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Intel invests $15m in Prism SkyLabs

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Wednesday, October 23, 2013

Prism Skylabs, a two-year-old startup founded by Ron Palmeri and 3VR’s Steve Russell today announced a $15 million Series B funding round led by Intel Capital, Intel Corporations’ investment and M&A business. The round included investments from Presidio Ventures, Triangle Peak, Data Collective, Expa, and some existing investors, Russell told me.

Prism Skylab is a cloud service that transforms any video camera “into visual merchandising, auditing and business intelligence tool that can be accessed in real time from any device.”

“On the business side, it’s hard to overstate the value of having [an investor] like Intel for a company like Prism,” Russell said.

The funding round was announced today in San Diego at the 14th Annual Intel Capital Global Summit where Intel awarded a total of $65 million in funding to 16 companies.

“At this conference we are able to look at how Prism might integrate with next-gen mobile devices [as well as the possibilities, for example, of using] new techniques in a data center that will allow us to increase our performance over 100-fold.”  

“The core of our business is the R&D and product work we do, and we’ll continue to invest in that,” Russell said, but the bulk of the funds from this round will be used for sales and marketing.

Since its launch, Prism has “brought on a host of interesting first customers, the new challenge for the business is to continue to serve the large customers we’ve won already and to build out our sales and marketing team to expand [the customer base] even further.”

Prism SkyLabs has “well north of 50 customers” that include Fortune 500 companies and well-known brands that fall into the category of “large distributed retail companies.”

“We solve one or two important problems for them,” Russell said. “We provide a set of data and instruments in the real world that heretofore you could only get for online properties. … The other value we provide is allowing global brands to peek in and better manage their stores,” he added.

“It’s the analytic and visual [capabilities] that are really the secret sauce,” he said.

Prism now has about 30 employees and Russell expects to double the size of the company within the next 12 months.

Prism raised $7.5 million in funding in October 2012.

“Intel Capital has long been known as a hands-on investor,” Russell said. Among the ways the investor will assist Prism include “providing networking and matchmaking [among] its truly vast portfolio [of partners].”

The Intel Summit “[has] been an incredibly productive and fun three days for us,” he said.

Former security industry investors reunited—in prison

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Tuesday, October 22, 2013

Timothy McGinn and David L. Smith, former partners in the Albany, N.Y.-based brokerage firm of McGinn, Smith & Co., which conducted dealings in the alarm industry, will serve out their fraud sentences in the same penitentiary, according to a recent Albany Business Review report.

I wrote here in August about their sentencing, after the two were convicted earlier this year of fraud, conspiracy and tax evasion in a Ponzi-like scheme that caused investors to lose millions. A judge called 65-year-old McGinn “arrogant” and sentenced him to 15 years in prison. Smith, 68, convicted of fewer counts than McGinn, received a 10-year sentence.

Now, the Albany Business Review reports, the two are both in the same prison in Brooklyn, N.Y. Here’s more from the Oct. 17 article:

The federal Bureau of Prisons says both men are now at the Metropolitan Detention Center, in Brooklyn.

Prosecutors say as many as 900 investors lost money. …

Attorneys for McGinn and Smith originally believed the two would wind up in different prisons. Smith had requested to remain fairly close to his family, who live in Saratoga Springs.

Attorneys say that McGinn, meanwhile, needs special medical attention for his diabetes, and residual concerns resulting from a heart attack in 2010, months after the FBI and IRS and the Securities and Exchange Commission began probing the McGinn-Smith operations.

The two pleaded not guilty to the charges they faced, and maintained their innocence when testifying at trial. They are preparing an appeal, which may not be heard for several years.
 

 

 

Honeywell: You’re not too small to be an integrator

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Wednesday, October 16, 2013

A recent post on Honeywell’s The Security Channel blog caught my eye because it refutes the notion that only large companies can reap the benefits of being integrators. That’s not the case, says Jason Lutz, business development manager, First Alert Professional and CSS, in his post this week titled “Simple Integrations Can Lead to Increased RMR.”

