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Security Central promotes new managing director

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Wednesday, March 26, 2014

Brett Springall, formerly the IT director at Security Central, and one of the key architects of the company’s soon-to-launch total solution, has been named the managing director of the Lake Norman Security Patrol, of which Security Central is one of three divisions. Springall’s promotion marks the first time in the company’s 50-year history that day-to-day management will fall under the responsibility of someone who’s not a member of the Brown family, according to a statement from the company.

Ellen Brown Meihaus and Courtney Brown, the company’s CEO and COO, tend to promote people strategically from within the company, according to the statement. The two will continue to be highly visible at the company, though the release noted that they considered now “the right time” to begin shifting control over to a new managing director.

The Brown family figures to remain pivotal in terms of shaping the company’s direction—not only through the continued involvement of Meihaus and Brown, but also through the leadership of Caroline Brown, a third-generation family member who currently serves as the company's business development manager. Springall and Caroline Brown, the release noted, are the “future of Security Central.”

According to the release, Springall will wear “dual hats” for a short time during the transition, as the company, under the guidance of Meihaus and Brown, seeks a replacement IT director.

ADT’s move into commercial security, fire

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Wednesday, March 26, 2014

Will ADT move into the larger commercial security market when its non-compete expires with Tyco?

I contacted ADT to see if I could talk to someone about it. Cheryl Stopnick, director of dealer communications, responded, and told me that ADT's not going to discuss business plans at this time.

They may not be discussing plans, but it certainly seems like they’re making them.

Right now ADT does commercial security for small businesses, which ADT defines as those businesses that are 7,500 square feet or less. ADT and Tyco came up with that definition when ADT spun off from Tyco. At that time it entered into a non-compete agreement with Tyco Integrated Security. That agreement expires Sept. 30, 2014.

As Luis J. Orbegoso, president of ADT’s Small Business Unit, said during a Dec. 6 investor call (according to seekingalpha.com), the “ADT brand has supported not only small businesses but also medium and enterprise businesses for almost 140 years. And our current definition of a small business as a location that is 7,500 square feet or less is somewhat arbitrary and not necessarily a true reflection of the market. It was actually the result of our non-compete zone improvement with Tyco, which expires in 10 months.”

Orbegoso knows commercial security. He joined ADT in 2013. Before that he was with UTC for five years, where he led the commercial security business (though I think he held a few titles while he was there, which seems to be the norm for the security folks at UTC). He came to UTC as part of the GE Security buy.

During the Dec. 6 conference call, (again, according to seekingalpha.com) Orbegoso said “once this noncompete expires, we will have the ability to take a look at possible adjacencies, such as commercial fire solutions and larger commercial and enterprise security offerings that we can integrate and leverage with our existing infrastructure and customers. These adjacencies could potentially quadruple our addressable markets. And again, today we are extremely encouraged by the momentum that we have in this space and our ability to execute.”

The potential is definitely there with the larger commercial projects, according to the folks at Imperial Capital. Jeff Kessler estimates that the security market in businesses smaller than 7,500 square feet is $2 to $3 billion, but the the market segment that includes businesses that are 7,500- to 25,000 square feet is an $18 billion to $20 billion market segment.

I spoke to some folks in the industry (aside from TycoIS) who currently do work in that market segment and they fully expect ADT to jump in to that market.

And while it’s an opportunity, not everyone believes it's an $18 billion-plus opportunity. It may be on paper, but one integrator told me “that’s a segment that’s been stuck in neutral for a lot of years.”

The commercial fire business, on the other hand, if you can get the right people on board—and ADT certainly has the resources for that—could be a more immediate opportunity.

Orbegoso has instituted many changes in the way ADT approaches security for small businesses. It was typically treated as a kind of  “extension of residential security,” but that’s the not the case any more. It will be very interesting to see how Orbegoso and ADT approach this new, larger, more complex market segment.

There may be disagreement about market segment size, but there’s general agreement that ADT has the potential to have some meaningful impact in this segment.

Imperial Capital: Growth in smart home market will benefit large security companies, but not smaller ones

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Tuesday, March 25, 2014

I recently wrote about a new ABI Research report that predicts professional security companies’ share of the smart home market will be cut in half by 2019 as telecom and cableco competitors leverage their own strengths in the space.

However, not all security companies will fare the same, according to a new report from Imperial Capital, a New York City full-service investment bank. Imperial Capital says that large security companies will do much better than smaller ones as the smart home market grows.

