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Prism Skylabs looks at new funding round

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Thursday, June 13, 2013

Prism Skylabs, a cloud-based service that enables business owners to use data from existing video surveillance cameras for business intelligence, marketing and other purposes, is looking at doing a $10 million Series B funding round, according to a report published on PE Hub today.

I emailed Steve Russell, Prism Skylabs CEO and founder of 3VR, this morning to ask when the new funding round would happen. He didn't give me an definitive answer, but said he'll keep me posted.

The PE Hub report was a glowing review of Ron Palmeri of MkII Ventures. Palmeri co-founded Prism Skylabs with Russell and is involved in a number of other non-security ventures. In that report, Palmeri is quoted as saying that Prism Skylabs "is probably worth about $80 million."

Last fall, Prism launched a partner program and also raised $7.5 milliion in funding.

 

 

 

 

Once IR spins off security division, will others follow?

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Wednesday, June 12, 2013

Once IR spins off its security division, will others follow? Poking around some investor conference info recently, I came across this tidbit on Seeking Alpha

“Stanley Black & Decker Chairman John Lundgren made an interesting revelation during his chat at the Electrical Products Group Conference yesterday. [The conference took place in late May]. The exec says the company will keep an eye on the spinoff from Ingersoll Rand of its security business to see if a similar move would make sense for SWK with its security business. On strategy: "Because if we are convinced a year or two years from now that we have got a 12x EBITDA business trapped in a 7 or 8x business, we will make it bigger."

Through my Stanley contacts, I asked Brett D. Bontrager, SVP and Group Executive, Stanley Security Solutions, for further comment on Lundgren’s statement. Bontrager declined comment saying that there was nothing more to say beyond what John Lundgren stated.

You may recall that Ingersoll Rand announced in December that it would spin off its security products business.  Here’s my story. The IR security business—which includes brands such as Schlage locks and other electronic and biometric access control products—will be a $2 billion company once it is spun off. The remaining IR business will be a $12 billion business.

Following the IR spinoff announcement, reports, such as this one from Bloomberg, speculated that the new standalone IR security company will present an acquisition target. This report said potential acquirers include Stanley Black & Decker (to add to its security businesses and further diversify from its power tools), Tyco (might be interested in IR’s commercial products but not its resi security products) and UTC. The report also notes that IR, which is headquartered in Swords, Ireland, presents certain tax advantages.

The IR spinoff was prompted by activist shareholder Nelson Peltz, whose Trian Fund Management owns about 7.3 percent of IR stock.

During ISC West, IR announced that Patrick Shannon will serve as senior VP and CFO of the new security spinoff and Barbara Santoro will serve as SVP and general counsel. They will report to the CEO, who has yet to be named.

Selling alarm gear? Meet your match on new website

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Wednesday, June 12, 2013

Looking for a pair of used Osborne Hoffmann 2000 receivers? How about a mix of Philips Lifeline 6800 and 6900 PERS units? Or maybe you have a security item to sell but you don’t want to pay to list it?

Welcome to AlarmClassifieds.com. It’s the brainchild of Josh Garner, CEO of Ogden, Utah-based AvantGuard Monitoring, who launched the free website in May because he saw a need for it among his dealers and in the industry at large.

“Last year, I had a number of our dealers who emailed me a list of equipment or tools that they were trying to sell, and they asked me to broadcast out to our entire dealer base that they had these items for sale,” he said. “I knew there had to be a more effective way for dealers to sell things to other dealers. So I went out and bought the domain.”

In addition to providing classified advertising space, the website features a directory where people serving the alarm industry can list their names (or the names of their companies). The classified ads expire in 30 days, but the directory items stay online for a year. All listings are free.

“I envision every vendor who is serving the alarm industry would want to put a directory listing up specifically in their category,” Garner said. “Why wouldn’t they? It’s free advertising.”

Categories on the site include brokers, consultants, manufacturers, marketing, software providers and RMR-enhancing services. There are more than 20 categories listed, and Garner said if you have one to add, “tell us and we’ll create it for you.”

Garner modeled the site on the popular KSL classifieds that serve Web customers in Utah, Idaho and Wyoming. KSL is the NBC news affiliate in Salt Lake City that has basically replaced Craigslist in the region with the advertising section on its home page, he said.

“If you want to buy something, if you want to sell something, you go to KSL.com for free,” he said.

The only mention of AvantGuard on AlarmClassifieds.com is small text block and company logo introducing the website. There is no other display advertising.

