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Who will be in the '20u40' Class of '16? Make your choice.

Wednesday, June 22, 2016

The "20 under 40" awards are one of our favorite projects here at SSN. And, no wonder, in the past nine years, we've honored some real superstars.

We need help finding the superstar integrators or end users for the Class of 2016. Don't delay: The July 1 deadline is around the corner.

Here's a link to the nomination form. It only takes a couple minutes to fill out.

A reminder: The "integrator" category included people who work for a security integration firm, alarm company or installing security dealer, or a monitoring company. The "end user" category is for security professionals who work for an end user. Sorry, manufacturers,consultants, bankers are not eligible. However, anyone can make a nomination.

Please make a nomination today.

Got questions? Call or email me.


Smart home wars heating up

Wednesday, June 22, 2016

Just as we have seen with the smart phone revolution, the battle for the smart home looks like it will be just as hotly contested, as there is no denying that consumers today are embracing the smart home concept. 

Studies are popping up weekly confirming that demand is increasing for smart home products and services as homeowners learn more about smart home and home automation technology available today.

The latest research, from market research firm Berg Insight out of Gothenburg, Sweden, shows that North America is leading the global smart home market with 12.7 million smart homes in 2015, a 56 percent year-on-year growth. According to the research, the strong market growth is expected to last for years to come, driving the number of smart homes in North America to 46.2 million by 2020, which corresponds to 35 percent of all households.

The study found that the most successful products in the smart home market include smart thermostats, security systems, smart lighting, network cameras, and multi-room audio systems.

“There is no doubt that regular consumers in the future will own and operate a wide range of connected objects in their homes, from connected home appliances and luminaires to thermostats and security devices,” said Johan Svanberg, senior analyst, Berg Insight. “Attractive use cases, interoperable devices, and well-implemented user interfaces are needed in order to accelerate the market.”

Although Amazon Echo’s Alexa is leading the smart home charge right now, Apple is making a serious play with its announcement at its Worldwide Developers Conference last week of its new app called Home, which will be a hub on the iPhone for all the connected devices in the home. The app is the logical next step for Apple’s HomeKit platform, and both work with Siri, who is getting some improvements and upgrades as well.

Apple also announced that it is working with homebuilders—Brookfield Residential, Lennar and KB Home—to build homes later this year that come with built-in Apple HomeKit infrastructure.

Other major players in this battle for the voice-driven smart home include Microsoft with its Cortana voice platform, and Google Home’s Assistant, which was announced in May. Rumors abound that both Microsoft and Google, like Apple, are gearing up for a serious play for a piece of the smart home market. 

Apple’s brand equity with consumers, though, shouldn’t be ignored, as it is not a big leap to think that consumers would be willing to take the plunge into the smart home market with Apple, a company they know will be able to provide a complete, somewhat air-tight system from the ground up, so to speak.

One negative for Apple is its seemingly late entry into the smart home space, where many early adopters are already using many smart home products that will not work with Apple’s HomeKit platform, which requires using a special encryption chip. Some HomeKit-certified products are currently available from companies like Honeywell, August and Phillips Hue, and Apple said that there are close to 100 more compatible products coming this year.

Stay tuned, because things are starting to get interesting in the smart home space.

CMS’ Tony Wilson talks about DragonFly

Wednesday, June 15, 2016

I recently got the chance to have an email conversation with CMS’ president Tony Wilson about the company working with Honeywell’s DragonFly DIY offering. The DragonFly product is a self-installed system that is tied to professional monitoring. Wilson said the company hopes to have dealers on the DIY program by the end of June.

Wilson said that this is the first DIY solution that CMS is offering its dealers, adding that the company is also “considering adding an additional DIY program that will offer a more traditional security system solution.”

CMS has been looking at the DIY offering since April 2015, according to Wilson. “In April 2015, CMS hosted a small dealer meeting, where one of the hot topics was the growing DIY market. I invited Keith Jentoft, president of RSI/Videofied at the time, to speak at that dealer meeting. Keith introduced the DragonFly offering to the group, and there was a fairly positive response from that small group of dealers.”

“Once we knew the majority of our dealers were interested it was a no-brainer,” he said. “We ramped up the integration of DragonFly with our monitoring platform, and started educating our Business Development team about the product.”

