The "haves and have-nots of security integration companies"
PSA TEC is in full swing. The action started on Sunday night, but I arrived late on Monday. Yesterday I spent the day (Tuesday) talking to PSA Security integrators and members and attending four different educational sessions.
I attended the State of the Industry panel, moderated by PSA Security CEO Bill Bozeman and featuring a large group of integrators and industry experts; a discussion on Big Data, Business Resiliency and Physical Security moderated by Chris Peckham of Kratos; a session on security finance moderated by Bozeman; and a session on how to adopt managed services, moderated by Sharon Shaw, of Integrators Support.
These folks covered a lot of ground. I’ll be writing more in-depth stories on some of the topics covered, but below are some highlights from the day.
Haves and have-nots
Bozeman started the first session of the day quoting Imperial Capital’s Jeff Kessler, who in a recent report wrote that increasingly the world of systems integration is dominated by the "haves" and the "have-nots." The "have" have an RMR base, are making a good margin on jobs, and are profitable. The have-nots have not moved into managed services and are surviving on installation revenue. Bozeman agreed with Kessler, recommended all read his report, and spent a great deal of time in this session and others talking about how all PSA Security integrators can join the "haves."
Know your verticals
Phil Aronson of Aronson Security Group, Ron Oetjen of Intelligent Access, and Eric Yunag of Dakota Security all said “deep focus” on your vertical markets is key. Yunag, whose Dakota Security is growing rapidly, said that his company made a strategic misstep 7 or 8 years ago when it decided to expand outside of the financial vertical. Banks are something that Dakota had grown to know very very well. The mistake the company made was not the fact that it expanded outside of that vertical, but it did so without the focus and understanding of other verticals.
The message from integrators on the panel was this: Focusing on different verticals is good, but get to know them. And don't delve into too many. How many verticals should an independent integrator focus on? Three, most agreed.
Mad about channel conflict? Look within
Another topic that came up was the problem of channel conflict and manufacturers going direct to end users. Jim Henry of Kratos, said it’s important for systems integrators to remember that manufacturers who go direct to end users fail. However, he noted, “it’s important that and end user sees you as a value, not a middleman making a margin.” Yunag added that if an end user is going direct in your coverage area “that’s your failure as a systems integrator.” You need to know what’s happening in your region, and if this kind of stuff happens take a look at your own organization.
Don Erickson, CEO of SIA, was banging the drum about the opportunity for integrators who want to do business with the federal government. Despite sequestration and budget problems, money is in the pipeline for K-12 projects, ports, transportation. “Consider the GSA Schedule program, it’s a very effective contract vehicle for doing business with the federal government.”
How to build an effective business?
During the State of the Industry, Ron Oetjen of Intelligent Access Systems broke it down this way: hire the right people and focus on your strategic plan. Later, during a finance educational session that got pretty granular about how to make your business attractive to buyers, Kratos’ Jim Henry said that the businesses that he’s attracted to are the ones that are not for sale, the ones with a “clear vision and a mission.”
Boston bombing and video surveillance
In the aftermath of the Newtown gun massacre and the Boston Marathon bombing, Yunag said that now is a “significant watershed for our industry and the services we provide … in the next five to ten years, the way video surveillance is used will change,” he predicted. The general public has seen, particularly with Boston, how video surveillance can be useful. Jim Henry said that the incident clearly demonstrated how video can be used for “actionable intelligence and business intelligence.” Further, he said, it's important to note that the ability to find the suspect was not because the camera in question was a certain quality or manufacturer, but because it was a “well positioned camera installed by a professional.” This horrific event showed the world how video can be used, Yunag said, and it's incumbent on integrators now to have those conversations with law enforcement and others about how they can best take advantage of video and other physical security offerings to help prevent and detect situations like these.
There are many more highlights that I’ll report on later, now I need to get to the conference.