Here’s what he says in his intriguing intro: “There are few things that can make some dealers cringe more than when I begin to talk about integrating systems. Many dealers think they are too small to do integrated systems or that integrating systems can be too complicated or even that there isn’t enough Recurring Monthly Revenue (RMR) and therefore it’s not worth the hassle. Before I go further, let’s clarify what an integrated system is and how much money you are leaving on the table by not offering it.”

He goes on to explain that “an integrated system can be as simple as two separate systems working together to satisfy a client’s need.”

Then he asks: “Are your current or potential clients expressing needs like these?
*Can you set up my cameras to only record when my system is armed?
*Can you make the cameras record only when I have an alarm?
*Can you let me know when my DVR has a loss of video, loses its connection to the Internet or the hard drive has reached full capacity?”

Lutz goes on to explain how even a small security provider can answer such needs—benefiting both clients and the provider. Check out his post.
 

Women in Security: 2013 Special Report

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Wednesday, October 16, 2013

The editorial mission of Security Systems News is distinct from other publications in the security industry. We focus on breaking business news (as opposed to products, how-to information or case studies). More specifically, we focus on writing stories that will help our readers make good decisions about their businesses.

In our November issue, we will dedicate one story in each section of our publication—Commercial and Systems Integration; Fire Installation; Monitoring; Residential; and Suppliers—to a woman leader in security. In addition, two women leaders—a consultant and a legislative expert—are profiled in our General News section. Those profiles will also be online this week.

This year, we interviewed Terry Basford of 4b Technology, Elizabeth Hunger of SIA, Karen Head of Kratos PSS, Jennifer Jezek of York Electronic Systems, Betsy Francis of AT&T, Elle Daley of COPS Monitoring and Deb Spitler of HID.

It’s our annual Women in Security special report. This is the fifth year in row that we’ve compiled this report. We don’t go through a formal nominating process, so this is not a vote-driven selection. Rather, we ask our readers to send in nominations and then Tess, Leif and I decide who we’d like to profile.
 
I’m happy to tell you that we get more and more nominations every year. It seems like it’s not as difficult to find women leaders in all sectors of security as it was five years ago. The women who were nominated but were not chosen this year will, in many cases, be interviewed for SSN news articles in the future.

While the women profiled all have unique stories, there’s one noticeable common thread. They love their work and they’re making a difference in their respective workplaces. That’s the good news.

The not-so-good news is that we still hear about how women are “tested” in the boardroom or field because men assume they don’t understand technology, and we still see a paucity of women in the industry—across all sectors.

Read through the profiles in our Women in Security special report and you’ll notice how well this special report aligns with Security Systems News’ editorial goal of helping you make good decisions about your business.

There are plenty of studies that show that there's a correlation between the presence of women in a company's boardroom and profitability. Time after time, studies reveal that companies that have a higher percentage of women executives also have higher corporate profitability on average. Period. Here’s a good story about those studies.

Of course, it’s difficult to prove causation—to show that the reason one company is profitable is because it hires more women executives.

However, ponder that correlation as you read through this year’s profiles. We believe this industry can use more people like HID’s Deb Spitler, Kratos’ Karen Head and the others profiled here.

Hiring smart, ambitious people is a good business move. Making the extra effort to hire a few smart, ambitious women, may prove to be an even better move for your business.

SecureNet launches cloud-based platform

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Wednesday, October 16, 2013

A few developments surfaced today out of the SecureNet Technologies camp. The Longwood, Fla.-based company, which provides video monitoring services and interactive home features, announced the launch of the SecureNet platform, a system that gives alarm providers a cloud-based management service.

The system is designed to increase the speed of alarm responses while improving their accuracy by eliminating errors caused by traditional notes-based dispatching systems, the company noted in a news release.

