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Protection 1 on the block?

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Tuesday, August 5, 2014

Home security giant Protection 1 is up for sale for more than $1.5 billion, according to a Reuters news report this week.

GTCR, the private equity firm that bought Protection 1 in 2010 for $828 million has asked Morgan Stanley to help in the sales effort, the news service reported Aug. 4.

I’ve reached out to Romeoville, Illinois-based Protection 1 for comment on the report, which Reuters ascribed to unidentified sources.

Protection 1 is one of the largest full-service business and home security companies in the United States. As of the end of 2013, it had 1.5 million customers and $28 million in RMR, an increase of nearly 8 percent over the previous year, according to published reports. Revenues exceeded $429 million.

By contrast, home automation/home security company Vivint—which was acquired by The Blackstone Group in 2012 for more than $2 billion—ended 2013 with more than $42 million in RMR, an increase of 23 percent over the previous year. Provo, Utah-based Vivint, which has more than 800,000 customers, had in excess of $500 million in revenues in 2013, according to published information.

Stay posted. I'll be updating this story as I get more information.

 

Speco woos integrators with IP savvy

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Thursday, July 31, 2014

Speco Technologies, a video surveillance manufacturer based in New York, may be best known for its analog solutions, but it is well into IP-based technology these days.

Today, Speco counts 25 of the largest and most sophisticated independent integrators in the U.S as its valued resellers, with Protection 1 as one of its marquee customers.

These are relationships the Speco management team has actively pursued. And, their pursuit of integrators has just begun, they say. The company’s sales, engineering, marketing, training and management are eager to talk about what they’re doing daily to increase the number of security systems integrators who turn to Speco for easy to use, innovative IP-based video technology.

I visited Speco this week, got a look at their headquarters in Amityville, the manufacturing and training operation and had a chance to hear Speco executives talk about their strategy.  

In business since the early 1960s. Speco is a privately held business owned by the Keller family. The company went private on Sept. 10, 2001, the day before the horrific events of September 11, 2001.  

Todd Keller, Speco president and owner, said the business employs about 100 people. In 2008 it broke $100 million in revenue, today it’s “headed back to about $85 million” in 2014 revenue. The company is selling more products, but prices for many products have come down.

All of its products are assembled here at its headquarters in New York and most everything is engineered here or “outsourced in America.” Keller and other management believe that being family-owned gives Speco an advantage over corporations. "We have the flexibility to pursue ideas, to engineer, innnovate, design," TJ Dickson, VP sales and marketing said, adding that Speco constantly tests and evaluates, and re-evalutates its products. It does the same with competitors' products, he said.

It has a warehouse in Amityville and a new warehouse in Reno, Nevada which it opened in April. This new warehouse houses $3 million in inventory and enables Speco to get products to distributors in the west much more quickly and inexpensively.

Corporations use "voice of the customer" Dickson said. "They hear the customer, but I'm not sure they listen to the customer." Because Speco is not a giant corporation, it is able to implement changes quickly, he said.

Speco is well known for some signature products: two way audio; Digital Deterrent; inventing (Keller says) the bullet camera; its wall-mounted DVR. It's also known for private labeling its products for customers large and small. Keller said he'd much rather have an installer's name on a product than Speco's name, saying that if they sell more "Speco wins."

Speco is also well known for its "Intensifier" technology, which several years ago made it possible for analog cameras to "see" in the dark and low light conditions. This September Speco is planning an "all out blitz" to launch its Intensifier technology built into HD IP cameras, according to Peter Botelho, EVP and GM at Speco Technologies.

"It will be a very aggressive launch aimed at a target group of integrators," he said. Botelho said Speco has taken its time and "worked to get it right." Some competitors have similar technology, he said, "but it doesn't perform like ours and when you add [Speco's lower] price point, this is a potential big win for us in IP," he said.