“After a year or so of discussion with our dealers about the DIY business model, and the growth of DIY as a competitor in the security market, we’re hoping that this is an easy way for them to combat against sales they’re losing to DIY only companies.”

Wilson also said that the offering could help CMS dealers enter new markets, “like renters, and all those millennials who don’t see the value in a traditional security system.”

The company announced the DragonFly offering at ISC West, alongside its new proprietary dealer portal, CMS Compass. “Our dealers are excited about the mobile app, the real time data entry, and easy access to reporting.  They realize that CMS Compass is going to be much more than a dealer portal, it’s going to help them navigate their business in a whole new way. … [It] should be ready for our dealers by the end of July.”

CMS is a wholesale monitoring company under Protection 1. Concerning the recent deal merger with Protection 1 and ASG, a company spokesperson declined to discuss the deal, saying that not much has changed at CMS.

Economist to security dealers: acquire and hire now

Wednesday, June 15, 2016

Economist Alan Beaulieu, closing keynote speaker at the ESX 2016 show that wrapped up last week in Fort Worth, Texas, was back by popular demand and did not disappoint, as he was able to mix economic forecasting with a wry sense of humor that had attendees both intellectually riveted and spitting out their drinks at the same time.

After telling the audience, “Another great depression is coming in 2030,” as baby boomers continue to age and put pressure on our healthcare system and finances, Beaulieu then said the next few years will be very good for the country and the security industry overall.

“2015 was a good year—record high levels of GDP and job opportunities, and the economy is growing,” he said. “I expect the fed rates to go up, so now is the time to get that loan, and make that purchase or acquisition, hire new people.”

He said that it is also imperative to “make sure your training and retention programs are top notch,” and “plan for higher wages and energy costs” down the road.

In the short term, Beaulieu said that he sees a mild recession coming in 2019, similar to the one we had in the ‘90s, and although he wouldn’t pick our next president, he did guarantee a “one term president” because of that looming recession.

In regard to that great depression in 2030, Beaulieu said we have the baby boomers to blame for it.

“We have 80 million baby boomers, but we have 3- to 4 million more millennials,” he said. “The millennials are going to need all of us baby boomers to die off because we are going to ruin the economy for them.”

As for the millennials, Beaulieu said, “Who knew it, but they are just like us, and want the same things we do—a family, kids and a house in the ’burbs. They will be a strength for our nation, but only after us baby boomers die off.”

Beaulieu told the audience not to be afraid to hire millennials, especially at a time when it is so difficult to find quality employees in the security industry. “Just make sure you feed them,” Beaulieu said. “And I am talking actual food.”

Electric Guard Dog has new owner

Wednesday, June 15, 2016

COLUMBIA, S.C.—Electric Guard Dog, a manufacturer and installer of a solar-powered perimeter security system that is electrified and monitored by a central station, based in Columbia, S.C., has a new private equity owner as of June 14.

Snow Phipps, a PE private equity firm focused on middle-market control investments, targeting platform companies with enterprise values ranging from $100 million to $500 million, has purchased Electric Guard Dog from Ulysses Management for an undisclosed amount.

Raymond James & Associates advised to Electric Guard Dog on the deal.

“The company is poised for significant growth and we intend to meet growing demand by continuing to invest in sales, marketing, service technicians, compliance, and technology,” Sean Epps, partner at Snow Phipps, said in a statement.

Electric Guard Dog CEO Jack DeMao and the current management team will remain. In December, Electric Guard Dog CFO Nathan Leaphart answered an SSN News Poll about the benefits of being owned by private equity.

In 2014, Electric Guard Dog passed $2m in RMR.

Snow Phipps operating partner John Kenny will join Electric Guard Dog as the non-executive chairman of the Board of Directors.

ESX 2016 Report

Tuesday, June 7, 2016

Friday, June 10

I started the final day at ESX sitting in on a session titled, “Rethinking the Political Landscape - How to Impact the Industry through Legislative Action,” which was moderated by Robert Few, director, Time Warner Cable - IntelligentHome, and featured panelists Todd Baxter, regional vice president of government affairs, Texas, Time Warner Cable, and David Morris, founder, Modern Systems Inc.

The Panel emphasized taking a proactive role through industry representation with elected officials.