As we continue to see, there are several benefits for central stations who deploy a cloud-based platform. First off, it improves redundancy in the event of outages or natural disasters. It also reduces the man hours required for continual technological upgrades. Interestingly enough, while SecureNet’s platform is clearly moving with the hosted solution wave, it is also offered as a traditional on-site service.

The other piece of news, less of a strictly monitoring nature, is that SecureNet has joined the Z-Wave Alliance, a group of technology companies that design wireless home control products based on the Z-wave wireless communications standard.

SecureNet’s Interactive Gateway Modules, a line of hardware devices that integrate with the with alarm panels, is designed primarily for its adaptability to home management services. The devices use Z-wave technology to control and communicate with interactive video monitoring, access controls, as well as an array of home automation features.

In the coming days I’ll be following up with SecureNet to get a closer view of these latest developments.  

Henry Edmonds presents on PERS valuations

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Wednesday, October 9, 2013

As I encounter new theories and projections about PERS valuations, I continue to find a refreshing lack of consensus among the experts. That’s not to say there aren’t areas of agreement. There are. Those watching the market often cite similar determinants of valuation, such as attrition rates, cash flow and the costs of creating new accounts. But experts seldom invest the same metrics with equal importance.     

For example, Barry Epstein, president of Dallas-based Vertex Capital, believes reducing attrition rates to be a critical component of increasing PERS valuations. Conversely, Mark Sandler, a principal with SPP Advisors, downplayed the importance of churn, saying instead that a company’s value hinges more on how efficiently they can redeploy their units.

Today I came across a presentation on PERS valuations delivered by Henry Edmonds, president of The Edmonds Group, at the Medical Alert Monitoring Association conference held last week in Orlando. Edmonds’ insights reflect another nuanced interpretation of the market. In the presentation, he boiled PERS valuations down to four key metrics: cash flow; churn (attrition rate); growth rate/new account volume; and creation cost.

Just as vital for maximizing value is the ability of dealers to compile solid data on these metrics, Edmonds noted in one of the slides.

Edmonds developed some pretty in-depth calculations that he believes dealers should be cognizant of. For instance, churn rate metrics should account for total lost RMR on a trailing 12-month or trailing six-month basis. That figure should then be divided by average outstanding RMR. With respect to the cash flow, Edmonds advises dealers to focus on adjusted EBITDA and steady state free cash flow.

Edmonds’ presentation also offered a trove of information about buyers. He noted that buyers will create finance models for target companies, develop key assumptions based on a target company’s past performance and determine a capital structure based on current market conditions.

Edmonds also provided the following aphorism: “Buyers never pay more than they think they have to.”

In the coming weeks I plan to speak with Henry Edmonds himself to get a more in-depth take on PERS valuations and the state of the market in general. Stay tuned.

IHS: More security systems in homes in next four years

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Wednesday, October 9, 2013

The research group IHS believes—as others have predicted—that the penetration rate of home security systems in North America will rise in the next few years.

That rate has been stuck at 20 percent for the past couple of decades, but many have predicted that the “new entrants” into the industry, cablecos and telecoms, through their advertising and other efforts—will help finally move the needle on that particular statistic. IHS has jumped on that bandwagon in is its newly released report, “The World Maker for Intruder Alarms–2013 Edition.”

In a news release, IHS says that there is “realistic momentum with the growing trend to combine home automation and home security systems, on a single platform.”  

The report says that “the residential sector accounted for 40.7 percent of the $2.7 billion global intruder alarm market in 2012, and is forecast to be one of the fastest-growing verticals with a five-year compound annual growth rate of 5.3 percent from 2012 to 2017.”

In a statement, Adi Pavlovic, analyst for access control, fire and security at IHS “Home-management integration is gaining the most popularity in North America, which will increase the penetration rate of intruder alarm products into the residential sector. Europe also may not be too far behind, as energy-management features are making their way into more homes every year. Deployment in Asia, however, is expected to be the slowest due to its large multifamily-apartment culture and the absence of professional monitoring services.”

