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A better plan for churches

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Tuesday, August 18, 2009
Remember that article I linked to about arming the congregation? Looks like some guys are coming together to see if they can figure out a better plan. I don't have a link, but here's the gist:
The American Society for Industrial Security International (ASIS) is bringing together security and cultural professionals from various religious communities for the Faith-Based Organization Security Council (FBO Council), an interfaith sub-council started earlier this year as part of the organization’s Cultural Properties Council. The FBO Council will address the security risks and needs of houses of worship and faith-based organizations to develop best practices and standards.
Good idea, if you ask me.
“The Faith-Based Organization Council is a result of incidents of violence and other crimes against houses of worship and faith-based organizations,” said Jeffrey Hawkins, executive director of the Christian Security Network, and head of the FBO Council. “We want to have all faiths represented so we can effectively develop comprehensive standards and guidelines, and tackle issues that all religions are facing now and in the future.” Hawkins is also vice chairperson of ASIS International’s Cultural Properties Council. He will head the Faith-Based Organization Council through 2009 and become chairperson of the larger Cultural Properties Council next year. ... The Faith-Based Organization Council is ASIS International’s first body dedicated to security issues among faith-based organizations. The group already has recruited members from the Christian, Jewish, Mormon, and Muslim faiths. “Having representatives from diverse faiths will help garner further communication and help build trust,” said Nawar Shora, legal director of the American Arab Anti-Discrimination Committee and a FBO Council member. “Perhaps one of our greatest challenges as a society has been a lack of trust and lack of understanding. The Faith-Based Organization Security Council will help further communication and broaden understanding, thus ultimately improving society's trust. Once faith-based communities secure this trust, they can move forward in security, safety and dialogue.” The organization will identify the major risks that houses of worship and faith-based organizations face, including violent crimes, arson and internal theft, and develop standards and guidelines to combat them. One of the first projects of the council is a resource guide for houses of worship and other faith-based organizations. The guide will provide insight and instruction for developing safety teams, assessing risks, identifying potential dangers and protecting high-profile religious leaders. Hawkins will outline several strategies in “Increasing Risks for Faith-Based Organizations,” a presentation at ASIS International’s Annual Conference in Anaheim, Calif., Sept. 21-24.
Practically speaking, it wouldn't be a bad idea for integrators to bone up on the guide they release and hit this panel discussion. Places of worship represent a real marketplace - already, the A/V guys make many a good sale on giving them their sound systems. No reason not to add on video, intrusion, and access control. I still don't think they'll go for the metal detector at the front door, though.

Is this the worst model ever for municipal monitoring?

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Monday, August 17, 2009
We've been writing quite a bit about public-private partnerships for municipal surveillance, with the general model being that the city and/or some private businesses buy some cameras, have them installed, and then contract with a private monitoring center to monitor them. It seems to work especially well with some analytics involved. But here in Lancaster, it's an unaccountable non-profit organization that's installing and watching the cameras. Why? As the critics in the story I linked to suggest, it's not controlled by the cops, so there's no jurisdictional reason for these people to be watching, and it's not a professional security company, so there's no industry-standard controls as might be employed at a five diamond monitoring center. This weird Lancaster Community Safety Coalition runs everything, but they don't seem to have any idea what they're doing. They're defending themselves as though they're being hit with Big Brother attacks, but that's not really the issue. The issue seems to be that their model is doomed for failure and makes no sense. But they don't even get the argument being levied against them. People say this: "Crystle, a software entrepreneur who has spoken out against the cameras for more than four years, says they should be turned off until the coalition establishes clear framework for accountability and oversight." LCSC replies with this: ""There have been lots of opportunities to weigh in on this," says Lancaster Alliance president Jack Howell, also a coalition board member." But then can't give an example of who they'd actually be accountable to the community. It's not that people don't feel like they can't weigh in, it's they feel like there's nothing good to weigh in on. I'm really quite perplexed by how they came to the idea that they wanted neighbors and volunteers watching the cameras instead of police and professionals. This commenter at the bottom seems like the smartest guy in Lancaster to me: "I really just wish that this was something the police controlled entirely. Oddly, I feel even stranger knowing that most of the people that work there live in the city. I feel a lot could be done to hide footage or just not tape crimes being committed when they might be friends of yours." Right? Do you really want your neighbors watching the cameras? Or do you want third-party, objective people watching the cameras? It just seems like a strange, strange setup. One not to be emulated.

Do resi security? How about those housing numbers?