“ESA is currently tracking and monitoring 177 bills that could possibly affect the industry,” noted Baxter, who said it is imperative that security company owners get to know their state legislature, who can make them aware of impactful legislation.

“It is so important to meet and get to know them [state legislators],” he said. “They are there to represent you.”

Morris told his story of how he was able to block some legislation in his state of Kentucky that would have been harmful to security businesses by reaching out to his state legislators and getting the word out to others in the industry and within the state. “I knew it [the proposed legislation] wasn’t good for our industry,” he said. “Don’t assume the state knows what they are doing when it relates to our industry.”

Morris was able to work with his state legislators to amend and rewrite the bill to better reflect the needs of the security industry and professionals in his state. “Everything we suggested to the state they agreed to and added in the language of the bill.”

Although the bill died in committee, the panel all agreed that sometimes halting or killing a bill that is bad for business is an important first step. 

“The entire process is set up to kill bills,” said Baxter. “I like to tell people that there are two things you should never watch being made: sausage and legislation. It is very difficult to get a bill through and more than half don’t make it.”

For those looking to dip their toe into the legislative pool, Few said participating in the annual ESA legislative trip to Washington, D.C., “was the key to figuring out the process” for him.

For the closing keynote, Economist Alan Beaulieu, a principal of ITR Economics, returned by popular demand and did not disappoint, as he was able to mix economic forecasting with a wry sense of humor that had attendees both intellectually riveted and spitting out their drinks at the same time.

For starters, to get everyone’s attention, Beaulieu started out by saying, “Another great depression is coming in 2030,” as baby boomers continue to age and put pressure on our healthcare system and finances.

“We have 80 million baby boomers, but we have 3- to 4 million more Millennials,” he said, pointing out, “The Millennials are going to need all of us baby boomers to die off because we are going to ruin the economy for them.”

In the short term, though, Beaulieu said that he sees a mild recession coming in 2019, similar to the one we had in the ‘90s. But before that happens, he says the next few years will be very good for the country and the security industry overall.

“2017 was a good year—record high levels of GDP and job opportunities, and the economy is growing,” he said. “I expect the fed rates to go up, so now is the time to get that loan, and make that purchase or acquisition, hire new people.”

He said that it is also imperative to “make sure your training and retention programs are top notch,” and “plan for higher wages and energy costs” down the road.

Although he wouldn’t pick our next president, he did guarantee a “one term president,” because of the looming recession in 2019.

As for the Millennials, Beaulieu said, “Who knew it, but they are just like us, and want the same things we do—a family, kids and a house in the burbs. They will be a strength for our nation, but only after us baby boomers die off.”

He told the audience not to be afraid of hiring Millennials, especially at a time when it is so difficult to find quality employees in the security industry. “Just make sure you feed them,” Beaulieu said. “And I am talking actual food.”

Thursday, June 9

Day two at ESX 2016 began with the Industry Excellence Breakfast, which provided the perfect setting to recognize and honor the industry’s leaders with awards. It also featured keynote speaker Michael Jagger, founder and CEO of Provident Security, who stressed to attendees that becoming great or “remarkable” at what you do involves staying focused on your business model, and many times saying no to the numerous opportunities that arise for companies in today’s security industry.

He gave the example of renowned master chef Jiro Ono at Sukiyabashi Jiro in Tokyo, a three-star Michelin restaurant located in the basement of an office building that Jagger visited on a recent trip. Ono has made a name for himself, Jagger pointed out, by “intentionally not being bigger, staying smaller and being the best sushi chef he can be,” he said.

After the Industry Excellence Breakfast, I sat in on an educational session titled, “Video is the New RMR,” moderated by Scott Carpenter, president, Action Alarm Solutions, and featuring panelist Larry Folsom, president, i-View Now, Nik Gagvani, president, CheckVideo, LLC, and Daniel Forrest, CEO, Eyeforce Inc.

Carpenter led the session off by saying, “Video is the next market that will save everyone,” as it provides the opportunity to add a new level of RMR to your business.

Gagvani pointed out that in addition to the new wave of IP-based cameras available and the capability of cloud-based monitored video being readily available, “video analytics allows you to expand your monitoring capability.”

Forrest noted that although video is being used for small to enterprise commercial locations, he sees increased adoption of video on the residential side. “There have been some privacy issues in the past for the home but that is changing,” he said, opening up another area for increasing RMR for dealers today.