Speco also last week released its SecureGuard Plus, a VMS that "provides access to multiple DVRs, NVRs and IP cameras for remote viewing, playback and other functions." It does not have licensing fees. Botelho said that SecureGuard Plus is "all American programming, American processing, and an All-American idea" that was developed with input from the SecureGuard User Group, which consists of 15 to 20 integrators.  He called SecureGuard Plus "a VMS with some serious plans to take it way beyond [the traditional] VMS." Future versions of this software will "have special features and integrate with some things that we believe others haven't thought of."

Where's Speco heading in terms of software engineering? Developing software that "runs all peripheral devices and does something with the all the data that's collected," Botelho said. "We are well positioned to move into that space," he said. Why? "More than anything we have a management team that has the ability to understand what's really happening at the installer level. ... and that comes from listening," Botelho said.

Speco "listens" in many ways. Its Tech Support department takes between 300 and 500 calls per day. At the end of every month, Speco takes the top 10 issues its Tech Support department has dealt with, assesses those issues, solves them with other department input if necessary and "turns them into a positive," Keller said.

It does the same thing with the products themselves. Speco has a 2 percent rate of return and defective rate of less than a half a percent. All of the returned products are assessed as well. If, for example, a number of products have been returned because they've been damaged by a lightening strike, this may not be a defect, but this is good information for Speco engineers to have as they design a newer version of the product, Keller explained. 

Speco also "listens" to its customers during training sessions. It has invested significantly in bringing its dealers to its headquarters for training. This year it has done more than 100 trainings so far in 2014. It has had 10 different distributors, dozens of independent integrators and all of Protection 1's national account managers to its headquarters this year.

Trainings held at the headquarters are the most effective, Dickson said, because Speco has a chance to talk about the company as well as the products.

Botelho said he also sees the trainings as "built-in focus groups" where engineering, marketing or sales people can learn what Speco customers are looking for.

However, it's important, Dickson said, to be able to execute on what you learn from customers. He said Speco can do this and cited a recent example of an integrator who wanted a special feature on its wall-mounted DVRs, a button that would flash and alerting a local store manager to push the button to download video. "We had it done, designed and the software written within a week. They were blown away," Dickson said.

 

 

Security threats to wireless alarms?

 - 
Wednesday, July 30, 2014

Tech publication Wired magazine may not focus too closely on alarm monitoring or residential security, but it does devote a good deal of ink to assessing network security threats, no matter what the context.

Just last month a writer for the magazine, Mat Honan, painted a funny dystopian sketch of the connected home in revolt, commandeered by morally wayward hackers on some perverse quest for Internet notoriety. Identifiable only by screen names evoking bad cyberpunk films from the 90s, these lonesome code junkies are intent on doing everything from dousing homes by activating sprinkler systems to invading your privacy in all the imaginable ways in a home amply stocked with network cameras.

The piece, titled “The Nightmare on Connected Home Street,” is of course meant to be hysterical: The narrator is jarred awake at four a.m. by the blaring pulse of dub step music exploding from his connected pillow. The vignette ends, a few hours later, with a bare and awesomely memorable paragraph: “The skylights open up. The toaster switches on. I hear the shower kick in from the other room. It’s morning.”

It’s all just a thought experiment, but the piece is entertaining and well worth a read.

Interestingly enough, about a month later, Wired turned its attention to security again, this time focusing on concerns that, surprisingly, have nothing to do with Internet connected devices. This time, the article dealt with security vulnerabilities related to wireless home alarms, which, according to a pair of researchers cited in the article, could be comprised—the alarm being either suppressed (via “jamming”) or made to deliver false signals. The researchers found identical problems with a number of brands.

The issue, according to the report, has to do with radio frequency signals. While the conversation is understandable for a layman, it can seem a bit arcane. In sum, the researchers found that the systems “fail to encrypt or authenticate the signals being sent from sensors to control panels,” according to the report, “making it easy for someone to intercept the data, decipher the commands, and play them back to control panels at will.” Would-be malefactors, the report says, can do this relatively easily.