Imperial Capital’s latest prediction on the market for the next six to seven years was released today. It differs from the ABI report in that it drills down more on how size matters.

Simply put, what Imperial Capital predicts is that the top 30 residential security companies will do well over that time period, whereas “the bottom 80 percent of security providers” will see negative growth.

The report, authored by Jeff Kessler, Imperial Capital’s managing director of institutional research, says that Imperial Capital’s and ABI’s views on the market are “generally consistent.” However, Kessler writes, “our biggest difference with the ABI report may be that it does not separate out the top 30 security companies from the rest of the industry, which may very well have customer generation problems.”

Those big companies will do well, Imperial Capital says in its report.

“Our estimates are that the market for home services will grow about 10 percent annually over the next seven years to over 50 million homes, driven by new applications form the security industry, new home services offerings, and marketing from cable and telcos,” the report says. “We estimate the top 30 residential security companies will grow subscribers at about 5 percent annually, from about 11 million current users to about 16-17 million users, driven mainly by life-safety focused subscribers to whom professional response and service and the certainty of police, fire, and personal emergency response is more important than price and bundling convenience.”

However, the report says, “this is offset in our analysis by all other smaller security companies falling from 12 million to 5 or 6 million by 2020.”

When you add those companies—which Imperial Capital says comprise 80 percent of security providers—to the top providers, “we see the security industry as flat to down in this period. In fact, because of this estimated decline in the revenues of small companies, our aggregate estimate of market share is actually more conservative [in] stance than the ABI Study.”

Imperial Capital also believes the smart home market will grow even more than ABI predicts.

“Where we also diverge with the ABI report is in the size of the market six to seven years from now,” the Imperial Capital report says. “ABI estimates a market in six years that is 37 percent larger, and Imperial Capital estimates that it will almost double in six years. The difference, we contend, is new services and technologies from the likes of Alarm.com, Vivint, and iControl … [and also more] “PERS” (personal emergency response systems) home health care and emergency response users. These advanced PERS applications are also being developed.”

Guardian empowers techs to help ensure customer satisfication

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Wednesday, March 19, 2014

When you think about it, all the marketing and sales work a security company does can be largely undone if that company’s technician makes a bad impression at an install or service call.

Guardian Protection Services, based in Warrendale, Pa., believes that the interaction between technicians and customers is so vital that it has added a new field service management system designed to empower technicians and help them be more productive.

Here’s more of what Guardian announced today about how its selection of TOA Technologies’ cloud-based field service management application, ETAdirect, will help its technicians be on time, efficient, and prepared with the right tools and information to do their jobs:
 

“A quality experience is reliant on a smooth service process, which can only happen if every technician is on time, responsive and has the right knowledge about the customer and the job requirements. TOA’s ETAdirect solution will help to achieve this by providing us with a different approach to field service – one that creates personalized workdays unique to the routine of each of our field service employees. This will make their lives easier on the road, set them up for success in the customer’s home or business and drive efficiencies in the process. For example, ETAdirect will allow us to create daily schedules that start and end near our technicians’ homes – and still cut drive time between appointments significantly,” said Eric Aulbach, CIO of Armstrong Group of Companies, which owns Guardian.

Guardian Protection Services will use ETAdirect to:

    Build better customer relationships thanks to field service technicians who arrive at the client’s home or business on time and have all the right tools and information at their fingertips

    Create schedules that leverage the skills and strengths of each field service technician

    Enable service technicians to communicate directly with each other to ask for help or to provide support when needed – all performed within the same mobile field service application they use to access job details and complete work

    Ensure technicians arrive to appointments in a timely manner, and keep customers in the loop regarding the status of those appointments

    Generate efficiencies in travel time and costs, appointment duration and jobs completed per day

    Seamlessly connect field service delivery to its billing systems using the solution’s powerful APIs

“With ETAdirect, Guardian can better connect the field service processes to the holistic customer service experience, while realizing unique savings and benefits across the board,” said Yuval Brisker, co-founder and CEO of TOA Technologies, a provider of field service and mobile workforce management software solutions.

 

PPVAR panels at ISC West merit a close look

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Wednesday, March 19, 2014

For anyone monitoring the progress of the latest push toward a comprehensive verified alarm standard, there’s a pair of consecutive PPVAR panel sessions at ISC West that are can’t-miss in stature.