Gagvani added, “There are a lot of good use cases to draw on now in the home, so video will become more accessible to, and desired by home owners.”

Moving back to the main stage for the Public Safety Luncheon, featured speaker FBI Section Chief Philip Celestini provided an overview of what the FBi is doing to combat the ever-changing landscape of cyber threats. As a veteran special agent of the FBI, Celestini is the Senior Executive FBI Representative to the National Security Agency and U.S. Cyber Command, and has seen first-hand the financial and other impact cyber attacks have on the U.S. and throughout the world.

For example, ransom-ware attacks went from causing $25 million in losses to $200 million in just the last year in the U.S., as well as an astonishing $2 trillion in cyber crime losses worldwide. Furthermore, “80 percent of companies who have been attacked by ransom-ware are not reporting it to law enforcement,” he said, which is why the FBI is reaching out to the industry for its help in spreading the word of the importance of cyber security and working with law enforcement to minimize loss.

The second day on the trade show floor gave me another chance to check out the ESX Innovation Award winners’ products up-close and personal, and demo the latest and greatest products in the industry today.

Wednesday, June 8

The first full day at ESX 2016 in Fort Worth, Texas, began with a thought-provoking OpenXchange Breakfast discussion led by ESX Chairman George De Marco, featuring panelists Nate Williams, chief revenue officer for August, and Tim Colleran, director of Business Development for Qualcomm.

De Marco started things off right with some fun by announcing a special guest—Amazon Echo’s Alexa, who was given a seat on the panel to join the discussion. After some uncharacteristically witty banter from Alexa, it became apparent that it was not Alexa at all, but rather De Marco’s daughter, Lauren, who with the help of her father provided some levity before some serious discussions on identifying disruptive technologies and emerging trends in the industry today.

De Marco started the discussion by saying, “Every aspect of your business is about to change,” which as the day went on, emerged as a major theme for the show, as it reflects the pivotal time in the industry right now, especially on the residential side.

Williams pointed out that the industry needs to pay attention to the success of Amazon’s Alexa, which he pointed out is in 4.5 million homes, as “voice is the next big thing, and you will see an explosion in the next five years,” he said. “Voice control is just more natural and people want that today.”

“The big challenge,” he continued, “is integrating and bridging products in the home. Over time, we have to be able to show how devices work in concert, which is already starting to happen.”

After the OpenXchange breakfast, I sat in on a spirited session, “Go Big or Go Home? Expanding & Extending into New Markets,” which was moderated by Greg Simmons, co-owner/VP of Eagle Sentry, and included a great panel featuring Jeremy Bates, general manager and co-owner of Bates Security/Sonitrol of Lexington, Inc., Barry Epstein, president of Vertex Capital and Tom Kerber, director, Research, Home Controls & Energy for Parks Associates.

The panel was well balanced, with Kerber handling the research side of things, Epstein looking at acquisitions and Bates providing a dealer’s perspective.

Kerber pointed out to the packed session of interested dealers that today “a majority of security subscribers—more than 50 percent—have interactive services,” he said. “RMR growth, for the most part, has been driven by this increase in interactive services adoption. And security is the leading channel to the smart home,” providing an opportunity for dealers to increase RMR by being able to provide these options for their customers.

Bates pointed out that with so many smart home and interactive products and new opportunities, “dealers need to be careful what they chase and stay focused on their business model” as they look to possibly expand or grow into new markets or geographical areas.

For dealers who are trying to navigate the acquisition landscape, Epstein noted that there are certain criteria that must be met before a dealer decides to buy another company. The first thing to ask is “do they have good, solid contracts?” he said, “Because if they don’t have contracts, tell them to call you back when they have contracts.”

Prior to the trade show floor opening, the Opening Keynote Luncheon featured world-renowned business futurist and innovation thought leader Nicholas Webb, author of Innovation Playbook and The Digital Innovation Playbook, who raised some important questions to ponder in this new smart-home driven world we are now living.

Webb pointed out that there are a lot of hackers, so to speak, who will try to disrupt the industry by providing innovative technology or services that consumers today want, and provided examples of what Uber did to the taxi industry and what the WAZE app did to GPS devices like Garmin.

His take-home message to a packed house: “You either become a hacker—a disruptive innovator—or you get hacked by a disruptive innovator.” 