The researchers cited in the article—Logan Lamb and Silvio Cesare—plan to present their findings at the Black Hat security conference, a computer security conference held in Las Vegas next week. I’m eager to here more about their findings and to see what kind of impact the research could have.  

Are wireless home systems vulnerable?

 - 
Wednesday, July 30, 2014

Tech publication Wired magazine may not focus too closely on alarm monitoring or residential security, but it does devote a good deal of ink to assessing network security threats, no matter what the context.

Just last month a writer for the magazine, Mat Honan, sketched a funny, dystopian picture of the connected home in revolt, commandeered by wayward hackers on some perverse quest for Internet notoriety. Identifiable only by screen names evoking bad cyberpunk movies, these lonesome code junkies are intent on doing everything from dousing homes with sprinkler systems to invading your privacy through in-home network cameras .

The piece, titled “The Nightmare on Connected Home Street,” is supposed to seem nearly implausible. The narrator is jarred awake at four a.m. by the pulse of dub step music exploding from his connected pillow. The piece ends, a few hours later, with the bare and awesomely memorable paragraph: “The skylights open up. The toaster switches on. I hear the shower kick in from the other room. It’s morning.”

It’s all just a thought experiment, of course, but the piece is thought-provoking and well worth a read.

Interestingly enough, about a month later, Wired turned its attention to security again, this time focusing on vulnerabilities that have nothing to do with IP devices. This time, the article dealt with security concerns related to wireless home alarms, which, according to a pair of researchers cited in the article, could be compromised—the alarms either being suppressed (via “jamming”) or made to deliver false signals. The researchers found identical problems among a number of brands.

The issue apparently has to do with radio frequency signals. While the conversation is understandable enough for a layman, it can drift into the arcane. In sum, the researchers found that the systems “fail to encrypt or authenticate the signals being sent from sensors to control panels," the report said, “making it easy for someone to intercept the data, decipher the commands, and play them back to control panels at will.” Would-be malefactors, the report says, can do this relatively easily.

A vulnerability is a vulnerability, and certainly no security company wants there to be any possibility of a system being hacked. But it should probably be mentioned that while these techniques may come across as elementary to the reading community of Wired Magazine, these methods would probably be, for your run-of-the-mill burglar, well above the norm from a sophistication standpoint.

The researchers cited in the article—Logan Lamb and Silvio Cesare—plan to present their findings at the Black Hat security conference, a computer security conference scheduled next week in Las Vegas. For my part, I’ll be eager to hear more about their findings and to see what kind of impact the research could have.

Security threats to wireless alarms?

 - 
Wednesday, July 30, 2014

Tech publication Wired magazine may not focus too closely on alarm monitoring or residential security, but it does devote a good deal of ink to assessing network security threats, no matter what the context.

Just last month a writer for the magazine, Mat Honan, sketched a funny, dystopian picture of the connected home in revolt, commandeered by morally wayward hackers on some perverse quest for Internet notoriety. Identifiable only by screen names evoking bad 90s cyberpunk films, these lonesome code junkies are intent on doing everything from dousing homes by activating sprinkler systems to invading your privacy in all the imaginable ways in a home well stocked with cameras.

The piece, titled “The Nightmare on Connected Home Street,” is of course meant to be hysterical: The narrator is jarred awake at four a.m. by the pulse of dub step music exploding out of his connected pillow. The vignette ends, a few hours later, with a bare and awesomely memorable paragraph: “The skylights open up. The toaster switches on. I hear the shower kick in from the other room. It’s morning.”

It’s all just a thought experiment, but the piece is entertaining and well worth a read.

Interestingly enough, about a month later, Wired turned its attention to security again, this time focusing on concerns that, surprisingly, have nothing to do with Internet connected devices. This time, the article dealt with security vulnerabilities related to wireless home alarms, which, according to a pair of researchers cited in the article, could be comprised—the alarm being either suppressed (via “jamming”) or made to deliver false signals. The researchers found identical problems with a number of brands.

