Serving Up Security as a Service

Before selling security as a service (SecaaS), here are a few things you need to consider.

Hosted and cloud-based service offerings are all the rage, and security is no exception. Interactive services, video surveillance and access control seem to be the hottest electronic security and life-safety products in the marketplace, but many other opportunities exist as well.

For end users, the emerging technologies offer convenience and cost savings, and require less infrastructure. For the security dealer or integrator, they have the added benefit of increasing installation revenues, but more importantly, creating newer and higher recurring revenue streams. What’s not to like? Unless, of course, you are dead set against being pushed out of your perceived comfort zone ( see sidebar).

Here are a few things to consider before selling SecaaS (security as a service): Have you created a solid go-to-market strategy? How will you deliver an exceptional customer experience for these services? What must you do operationally to ensure success, revenue growth and profitability? This article answers these questions and addresses the concepts to help get you started.

Make Interactivity a Standard Offering
SecaaS is blurring the lines of the electronic security industry’s traditional standalone services. However, to be clear, the central station monitoring business – intrusion systems – has been a SecaaS product for decades.

The new hosted services model enables a traditional security dealer the opportunity to enhance its client relationships by offering a richer interface and connectivity, with products and services that better resonate with the customer base. Interactive services for security systems should no longer be seen as an option, rather a lifestyle expectation and should be included in every sale.

RELATED: How Security Dealers Can Survive ‘Alarmageddon’

Video is being offered in many forms – observation, cloud storage, video alarm verification, guard tours and many others. The data-rich information that video provides is expected and sought after by both commercial and residential end users.

For many years, video has traditionally been sold and installed for a profit and not associated with RMR (recurring monthly revenue) services. When video had been sold as RMR, it often was in the form of a lease or rental program. These models typically come with service and hardware obligations that burden the value of these recurring revenue streams.

“Dealers and installing central station customers that in recent years have advanced to offering video lifestyle service offerings, such as being able to look into a house or receive video alerts, can now add incremental value by including video alarm verification capabilities,” says Gordon Hope, general manager, Alarm-Net (Honeywell). “Today, hosted and cloud-based video services can be sold in a recurring monthly model much like traditional security systems. For hosted video services, they should be offered to every potential client on every proposal.”

Although similar to video sales practices, PC-based access control systems and hardware are all but being replaced with the hosted model. The access control architecture of hardware and software make monitoring and user management problematic at best. Today’s access control devices with network appliances and cloud-hosted user management are far more appealing to the end user, and more convenient too.

For the security dealer or integrator, the recurring revenue stream is very appealing, especially in the two- to four-door market segment. As with video, hosted access control should now be offered in every commercial opportunity. These are just a few of the new hosted and cloud-based security service technologies that can be offered by electronic security system providers.

Get Started With Security as a Service
Being successful with SecaaS requires committing to new ways of operating your business. These are not services that you can occasionally add or sell as an, “Oh, by the way” add-on. Without proper commitment and strategic vision, you will end up frustrated, and this includes your customers and your vendor partners.

Commitment is key. Start by choosing a market segment or by asking who is my client? Once identified, determine what you can offer them. For example, a small business will consume SecaaS differently than a homeowner. Both have their pain points or what is important to them. That is why SecaaS for small business or residential clients comes in many practical forms.

From an operational perspective, treat all of these services with the same creation cost principles the industry uses for intrusion systems. What is the cost of the system equipment, the labor to install it, the commission on the sale price, and the monthly costs associated with providing the hosted or cloud service? These direct costs must be clearly understood before you offer these services to end users.

Next you need to uncover the pricing model, which can be determined through competitive analysis in your market and surveying your customer base. When seeking out these strategic factors, don’t forget about your manufacturer and service partners, and your fellow dealers too.

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