Back to school

MDI: Reinvented for the last time?
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Sunday, April 1, 2007

SAN ANTONIO--A $2.6 million funding round from Stratis Authority has led to a $25.3 million contract with six southeastern school districts for MDI Security Systems. The security management software manufacturer, which has a new focus on system design and end user support, may have finally turned the corner in a many-year reinvention that began with Honeywell's acquisition of Ultrak in 2002.
At that point, MDI was part of the non-CCTV leftovers Honeywell didn't want and part of a new American Building Controls, which sold its retail security arm to Mace and renamed itself MDI in 2004, the year current chief executive officer J. Collier Sparks took his office. Sparks is now executing a plan he began formulating in 2005, creating Global Support Systems, a new subsidiary of MDI that will design and integrate security systems before handing them off to regional integrators and installers, while retaining
project management oversight. The company will immediately begin qualifying installation partners to help with a steady stream of work it's already seeing from the Learn Safe program, the Stratis Authority-run effort that essentially gives security systems to schools for free, funded by corporate sponsorships. The for-profit Stratis, with the $2.6 million investment in MDI, made MDI the sole security provider for Learn Safe's efforts throughout the United States, which target as many as 17,000 school districts.
"MDI will be providing not only the operating system and the linkage of the access control and CCTV," said Jim Vandervere, new MDI board member and chief executive of Stratis, which is a holding company with a number of security-related subsidiaries. "We're going to incorporate the background checking and badging into one package, and MDI will be the keeper of that technology. Also, we'll use MDI for their relationship with the installation base. Those installers will be Learn Safe certified."
Sparks dismisses talk of channel competition. He said MDI is simply bringing more business to its customers. "We're looking to embrace and recruit dealers and integrators in the marketplace. We'll see who has the ability to be part of this program." The Learn Safe program, by some calculations, is a $3 billion opportunity for security applications. The $25 million order already announced represents nearly double what MDI did in revenues in 2006.
But it's just the tip of the iceberg for the Stratis deal, Sparks said. Soon will come Work Safe, a similar model targeting corporations with remote locations.
MDI board chair Jim Power, an industry veteran who was added in 2005, said MDI staffed GSS with veteran talent he and Sparks recruited and that the expertise allows them to "manage the $25 million job with about six people."
"This is a paradigm shift in the industry," said Sparks, "but it's not that strange in the IT world. Look at the relationships businesses have with Cisco, IBM. We have a direct relationship with SAP, for example, and we want one of their employees on site. This is the same method. We're not pioneers. Our customers just want us on site. Our industry is 10 years behind; we ought to be in the late '90s pretty soon."