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False alarm ordinance compliance push pays off in Seattle

Wednesday, April 29, 2009
Following up on an earlier story I wrote for SSN, false alarm ordinance compliance efforts in Seattle have been successful, according to a recent press release from SIAC. False alarm dispatches have fallen by 26 percent. That's a good sign that something's working. Earlier in the year when I wrote about the initial compliance push, Seattle PD detective Christopher Hall, false alarm administrator at the SPD, said compliance was not about cracking down. “In 2004, they rewrote the law that basically started billing the alarm companies instead of the consumer, and it included all these provisions, and now we’re finally getting around to enforcing them,” Hall said. “This past year has really been the first time we’ve done a real big push and started enforcing the no response aspect of our ordinance. And we’ve seen some good results from that.” According to Ron Haner, alarm response manager for the WBFAA, "Seattle is an excellent example of the positive effects that come from enforcing a cooperative alarm ordinance between law enforcement and the alarm industry." Everyone wins when false alarms are reduced. A recent ordinance passed in Lynn, Mass. was also lauded for it's involvement of private citizens, the security industry, and public officials. In the words of SIAC executive director Stan Martin when he discussed with me a nascent ordinance in Chicago, "A little communication is good for everyone."

Media=bad at flu reporting

Wednesday, April 29, 2009
This is tangentially related to the security industry, but ASIS is tracking the swine flu and people do sell flu-detecting cameras, so I figure it's fair game for me. Basically, the mainstream press sucks at reporting about this whole swine flu thing. Sure, it could be a worldwide pandemic, and I'm not underestimating the potential loss of life and general scariness a flu pandemic can really cause, but it's not quite there yet and what we generally have are a bunch of breathless reports that quote people postulating that things "might get really bad," or some other such nonsense. And what really gets me are the caveats that are always thrown in at the end of reports that "36,000 people die of the flu each year in the United States," etc. Well, if that's true, why is this story a big deal in the first place? For example, let's look at this story that's the top story on Yahoo this morning. Here's the first couple graphs:
WASHINGTON – A 23-month-old Texas toddler became the first confirmed swine flu death outside of Mexico as authorities around the world struggled to contain a growing global health menace that has also swept Germany onto the roster of afflicted nations. Officials say the death was in Houston. "Even though we've been expecting this, it is very, very sad," Dr. Richard Besser, acting chief of the Centers for Disease Control and Prevention, said Wednesday of the infant's death. "As a pediatrician and a parent, my heart goes out to the family."
Is it very, very sad that a 23-month-old child died yesterday. Yes. Absolutely. My heart goes out to the family, too. As a father of a 5-year-old and a 2-year-old, this scares the pants off me. However, by my math, 36,000/365 means that roughly 99 people died of the regular old flu yesterday. Were none of them children? Why isn't there a pediatrician being quoted about how his heart goes out to their families? Why isn't there a story every single day about how many people died of the flu yesterday? Because no one cares. We know that 36,000 people die of the flu every year, if not consciously then unconsciously. Bad stuff happens and people die. It's something we've come to accept. Every day on the way to work I hear about some poor teenager who died in a car accident or an ATV accident or, here in Maine, a snowmobile accident. Some poor teenager got killed on my road this month walking home from work in the dark when a pickup truck didn't see him and hit him. All of those things are tragedies, and they sometimes make the cover of my local weekly newspaper, but none of them makes the front page of Yahoo. So why does swine flu make the cover of Yahoo? Because it's called swine flu? Here's the explanation I get in the story:
Sixty-six infections had been reported in the United States before the report of the toddler's death in Texas. The world has no vaccine to prevent infection but U.S. health officials aim to have a key ingredient for one ready in early May, the big step that vaccine manufacturers are awaiting. But even if the World Health Organization ordered up emergency vaccine supplies — and that decision hasn't been made yet — it would take at least two more months to produce the initial shots needed for human safety testing.
Dang. 66 people sick. Now that's a huge problem. And this whole talk of vaccine - has none of them ever got a flu shot? I've taken a flu shot every year since I was teaching high school 10 years ago and it never really works. And does no one remember last year how, oops, they sort of made the wrong vaccines? I got the flu this year. It hammered me. Sickest I've been in years. I had to miss three days of work. Maybe loyal blog readers remember. Did anyone care? Not especially. When I went to the doctor, did she recommend Tamiflu or any other drug to make me feel better? Nope. She told me I was screwed, to go get some rest, and to drink lots of fluids. Could this swine flu be more deadly than whatever "human flu" I was rocked with? Of course, but it's killed one person in the U.S. so far, vs. 36,000 every year, so that evidence hasn't quite presented itself yet. Could it be a pandemic like the one that killed millions of people in 1918? Somehow I doubt it. I think we're a little better prepared these days for that kind of thing. In 1918 people were lucky if they had indoor plumbing. That 1918 is even referenced in some of these stories is irresponsible. Christ, people used to die of simple infections and things like "consumption," which I think was a cold. What's my basic point? Maybe I just felt like a rant. It's not like people shouldn't be informed of what's going on out there. And it's not like people need the latest news on who got voted off Dancing with the Stars more than they need news on swine flu. But I'd like some perspective with my news, a little less idle speculation and more simple reporting. They don't even bother reporting when a U.S. soldier dies in Iraq anymore, but a kid dies of the flu in Texas and it's being read by 50 million people. Doesn't there seem to be something intrinsically wrong with that?