“This isn’t about revenue,” Garner said. “It’s a service to my dealers, but it’s really only a service to my dealers if the rest of the industry uses it. It’s about giving something that’s of value to the industry that I think is needed.”

North Carolina hotel room a CO deathtrap?

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Wednesday, June 12, 2013

North Carolina requires carbon monoxide detectors in homes and apartments, but not in hotels. Now, some tragic deaths in a hotel room in Boone, N.C. make a compelling argument for a CO detector mandate for hotels.

First, an elderly couple died in April in room 225 in the Best Western Plus Blue Ridge Plaza, according to news reports. Then, on Saturday, an 11-year-old boy was found dead in the same room, reports say.

Blood tests show that the April deaths were due to CO poisoning, according to TIME Magazine.

Next to die, on June 8, was the young boy, Jeffrey Lee Williams. “The cause of death was determined to be asphyxia, meaning his lungs couldn’t get enough oxygen,” TIME reported June 9. “Williams, from Rock Hill, S.C., died spontaneously, and his 49-year-old mother was hospitalized in critical condition — circumstances strangely similar to that of Daryl Dean Jenkins, 73, and Shirley Mae Jenkins, 72, from Longview, Wash., who were found dead in the same room on April 16.”

It has not yet been established if CO poisoning caused the boy to die and his mother to become ill, news reports said. But TIME said that an initial test taken the day the boy died “showed a high amount of poisonous gas in the room.” A toxicology analysis is pending, the magazine said.

The report says police didn’t explain why it took two months to get toxicology results on what caused the Jenkins to die. Earlier results, the magazine said,  “could have led to the closing of the hotel long before Williams’ death.”

The magazine added, “Room 225 is directly above the room housing a natural gas heater for the hotel’s swimming pool. Documents obtained by the Charlotte Observer show a Watauga County Health Department report indicating deficiencies in the pool.”

According to an NBC report, the independently owned and operated hotel released a statement saying, “The health and safety of guests who stay at our hotel is our No. 1 priority. Our thoughts and prayers go out to the family and friends of those involved. We are cooperating fully with authorities who are investigating this truly tragic incident.”

According to a new interactive map of CO legislation in the United States developed by System Sensor, North Carolina’s law requiring CO detectors in homes and multi-family dwellings took effect Jan. 1, 2010. System Sensor, based in St. Charles, Ill., makes fire detection and notification devices, including carbon monoxide detectors.

Surveillance cameras called ‘worse than useless’ in Philly

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Wednesday, June 5, 2013

It’s not the kind of press you would expect for video surveillance, especially after all of the positive PR for helping bring down the suspects in the Boston Marathon bombing. Only onward and upward, right?

Apparently Philadelphia didn’t get the memo.

Last week, City Controller Alan Butkovitz announced the results of an audit of the police department’s surveillance camera program. The news wasn’t favorable: Only 32 percent of the cameras reviewed were functioning as they should, down from 45 percent found to working properly during a random sampling last year.

“That means that at any given time when crime is occurring around our city, only a third of the cameras are able to capture criminal activity at camera locations,” Butkovitz told the Philadelphia Daily News. He said the system is “worse than useless” because it gives residents a false sense of security.

Butkovitz said the problems included blurry images with pixelated edges and condensation in camera domes, making it difficult or impossible to read license plates and identify crime suspects.

“Suppose that had been the quality of photos in the Boston bombing,” Butkovitz told KYW Newsradio, letting listeners draw their own conclusions.

Mayor Michael Nutter was quick to respond to the assertions, calling Butkovitz’s report inaccurate. Nutter said that by his administration’s count, 85 percent of the 216 police cameras were working as of May 27.

Asked by the Daily News why there was such a wide discrepancy in the figures, Nutter said, “I can’t account for the controller’s inability to count. … We know what cameras work. [Butkovitz] does some kind of sampling. We actually pay attention to all of the cameras.”

Regardless of who’s right, Philly’s spat highlights the benefits for the security industry post-Boston. For cities that don’t have a video surveillance system, the law enforcement benefits of adding one have never been more obvious. For cities that are already onboard, now is the time to make sure the systems are doing what they’re supposed to be doing. That goes for the monitoring side as well.

Kessler and DeMarco: Professional monitoring, strategy bode well for DIRECTV/Lifeshield deal

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Wednesday, June 5, 2013

I had a chance to speak to Jeff Kessler, research analyst for Imperial Capital, and ESX chairman George DeMarco about the satellite television giant DIRECTV getting into security with the purchase of LifeShield.