The story is different on the commercial side, according to IHS. “While the trend to integration is becoming popular in single-family homes, its progress in the commercial sector continues to be slow.” The research group blames the “lack of unified legislation across each technology platform” for the stagnation it sees in the commercial side, noting that  regions “with more lenient regulations, such as the Middle East, benefit from having the opportunity to integrate multiple systems into a single solution. Such an approach is not only more convenient, but also saves time and lowers costs by working with just one installer.”

IHS advises manufacturers “interested in integrated solutions should continue to focus on the residential market while integration in commercial applications remains sluggish, as the industry as a whole awaits standardization.”

 

DIY home security goes to the next level at Costco

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Wednesday, October 9, 2013

I’ve written before about how telecoms, cablecos and professional security companies, large and small, are now selling their security/home automation products in a retail environment. Those companies include Comcast, Verizon Wireless, Security Options, The Alarm Company and SecureWatch 24. Now add Link Home Security to the list.

Link, which bills itself as “the leader in do-it-yourself (DIY) wireless security systems,” is now offering a DIY home security/energy/video surveillance package through Costco, the national online retailer. It’s a deluxe package with all the desirable home automation features homeowners have been hearing about—and it includes professional monitoring.

Ogden, Utah-based Link describes its Premium Plus Video Package by saying to customers it “puts you in control of your security, home automation and remote video monitoring and gives you the convenience of premium 'advanced interactive' services managed from your smartphone or secure internet login. The cellular, color touch screen panel does not require a phone line and is Z-Wave(R) enabled—allowing you to add security, safety, energy management and camera components to your system at any time.”

Link said it is offering monitoring for $34.99, which “ includes remote video monitoring and recording plus services like fire monitoring and remote accessibility that you won't find anywhere else. Z-Wave operability is no additional cost. … Cellular signal and 2-way voice communication in emergencies is included as part of the service.”

It said other features of the premium service will allow customers “to augment your existing smoke detectors with a 3-in-1 smoke/heat/freeze sensor (included) that is continually monitored by our UL Listed and 5-Diamond rated central station. The door/window and motion sensors come custom-programmed with the locations you specify, such as "Front Door" or "Master Bedroom Window". Our Z-Wave programmable thermostat (included) offers a “Smart Schedule” that utilizes the other components in your system to recognize activity and usage in the home or business and recommend energy saving HVAC schedules. The two Z-Wave LDM Light/Appliance Modules (included) plug into a standard outlet to control lighting and small appliances. Both the thermostat and light/appliance modules are remotely accessible from a smartphone or secure internet connection so lighting and temperature can be adjusted while away. The HD100 Indoor Camera (included) is easy to install and gives you the peace of mind of being able to keep an eye on the activity in your home or office, observe a live feed in case of an alarm event, or review past video footage at your convenience. The HD100 delivers a high resolution video with infrared “night vision” capability.”

This offering clearly shows that DIY is going beyond simple to incorporate the next level of technology.
 

Dynamark Convention wrap up

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Friday, October 4, 2013

Over the course of my two days at the Dynamark Convention, I had the good fortune of speaking with several knowledgeable industry veterans, and I’d be remiss not to mention some of them in this space. Whether at the vendor show, educational sessions or during my tour of Dynamark’s central station, I found no shortage of folks with industry expertise.

The vendor show featured a vibrant mix of companies, with virtually every facet of the industry represented, from access control and video surveillance to fire alarms and intrusion detection. There were distributors like ADI, which had a booth, and several attendees from The Systems Depot, including CEO Robert Pinion, who gave me a thorough description of the company’s new call center, a 20,000-square-foot facility with an efficient layout that's rapidly adding new employees. In the spirit of the season, there was some gridiron chat weaved into the industry-specific discussions. As it turns out, Pinion’s son is a punter for the No. 3-ranked Clemson Tigers.

