Logical and physical a must

CHICAGO—The leaders of a number of industry trade groups had some stern words of warning for physical security integrators here at PSA-TEC's “State of the Industry” panel discussion last week. Looking into a future where end users are demanding more skills be evidenced by their integrators, where end users want fewer vendors responsible for more services provided, there was general agreement with this statement by SIA executive director Richard Chase: “demands have exponentially grown. Integrators are being asked to manage far more ... It's not, 'solve my problem,' anymore. It's 'manage my risk.'”

“The challenge is in the systems architecture itself,” agreed David Carter, managing director of the Security Network of America, a coalition of independent installers and integrators. “For example, mobile access is an expectation today. If you don't have it, you're not even competitive.” Further, he said, he's seeing a shift to “securing the business, not just the property.”

This means, they said, a long-standing, service-based relationship with the end user, and getting away from the contracting model, especially in what Bill Bozeman, president and CEO of PSA Security, called “an extraordinarily difficult contracting environment.”

“There is a huge demand,” said Chuck Wilson, executive director of the National Systems Contractors Association, “by more sophisticated end users for best-in-class technology, but sole-provider responsibility. Convergence is outpacing our traditional contracting model. The methodology of the contract has to evolve.”

It's not only the end user demands that integrators must satisfy, said Bozeman. He pointed out that there is a serious lack of credit for contractors who don't have a significant recurring revenue base. While members of the SNA often have a residential piece to their business, and therefore average 65 percent of their revenue from recurring sources, this is not the case with most PSA integrators. The SNA members, he said, “have a great model.” Looking out at the crowd of PSA integrators, he said, “their model is better than your model.” Bozeman had been speaking with a VP from Bank of America who was attending the PSA-TEC show for the first time: “He's just not interested in lending money to a contractor.”

However, said Sandy Jones, head of Sandra Jones and Co. and moderator of the panel, some integrators are beginning to see the light. “We never used to see integrators over 10 percent RMR,” she said. “Now we're seeing some in the 40- to 60-percent range.”

So, will we see consolidation, whereby physical integrators purchase data-security integrators to provide end users with that ideal “one throat to choke”?

No, said Paul Cronin, CEO of 1nService, a group similar to PSA but collecting IT integrators. “There really today is not an interest in that,” he said. “Our members are adding video and security, and they're doing it themselves. Security is seen as a small piece. It's the person who owns the business applications they care about. Adding physical security is just too small.”

However, he is seeing partnerships between physical and IT integrators, he said, and “that's one of the quickest ways to make sure you hold onto your business.”

SIA's Chase also theorized that end users are looking for validation that the companies they're working with are versed in both physical and data security. “If you can sell yourself as that bridge,” he said, “you will make some serious money.”