Below is a summary of those discussion:

This deal is different from the string of cable companies and telecoms that have jumped into the fray over the past couple of years, Kessler said, for a couple of reasons.

First, DIY is built into the DNA of both DIRECTV and LifeSheild, Kessler said. “They understand each others’ way of working,” and that will make the combination more successful.

Second, LifeSheild, and now, DIRECTV, is using CMS, Protection 1’s professional monitoring arm to monitor security customers.

With the exception of AT&T, which is building two monitoring centers, the other cable and telecom players are not using professional monitoring centers.

“This allows DIRECTV to show off its feathers in front of other cable and telecom players,” Kessler said. Those companies are using “generic customer service organizations to do their initial [monitoring] service, [but DIRECTV has a acquired a company] that uses the largest independent monitoring company in the country with five branches.”

He pointed out that CMS has extremely experienced people answering phones who know about intrusion and life safety, including carbon monoxide. The company also has a group of people who are specially trained in health care for calls related to personal emergency response.

All of this is important, he said, because it will improve the customer experience for DIRECTV’s security customers. Going with a professional monitoring company will help convince customers that they can trust DIRECTV as their security provider because customers believe that the “police will be there in five minutes, or a health specialist will stay on the phone for 35 minutes with a customer,” he said.

In general, the public’s perception about cable companies’ service is not good. This is a hurdle for cable companies who enter the security industry. By partnering with CMS that has “proficiency and experience dealing with customer emergencies, whether it’s security or health,[DIRECTV] is in a better position to succeed,” Kessler said.

Kessler said there will likely more deals like this where an outsider like a satellite or cable company will buy a home security provider. In addition, Kessler expect to see more “partnerships as telcos and cable operators realize the value in having a high-quality partner on the service end of the business.

George DeMarco, chairman of ESX, and former owner of Greater Alarm said DIRECTV’s strategy is pretty straightforward.

“DIRECTV has 20 million customers. If the current market penetration for electronic security systems is approximately 20-25 percent, then their customer database is a gold mine.”

DeMarco said it’s all about finding new, complementary, recurring revenue streams that “boost their ability to attract a greater share of the customer’s wallet. Offering security and home management systems with interactive service capabilities, especially video, gives DIRECTV an opportunity to overlay additional home services for customers, while growing top-line revenues and increasing bottom -line profits.  
 
“With the advancements in product technologies, cloud-based services, and mobile devices, Multiple System Operators (MSO) and telecoms have been eyeing the electronic security industry of late. That said, I believe DIRECTV and other MSOs are looking for ways to augment their current offerings.” 

DeMarco said the those industries’ subscribers are willing to “cut the cord” from content packages because of the impact of Hulu, Netflix, and Amazon’s Prime Service. “In other words, MSOs can increase new phone and broadband subscribers while losing paid TV subscribers. Consumers have more choices today for content and delivery of broadband services. As a result, MSOs are exploring other sources of revenue for growth opportunities and the electronic security industry seems to be the likely candidate.”

 

Time Warner about to wrap up home security rollout

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Tuesday, June 4, 2013

I’ve been writing about IntelligentHome, Time Warner Cable’s home security/home automation product, since it launched in a few markets in 2011. Two years later, Time Warner is now announcing that the rollout of IntelligentHome should be complete by this fall.

Here’s what the company had to say in a news release today:
 

Time Warner Cable has announced that it will launch its home management and security system, IntelligentHome, throughout its Ohio and Wisconsin service areas in June, followed by New York City this fall. The upcoming launches will wrap up TWC’s rollout of the new product to all major markets in its service area.

Time Warner amped up the introduction of IntelligentHome this spring, launching it in Maine, Kansas City, Mo., South Carolina and all of North Carolina and also in San Antonio.

Time Warner describes IntelligentHome as “an easy-to-use wireless system that offers professional home security along with flexible features that allow customers to check in on their kids or pets, arm or disarm their security system, turn on a light or set the thermostat the way they like it—all via a smartphone, laptop or in-home touch screen.”

The product is professionally installed by Time Warner employees and also is professionally monitored.

How is the New York-based cableco liking security? I’ll be talking the company’s VP of IntelligentHome to learn more. Keep posted.

 

Ty Davis steps away from PERS to start new venture

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Wednesday, May 29, 2013

After a three-year stint in PERS, Ty Davis has launched a venture to make the security world a more beautiful place: producing keypad overlays that can be customized to match any home or office.

Davis, an SSN "20 under 40" alumnus, got his start at Southwest Dispatch and then moved on to become VP of monitoring at Life Alert. He still sees a great future for PERS, but he also sees a growing consumer demand for something beyond the standard white keypad—something that dealers can benefit from as well.