The first session, moderated by Steve Walker, vice president of Stanley Convergent, kicks off on Thursday, April 3 in Room 502, and is especially noteworthy because it brings several outside-the-industry perspectives into the same forum. Titled “Insurance and Law Enforcement Review Verified Alarms,” the session illustrates the array of stakeholder groups now influencing the conversation of verification. Among the six panelists are Cmdr. Scott Edson, Los Angeles Sheriff’s Dept., and Anthony Canale, vice president of Verisk Crime Analytics.

The second panel, “Video Verification in the Alarm Industry,” is moderated by Donald Young, PPVAR president and chief information officer at Protection 1. The panel roster for this second discussion is designed to showcase a broad array of intra-industry views on the role of video verification in the alarm industry. Keith Jentoft, an industry liaison for PPVAR, said the lineup will feature representatives from the manufacturing side (Scott Harkins, president of Honeywell) and the central station space (Chuck Moeling, executive VP of sales at Interface, and Tony Wilson, president of CMS), along with representatives from the private investment and legal arenas.

The debate surrounding verified alarms is a fascinating one, and that’s due in part to the general complexity of an issue that involves stakeholders from outside the industry, as well as a host of ideas about the role of verified alarms that dovetail as much as they diverge.

I expect these discussions to generate some high-quality dialog that not only zooms into the subtleties and particulars of verified alarms, but also pans out to ask the big, overarching questions about the role of the industry in general. As the industry evolves, what aspects of the alarm industry as we know it will remain in place? What’s bound to change? What qualifies as a verified alarm, and where do legacy systems fit into the discussion?

These questions may not be asked explicitly, but I expect them to permeate the discussion.  

Is Avigilon in a buying mood again?

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Tuesday, March 18, 2014

Avigilon will soon have more cash for purchases.

The HD surveillance provider on March 17 increased a previously announced financing to $100 million (Canadian).

The official statement said that the “company intends to use the net proceeds from the offering for general corporate purposes and for potential strategic acquisitions.”  

I have a call in to Avigilon to see if they'll comment on why they're increasing the financing.

The offering is expected to close just after ISC West this year “on or about April 8, 2014,” the company said.

The financing, “a bought deal offering of common shares of Avigilon,” is an expansion of a previously announced bought deal offering for $69 million, which was announced in November, just before Avigilon acquired VideoIQ on Dec. 31.

Under the terms of the expanded financing, a “syndicate of underwriters led by GMP Securities L.P. and including BMO Capital Markets, National Bank Financial Inc., CIBC World Markets Inc., RBC Capital Markets and PI Financial Corp. have agreed to purchase, on a bought deal basis pursuant to the filing of a short form prospectus, an aggregate of 3,448,280 Common Shares at a price of $29.00 per common share for aggregate gross proceeds to Avigilon of $100,000,120,” the announcement said.

The syndicate may purchase an additional 517,242 shares at the same price up to 30 days after the closing. If that happens, an additional $15,000,018 will be raised, and Avigilon’s gross proceeds will be $115,000,138.

ADT settles FTC complaint that it misled consumers

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Wednesday, March 12, 2014

ADT misled consumers by paying experts to promote ADT Pulse on NBC’s Today Show and through other media outlets without revealing the experts were paid—giving the impression the experts’ reviews were independent, the Federal Trade Commission alleges.

The administrative complaint is part of the FTC’s “ongoing crackdown on misleading endorsements in advertising,” according to an FTC news release. Now, to resolve that complaint, ADT has reached a settlement with the FTC that prohibits ADT “from misrepresenting paid endorsements as independent reviews in the future,” the March 6 news release said.

I asked Boca Raton, Fla.-based ADT about the matter. The company provided this response: “ADT has a tough disclosure policy that follows the FTC endorsement guidelines. That’s why we are happy to have resolved the matter amicably, and why we are willing to commit publicly to maintain that policy.”

Here’s what happened, according to the FTC:
 

ADT paid three spokespersons, including a child safety expert, a home security expert, and a technology expert, more than $300,000 to promote the ADT Pulse, with one spokesperson receiving more than $200,000. Two of those spokespersons also received a free ADT Pulse security system, valued at approximately $4,000, and free monthly monitoring service, according to the complaint. In exchange, the spokespersons appeared on more than 40 different television and radio programs nationwide and posted blogs and other material online.

