Not such a small fry after all

Wednesday, December 1, 2004

For years now, I’ve watched the security industry go through its transformation. I’ve seen new companies come into the fold, and existing businesses get larger. And along the way, a few have failed.

But for the most part, many of the companies that I cut my first teeth on when I learned about the security market are still around, in one form or another. Those businesses may not be known under the same name, have the same owner or remain the same in terms of size, but they’re still around.

Sometimes you just have to look a little bit harder to find those companies and then, take some time to learn about the emerging businesses.

There’s a shell game taking place in the security industry, but sometimes it appears the more companies move around, the more the business stays the same.

Here’s one question that comes to mind as of late. Is the market getting smaller, or larger? It certainly depends on how you look at.

Maybe the number of security businesses, both in terms of manufacturers and the installing community, has not grown significantly, but the size of the players has. There are more conglomerates who own a piece of the security manufacturing business than ever before, and by my estimates, they now control a larger percentage of the market than many of the smaller and niche manufacturers combined.

Names like Tyco, Bosch, GE, Siemens and Honeywell had little, if any, stake in the security market 10 or more years ago. But today, here they are. And these large companies now have a considerable amount of influence in shaping the future of this industry.

Now only do they have the name recognition, they also have the financial resources to bring more product to market faster than its smaller counterpart. And, let’s not forget about their reach in the installing community. I honestly believe we would be hard pressed to find an installer or systems integrator who does not offer some sort of product from one or more of the above mentioned companies.

I believe these large companies have a tremendous amount to offer to this industry. They’re an important partner in this business, and have helped this industry evolve probably more so than many long-time veterans could have ever imagined.

But it’s important to also remember that the foundation of this industry comes from the small company, whether it’s a technology boutique or a small systems integration firm. These businesses are often the ones that provide the roots from which the security market is built upon. And these companies have more influence in this market than many people realize.

Sometimes these companies can be a little more agile in their approach, or which products and technology they bring to market. And for the small manufacturer, it’s not uncommon to see their product or technology licensed by many or bought by one of the bigger players in the market.

The same appears to be true in the installing community. These businesses have to start somewhere, and its often the owner who works in the trenches building a company one customer at a time before he finally reaps the reward of moving to the next level, either by expanding or selling to a larger counterpart.

Despite all the changes that we’re seeing happen in recent years, with new and larger players coming in every day, has the cornerstone of industry really changed all that much?

As I said, it’s all in how you look at it.