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Monday, August 17, 2009
The good news is that a leading index of builders' confidence went up. The bad news? They think the market still stinks. Guess that's good in the sense that they haven't lost their marbles. I mean, if those builders thought the market was really great all of the sudden, you might wonder what kind of punch those builders were quaffing, no? Here's the WSJ story. The Commerce department will be releasing more data this week. Tomorrow we'll have housing starts and building permit data. The home builders' index will likely rise to 19 in August from 17 in July. The MarketWatch consensus calls for starts to rise about 2% to a seasonally adjusted annual rate of 596,000 from 582,000 in June. See what happens tomorrow.

Your false alarm refund check may already be in the mail...

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Monday, August 17, 2009
If you live in the Fort Lauderdale area and you've paid false alarm fines, you may have reason to expect a refund from the city. This story from the South Florida Times paints an interesting picture of residents and businesses being improperly fined and overcharged for false alarm runs, possibly for the last nine years. The potential reparations? Over $450,000, according to the article. This whole situation has the potential to get very nasty with forecasts of lawsuits if the financially strapped municipality (no offense Fort Lauderdale, but honestly, who isn't financially strapped these days... and if you weren't financially strapped, why overcharge your citizens in the first place?) doesn't refund the money to the residents and businesses who were improperly fined. I do not envy the powers that be in Fort Lauderdale. The article also links to an itemized list of all the overcharges.

Somerset's losing money, but they're buying

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Monday, August 17, 2009
I came across a new company today, via press release of its earnings (or lack thereof): Somerset International. Edit: Okay - they're not new. Looks like we wrote about them at the beginning of last year. Maybe I should search our site BEFORE I blog. Anyway, the rest of this still makes sense. Apparently, it's public holding company that's looking to capitalize on "the exponential growth in concern and demand for security." Haven't you noticed the exponential growth in demand for security? I certainly have. Anyway, they've purchased a number of companies in the last couple of years and the earnings statement released today says the company is still on the hunt. According to Yahoo, the company's stock is worth less than a penny, and only has 94K on hand, and is losing roughly 350K a quarter, but, regardless:
John X. Adiletta, President of Somerset, concluded, "As part of our growth strategy, we remain focused on continuing to expand our portfolio of security technology companies through additional synergistic acquisitions. Our goal remains to expand our portfolio of companies, increasing cross-selling opportunities and operating efficiencies, and ultimately achieve profitability."
I'm assuming there's another bank of investors somewhere who've committed cash to the venture. Otherwise, that makes no sense. Currently, Somerset operates: Secure System, which "provides personal alarm systems, wireless transmitters and receivers, and personal alarm locators. The company currently serves colleges and universities and medical and mental health facilities. Its products are also easily adaptable for office campuses, residential facilities, and correctional facilities. The system works by providing an individual with a wireless personal alarm locater with which they can summon help and be located by the pressing of a button." Meadowlands Electronics and Vanwell Electronics, which "specialize in the distribution, sale, installation and maintenance of fire and security equipment and systems that include fire detection, video surveillance, and burglar alarm equipment. Meadowlands and Vanwell have similar product availability from distinct manufacturers. Vanwell exclusively distributes Siemens Building Technologies, Inc. products and Meadowlands distributes other brands of fire and security equipment. This affords the opportunity to provide a wide array of specified equipment with the flexibility to offer cost effective alternates when appropriate. The products encompass complete lines of fire, CCTV (closed circuit TV), communications and PA systems; services include maintenance contracts, monitoring services and system engineering." And Fire Control Electrical Systems, which "specializes in the distribution, sale, installation, and maintenance of Honeywell Life Safety fire and security equipment and systems that include fire detection, video surveillance, sound systems, and burglar alarm equipment." I'll be putting in a call to Adiletta. Should be a company to watch.