The issue, according to the report, has to do with radio frequency signals. While the conversation is understandable for a layman, it can seem a bit arcane. In sum, the researchers found that the systems “fail to encrypt or authenticate the signals being sent from sensors to control panels,” according to the report, “making it easy for someone to intercept the data, decipher the commands, and play them back to control panels at will.” Would-be malefactors, the report says, can do this relatively easily.

The researchers cited in the article—Logan Lamb and Silvio Cesare—plan to present their findings at the Black Hat security conference, a computer security conference held in Las Vegas next week. I’m eager to here more about their findings and to see what kind of impact the research could have.  

Security threats to wireless alarms?

 - 
Wednesday, July 30, 2014

Tech publication Wired magazine may not focus too closely on alarm monitoring or residential security, but it does devote a good deal of ink to assessing network security threats, no matter what the context.

Just last month a writer for the magazine, Mat Honan, painted a funny dystopian sketch of the connected home in revolt, commandeered by morally wayward hackers on some perverse quest for Internet notoriety. Identifiable only by screen names evoking bad cyberpunk films from the 90s, these lonesome code junkies are intent on doing everything from dousing homes by activating sprinkler systems to invading your privacy in all the imaginable ways in a home amply stocked with network cameras.

The piece, titled “The Nightmare on Connected Home Street,” is of course meant to be hysterical: The narrator is jarred awake at four a.m. by the blaring pulse of dub step music exploding from his connected pillow. The vignette ends, a few hours later, with a bare and awesomely memorable paragraph: “The skylights open up. The toaster switches on. I hear the shower kick in from the other room. It’s morning.”

It’s all just a thought experiment, but the piece is entertaining and well worth a read.

Interestingly enough, about a month later, Wired turned its attention to security again, this time focusing on concerns that, surprisingly, have nothing to do with Internet connected devices. This time, the article dealt with security vulnerabilities related to wireless home alarms, which, according to a pair of researchers cited in the article, could be comprised—the alarm being either suppressed (via “jamming”) or made to deliver false signals. The researchers found identical problems with a number of brands.

The issue, according to the report, has to do with radio frequency signals. While the conversation is understandable for a layman, it can seem a bit arcane. In sum, the researchers found that the systems “fail to encrypt or authenticate the signals being sent from sensors to control panels,” according to the report, “making it easy for someone to intercept the data, decipher the commands, and play them back to control panels at will.” Would-be malefactors, the report says, can do this relatively easily.

The researchers cited in the article—Logan Lamb and Silvio Cesare—plan to present their findings at the Black Hat security conference, a computer security conference held in Las Vegas next week. I’m eager to here more about their findings and to see what kind of impact the research could have.  

Viscount will be highly visible at ASIS

 - 
Wednesday, July 23, 2014

Viscount, the access control system that is software-based and does not have a panel, will be highly visible at ASIS, according to CEO Dennis Raefield.

Raefield joined Viscount at COO in December of 2013 and became CEO of the company, replacing Steve Pineau, in January of 2014. In February, Viscount "raised $2.4 million in new cash in a  private placement." He's used that funding to "staff up" adding tech support and sales people including hiring Michael Pilato, as VP of sales and marketing. Pilato has worked for Schlage/Ingersoll Rand, Assa Abloy, Honeywell Security, and Sensormatic/Software House (now Tyco).

"We went from 26 to 36 employees," Raefield said. "We now have dedicated tech support from 5 a.m. to 5 p.m. and on-call support 24/7," he said.

Viscount has been in business for 12 years, but its Freedom Encryption Bridge access control product is relatively new. It made traction with the federal government, in banking and it is  installed at Microsoft's GSOC.

"Our biggest deal is with the Department of Homeland Security, the CIS (Citizens Immigration Services) Group. [Freedom] is installed all over the country in 30 different sites and the plan is to roll out 200 more sites in the next year," Raefield said.