Note: Please check back here and at SSN Editor Martha Entwistle’s blog page for updates from the show.


Ready for 5G?

Tuesday, June 7, 2016

The Central Station Alarm Association name is on its way out. At the CSAA general membership meeting here at the ESX show here in Fort Worth, Texas, members voted to change the name to The Monitoring Association. Here's a story that Spencer wrote about the name change a couple weeks ago.

Jay Hauhn, CSAA executive director, told me that 90 percent of those voting were in favor of changing the name to The Monitoring Association, "and the other 10 percent wanted to change the name, the only discussion was about what exactly the new name should be." 

The new name signals a change in direction for the association, and is among a list of improvements and updates that Hauhn and CSAA president Pam Petrow have outlined over the past year or so.

Hauhn said the new name better reflects what professional monitoring companies do. "Central Station Alarm Association is an old school term that was driven by UL standards," he said.

Today's monitoring companies are monitoring "things that are mobile, people, and more. It's not just the monitoring of fixed assets anymore," Hauhn said.

Petrow said that there are some research and registration tasks that the association will have to complete before the name change is official.

The OpenXchange breakfast on Tuesday morning featured a panel discussion moderated by ESX chair George DeMarco with speakers Nate Williams of August Home and Tim Colleran of Qualcomm, and “special guest Alexa Amazon,” (played with perfect timing by Lauren De Marco.) Please see photo. Alexa was seated in the chair between George De Marco and Tim Colleran.

The theme that emerged was how “new players” such as Qualcomm and August can help foster innovation in the security industry by collaborating with traditional security companies—manufacturers and installers.

Nate Williams  said there are two reasons customers want a smart home: "to save money or for more security." However, the smarthome devices must make the homeowners life better. "No one wants to be CTO of their home," August said.

Tim Colleran predicted that voice will be "the next big thing in smart home," but, he cautioned that devices need a smart filter for anything that's' being stored in the cloud. He talked about smart home features helping raise the historic 20-percent penetration rate of residential security systems, but it's important for security companies to pay attention to demographic data. A smart home consumer in rural Colorado and the smart home consumer in Los Angeles have vastly different reasons for investing in a smart home, he said. 

On the show floor later in the afternoon, I spoke to many of the exhibiting companies including Axis Communications, where I had a chance to catch up with Jennifer Bruce, who's in charge of business develeopment for Axis cloud solutions. Bruce has agreed to be an advisor for Cloud+ and I'm looking forward to working with her on the 2016 educational program.


Day 1

Security Systems News editors have just arrived in Fort Worth to attend ESX 2016.

I'm looking forward to many of the "main stage events" and the exhibit hall, and I'm planning to check out a couple of educational sessions tomorrow including one on cloud technology. It's called "Making Sense of Cloud" and it's at 10 a.m. in room 202A. I'm doing some research as I plan the educational program for Cloud +. What's Cloud+? Here's a link to the website and here's a link to a story about Cloud+.

Even though it's at the same time, I'm also going to check out the "Risky Business" session, which will address what SMBs need to do to survive a cyberbreach. It's 10 a.m., next door in room 202B.

And, as I was winging my way out here today, I read an interesting story in the Atlanta Business Chronicle (from Monday) about AT&T expanding its 5G lab trial to Atlanta. According to the story AT&T's trial is already happening in Austin, Texas. In addition to Atlanta, the trial will also be expanded to Middletown, N.J. and San Ramon, Calif.

This shoud come as a reality check to security companies out there still dealing with 2G sunset. Here's a link to the story.

Doyle buys in Albany

Wednesday, June 1, 2016

Doyle Security Systems acquired Albany Protective Services yesterday, adding 1,100 accounts to the company, almost doubling Doyle’s presence in the Albany area.

“It gives us a great expansion in our Albany market—just a much stronger presence,” John Doyle Jr., company president and CEO, told Security Systems News. Prior to the acquisition, the company had about 1,400 accounts in that area.

Doyle has been working on the deal for about 6 months. Financial terms of the deal were not disclosed. Albany Protective’s account base is mostly commercial, Doyle said. “Their split is about 70 percent commercial and 30 percent residential.”