Monitronics announces ISC West '09 contest winners

Tuesday, April 28, 2009
Monitronics last week announced the winners, selected at random, of the contests it held out of its booth at ISC West this year. Monitronics gave away to Spokane, Wash.-based King Marketing owner/operator Brady Nelson an all expense paid trip to see a UFC match between Chuck "The Iceman" Liddell and Mauricio "Shogun" Rua which took place April 18. Liddell had been a celebrity booth presence for Monitronics at ISC West. [caption id="attachment_1845" align="aligncenter" width="200" caption="Monitronics UFC fight giveaway winner Brady Nelson with Chuck "The Iceman" Liddell at the Monitronics booth at ISC West '09"]Monitronics UFC fight giveaway winner Brady Nelson with Chuck [/caption] Monitronics also awarded a tropical cruise to the Caribbean for two to Jesse Depew of Canadian alarm dealer Liberty Security. I spoke with Montronics' Mitch Clarke at ISC West this year, and I wish he'd mentioned the contest to me. I love winning stuff. Congrats to Nelson and Depew! And condolences to Liddell, who many are saying should think of retiring. Shogun Rua beat the Iceman with a TKO in the first round.

Municipalities getting into residential video monitoring

Tuesday, April 28, 2009
I just came across this story from the Silicon Valley Mercury News. Looks like another municipality is contemplating getting into the security industry. I wrote a story a while back about another municipality getting into intrusion alarm monitoring. I've got calls out to the appropriate AHJ and will follow up on this story as it develops.

ADT helps out

Monday, April 27, 2009
ADT announced Friday that it's providing money and security equipment to Interact Family Safety & Empowerment Center, a new Domestic Violence Resource Center in Raleigh, N.C. Here's the release. ADT's providing access control, panic alarms, video systems and emergency call stations to the center which serves more than 36,000 people, including 6,400 direct victims of crime and their families.

Barron's hearts Stanley Works

Monday, April 27, 2009
Barron's has upgraded Stanley Works stock from neutral to outperform, using the performance of the security portion of the business as a large part of its reasoning. Here are some of the laudatory remarks:
First-quarter results highlight solid execution and we are incrementally positive on Stanley Works' ability to weather the macroeconomic downturn via structural improvement initiatives. Growth and high returns in the security business, early-cycle exposure at CDIY [construction & do-it-yourself], and solid free-cash-flow profile drive our constructive investment thesis.
Basically, part of Stanley's push to get into security was their distaste for construction and do-it-yourself, which is driven by the big box stores who drive margins absurdly low. This is nice validation for that plan.
Restructuring actions implemented are expected to yield $320 million in savings annually with a substantial majority considered permanent. The company's $2.00-$2.50 EPS forecast incorporates approximately $2 per share in benefits from restructuring actions, helping offset significant volume pressure (a $2.40-$2.90 impact). We believe portfolio is well positioned to generate operating margins in a 15% range once macroeconomic headwinds stabilize with resulting earnings power approaching $5 per share. The company continues to invest in growth initiatives during the downturn: $15 million of restructuring savings is being reinvested into various initiatives, such as expanding security sales force and promoting the brand through sponsorships.
Generally, "restructuring" means layoffs, as far as I can tell, but it doesn't sound like those layoffs will come in the integration side of the business. In fact, they'll be hiring more sales people (and this is probably related to the extra spend on training Stanley's been making, too).
The security business is holding up. Sales declined 4% organically in the first quarter. Management believes that organic declines could be limited to the mid-single-digit range as recurring revenues provide approximately 30% of the segment's sales. We believe Stanley Works' 4% organic sales decline could be indicative of market share gains as other industry competitors appear to have reported slightly steeper declines in comparable end markets. We are forecasting Security sales to decline 2% organically in 2009. Ongoing acquisition integration provides further operating margin upside to the business as well. Material acquisition activity appears unlikely with Stanley Works focused on deleveraging.
Consider that the 30 percent that's recurring is 30 percent of the overall security business, which includes product sales. That's got to mean that the recurring revenue is as much as 50 percent or more of the integration piece. I'm not sure I agree with prediction that Stanley will step off the gas with acquisitions, though. Maybe "material acquisition" means big acquisitions, and more Sonitrol franchises are too small to matter much, but I'm fairly certain you'll hear about more Stanley buys in 2009.