This reminds me of the software article I just wrote

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Friday, August 14, 2009
So, I just got done writing this quite lengthy special report on what "stability" means for physical security software, covering everything from testing procedures to metrics, network compatibility to the stability-feature dynamic. Most people agreed, referring to that last bit there, that in order to have robust features you've got to have a long track record, as each feature must be thoroughly vetted, and you can't thoroughly test a brand-new piece of software that has a million features. It's just not possible to test them all in a real-world environment. Rather, many companies (especially the established ones) said, you need to start with a relatively simple and stable platform, and then build on that proven technology by adding feature sets, testing each feature thoroughly before it's added. Makes sense to me. Funny that today I should run across this article, telling the browser makers to just knock if off. No new browsers, please. Basically, the jist is similar: sure, this new browser might be really cool, since it's based on a new engine and everyone else is working off an older engine. But, the thing is, those older engines sort of work, right? They might have some drawbacks, and we might all fight over which is faster, but many of the bugs have been kinked out. With this new browser, RockMelt (a crap name for a browser, if you ask me - sounds like a bad sandwich), the bugs will be all brand new, unless the vetting process is remarkable, which it probably won't be (I'm just cynical by nature).
But let's look at the flip side of that statement. When you build something from scratch, you still have to make it work with all the other stuff that exists. The Web is a vast place, with billions of sites and countless plug-in technologies, many of them considered a standard part of the Web. There's Flash, Acrobat, QuickTime, Java, JavaScript, CSS, and HTML. Now, you can build new interfaces for all of that and force the companies that own these plug-ins to work within these standards to support your browser. However, none of that may be very easy.
Wait a second - I thought IT had standards... Doesn't everything work with everything else? But I digress...
I imagine that these companies have a hard enough time supporting the growing list of upstart browsers. Google Chrome, for example, which has about 2 percent of the browser share, is never first on the list when someone's building a plug-in. My favorite password manager, LastPass, is still working on a Chrome toolbar.
Hmmm. Remind you of any security industry problem you know of? Exactly - every new VMS vendor that comes out is sort of a pain in the ass, isn't it? Not that I begrudge them their business models, but don't we have enough VMS vendors by now? Shouldn't we be working on whittling them down rather than adding to them? Anyway, if you get through the monster that is that software article I wrote, feel free to drop me a line of feedback. I'll be working on follow ups as the year goes along.

Look who's turning 15!

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Thursday, August 13, 2009
Just got an announcement from Dallas-based Monitronics. They're very excited to be celebrating their 15th anniversary this month. I guess in this economy, who wouldn't be excited to still be going strong after 15 years? According to the release:
since it's inception in 1994 as a small start-up, this alarm monitoring company has grown to nearly 700 employees and 600,000 customers.
Monitronics has celebratory events throughout the month of August, leading up to a company-wide celebration on Aug. 21. Monitronics' VP of marketing Mitch Clarke had this to say:
This month is an opportunity for us as a company to recognize our customers and our dealers and thank them for their loyalty. We strive to provide the best service to them day in and day out.
Congrats to Monitronics on their 15th birthday.

Henry Bros. hit by slowdown (like everyone else)

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Thursday, August 13, 2009
Not that anyone needs more evidence that the first two quarters of this year were particularly bad, Henry Bros. announced its first half results today. The report is predictable, but still somewhat encouraging. While revenue is down - and that's caused them to amend down projections from $80 million to $70 million for 2009 - the company maintained slight profitability and hasn't given back all of the gains it made in 2008. Some bits and pieces:
Revenue - Revenue for the three months ended June 30, 2009 was $13,971,980, representing a decrease of $1,151,971 or 7.6%, as compared to revenue of $15,123,951 for the three months ended June 30, 2008. Revenue was down in all of the Company's integration regions in the second quarter of 2009 versus the same quarter in the prior year, with the exception of Colorado, which was up 57.7%. The New Jersey region had the greatest decrease, as a result of the winding down of large projects that were not replaced by similar projects due to competitive margin pressure. These declines are due principally to the protracted credit freeze and economic downturn which is having a significant negative impact on construction markets and capital spending patterns of commercial businesses. Partially offsetting these declines was an increase in revenue resulting from the L-3 Contract.
The bolding is mine. Essentially, Henry Bros. is saying they could have increased their revenue with some bunk jobs but decided to let other people have the low-margin fruit. This could be an example of the low-bidding I've heard decried in the last 18 months as companies of all stripes become more desperate for work of any kind. In the long run, this is a dangerous practice (NetVersant is held up as example number one of why not to do this).
Cost of Revenue - Cost of revenue for the three months ended June 30, 2009 was $10,081,872 as compared to $11,282,000 for the three months ended June 30, 2008. The gross profit margin for the three months ended June 30, 2009 was 27.8% as compared to 25.4% for the three months ended June 30, 2008. Our Arizona and Mid-Atlantic operations had lower quarter over quarter gross profit margin dollars due to their respective decline in revenues. While revenues and gross profit dollars were down in our New Jersey / New York operation, margins improved as we closed out several of the jobs with large public agencies in the New York Metropolitan area referenced above in "Revenue". Also contributing to the increase in gross profit was the profit recognized under the L-3 Contract.
No surprise that Arizona is getting creamed. Also, those gross margins aren't the best, by any stretch. I've heard a number of integrators say 30 or above is where they'd like to sit. Still, there is some net profit there (theoretically).
Net Income - As a result of the above noted factors our net income was $55,253 for the three months ended June 30, 2009 compared to net income of $337,261 for the three months ended June 30, 2008. This resulted in diluted earnings per share of $0.01 on weighted average diluted common shares outstanding of 6,064,742 for the three months ended June 30, 2009, as compared to diluted earnings per share of $0.06 on weighted average diluted common shares outstanding of 5,976,008 for the three month period ended June 30, 2008.
It's pretty tough to show income of just $55,253 when you brought in $14 million. Ouch. Diluted over $6 million shares? Ouchier.

