Proprietary vs. open systems: Open is preferred, but it’s harder to sell

Integrator, consultant and manufacturer discuss the drivers and limitations of both types of systems
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Wednesday, March 25, 2015

DELRAY BEACH, Fla.—The debate over open systems versus proprietary systems is usually not a debate in the physical security industry. Open systems are generally thought of as better. Integrators want them, end users demand them and manufacturers are making them, right?

At least that’s the claim made by many manufacturers’ marketing departments.

And that’s the reason standards bodies are working hard to make security systems components more easily compatible.

In the field, the reality is different. Proprietary systems are often favored and not just by manufacturers, according to a leading integrator, consultant and manufacturer who spoke at TechSec 2015 on the “Proprietary Jail: Is the industry bailing on open systems?” panel discussion.

Panelists were David Sime, VP engineering and delivery for CONTAVA, a systems integrator based in Edmonton, Alberta, Canada; Ben Butchko, president and CEO of security engineering firm Butchko Inc., based in Tomball, Texas; and Joe Grillo, managing director of Vanderbilt Industries of Wiesbaden, Germany; Chris Peckham, senior VP, chief technology officer and special projects KRATOS/HBE, was the panel moderator. (Photos are included in this order, from top to bottom.)

When and why are proprietary systems favored? The top reason, unsurprisingly, is money. Making and installing proprietary systems is easier and can be more profitable for integrator, end user and manufacturer alike, especially if it’s a one-location, lower complexity system.

They may still prefer open systems, but proprietary can work well in certain applications and for certain types of end users, TechSec panelists said.

“As a systems integrator, we are a proponent of open systems because they support the long-term relationships [we want to have] with our customers, though they’re not the easiest to sell upfront,” Sime said.

But manufacturers go proprietary for a number of reasons, Sime said. “It’s an opportunity for incremental revenue; they can sandwich another product in with the offering,” he said. “Developing software from scratch is a lot easier than dealing with another organization’s APIs, products and platforms,” he added. From a support perspective, proprietary is easier for the manufacturer.

For the integrator, “being heavily invested in open systems is expensive. We have to train our people on numerous manufacturers.”  And, when there’s an update there’s even more training and troubleshooting required.

When he looks at a proprietary system, Sime said “sometimes it’s tough to look away.” A proprietary system is “an easy win, it’s easy to put in an end-to-end system and it definitely reduces our cost,” he said.

Sime said that end users are “influenced by the promise of a simple platform [and] the reduced cost upfront.” There are some arguments that proprietary systems are safer from a cybersecurity perspective as well.

All of those factors are powerful reasons to go proprietary, Sime said, “unless you stick to the fundamentals … continuing with the long view, looking 10 years out, wanting to continue the relationship with the client and ensure that we meet their needs.” Consider the fundamentals and you want to stay with open systems, Sime said.

If the system is closed, you cannot leverage new technology developments. It’s important to remember today’s great manufacturer will not necessarily always be the best. “We have to have an option to take customers onto a new platform, camera or new storage,” Sime said.

What is the definition of an open system? Butchko said it has to be “defined how to connect, it has to be available, useable and it allows for the connection of different technologies, different data sets to create a larger solution.” Open systems vary from what Butchko says are interconnections to full integration.

It’s important that the system is really publicly available and “not wrapped up in multiple layers so the key element of the technology is [really only] 20 percent available.”

The business model must also support the open systems, Butchko said. “You may have a wonderful API and SDK … [but if the] cost of entry to get access exceeds that value of the interconnection … yes, you’re open, but you can’t afford to get it and if you do, you can’t make money in the marketplace.”

Grillo observed that the security industry is much smaller than other larger “more open” industries. Many basic security systems work well for a long time, he said.

He said that security “is a conservative industry … when you’re dealing with a security system [end users] don’t want to be the first to jump into new systems that in theory might create risk,” he said.

In the past few years, we’ve seen video companies get into access control, access control companies get into video and one video company buying another. What does this mean for the openness of systems?

Sime gave an example of where this kind of consolidation works for the integrator: If CONTAVA was doing a ton of video for a customer and that customer wanted to add access control for a few doors, that customer does not need an enterprise access control platform. In that instance, if the camera company had an access control system “that uses the same management platform [and it’s] integrated right out of the box … we value that.”

The integrator’s concern about consolidation is “with the investment in time, money and focus … are they still investing enough in the core product? We care a hell of a lot more about the core product,” Sime said.

Butchko agreed with Sime, and added another concern: When a small company is acquired by a larger company, what happens to the original product in terms of future development and support?

Grillo said that there are plusses and minuses for end users with M&A. A minus is when a new owner decides to end-of-life a product. The upside is that a new owner can supply funds and resources for future R&D.

And what about manufacturers who own a major market share? “If you own 80 percent of the market, you are a de facto standard. Whether you’re open or closed, you set the tone,” Butchko said.  The big company with huge market share can “limit innovation and the progression of additional features.”

Grillo said it’s important how companies that own market share behave.

Sime said that innovation is key to security projects involving large enterprise, government and critical infrastructure. “You need the innovation of multiple manufacturers competing.”

How do standards play into the question of quality?

Standards drive quality and they’re important because integrators are only as good as “the lowest quality product in the security platform … a fob, whatever it is, we’re judged on the lowest common denominator, that’s a challenge for us.”

Butchko said standards improve the “predictability of products, and if the market drives demand for quality … that combination is strong.” However, standards can limit innovation in some cases he said. Butchko believes that were standards can have the best effect when you standardize data protocol and the interchange between components.”

Asked where the industry is getting more open or closed, Grillo voted for open.

“It’s not so black and white [when you talk about openness] that’s not what we’re faced with today,” Grillo said. “I think we’re moving more toward open systems, particularly through [impact on the security industry of the] IT industry and the [end users] IT departments.”

Butchko predicted there will be more openness for all products from a “pure technology standpoint.” Most of that will not be “realizable for the marketplace.” There will be more openness for “a whole host of mediocre products, but the ability to get premier products that are open … there are business drivers that limit that,” Butchko said.

Sime believes there will be a market fracture “with enterprise offerings there will still continue to have open [systems] opportunities. The market will enable manufacturers to grow in that market. [But] the small platform offering may go in the other direction [toward more proprietary systems],” he said.

Proprietary systems are not preferable in either the enterprise or SMB market, “but they’re a great sales mechanism,” Sime said.