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PSA TEC 2018 call for presentations now open

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Wednesday, July 19, 2017

The PSA Security Network, a security and systems integrator cooperative with headquarters in Westminster, Colo., is accepting presentations through Aug. 4, 2017 for its TEC 2018 annual conference. Proposals can be submitted at www.psatec.com/cfp.

TEC 2018, which will be held at the Sheraton Downtown Denver in Denver, Colo., March 12-16, 2018, is a premier education and networking event for all professional systems integrators in the security and audio-visual markets. TEC features education and certification programs, networking, and dedicated exhibit hours designed to advance the skills and expertise of industry professionals nationwide. This training venue is open to all industry professionals and is designed to meet the educational needs of all employees within an integrator’s organization.

PSA Security Network’s president and CEO Bill Bozeman told Security Systems News that the move from Westminster—where the conference had been held for several years—to downtown Denver fro 2018 was needed to accommodate the growth of the show.

“The hotel [Downtown Denver Sheraton] is bigger, so we look forward to having everyone under one roof,” Bozeman told SSN. “In addition, I think some of our younger members and supporters are going to enjoy being in downtown Denver, where there is so much to do.”

The education program will deliver sessions tailored to physical security and audio-visual integrators focused on emerging technologies, critical issues in the industry, and tool development to augment attendees’ knowledge needed to continue to drive these industries forward. Sessions will be selected that serve a variety of disciplines including business management, sales and marketing, HR and recruiting, project management and operations, and installation and service.

Proposals are welcome for both certification programs and general education sessions for the security and audio-visual markets. All sessions must be unbiased and minimize commercial references and overt branding. Submissions are evaluated based on topic relevance, speaker expertise, and originality of the content. Additional guidelines are available within the call for presentations submission tool.

Accepted and approved presenters will receive complimentary registration to TEC 2018 and will have the opportunity to solidify their reputation as an industry resource and subject matter expert while expanding their own professional network and gaining access to strategic partnerships. PSA does not pay honoraria or expenses for accepted proposals.

CSG gains $40 million in financing

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Wednesday, July 12, 2017

Central Security Group on July 6 announced that it received an incremental first lien term loan of $40 million, as well as a 12-month maturity extension to its credit facilities.

The new funding “is part of a broader $350 million financing the company started in 2014. This was an add on to that financing,” Richard Ginsburg, president and CEO of Central Security Group, told Security Systems News in an email interview. CSG finances through Credit Suisse, Ginsburg noted.

Asked about growth initiatives, Ginsburg said, “We continue to grow our business through our long-standing Authorized Dealer Program, supplemented by our organic efforts.”

In the recent announcement, Ginsburg mentioned that the funding will help the company with geographic expansion, acquisitions and growing its account base. The announcement also emphasized the company’s Alert 360 offering, which provides interactive security.

Concerning acquisitions, Ginsburg told SSN, “We are always looking but are very selective.”

Ginsburg discussed what CSG looks for in an ideal acquisition. “We would consider quality companies with customers put on through more traditional marketing,” he told SSN. “We also look for companies with good employees and managers who are hitting glass ceilings because of the company's size and who would benefit from a company like ours, with more resources, financing, and a positive culture.”

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Sandy Springs considers fining dealers for false alarms

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Wednesday, July 12, 2017

The new Sandy Springs, Ga. alarm ordinance, which is set to be voted on July 18, is alarming many in the security industry as it looks to force alarm dealers to pay their subscriber's false alarm fees and fines.

“This makes as much sense as a car rental company being responsible for paying your speeding tickets if you get caught speeding in their car,” Dan Gordon, president of the Georgia Electronic Life Safety and Security Association (GELSSA), and owner of Ga.-based Gordon Security, told Security System News.

Gordon, as well as many security companies working in Georgia, including LOUD Security and Ackerman Security, are rallying others in the industry to pay attention to what is going on in Sandy Springs.

“If Sandy Springs passes this, which city goes next?” John Loud, president of LOUD Security Systems, told SSN, noting that he does not think this ordinance will help Sandy Springs reduce false dispatches.

“They outsource the collections to a firm called CryWolf (Public Safety Corporation),” Loud explained. “Their service includes collecting the assessed fines. The cost to Sandy Springs is the same, whether the bill goes to the end users of the alarm system or the alarm company. But the alarm company’s costs will increase. They will now have to bill their customers and establish a collection process, increasing the workload for their personnel.”

