Timing is everything

Tuesday, November 1, 2005

The security industry never ceases to amaze me. It's incredible how this industry has evolved over the last seven years, not just in terms of technology but business savviness, as well.
When I first began covering this market, stories on investors coming into the security market were few and far between. It was the dotcom days, and that's where the money landed.
But today, it seems like everywhere we look there is yet another new venture capital firm entering this market or another IPO to raise funds to invest here. In this issue alone, we reported on two venture capital transactions and an IPO.
That does not include, however, the countless other stories that deal with finances in one way or another, whether it's one company buying the portfolio of another or a firm's expansion into a new market.
The money comes from somewhere and it seems like these days the cup runneth over.
The fast pace of today's capital market reminds me a little of the mass marketing days of the 1990s. Remember then? That was when every person, and his brother, it seemed, was looking to get a piece of the residential security business. Power companies were in this market, so too were cable and phone companies.
And with cash in hand, they began making hand over fist purchases to enter the security business.
Does this sound familiar in any way to what is happening today? Sure there are significant differences between the residential company buy-up and the investments of today in the security space, but the feverish pace at which they are happening appear to be pretty similar.
Unlike the deals of a decade ago, today's investors in the market are looking for commercial properties, not residential. And, they're seeking technology and software, not widgets.
They also appear to be well-informed about the market. Many are not new players, but have worked in the security industry for decades. Some have developed other successful businesses here, only to move onto another project to do it all over again.
The security industry is reaping the benefits of the funding and intelligence coming in. It's about time.