APS had operated its own UL central station, but Doyle is transferring the accounts to its monitoring center in the Rochester, N.Y., area. “They were on the same software platform as we were, which was really helpful—for both their monitoring and their billing,” Doyle said, both companies used Bold Manitou for automation and Sedona for billing. “It’s been a very smooth process. It’s not 100 percent done, but its pretty close.”

Four employees from Albany Protective Services are joining Doyle. Former president and majority owner of APS, Mark Foster, is joining Doyle’s Albany office in a management position, the company announced. Ross Foster, who was part owner of APS, will work in Doyle’s sales, and two service technicians are joining the team from APS.

“Mark Foster—he just has tremendous knowledge about the industry and his customer base. Bringing him on board was very important to us, and likewise with his brother Ross. … Having them on our team is just a huge plus for us,” Doyle said.

The company now has about 27,000 accounts. Doyle said that it is not every day you see two multi-generational family businesses joining forces. APS, a third-generation family business, was founded in 1935, and Doyle is a fourth-generation business, founded in 1919.

Convergint buys fifth company in five months

Wednesday, June 1, 2016

SCHAUMBURG, Ill.—Convergint Technologies today made it five purchases in five months. And, there will be more, according to Dan Moceri, Convergint executive chairman and co-founder.

Convergint's fifth purchase of 2016 is: Corporate Security Services of Edison, N.J.

Moceri told me the deal expands Convergint’s geographic reach in the N.Y., N.J. and Philadelphia region, brings "really nice integration skills, product expertise across product lines we support, ... and a similar focus on the customer on the service side."  Corporate Security Services also has a "highly visible customer base with a strength in the financial and hospital verticals," according to a Convergint statement. Here's a story about CSS work at MetLife Stadium.

Bob McCabe, president of Corporate Security Services, and all of his 30 staffers are joining Convergint. “Convergint’s commitment to superior customer service was a driving factor in our decision to join their team," McCabe said in a prepared statement.

When will the acquistiions stop? Not in the foreseeable future, Moceri said.

Moceri expects Convergint's 2016 revenue to be about $600 million. He wants to continue to expand the company organically and through acquisitions, and he has the support of PE partner KRG Capital, which Convergint has been working with since September of 2012.

"We think by 2020 we can be a billion dollar organization," Moceri said.

Convergint purchased Dakota Security in January of this year. In April, Convergint acquired H&E Comfort Controls of Windsor, Ontario. and Enion, an integration firm based in Switzerland.  Last month, Convergint bought Total Recall of New York.




Smart home mania or madness?

Wednesday, June 1, 2016

With the flood of new smart home products hitting the market these days, one of the things I look forward to each day is checking my Google Alerts to see what new surprises this wild west of home automation and connectivity is bringing us now.

From smart toasters that tell you when your toast is ready, or if you like, that toasts the past night’s sports scores right onto the bread for you, to a smart-fridge that tells you when you need more milk, the number and volume of new smart home products hitting the market today is staggering. And, to say the least, a little befuddling, like the smart grill that tells you when your steak needs to be flipped, or the smart coffee maker that texts you when your coffee is ready, or … brace yourself … the smart tampon that reminds you when it is time for a change—huh?

As one of my SSN colleagues pointed out, you have to wonder if consumer interest and demand is driving this innovation or if companies are just throwing stuff at the wall to see what sticks. We both agree that more often than not, it is the latter.

The latest innovation, and I have to say I am surprised it has taken this long, is the smart home robot named ZenBo, which is basically Amazon Echo’s Alexa on wheels. ZenBo, and other robots like it that will surely flood the market in the coming months, can turn on your lights, walk you through a recipe, remind you to take your medicine or even read a bedtime story to your kids, if that idea doesn’t freak you out as much as it does me.

For every convenience that a product like ZenBo can provide to a family, you have to wonder if we haven’t flipped open the lid on Pandora’s box. When will the madness end, and how are dealers to make sense of all of these new products hitting the market?

For every interesting new product I read about, like the smart go-cart that Tony Fadell, co-creator of Nest, is designing to allow parents to geofence where their kids will be able to drive, there are five to 10 other new products that make you shake your head.

When it comes to sorting through all of this and figuring out what is viable and what is just, hmm, let’s say—insane—it is important for dealers to ask themselves: Will my customers be interested in this or are these companies creating a problem where there isn’t one just to sell another clever smart home product?