Loud and others in opposition to the ordinance believe this will actually cause an increase in the amount of false dispatches.

“Citizens will usually respond to citations from their local police or city municipality,” he explained. “If a vendor or service provider sends an assessment, they could very easily change monitoring companies and get additional false alarms through new providers. They can choose to never pay and continually change companies.”

He noted that this would result in more false dispatches as the end user would never be forced to change their behavior.

Loud also pointed out that the court systems of Sandy Springs will have a lot more cases. ”Either the alarm companies will be filing suit to collect monies from customers refusing to pay or the city will be pursuing alarm companies for nonpayment of fines they do not have the money to pay.”

He continued, “You will likely see many alarm companies choosing to not do business with residents/businesses that must comply with this ordinance. In Sandy Springs, most alarm companies charge only $25 per month. While false alarm fees can cost hundreds of dollars, the accounts receivable process will likely make it financially impossible for fire/alarm companies to take on such risk.”

He said that Sandy Springs could achieve greater reduction in the false dispatches if they would enforce all of their current ordinance provisions, such as:

- Follow the Enhanced Call Verification Georgia State law that went into effect in 2013. “The 911 operator could very easily ask for the two phone numbers the alarm company called prior to dispatch request,” said Loud.

- Do not allow dispatch on the subscribers that have not paid for previous fines—put them on a do not dispatch list.

- Do not allow dispatch for subscribers that have had 10 false alarms in a permit year.

- Activate the false alarm school the ordinance allows for, which will provide the training and prevention of future false alarms.

“Another step Sandy Springs could pursue is a higher fee structure for excessive false alarms,” said Loud. “This would force subscribers to either fix their system, teach others to use it properly or they could choose to stop arming their system. All three of the options result in reduced dispatches.”

He continued, “While I certainly see there are many ways to help unite with the City of Sandy Springs and help them achieve their ultimate goal of reducing false dispatches and wasting government recourses, I do not believe requiring the alarm companies to pay the fees is the answer.”

The GELSSA, along with strong industry voices like Loud's, are urging those in the industry to reach out to the mayor of Sandy Springs to voice their concerns, and for security dealers in the Sandy Springs area to attend the planned vote on July 18.

AICC opens annual survey

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Wednesday, July 5, 2017

The Alarm Industry Communications Committee recently opened its sixth annual communications survey, which asks about monitored accounts using POTS, VoIP digital dialers, as well as other technologies used for transmitting alarm data.

AICC started conducting the survey in 2012 because there was a lack of data on communication paths, according to AICC chair Lou Fiore. “The idea is to figure out what communications is in use, from the premises to a central station,” Fiore told Security Systems News.

“When we go to congress and the FCC and we want to ask that they retain something, or ask for new services, we have data to back it up,” Fiore said.

“This year, I introduced a question regarding AES, as opposed to cellular. But, in previous years, we’ve lumped AES … or private one-way radio with cellular, [calling] it all ‘wireless,’” Fiore said.

Part of the survey covers wireless technologies. “In 2016, 58 percent of new installations were using some form of wireless. Back when I started that part of the survey in 2013 it was about 45 percent. So, it’s steadily ticking up, and I’m sure this year it will [increase] even more,” Fiore said.

In 2012, 83.5 percent of monitored accounts used POTS digital dialers, either as a sole method of transmission or along with another method, Fiore said. “Now, it’s down to 58 percent,” he said, adding that he expects it to be lower this year.

The survey also asked what percentage of accounts use another technology—such as radio, IP, or cellular—as the sole method of transmission. “In 2012, it was 14.5 percent. 2016, it went up to 40 percent,” said Fiore.

In 2013, when the survey began asking about accounts that use IP exclusively, 15.6 percent used IP exclusively. That figure decreased to 9 percent in 2016, Fiore said. “IP exclusively, the use of Internet … is not as popular as everyone’s thought. It’s actually decreasing; it’s been steadily decreasing through the years.”

The survey can be found here: https://www.surveymonkey.com/r/R9SH7JC. Participation is not limited to TMA or AICC members. Fiore will share results after the survey closes on Aug. 11.