Freedom is doing well for two reasons, Raefield said. "One. It's highly secure from hacking for a very simple reason. The traditional [access control] panel has a database ... that is highly vulnerable to hacking. ... What we did is very simple. We took that database out of the panel," he explained. "We use a little thing called a bridge that converts all information at the door ... sends it to the company's own computer. Our software is on their server and the server makes the decision [about access]." This makes the IT director much more comfortable than a traditional access control system where a security appliance that is out of the IT director's hands is hanging on the company's network, he said.

Because the Freedom access control system is behind a company's firewall, it is as secure as any other application on an end user's network, Raefield pointed out.

Raefield noted that the recent Target data breach which received so much publicity and resulted in the firing of the Target CEO "was not a frontal assault on the IT infrastructure" but rather a "backdoor breach"—the result of a stolen HVAC contractor's password. That kind of backdoor breach cannot happen with this access control system, he said.

The second reason the federal government likes Freedom, according to Raefield, is that "our little bridge is much less expensive that anyone's panel. ... "You take out the expensive control panel and the dedicated computer for security and you now have a significaly lower total cost of ownership," he said.

The security director now can worrry about physical security instead of managing hardware and computers, he added.

Viscount Systems did about $4.1 million in revenue in 2013. About $3 million of that came from Viscount's legacy telephone entry system, a product called Mesh Enterphone, which is used in highrise buildings. It's been a "stable bread and butter" product for Viscount for 12 years. Raefield is also investing in that product, making it "high end with a touch screen." It can also be integrated with the Freedom access control system. The remaining $1 million in 2013 revenue was from Freedom, which Raefield said went from $0 to $1 million in one year. Raefield expects Viscount, which is a publicly traded company based in Vancouver, to do "between $6 and $8 million" in revenue in 2014.

Asked about whether Freedom can be used as a managed access control system, Raefield said yes. "The long term strategy is that [Freedom] will be able to be managed on site, in the cloud, any of the above, because it's all software."

Viscount is currently working with major integrators such as Stanley, Convergint and Johnson Controls. At ASIS, the company plans to make its case from a big booth to the integrator community that "this is the next direction and a smart direction," Raefield said.

Pilato said that Freedom has been rigorously tested by the federal government, it has shown itself to be "secure, scalable architecture" and it's ready for wider deployment in the commercial market, in K-12 schools, in banking and elsewhere. "ASIS will be the official commercial launch of Freedom," Pilato said. "The commercial side of the house is ready for prime time."

 

 

 

 

 

 

Another tech giant making a $200m move into the connected home?

 - 
Tuesday, July 22, 2014

I’ve written recently about Google’s $3.2 billion buy of smart thermostat and smoke alarm maker Nest Labs, and then Nest’s $555 million plan to buy Dropcam, which makes video cameras that stream video to a user’s computer or cellphone. Also, Apple in June introduced HomeKit, its new home automation/home security framework.

Now, Samsung also may be making a home automation push with a $200 million buy of startup SmartThings, according to news reports.

The potential deal was first reported in TechCrunch.

Forbes says that SmartThings is based in Washington, D.C. and “sells $100 hardware hubs and provides a cloud platform to make the hundreds of smart gadgets out on the market talk to each other in one unified app.”

Forbes notes that Samsung “already has many connected home appliances on the market.” However, Forbes says SmartThings could enhance those.

“What the SmartThings technology could do is better connect its appliances to other third-party devices onto one central platform. This is what Apple looks to be aiming to do with its HomeKit and what Nest may one day achieve after opening up its API program to allow other devices to talk to its growing family of smart gadgets.”

SmartThings, founded in 2012, has “tens of thousands” of SmartThings systems currently installed in U.S. households, Forbes said.

 

Vivint providing actionable intelligence for smart homes

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Wednesday, July 16, 2014

The BusinessDictionary defines “actionable intelligence” as data “that can be used to boost a company's strategic position against industry peers.” But with a new partnership announced this week, Vivint is using data collected from sensors in smart homes to “identify actionable insights to enrich their customers’ lives.”

