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Free Lunch costly for security industry image

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Friday, January 11, 2008
Good thing there’s no snow in the weekend forecast up here in Maine because it turns out I have some reading to do. I just read an article from The Oregonian about a new book written by Pulitzer Prize winner and New York Times reporter David Cay Johnston titled “Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)” that apparently has a large section dedicated to the public cost for false alarms. Of course, I haven’t read it yet, but based solely on this excerpt, I’m thinking this isn’t a good thing for the security industry: "The burglar alarm industry," Johnston writes, "charges hefty fees for a service that costs it very little. Then the industry dumps onto the taxpayers the real costs of providing the very service it sells. This is economic pollution sold to people under the guise of making them safe. In fact, it makes them less safe." Uh oh. My dad was the first one who directed me to this book after he heard an interview on NPR, so know your customers are reading it and you should, too. But, in case you've already made weekend plans, I’ll take some notes and give you a better summation on Monday.

Devcon to save $1.2 million with staff reduction

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Friday, January 11, 2008
Devcon International, the Florida security company that shed the last of its non-security-related businesses last year, announced this week that it will let 42 employees go--that's about 8% of the staff. The company expects to save $1.2 million as a result. The move was made possible by the consolidation of back-office operations as the result of acquisitions, the company said. Here's the announcement.

This seems like a bad idea

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Thursday, January 10, 2008
Does this company just not have a security director? The plan is to put data centers on boats and then move them around to where they're needed, for disaster recovery situations and what not. Okay, for the temporary disaster recovery market, maybe I can see the need for this. But for a long-term data center solution? Aren't the risk factors a little too numerous? While every other data center does its best to remain anonymous, surrounds itself with bollards and two-foot-thick concrete walls, and talks about hot-redundancy, these guys float around on the ocean, open to the weather, with crazy people looking to pull a USS Cole, and talk about using the heat from the servers to warm their staff. In an ideal world, this might be a great idea. In the risk-laden world in which real people do business, this strikes me as borderline insane.

Michael's got more mail

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Thursday, January 10, 2008
I’ll have more on this later, but [CEO of The Brink’s Company] Michael Dan’s mailbox runneth over these days with missives from hedge fund land. This note was sent Jan. 9 from Steel II, which owns 6.5 percent of Brink’s stock. Like the mail he’s getting from Pirate Capital and MMI, the message is this: spin off either Brink’s Home Security or the Brink’s armored trucking biz. Here’s the AP story

Curious about the CES show?

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Wednesday, January 9, 2008
Well, there's plenty of security-related news coming out of the Consumer Electronics Show in Las Vegas right now, but I don't feel like getting into much of it because I'm trying to get a paper out the door. Instead, I'm pointing you to this blog, where people seem to have the same opinion of giant shows in Las Vegas that I do (people who don't like naughty language, do not follow this link - you've been warned). My favorite bit? You can't walk five feet on the show floor without hearing some horrible line of moronic marketing speak come out of the mouth of an overly perky 5-foot-tall PR girl in a pantsuit, and it makes me want to stab myself in the ears. Not that I would know anything about that.

Argyle buys three companies

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Tuesday, January 8, 2008
Argyle Security, a rapidly growing international integrator born out of the San Antonio-based ISI, has announced three buys just now. The total purchase price is $14 million, so none of them is a big move, but they have collectively caused the company to up its revenue projections from between $105 and $115 million to between $128 and $142 million. If they're paying $14 million for about $25 million in year one revenue, that's not too bad, right? I'll have more about this on the wire Thursday.

L-1 to buy Bioscrypt

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Monday, January 7, 2008
News just came over the wire that L-1 has entered into a definitive agreement to buy Bioscrypt, recently named the biometric market leader by an IMS study. In a stock-for-stock deal, L-1 will pay about $44 million Canadian, which isn't bad considering the 3Q results you can find here for Bioscrypt. Basically, the company will do about $20-$22 million in 2008, but lost $10 million in the three quarters ending Sept. 30, 2007. This statment from L-1's version of the release thus seems a little optimistic: It is expected to be Adjusted EBITDA accretive in 2009. The cost-savings measures L-1 has planned must be something special, especially considering Bioscrypt will operate as a wholly-owned subsidiary and keeps its current locations. I'll have more on the newswire Thursday.

Remote monitoring marketing materials

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Monday, January 7, 2008
Stories like this one about the nuclear industry's new panic about sleeping guards just couldn't be better marketing fodder for those of you out there peddling remote monitoring and video analytics. Perhaps the most shocking part is the ridiculously hypocritical nature of the operators of the power plants themselves. While they protest that they're very (VERY) concerned about security, it takes a borderline heroic security guard to embarrass them on local television before they take his claims about sleeping guards seriously. Check it out: I admire, actually, Wackenhut's realism here. The author paraphrases it this way: Wackenhut says that the entire nuclear industry needs to rethink security measures if it hopes to meet the tougher standards the NRC has tried to impose since the Sept. 11, 2001, terrorist attacks on the United States. As in, "Dudes, you were fine with the sleeping guards for the past 50 years. Did you think they'd all of a sudden get much more attentive?" Everyone knows guarding a nuclear power station is some seriously boring work. Unfortunately, the one time guards are needed to act every 10 years or so is a pretty important situation. Thus, it makes sense that the guards need to be patrolling (i.e., moving) and video analytics and central monitoring stations need to be taking care of the surveillance.

Kermit's in da house

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Sunday, January 6, 2008
I was reading in the New York Times this morning about Clorox’s (yeah, the bleach) effort’s to become greener and how their purchase of Burt’s Bees (originally a Maine company that makes lip balm and other natural products) is going to help it do just that. Interesting story and smart move, but I think it'll be a while before we hear "Clorox" and think "green." The next “green story” I came across today was about how consumers’ resolve to be green may push home automation mainstream in 2008. And, of course, residential security is an important piece of the home automation package. The story notes that the “environmental benefits of home automation will be touted at this week’s Consumer Electronic Show in Vegas.” The first wave of home automation adopters may have been the fabulously well-to-do and techy nerds, the story says, but the home automation industry believes “high energy costs and environmental awareness” will help drive widespread adoption, and soon.

AMPS-It's everybody's problem

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Friday, January 4, 2008

Despite all the clamor in the security world about the looming analog deadline, this mainstream news article points out the more widespread panic about analog getting the axe. Since I've personally experienced tunnel vision about this issue from a security-only perspective, I enjoyed reading about irked GM customers who discovered that the cars they bought were equipped with analog OnStar units that wouldn't work come February and couldn't be upgraded despite being less than five years old. BUT, GM did issue some customers a $500 voucher towards the purchase of a new GM vehicle ... And people say the US car industry is floundering. AND, I thought the author did a decent job of including the woes of the security world in the article--towards the bottom of course, but how else will they get you to read the whole thing? However, this article, I can't say the same for. It too was about the analog issue, but frankly, it was just awful. Here's a few of my favorite choppy sentences (granted, it is broadcast writing - never trust anything you hear on television): In home security and fire alarm systems, the change only effects back-up systems. Primary systems function using land phone lines. But if those lines are ever effected by weather or cut by burglars the security system switches to its back-up. The back-up is usually a cellular phone line. If the connection is analog, it must be changed or else security companies would never receive an emergency signal alerting it to call 911. "As long as your [land line] telephone is working, we're going to receive signals from the [security system]," said Vinton security expert Scott Bolen of Alert Security Services.

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