Camera demand growing as prices plummet

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Wednesday, July 5, 2017

The world market for professional video surveillance equipment grew by 3.9 percent in 2016, despite a drop in camera prices, according to recently published estimates from IHS Markit through its Video Surveillance Intelligence Service.

“This is a higher rate of growth than in 2015 (1.9 percent) but still low by historical standards,” Jon Cropley, principal analyst, video surveillance, IHS Markit, said in the announcement.

IHS forecasts a slightly higher growth in the global market for 2017—at 5.5 percent—and as a result, the world market will be worth $16.2 billion in 2017.

Accounting for more than 40 percent of global revenues measured in U.S. dollars, the Chinese market grew by 7.2 percent in 2016, according to IHS, which noted that exchange rate changes did play a role in suppressing a higher calculated growth in that currency (as the average annual exchange rate of the Chinese Yuan Renminbi to the U.S. dollar fell by 6.6 percent in 2016). In the report, Hikvision took the top spot in several categories.

“The world market excluding China grew by just 1.6 percent in 2016,” Cropley pointed out. “Demand for security cameras grew rapidly but prices fell considerably, affecting revenues. In fact, revenues declined in a number of countries.”

IHS also found that the supply base for professional video surveillance equipment is gradually becoming more concentrated, although it remains highly fragmented compared with supply to many other markets.

“The top fifteen vendors accounted for 58 percent of revenues in 2016,” noted Cropley. “In 2016, a number of Chinese vendors continued to gain market share rapidly in regions outside China. They tend to offer products with low prices and this has been a major factor in average price erosion in those regions.”

The report also found that 59 percent of all security cameras shipped in 2016 were network cameras, and shipments of HD CCTV cameras more than doubled. Less than 1 percent of network cameras shipped were 4K-compliant, according to IHS.

Note: Check back for more on this report, including additional comments from IHS’ Jon Cropley.

Ivan Spector voted president-elect of The Monitoring Association

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Wednesday, June 28, 2017

The Monitoring Association today announced that Ivan Spector, president of Montreal-based Sentinel Alarm Co., was voted to be the next president of TMA at its general membership meeting, held on June 13 during ESX in Nashville Tenn.

“I am very honored and humbled to serve in the position of President,” Spector said in TMA’s announcement. “I look forward to continuing our successes and I thank all of our members for their support and participation.” 

Spector is a Superior Court of Canada-acknowledged and accepted expert witness. Spector is a graduate of McGill University and he and his wife Jodi live in Montreal with their four children. Sentinel Alarm Co. is a full-service ULC-listed and Five Diamond designated monitoring station.

“In addition to his ownership of Sentinel Alarm, Spector is a leader in advancing alarm management in both Canada and the United States,” TMA said in today's announcement. For CANASA, Spector has served on the Board of Directors, was national president, and chair of the Response Committee. He was also a founding member and longtime board member of the Security Industry Alarm Coalition and he currently serves on the Executive Committee of TMA.

In addition to the election of Spector, officer positions for the next two years were proposed and accepted by vote of the membership: Don Young, ADT’s chief information officer; Morgan Hertel, VP of technology and innovation for Rapid Response; and CPI’s chief technology officer Steve Butkovich, will become vice presidents of the association and Alan Gillmore IV, Gillmore Security, will become TMA’s treasurer.

“Congratulations to Ivan and our other new officers,” TMA's current president Pamela J. Petrow, said in a prepared statement. “I have had the pleasure of working with all of them during my presidency, and know that the Association will be in very good hands under their leadership.”

These leadership changes become official at the conclusion of the TMA Annual Meeting in Scottsdale October 7-11.

New resi research promising

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Wednesday, June 28, 2017

U.S. households with professional security monitoring will generate nearly $14.7 billion in 2021, reaching a five-year CAGR of 4.7 percent from 2017-2021, according to Parks Associates’ Home Security NUMBERS research.

“Our last number from the fourth quarter of 2016 shows that 21.5 percent of broadband households, which is about 80 percent of overall households, have professionally monitored security,” Tom Kerber, Parks' director of IoT strategy, told Security Systems News. “So when you look at that number on an overall household basis, the number ends up being around 18.8 percent that have professionally monitored security.”

That is approximately 22 million households, and by 2021 Parks estimates that number will rise to 26.6 million, or 21.6 percent of households overall, having professionally monitored security, representing an approximately 3 percent growth rate.