Busting on security at RSA

Monday, April 27, 2009
Here's a fun little post from the Tech Herald regarding security procedures at RSA Security. I'm not sure "Epic Fail" is the appropriate headline, but it's still kind of an entertaining outline of wireless and physical security letdowns at the show. Here's my favorite paragraph, though:
Why is this important? For one, you always hear about the security risks with laptops, the danger they pose to a company if they are lost or stolen and contain sensitive information. Here were six laptops, just out in the open, for any of the expo attendees to examine or in the worst (do it and go to jail) case scenario steal. The other reason is that RSA is a security focused event, and physical security is just as important as digital security. Granted, Google is not a security company by default. However, why were the laptops left unattended?
Yeah, physical security is just as important as digital security, you know.

Go east, everyone?

Monday, April 27, 2009
Riffing on some of the themes of John Honovich's trip to the Far East for SecuTech (this is a good discussion of OEM practices, and you'll see I chime in), I just got notice that MDI is now the exclusive master distributor in the U.S. for Truen, a Korean IP video company. IP video products are commoditizing quickly, and I think you'll see more Korean/Chinese/etc. companies making inroads into the North American market through well-known manufacturers and integrators. With all of the great reference designs being supplied by chip makers like Stretch and Texas Instruments, it wouldn't surprise me, really, if the big integrators just started contract manufacturing their own cameras and software. For mid-sized jobs that don't require the highest of high tech, why give up the margin on a camera and software to another company? Just keep it yourself. At this point, making a decent DVR is pretty easy, from what I can tell. Remember when your DVD player cost $200? Now I get one from Wal-Mart for $19.95. Sure, it breaks in six months, but who cares? It's $19.95. (This, of course, is the unethical non-Green me talking. In the real world, I feel guilty about doing something like that, and probably avoid doing it at all. But, hey, it's $19.95.) Mike Garcia says the NVR and VMS that Truen makes are good enough for mid-sized jobs, up to 128 cameras or so. Then, for the enterprise systems, the Truen cameras talk to ONSSI and Milestone, which are then unified into the MDI ONE platform (MDI's secret sauce). And you'll remember that MDI is selling direct to the end user pretty much all the time now, so, for all intents and purposes, they're an integrator just like you - the competition.

ADT on the outside; Brink's inside. Just how many English majors does it take to pick a lock?

Saturday, April 25, 2009
Afraid I've neglected my blogging duties recently. Just returned last night from a week's vacation with my family. We took a much-anticipated trip to Northern California to see our very good friends who moved cross country almost a year ago. We all had a blast, like we always do, hanging out with our friends. And how can you not have fun exploring San Francisco and the coast? What a cool part of the country. You might think all I want to do is have some fun on vacation. OK, that is true. But, it wasn't all cocktails on the patio and Bloody Marys on Tuesday mornings, however. No, no, no. I like a little security-related activity while on vacation, and this one didn't disappoint. Don't worry, there weren't any robbers involved or anything. (Not this time anyway.) Rest assured, our friends' house is well protected by ADT. This time it was security inside the house. You see, somehow, someone was able to lock the guest room door from the outside, so we had to break in. The latched-handle door was innocuous looking enough, but this was no ordinary lock. The dads started with miscellaneous keys, credit cards, coat hangers, and moved on to bobby pins, nail files, and shoulder-slams. All four kids (ages 8-14) got involved, as did Elise (the other mom) and I. We busted out wrenches and power tools. After breaking a drill bit inside the key hole, we called in reinforcements. Elise's dad, Ike, who lives nearby, has a well-stocked work bench and he kindly showed up with a small crowbar and--here's the key--vice grips. It took another 30 minutes or so, but Ike finally extracted the lock from the door. I was happy to have access to the guest room, but what I really wanted to know was the brand of the lock. Made by Brink's. It looks like your average interior lock, but it is not. I emailed Dave Simon at Brink's Home Security to see if they make these locks and he said they're from BHS's former parent company, The Brink's Company--you know, the armored car company. If you really want to fortify your house on the inside--I heartily recommend this as the lock for you. I have pictures documenting this, my very own Brink's job--but alas--our technical people have not yet figured out how to get me "permission" to upload photos on this here blog. I'll post them if I ever get permission. Another vacation, another home security adventure.