Follow up on yesterday's summer model company news

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Wednesday, August 12, 2009
Regarding the not-so-positive news stories in yesterday's blog: I got an email from Stuart Dean at APX today. He called the police chief in Lufkin, Texas yesterday to get more information about the report, but as of 11 AM Eastern time, he hadn't heard back. He'll let me know when he gets more information. As far as the so-called "con men in Hawaii," I wanted to call this Leavitt guy from MAX Alarm, but can't even find MAX Alarm on the Web. Anyone know how to get in touch with them? The only thing I found under MAX Alarm was a You Tube video of a golden retriever sleeping.

How many integrators are there?

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Wednesday, August 12, 2009
So, I got an innocuous question the other day from Sarah Seibert, communications coordinator over at PSA: How many security-focused systems integrators are there in the United States? Easy, right? So, I gave a wild-guess response (I was busy, and it didn't seem to be life or death or anything):
"Really hard to say. What's an integrator? When does an alarm company count? Etc. If I were going to ballpark, I would say there are about 25,000 security system installers total, and maybe 8,000 of them do some kind of commercial work, and maybe 1,500 of them are sophisticated integrators with some kind of software engineering capability (and this includes the IT integrators who have become interested in security). That's going by our circulation efforts and industry show attendance. But that could actually be a low estimate. I'd be curious what other people say."
So, I was pretty happy with that. Sounds smart, right? This is what I get back from Sarah:
Thanks for the info, Sam! Here’s what Scott Goldfine said: We estimate about 3,000 of the estimated 12,000-15,000 installing security companies to be legitimate systems integrators. The rest would be more security or alarm dealers.
Well, that's of course unacceptable (and insidious on Sarah's part - ho hum, Scott thinks you're wrong by about 100 percent). One of us has to be a little more right than that! We're thousands away from each other. A full order magnitude away from each other. And neither of us put any rigor into our estimates whatsoever. So here's what I tried by way of putting a little rigor into it. I'm happy to listen to why my analysis sucks, and why you have a better answer:
Okay, I'm not sure about integrators, but here's at least a starting point for security installers: California, the most populous state, has 2,047 licensed alarm companies, which equals one company for every 17,953 people New Jersey, the 11th most populous state, has roughly 1,200 alarm companies according to the NJBFAA, which equals one company for every 7,250 people (or so). If you figure the 9 states in the middle are somewhere in the middle of those two states, and we'll go on the low side at 1,500 per state, you come up with a total of 14,900 alarm companies (or so) for a population of 173,100,000, which equals one alarm company per 11,617 people. If you take that rate of one company per 11,617 people and apply it to the 304,000,000 population of the United States as a whole, you get a total of 26,168 alarm companies for the United States as a whole. I like that number because it makes my guess of 25,000 look smart. Further, if you look at California's numbers, there are 13,423 employees for those 2,047 alarm companies, an average of just 6.5 per company. It seems hard to believe that a true integrator could have fewer than 15-20 employees, so here's some more math: If 50 percent of the companies average 3 employees (true trunk slammers), that would leave just about 10,000 employees for the 1,025 companies remaining (if we're averaging 6.5, it makes sense that half would have about 3 and the other half would have about 10). If 50 percent of those companies average 7 employees (another spot in the middle), that's 6,400 for the remaining 513 (25% of our total) or so, which average about 13, which is getting closer. So, if you go with a quick and dirty estimate that 20 percent of companies have 15 or more employees and thus could likely be expected to do commercial work of some caliber, and you apply that to the national number of 26,168 that gives you a total of 5,233 or so commercially focused companies (loosely categorized as integrators) in the United States. That's at least not a wild guess.
Please note that I would have gotten the exact number of licensed alarm companies from the state of New York but you had to make the request via fax and I simply refuse to use a fax machine for any purpose whatsoever. Whaddaya think?

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