“Over the last decade it has never been close to that 21.6 percent number,” noted Kerber. “In 2010, the number was 13 percent, so that is strong growth. Although from a conventional wisdom perspective it doesn’t sound like much, it is substantial. We had significant recovery from the recession from 2013-15, and now the growth is more modest, but it is still growing.”

When asked about the impact of the telecoms into the space, Kerber noted that Comcast is making waves.

“Comcast when they went public with their subscriber count at 957,000 as part of their annual reporting, that was substantial, representing a 40 percent growth over the prior year,” he said. ”Whether it is bundling with their core services, or subscribing people when they move, or more aggressive sales tactics mixed with their call center operations, they obviously have figured out how to move the needle in a substantial way. At a million subscribers, they are equivalent to Moni, or Vivint to some extent. So you can’t discount that type of success.”

He continued, “Telecoms, led by Comcast, are growing at a faster rate than the market is growing, so they are gaining market shares. And when we look at some of the smaller players, they are not growing at the same rate as others in the market, and we are trying to understand why this is happening through some current research that we are doing.”

Dina Abdelrazik, research analyst, Parks Associates, told SSN that some of the smaller local dealers “are a little more hesitant to provide smart home controls. I don't know if it is more of an infrastructure basis—they don’t have the employees to do so or the technological savvy to do so—but they are falling behind in terms of providing these controllers in the home that consumers are actively asking for. So, of course, if consumers can’t find it through their local dealer, they are going to look to those who can provide it for them.”
 

Vivint announces new campus, new solution

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Wednesday, June 21, 2017

In the past couple of weeks, Vivint has made two announcements. The first announcement, which came out on June 13, was about the company’s new facility. Then, on June 20, Vivint announced its new solution for property developers and managers—Vivint Smart Properties.

According to Vivint’s announcement, the new facility will be a 43,000-square-foot building, capable of housing up to 400 employees and includes a demo home equipped with a Vivint smart home system, a full-size basketball court, fitness center and six training rooms, including a technical training room and a hands-on product training room.

“We look forward to tapping into the strong business and engineering talent of the Utah State University community and contributing to Utah’s growth as a tech hub,” Alex Dunn, president at Vivint Smart Home, said in a prepared statement.

"We are very pleased to provide space for Vivint Smart Home on the USU Innovation Campus," Noelle Cockett, Utah State University president, said in the announcement. "The center will afford employment opportunities for people in Cache Valley, including USU students. Also, we anticipate USU research and outreach faculty engaging with Vivint R&D personnel in areas of common interest," Cockett continued.

Vivint Smart Properties will bring smart home devices to single- or multi-family rental properties, marketed specifically toward property managers. Harrison Jenkins, senior director of product integrations, told Security Systems News that this program is essentially “taking what we’ve been offering to single-family residential homeowners for years and making it accessible to renters. So, [that includes] lights, locks, thermostats, doorbell cameras, security.”

The customer, property managers, looks a little different from the company's typical customer, Jenkins noted. “It’s just a different model for us, but I think we have a good understanding of how it needs to happen and we’re ready to deploy it.”

Tom Few, Vivint Smart Home's vice president of business development, described how the new offering benefits both renters and property managers.

“We believe that it’ll help drive occupancy, it’ll help drive net operating income with increased rents,” Few told SSN. “I believe that it allows the renter to have control of their apartment, whether it be through video, door access, thermostats, lighting. These are all things that people are becoming accustomed to having and I think it’s going to be an amenity that’s going to attract more renters to that property.” 

Vivint has dedicated that is focused on property managers, developers and owners, according to Few. “We are presenting the opportunity to them, we are getting to the decision makers, and … everybody that we have spoken to has been happy to talk to us and interested in the offering,” he said. “Now, it’s just about creating that demand and actually deploying it.”

SIA raises advocacy efforts

 - 
Wednesday, June 21, 2017

The Security Industry Association (SIA) announced this week the establishment of a political action committee (PAC) called the SecurityPAC, which was formed to bolster its advocacy efforts to fully engage within the U.S. political process on matters affecting the security industry.

The timing of this announcement couldn’t be better as it comes a week before the SIA GovSummit, a leading public policy forum for the security industry set for June 28-29 on Capitol Hill and at The Liaison Capitol Hill.

