Securing New Ground highlights business opportunities

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Thursday, November 23, 2006

NEW YORK--Here at the Roosevelt Hotel, in Midtown Manhattan, 245 of the security industry's power brokers convened at Securing New Ground to talk shop and discuss the future of the business of security, whether in high-technology homeland security applications or old-fashioned residential alarm monitoring. Thirteen sessions of speakers and panel discussions revealed a number of consistent themes, including the message that the convergence of logical and physical security is happening, but that doesn't mean large companies are embracing all of the shiniest widgets.
The panels comprised a number high-level executives at major and long-standing installation and integration companies: among them were Michael Dan, chairman, chief executive officer and president of the Brink's Companies; Richard Ginsburg, president and chief executive officer of Protection One; Dennis Moriarty, senior vice president of Diebold's global security division; Kevin Dowd, Sonitrol's chairman and chief executive officer; Marty Guay, chief operating officer, and Rolf Norberg, chief technology officer, of Securitas Systems, newly spun off from Securitas; George West, vice president of security systems at Siemens Building Technologies; and Tim Whall, HSM's president and chief operating officer.
Feedback from attendees was consistent in praising the majority of presenters for thoughtfully commenting on the industry, rather than simply selling their wares.
Ginsburg, for example, noted that the flaw in most monitoring centers' business plans wasn't about addressing attrition rates or retaining employees. Rather, he said, it's a lack of a good plan for disaster recovery. "It's very concerning," he said, "when a hurricane is barreling down on a central station ... UL requirements aren't stringent enough." Ginsburg said a good salesman can sell the difference between a company that has good disaster recovery plans and one that doesn't.
On that same panel, Whall was one of few speakers at this event to pooh-pooh convergence. "I'm not sold on convergence yet," he said. "I visit customers and I don't hear anybody telling me about convergence. They don't have us hooking onto their systems. They just want real time web access to their data. We provide that to our customers, but we don't jump on their network."
Both Ginsberg and Whall were relatively dismissive of specialty monitoring of high-technology sensors as a business driver, as well.
Moriarty at Diebold was far more bullish on convergence: "Convergence might not be real for our customers yet, but it is a reality. The customers I speak to say they would rather concentrate on their core competency. They're looking for partners that can give them the end-to-end solution. They don't want to build the infrastructure to support security."
The result of that, said Securitas' Guay is that, "We're seeing IT as a gatekeeper, though slowly becoming a participant. They're in the loop, but they don't know anything about security, with respect." Thus, said West, "our customers are operating in a far more collaborative manner within their organization. We're seeing physical and logical departments coming together, mostly because they need the budgets of the other to get it done. The other reason is because the CFO is getting two presentations, one from each side, and they want somebody to figure it out. Regardless of how they get there, what's clear is that achieving security can't be done with just physical or logical security. If physical security is on an unsecure network, it's unsecure."
This is good for the smart integrator, Guay felt. "The integration business has been mostly a time-and-materials relationship, which is a relationship based on failure," he said. Going forward, service will be an increasing part of revenues and offerings.
"Our customers are not looking for a system," agreed West. "We talk a lot about being able to provide a more secure environment for our customers, which is part system but mostly service over time. The customer base is beginning to understand that."
"It's more of an outsourced solution," concurred Diebold's Moriarty. "We'll walk away from one-time opportunities, because they're low margin."
To that last point, Guay joked, "Let us know which ones you're walking away from."
Securing New Ground was produced by Sandra Jones and Company, Lehman Brothers, ProFinance Associates, and BNP Media. Next year's event will be held Nov. 13 and 14.