Those very same Clemson Tigers travel north this weekend, heavily favored in their matchup with Syracuse, the alma mater of Tom Piston, vice president of sales & marketing at Dynamark. Piston, along with Lamar Shroyer, IT director at Dynamark, guided me and SSN publisher Tim Purpura on a tour through the central station. Shroyer showed us a veritable wall of servers and systems, which included Bold Technologies’ Manitou automation platform, as well as servers from Israeli-based Tadiran Telecom.

Keith Godsey, Dynamark’s vice president of central station operations, answered a few questions about Dynamark’s training procedures. Training typically lasts two weeks, and operators accrue greater responsibility as they ascend to higher levels of training. Interestingly enough, Godsey noted that 80 percent of their operators have been at the station since the facility opened in 2011—no small feat for a profession typically prone to high turnover.  

To conclude, I wanted to mention a final element of interest about the conference: The presence of companies offering peripheral services that both dealers and central stations are leveraging for value. I spoke with Joseph Narkin, director of business development at Demand, a marketing and business development firm that works with alarm companies, including Dynamark, and whose cold-calling team is comprised of qualified prison inmates (Narkin himself is a former prison inmate who said the company contributed tremendously to his rehabilitation and reintegration in society).

I also spoke with John Latimer, senior account executive at Keller Stonebraker Insurance, based in Hagerstown, Md. The company works with alarm companies, both dealers and central stations, to help transfer and mitigate risk—legal concerns of no small importance to the alarm industry as a whole.

In summary (I fully intended this update to be just that), my first voyage as part of SSN was a valuable and diverse experience, and the folks at Dynamark, and many others with whom I happened to cross paths, were nothing short of welcoming and bright.

Dynamark Convention: day two

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Thursday, October 3, 2013

Embrace new technology. Adapt. Preserve a human connection in sales and seize the opportunities provided by a market that's bound to become more aware of your products and services. Those were some of the words of wisdom offered by Wayne Alter, founder of Dynamark, and Wade Moose, CEO of The Systems Depot and Elk Products, in the keynote speeches at the Dynamark Convention 2013.

A spirit of optimism pervaded the basic message, and both Alter and Moose were engaging speakers, knowledgeable and honest, with a penchant for weaving helpful and often funny personal stories into their advice for dealers. Early into Alter’s keynote, he predicted the penetration rate for the market would see a spike between 5-8 percent in the not-too-distant future. It’s a lofty projection, but one grounded in the likelihood that market awareness stands to rise appreciably in the coming years due to the influx of new players, specifically the cablecos and telecoms, whose advertising clout could prove a boon to the entire industry. This development, together with a gradually recovering economy and a profusion of home management services that boost RMR and curb attrition, might be enough to nudge that stubborn penetration rate in an upward direction. I’ll be keeping a close eye on market reports to see if Alter’s prediction bears itself out. 

Another point of emphasis in both speeches, particularly Alter’s: The industry has come full circle. “It’s new in some ways, and it’s old in others,” Alter told attendees. While the technology and the means of reaching customers have undergone dramatic transformations recently, some of the original principles of salesmanship remain as essential as ever, Alter noted. He mentioned Vivint’s door-knocking summer sales model as an example of this, as well as the DIY monitoring systems, which Alter originally thought would appeal more to hobbyists than general customers.

Another two-part prescription Alter provided to dealers: Expand the number of people in your business and train them well. It’s a tested formula for building an account base, if not always an easy one to enact. This piece of advice again harkens back to the recurring theme of the keynote—the theme of keeping pace with the evolution of the industry while preserving certain core requirements that have always been conducive to growth.  

In a funny anecdote, Alter drove home the point that many of the same sales practices that work best now were the same sales practices that worked best when he started his business in 1975, a time when he had to scour phonebooks for sales leads.  

There’s much more to say about my experience at the Dynamark Convention. But since this space is reserved for a blog rather than a dissertation, I’ll have to save these thoughts for my next post. Tomorrow I'll discuss my inaugural central station visit at Dynamark's Hagerstown, Md.-based facility, along with some other goings-on at the convention. 

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