GE Security sells off a piece for $580m

Friday, April 24, 2009
Remember when GE Security tried to sell off a piece of its Homeland Protection business in a merger with Smiths Detection? Remember how that fell through? Well, looks like GE was determined to get this Homeland Protection biz off its hands:
They're so excited about it they put the headline in ALL CAPS. As in, HOLY CRAP THIS IS EXCITING! I'm too lazy to go looking around for the link, but here's the press release they emailed out at 1:30 a.m.:
Newark, CA, April 24, 2009 – GE (NYSE: GE) announced today that it has signed a definitive agreement with SAFRAN for SAFRAN to acquire 81% of GE Security’s Homeland Protection business for $580MM. Upon close, GE will own 19% and SAFRAN will have majority interest with 81%. The transaction has been approved by the Boards of both companies, and will be subject to customary regulatory approvals.
Just as a matter of thinking out loud, is it at all weird that this Homeland Protection business, which supplies all manner of puffer machines and shoe analyzers (maybe they're the same thing), is being sold to a French company? I guess not. But there might be a regulatory hurdle or two that's a pain to jump over.
The Homeland Protection business will become part of SAFRAN’s Defense Security division of Sagem Securite, led by Jean-Paul Jainsky, Chairman and CEO, Sagem Securite. Dennis Cooke, will continue as President & CEO, for the Homeland Protection business and headquarters will remain in Newark, CA. “This is a great move for our Homeland Protection business,” said Dennis Cooke, President & CEO, GE Security Homeland Protection. “Our business has a strong leadership team, dedicated and talented employees, innovative technology, a large installed base and a strong brand. This move aligns Homeland Protection with a business that is committed to globalization and further investment in new detection technologies and new products for the Homeland Security space.”
Also, GE just got $580 million bucks in a crap economy, which shouldn't hurt the flagging stock price of the parent company.
The combined company will focus on identification solutions and detection offerings globally and will benefit from continued access to technology advancements from GE’s Global Research Center and GE Healthcare. The combination of the complementary technology of both businesses will provide customers with the benefit of new technology solutions to keep ahead of the changing threats. SAFRAN and GE are expanding their already strong relationship as the companies have been working together for more than 35 years to deliver Aviation technology solutions. The new entity will feature SAFRAN’s industry-leading ID management, plus Homeland Protection’s world-class aviation safety, checked baggage screening, military & critical infrastructure protection together with new growth platforms in Chem/Bio, X-ray and Radiation/Nuclear detection.
This is actually the interesting part. SAFRAN becomes an interesting player in the security market, where they've already been growing and making noise. But don't take my word for it:
Jean-Paul Herteman, CEO of SAFRAN, said: “Following our 2008 acquisitions of SDU-Identification (a Dutch manufacturer of secure passports and ID documents) and Motorola’s biometrics business (Printrak brand), adding GE Homeland Protection will significantly bolster our Group’s third core business. This makes SAFRAN a pivotal player in the security market, a business that will generate 20% of the Group’s total revenues in the medium term, with double-digit profit perspectives and reducing exposure to aerospace cycles. Furthermore, this transaction is the latest step in our long-standing relationship of mutual trust and partnership with GE that reaches back some 35 years.”
This guy thinks so, too:
Jean-Paul Jainsky, Chairman and CEO of Sagem Sécurité, added “There is growing demand from both governments and private industry for cutting-edge security solutions, based on long-term projects anchored in advanced, very-high-reliability technologies. From this standpoint, the SAFRAN Group is in a perfect position to meet today’s most demanding public security requirements.”
But what does Dean Seavers have to say about it?
“This newly combined company is an excellent fit for our Homeland Protection team,” stated Dean Seavers, President & CEO, GE Security. “GE Security will continue to focus on our core security product portfolio with a strong commitment to delivering security innovations that bring value, quality and high performance to our customers and end users.”
I wonder if GE doesn't think they've already sold most of the big-ticket scanners and what-not they're going to sell for a while, and now it's time to focus on the smaller, incremental items that their dealers can push out there for them. Considering their recent releases aimed more toward the lower end of the market, it seems like they're trying to generate more smaller customers rather than cultivate those few very large customers.