"I'm not talking about the big guys, the ADTs and such, but the smaller dealers who need to be able to brand their security systems like anybody else," Davis said. "This kind of gives them a leg up on branding while matching the decor of the customer's home, which has always been a stickler for many mid- to high-end properties accent-wise."

Davis' new company, OWOW Designs, is catering to that niche. It just expanded to a 10,000-square-foot facility in Agoura Hills, Calif., where four full-time employees are producing keypads personalized with everything from family photos to patterns matching the foyer wallpaper.

"It's basically a car wrap—it's the exact same material," he said. "After the customer chooses what they want, you can still add your company name and logo. That way, you make sure you get that recurring revenue if the customer moves on and the next customer comes in, looks around and says, 'I need to call this guy' because it's his name on the keypad. It's the same way it works for the major alarm companies."

Asked about his tenure at Life Alert and PERS in general, Davis had nothing but good things to say.

"It was a wonderful experience," he said. "The move to a strictly PERS environment was an eye-opener. It was great to see another part of the industry and how it is truly a help to the elderly, providing them with additional protection inside the home. It's amazing how many independent dealers as well as major guys are getting into the market."

Will security investors McGinn and Smith do time?

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Wednesday, May 29, 2013

Security industry investors Timothy McGinn and David L. Smith are set to be sentenced next month and could face years in prison after being convicted of fraud earlier this year. But whether they’ll be sent to prison or just get probation and how much the Albany, N.Y.-based brokers owe as a result of their fraudulent activities are questions that remain up in the air, according to a recent article from the Time Union, an Albany, N.Y.-based newspaper.

The two men are seeking leniency and having friends and relatives send letters testifying to their good characters, according to the article.

A New York grand jury about one year ago indicted McGinn, 64, and Smith, 68—the founders of an investment firm that conducted dealings in the alarm industry—on a variety of fraud charges.

A federal jury on Feb. 6 convicted the pair of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, securities fraud, and filing false tax returns. The two—who also were the target of a civil suit by the Securities and Exchange Commission claiming they bilked investors of at least $80 million in a Ponzi scheme—are slated to be sentenced on their criminal convictions on June 28. Their possible sentences range from probation to more than a decade in prison, according to the Times Union.

However, McGinn and Smith, formerly partners at the brokerage firm of McGinn, Smith & Co., have filed motions asking a federal judge to overturn their convictions, saying the government’s allegations against them “are based on the complete failure of the government to attempt to comprehend concepts of investment banking and the inner-workings of running a broker-dealer.”

Also, Smith’s attorney, William J. Dreyer of Albany, is asking that the sentencing date be delayed because it’s not clear how much victims are owed. Here’s what the article had to say:
 

Dreyer wrote a letter to [U.S. District Judge David] Hurd saying there is not enough information available from the government or a federal receiver to accurately calculate the losses to victims. He said it will be a "large undertaking" to establish cash flows for each of the trusts and operating companies that were embroiled in the criminal case and also to determine the amount of back taxes owed by David and Lynn Smith, [David Smith's wife].

Also, Smith was acquitted on 14 of the 29 counts he faced, and Dreyer told the judge that makes "a proper calculation of the fraud amount the more challenging."

In addition, Dreyer said the government recently notified him it has pegged the forfeiture amount owed by McGinn and Smith at "four times" the $8 million listed in the indictment.

"No supporting data as to how such a number was reached was provided and this court should find that because the receiver is not in a position to determine a loss amount, there is no possible way that the government could make a logical calculation," Dreyer wrote. "As such, on its face, the government's proposed loss amount is misleading, obscene and further reinforces its complete ignorance of investment banking and accounting standards."

 

Stay posted here for updates on this interesting case.

Kratos has new SVP

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Wednesday, May 29, 2013

Don EricksonAt the PSATEC conference earlier this month, SIA CEO Don Erickson was talking about government opportunities for independent integrators large and small. The contracts and jobs are out there, Erickson said.

One of PSA Security’s largest integrators, Kratos Public Safety and Security Solutions’ Public Safety & Security division has created a new SVP position to go after the “growing DoD/DHS market.”

James Cotter, who has been with Kratos since 2007, has been promoted to senior vice president of the Government Solutions Sector.

In his new role, he’s charged with working with Kratos leadership “researching, identifying and ultimately captur[ing] those opportunities.”

Ben Goodwin, president of Kratos’ PSS division called Cotter an “idea fit for this position.”

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