ADT set up media interviews for the endorsers through its public relations firms and booking agents – often providing reporters and news anchors with suggested interview questions, and background video, also known as b-roll, according to the complaint. The paid ADT endorsers were introduced by program hosts as experts in child safety, home security, or technology, usually with no mention of any connection to ADT. The endorsers sometimes demonstrated child safety, home security, or technology products other than the ADT Pulse, adding to the impression that they were providing an impartial, expert review of the products.

The settlement is not official yet. The FTC has given unanimous preliminary agreement to it, but the commission won’t take a final vote until a March 6-April 7 public comment period closes.

Here are more specifics of the agreement, according to the FTC’s news release:

             [The order]

-Prohibits ADT from misrepresenting that any discussion or demonstration of a security or monitoring product or service is an independent review provided by an impartial expert.
-Requires ADT to clearly and prominently disclose, in connection with the advertising of a home security or monitoring product or service, a material connection, if one exists, between an endorser and the company.
-Requires the company to promptly remove reviews and endorsements that have been misrepresented as independently provided by an impartial expert or that fail to disclose a material connection between ADT and an endorser.

 

Mobotix CEO departs

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Wednesday, March 12, 2014

Magnus Ekerot is no longer CEO of network camera provider Mobotix. The company announced that Mobotix CFO, Klaus Gesmann, will take on the role of CEO and sales oversight “until further notice.”

According to a statement from Mobotix, Ekerot “was released of his position” on Feb. 17.

In response to questions from Security Systems News, Mobotix co-founder Sabine Hinkel said in an email that Mobotix is “not looking for a replacement for Dr. Magnus Ekerot. Our actual focus is the reorganization of the company back to its roots. There is no deadline to find a replacement for him.”

Hinkel declined further comment on Mobotix reorganization plans.

Ekerot joined Mobotix as chief sales officer in 2011; he was promoted to CEO in October 2013.

Meet the editors, be interviewed at ISC West

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Wednesday, March 12, 2014

It still seems a bit surprising how many folks in the industry I speak to regularly despite never having met them in person. That’s all about to change in a few weeks. And maybe for some of you, it will change within a few hours of ISC West kicking off.

On Wednesday, April 2, my SSN colleagues and I will be at the ISC West Media Stage from 9:30 – 10 a.m. for a “Meet the Editors” event. It’s a good opportunity for us to meet with readers and sources as well as newcomers wanting to become acquainted with our publication. The media stage is located just outside the entrance to the show floor.

The media stage is also where I’ll be conducting a round of on-camera interviews with those on the central station side on Friday, April 4 between 10 a.m. and noon. Through these interviews I hope to discover what’s piquing the interest of those in the monitoring arena, that is, what they’re finding of value on the show floor or in the educational sessions.

I still have a few slots open, so if you’re with a central station and want to discuss what’s new or in the pipeline at your camp, or just want to share some general impressions about the show, don’t hesitate to shoot me an email at lkothe@securitysystemsnews.com.

Another media-related feature of ISC West 2014 will be the giant Twitter wall, where readers can feel free to contribute their own discoveries and thoughts about the show. The wall will offer a scrolling display of #ISCW14 tweets.

And should you exhibit a pattern of Tweeting especially compelling insights about ISC West, you may find yourself eligible for the MVT Award, which (as you might have guessed) will be given to the most valuable Tweeter.

Monitronics nabs pair of Stevies

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Wednesday, March 5, 2014

Highlighted by the marquee acquisition of Security Networks, 2013 was unquestionably a strong year for Monitronics. It appears 2014 is starting the upswing as well.

Monitronics turned in an impressive haul at the latest Stevie Awards, reeling in a pair of Bronze prizes at the eighth awards show for sales and customer service. For the second consecutive year the third-party central station won in the Contact Center of the Year category, according to a news release from the company. The company was also honored in the Front-Line Customer Service Team of the year category.

The awards were presented at a gala banquet at the Bellagio in Las Vegas, the release noted.

On March 11, a pair of Monitronics leaders is slated to speak at the Piper, Jaffray Technology, Media & Telecommunications Conference held in at the Le Parker Meridien in New York.

Bill Fitzgerald, chairman and CEO of Ascent Capital, the holding company that owns Monitronics, and Michael Meyers, CFO of Ascent and Monitronics, will speak at the conference. According to an Ascent Capital news release, management may make “observations regarding the financial performance and outlook of both Ascent and Monitronics.”

In the wake of a big year for Monitronics, this presentation from management could be worth a listen. A live webcast of the presentation will be made available on the Ascent Capital investor relations website.

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