“SecurityPAC was established to strengthen the voice of the security industry on Capitol Hill, by enabling SIA members to support candidates for federal office who will champion issues that are important to the industry,” Joseph Hoellerer, SIA Government Relations manager told Security Systems News. “There are hundreds of trade associations in Washington with robust advocacy efforts and SecurityPAC provides SIA with an additional and important tool to advance the policy priorities of its members.”

The newly formed SecurityPAC will raise funds solely from SIA members to support candidates for federal office who champion important industry issues, and will support matters pertaining but not limited to issues such as homeland security, cybersecurity, federal procurement and critical infrastructure protection.

“The establishment of the SecurityPAC follows the core mission of SIA, which is ‘to be a catalyst for success within the global security industry through information, insight and influence,’” SIA CEO Don Erickson said in the announcement. “The Security Industry Association’s political action committee will enable the association to do just that by adding a vital voice to the national dialogue during federal elections. With SecurityPAC, we will support crucial causes for the improved security posture of the entire country.”

Contributions to SecurityPAC are strictly voluntary and in compliance with statutorily defined regulations of the Federal Election Commission. SIA members with user credentials can access the SecurityPAC website at www.siasecuritypac.org. Employees of SIA member companies interested in gaining access to the site should contact Joe Hoellerer at 301-804-4714 or jhoellerer@securityindustry.org.

ESX 2017 report from Nashville

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Tuesday, June 13, 2017

Day One

Excited to be in Nashville for ESX 2017, which is celebrating its 10th anniversary, returning to where it all started in the music city.

Started Day One moderating a very interesting session “CounterPoint of the Day: DIY Security - Passing Fad or a Real Opportunity?” featuring two great speakers—Megan MacDonald, vice president of marketing, My Alarm Center, headquartered in Newtown Square, Pa., and John Campau, president and CEO of Comtronics, headquartered in Jackson, Mich. 

I want to extend a big thank you to both of them for making my job easy by getting some great conversations and interaction going with the audience.

MacDonald, who was instrumental in launching My Alarm Center’s DIY division LivSecure, started the session by defining DIY.

In the DIY space, she noted, there are two distinctions—professionally monitored and then the systems that are completely DIY, including MIY or monitor-it-yourself.

"Those are the ones you buy on the retail shelf at [big box stores], and it is truly a DIY—you set it up, there is no professional monitoring component, and no integration with a third party provider; it is literally a do-it-yourself,” she explained. “As we refer to DIY in our business, it is a bit of a misnomer, because that is not what we do from a DIY perspective—that is MIY. What I refer to as DIY … is self installed professionally monitored systems, which is a lot of what we are going to talk about today, and that is what we do at LivSecure. So the customer sets the system up themselves but it integrates with our CRM and with our monitoring center just like a professionally installed system does.”

In terms of professionally installed systems vs. DIY, Campau said, “We are a professional installing alarm company going on 60 years, so DIY is not a threat for us; we embrace this.” He made a good analogy to someone who needs to have their house painted. Some will choose to paint it themselves while some will choose to hire someone to come and paint it for them.

In regard to whether DIY sales impact sales of the professionally installed side of the business, MacDonald noted, “LivSecure is a complement to our existing offerings and as a tool to close more sales, not to replace existing sales that we were already making. It is another option for our sales reps, and we will pay them a multiple of RMR, just like we would do on a professionally installed system.”

MacDonald said it is all about closing the sale—“selling the right product to the right person at the right time.”

“If we get a DIY system in the wrong hands, they will eventually deactivate,” noted Campau. “With DIY in particular, we’ve got a very low churn rate in our business; we are hyper-focused on keeping our customers.”

Both pointed out that by just having a DIY option, it opens the conversation and can lead to that potential DIY customer choosing to have the system professionally installed, which “is just a better sale, because that is a stickier customer,” said Campau, one who is more likely to use and add to the system and less likely to attrite.

“If you are getting into the business or launching this, I would be very firm and specific on what the process is and the requirements are for rolling a truck to a self installed system,” MacDonald said, noting that otherwise you are going to put yourself in a difficult situation of rolling a truck much more than you would like.