Provo, Utah-based home automation/home security company Vivint has partnered with Cloudera, which offers businesses “one place to store, process and analyze all their data,” according to a July 15 news release.

Palo Alto, Calif.-based Cloudera provides businesses with “fundamental new ways to derive value from their data.” In Vivint’s case that means, according to the news release, that “for the first time, Vivint is able to apply a new lens to data generated from intelligent devices and systems embedded with sensors in and around homes.” More than 100,000 data points “from smart sensors embedded in devices [are now] visible with Cloudera,” the release said.

Brandon Bunker, Vivint’s senior director of customer analytics and insights, put it this way in a prepared statement: “Vivint has been at the forefront of the connected home for decades, and now with the emergence of [the] IoT (Internet of Things), we are truly able to innovate by collecting and analyzing vast amounts of data from sensors embedded in our devices. We've taken that one step further with Cloudera and can now look across many data streams simultaneously for behaviors, geo-location, and actionable events in order to better understand and enrich our customers' lives.”

Vivint has more than 800,000 customers using various third party, smart-enabled devices, the release said. Each home has from 20 to 30 sensors, it said.

Here, according to the release, is how Cloudera’s services will make a difference with data from those sensors:

“Many of those devices come in the form of thermostats, smart appliances, video cameras, window and door sensors, and smoke and carbon monoxide detectors. Without a central internal repository to gather and analyze the data generated from each sensor, Vivint was previously limited in its ability to innovate and to add higher intelligence to its security offerings. For example, knowing when a home is occupied or vacant is important to security -- but when tied into the heating, ventilation and cooling (HVAC) system, you can add a layer of energy cost savings by cooling or heating a home based on occupancy. Similarly, by adding geo-location into the equation, you can begin to adjust temperature changes to a home based on the proximity to an owner's arrival, for instance, when the owner has a connected vehicle.”
 

Such "actionable intelligence" would be a sellling point for Vivint because consumers can save from 20 to 30 percent in energy costs by turning off their HVAC systems when they’re away or sleeping, the release said.

Vivint said it chose Cloudera because it has a proven track record and a very broad “big data ecosystem, to ensure support as more and more devices are connected to the Internet each day.” The company also ensures the data’s security, the release said.

And that traditional definition of “actionable intelligence,” about boosting a company’s position against industry peers?

Well, that’s actually a part of the partnership too, according to Vivint. “This platform has differentiated our business and given us a tremendous competitive advantage,” Bunker said in his statement.

 

ESA taps new president and officers

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Wednesday, July 16, 2014

The Electronic Security Association has installed Marshall Marinace, owner of Yorktown Heights, N.Y.-based Marshall Alarm Systems, as its president for the next two years.

Marinace’s presidency was one of five new officer appointments announced at ESA’s annual membership meeting held during ESX 2014 in Nashville.

Marinace has been involved in the security industry for 38 years, and his alarm company was founded in 1976. He also has a longstanding involvement with ESA, serving in several different capacities with the association, including multiple terms as vice president, chairperson of the Membership Committee and liaison to the Standards and Fire Life Safety Committee, among other roles, according to an ESA news release.

“Having been involved with association boards and committees for the past 30 years and counting, my personal goal is to continue the legacy and ongoing development of strong leadership that has made ESA the foremost industry association,” Marinance said in a prepared statement. “I am therefore honored and humbled to have been given the opportunity to fill the role as ESA president for the next term.”

The following industry practitioners were also elected to ESA roles:

-- Dee Ann Harn, CEO of RFI Enterprises, elected to one-year term as vice president

-- Chris Mosley, president of Complete Security Systems, elected to two-year term as vice president

-- Angela White, executive vice president of Central 1 Security, elected to two-year term as vice president

-- Jon Sargent, industry relations / government affairs for Tyco Integrated Security, elected to two-year term as secretary

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