contractors see as an area of growth within the life-safety market is the personal emergency response system (PERS).

“As baby boomers get older and start to enter assisted-care facilities, PERSs are becoming increasingly important as safety and security tools,” advises Bitton.
PERSs are increasingly employed in private homes where older individuals live. Siblings often get together to orchestrate the purchase, installation and ongoing maintenance of these systems for the sake of an aging parent. In some cases, the purchased PERS becomes an extension of an existing burglar/fire alarm system.

“The medical alert market is growing in accordance with the growing older population,” says Markowitz. “But the downside is higher liability and increased demand for 24/7 service.”

Nursing homes are another possible target for PERS products as they cater to older individuals who require hands-on care (see sidebar on page 52 of January issue). Assisted-living facilities, where people live without the same level of hands-on care, is also a likely place where PERS can be employed.

Voice Evacuation Systems Provide Profitable Side Benefits

TVA’s Dotts says many jurisdictions are becoming code conscious to the point where they now require the use of notification appliance devices where they had not before.

“Years ago, in BOCA [Building Officials Code Administrators Int’l], they only required one device inside the location and one outside in mercantile occupancies. Now, code requires a full notification system comprised of horns and strobes throughout the facility, which obviously adds quite a bit of cost to the fire alarm system,” Dotts explains. “Of course, now we are no longer under BOCA, but rather IBC [International Building Code] and IFC [International Fire Code], which require the additional protection.”

According to Dotts, not only is this trend becoming widespread, it offers some additional sales opportunities to enterprising security dealers. Dott’s firm does not install life-safety systems – it offers engineering services to the life-safety market. These include security companies and fire alarm contractors.

“There’s a fire alarm system on the market today where you can use the same system for both paging/background music as well as emergency voice notification. This is a big trend in certain areas of the fire market,” continues Dotts. “Rather than putting a full paging system in there and doubling it with horns for fire alarm, you can now eliminate the traditional fire horns and save the end user some money.”

In years past, the traditional security dealer would have installed a simple fire alarm system and would never have thought of selling them a paging/background music head-end.

More AHJs Accept Sprinkler Monitoring

Markowitz is now seeing a trend toward system upgrades in commercial and institutional facilities. This is especially true in the area of sprinkler monitoring.

“I see an increase in commercial fire work, both new systems and upgrades. Sprinklers are a big growth area as well as states adopt model codes, such as the International Code Commission [ICC],” he says.

What Markowitz is talking about is the shear volume of local communities and states now adopting their ICC code system and the fundamental differences between ICC’s International Fire Code and the core group of NFPA fire codes, although there are only a handful at best.

For example, where NFPA 72 allows the sprinkler main valve to be secured by a chain and lock, IFC does not.

According to Section 903.4, International Fire Code, regarding sprinkler system monitoring and alarms: All valves controlling the water supply for automatic sprinkler systems, pumps, tanks, water levels and temperatures, critical air pressures, and water-flow switches on all sprinkler systems shall be electrically supervised. For more on this, see this month’s “Fire-Side Chat.”

Internet Monitoring Holds Promise as a New Cash Channel

For some time now, the industry has been hearing about a new monitoring technology that uses the Internet as a signal transport technology rather than wireless radio or traditional POTS (Plain Old Telephone Service). This form appeals to some alarm dealers because it nearly takes the telephone carrier out of the picture. In addition, some large, enterprising dealers can partner with an Internet service provider (ISP) and generate another source of recurring revenue.

“Historically, fire alarm systems have been required to have two dedicated fire alarm lines so if one goes dead, there is another to take over automatically,” says Dotts.
As part of the same set of requirements set forth in NFPA 72 many years ago, when “800” watts lines are used for signal transport, both must be of different carriers.

“There are rules in [NFPA] 72 that say if you are using watts lines, those numbers have to be provided by two different carriers. Now there’s a big push to monitor over the Internet,” Dotts adds.

He adds that corporations with a broadband network connection will realize a significant savings in communica
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