Campau said that if a customer has a problem and needs assistance, he will roll a truck, but for a $100 fee and a commitment to an additional year on the traditional two-year monitoring contract that he offers. “You'd rather have that convo before the sale, on the front end; don’t rush to get that sale.”

The discussion also covered RMR potential, which is in the $40 to $45 range, as well as branding, marketing and engaging the customer. Both agreed that the more engaged a customer is with their system, the less likely they will cancel the service and much more likely that they will add more services over time.

Day Two

I started Day Two in the session “Must Know Future Trends of the Industry,” featuring two highly knowledgeable speakers in Speros Venios, VP of channel sales at Interlogix, and Michael Barnes, founding partner of Barnes Associates, an advisory and consulting firm that specializes in providing financing and acquisition related services to the security alarm industry.

Venios, who is responsible for the integration of security and smart home devices in the residential and commercial segments through the distribution, MSO and OEM channels, said that 50 billion objects are projected to be connected to the IoT by 2020.

“Connected homes will be the largest sector for IoT technologies,” he said, noting that by 2019 it is estimated to be a $490 billion market. “According to one survey, more than two-thirds of consumers plan to buy IoT technology for their homes by 2019.”

Despite all the disrupters, such as the cable, telecoms and tech companies in the market right now, “The security channel is well positioned to deliver these solutions,” Venios said, noting that they have an opportunity to be that trusted provider of both security and smart home products and services.

Barnes pointed out that over the past year his focus on operating performance and valuation trends in the industry—how product and technology is affecting the industry—has revealed three big trends: Faster product evolution and shorter lifecycles; a broadening array of capabilities and services; and a changing competitive landscape.

“The number of new products coming out each day is much faster than it was before and those products are expected to have shorter lifecycles … not because they’re not manufactured well, but because they’re going to be replaced with something faster, better or cheaper,” Barnes said. 

The broadening array of capabilities and services is “a wonderful thing for consumers and commercial end users of all types,” he said. “But, of course, it puts strains on those of you who are trying to provide those services—how do you pick which ones to offer, how do you package them and how do you price them?”

With all of the disruptors in the industry right now creating a changing competitive landscape, “Clearly technology is enabling some of these new competitors … that previously wouldn't have been a competitor in the industry,” he said.

Despite some of the challenges presented by the abovementioned trends, “This is a great time to be in the business,” Barnes said, noting that he sees nothing in the data that would tell him otherwise. “We look at, and we track hundreds of alarm companies and we try and track every deal that is going on in the industry, every dollar of capital that is being raised to support the growth for all of you.”

Next, I sat in on a spirited discussion, “CounterPoint of the Day: Cable Service Companies Are Here to Stay - What Impact Are They Having on the Industry?” which was moderated by ESX chairman George De Marco, and led by speakers Daniel Herscovici, Comcast's senior VP and general manager, and John Knox, owner and president of Knox Integrated Systems, who was elected as ESA president in 2012.

De Marco noted that the counterpoint forum is new to ESX this year, with the goal of getting everyone in the session involved in an interactive debate. A cushioned square, which had a microphone inside, was available to pass or throw around to anyone who had a comment or question.

De Marco started the discussion by asking Herscovici why Comcast entered into the security industry and how this has helped or challenged traditional companies.

Herscovici pointed out that Comcast is not only a direct-to-consumer home security solution but through the acquisition of Icontrol, it is also a platform provider.

“We entered the industry mostly because we saw a real opportunity to offer a great experience and leverage our current assets,” he said. “Comcast has 27 million household relationships through our Internet, video and voice products.” Plus, the acceleration of the connected home drove that as well, he said.

“More than half of our customers have never had home security before, so it is not that we are out there converting or doing a bunch of takeovers—a lot of our acquisition is new to the category, new to home security,” he said. “Awareness of what the possibilities are with the connected home security product on a broad scale and the awareness that we generate through our reach, through our consumers, kind of lifts all boats, and makes your conversations easier when you are selling.”

Knox said that he hasn’t personally seen any affect. “I don’t think that I have lost any customers to the cable companies,” he said. “I think it is more like what he [Herscovici] says: They are bringing more people into the market that weren’t in the market before.”

He continued, “Since I have been in the business, every five years someone has been putting me out of business. We have been living that our whole lives and we are still here. And if they don’t do a good job of supporting the customer, we are going to benefit off of that.”

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