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The great New York State legislation debate!

 - 
Monday, January 24, 2011

I first wrote about Article 6-E, the proposed NYS legislation that would require licensing of all central station employees involved in the business of monitoring security systems in New York, a few months ago. Article 6-E is intended to be similar to 6-D, which requires licensing of the installers and service techs who actually go into end users' homes... There have been many voices pro and con, and a good debate is brewing... In addition to speaking with me and getting their voice heard, folks have also been sending their comments in to Ken Kirschenbaum's email newsletter. I've correlated some of the response I've seen there below.

Comments on New York's proposed monitoring license

To: Whom It May Concern:

From: Robert Keefe,  All American Monitoring

RE: Article 6E New York State

 

I have recently read of the New York State article 6E proposal regarding the separate licensing of Central Monitoring Stations and do not profess to know its content.

I also read Russ MacDonnell’s (of Rapid Response Monitoring) comments and do not detract from them.

I have been in this business as both a Monitoring and Installation Company for almost 38 years. I have seen Licensing and Alarm Ordinances come from nowhere to the bureaucratic and financial situation it is today for all of us.  Over the years, questions have been raised as to its purpose from quality of service to money to restraint of competition.

Fortunately, on the latter, while I have heard those voices over the years, always in the end wiser minds prevailed and restraint never materialized for the good of all.

We also are a Wholesale Central Station Monitoring Company for 1450 Alarm Dealers across the United States.  I agree with MacDonnell, that Dealers are very concerned regarding the monitoring of their accounts to the point we receive their visits from all parts of the country as far away as Alaska on a regular basis.  We welcome their visits and these Dealers go back home feeling they and their customers are in good hands.

Both they and us would have it no other way.

On the Licensing side, let me tell you a little bit about us.  We have been a Central Monitoring Station since 1973 and UL Certified since 1981.  We monitor in all of the United States and are licensed in all states where required with many, many municipal licenses as well. Yes, it is very time consuming and expensive, yet every state and municipality feel their purpose is beyond reproach so on it goes.  I’m not sure it stops as it seems to be the system in place and these jurisdictions want to police their area.

I am in continuous continuing education as you might imagine.

Regarding our Central Station Operation, we have two SIA trained Instructor Operators and all Operators are Level 1 or 2, CSAA certified. They are all fingerprinted and checked for criminal history by the Florida Dept. of Law Enforcement. They are well paid and our well qualified trained staff are second to none.

Our technology is the latest and greatest. We meet all the qualifications of a CSAA Five Diamond Central Station.  With all that we would seem to be qualified to monitor anywhere which is true except one location, that is NYC Fire Monitoring which seems to be a very closed group, and extremely difficult to become part of, which is where the tone of my letter is going.  New York State will do as New York State will do and as so many others have done including my state of Florida, so I’m not sure I’m in a place to tell them what to do.  On the restraint side, I get even more concerned and I hope there is no consideration there.

As I said, you would think with our qualifications we would be qualified to monitor Fire Alarms in NYC, but it seems very difficult to accomplish, so we are unable to do that while NYC Monitoring Companies with a Florida License are permitted to monitor Fire Alarms in all areas of Florida as far as I am aware.  If there is to be free and open fair trade, the American way, then I guess New York State will not be much different than most which brings me to my final question, regarding New York City.  If New York State implements Central Station Monitoring Licensing and its intent is not to be restrictive as we would all expect, would that then mean we would be qualified for Fire Monitoring in NYC?

While we all understand that AHJ is the final authority, I would hope NYC Fire Monitoring would be an easier task to accomplish then it currently is for well qualified Central Station’s such as we are.  I would appreciate being advised by someone in the know.

Robert makes a good point: In order to be a successful monitoring station and compete in a free market with other businesses, aren't you already doing a pretty good job of vetting your employees? Why go with more licensing?

Joe Hayes of the NYBFAA has some counterpoints:

Regarding the licensing of alarm monitoring firms.

Point #1 Those who work in NY and hold the Article 6D license (Business of Installing, Maintaining and Servicing Security and Fire Alarm Systems) are required to be fingerprinted and to fingerprint our employees, resulting in a background check of the employees. Hopefully, we all comply with that requirement. We then obtain sensitive information from our subscribers (pass codes, open and closing times, vacation schedules, etc,) and give that information to a monitoring station who may or may not (ask them, and trust but verify) fingerprint their employees. Seems that there is a glaring vulnerability that needs to be closed.

Point #2 It wont be long before some enterprising member of our industry decides to open a monitoring station in, say Mumbai or some other third world call center area. How secure would you feel exporting your client's information to an offshore monitoring station? And what about those alarm companies who monitor critical infrastructure (consider sewer plants, water pumping, electrical substation, I could go on)? Would you feel secure in having someone in a time zone 7 hours or so away monitoring those accounts? Or having access to the account information?

Point#3 There are some in our industry who have been very vocal in their opposition to the proposed Article 6E monitoring law. Those of you who have, just be man enough to take the responsibility for opposing this law (and not proposing an alternative or improvement)  when an event happens that gives a black eye to your industry. An event will happen, it's not a case of if, but when. And then, take responsibility for the law that gets rammed down out throats by the "we need to protect the people" political types. It will be worse than anything we, as an industry create. Coming from a law enforcement background, I know it is always better to police yourself than to have "outsider" police your organization.

Point#4 The NYBFAA is holding an open meeting on Feb 10, 2011 in Albany to hear comments from the industry. Your thoughts? Oh, before you comment, I suggest reading the proposed bill on our website.  Thanks

Joseph Hayes, CPP, PSP, CET

President, NY Burglar & Fire Alarm Association (NYBFAA)

Interesting... Joseph argues that it's better to police oneself than to wait for municipalities to be hurt by rogue central stations or operators from Mumbai...

Someone calling himself Portland Paul also comes down in favor of the licensing, saying it won't be that expensive...:

Let me figure out the increased cost of the proposed licensing requirement in New York  that will be passed on to the Rapid Response Dealers based on the cost of a license in my state, which is $310's every two years.  1200 dealers divided by $310.00 equals $3.87 per dealer every two years or $1.94 a year. Hopefully they already have their insurance coverage handled. That shouldn't change whether you are licensed or not. If you are already following good sound business practices, I doubt the law will have you change anything so your cost shouldn't go up to meet the requirements. If your are using good business practices in the security industry, than you are probably overcharging the dealers anyways. I will pay that $1.94 increase in a heart beat to know that I am dealing with a company that is regulated and following the law. Stop whining. Get licensed. You are already doing it other states, so what is the big deal.

Portland Paul

Someone else going by the name Dusan says it's not about the cost, but about the principle...:

To Portland Paul: It is a big deal! It isn't about the fee. It is about government control, extortion, fines and punishment of working people and businesses. When you allow the government to create unreasonable laws, or laws not clearly black&white on LOCAL LEVEL, then every County, every Town will have different laws. You won't be able to know, or follow the laws, you may not even be allowed to work in a ZIP code other than your own, and if you do, you may face fines and imprisonment. You may get busted by cops, locked up, your truck impounded or broken in - because you failed to recognize some local law which was never published and you couldn't even know existed. That's what LOCAL government control will do.

Dusan

Morgan Hertel over at Mace CSSS comes down against the proposed licensing law:

To all:

Regarding  6E, and state licensing of out of state central stations.

First of all if you don’t post your real name and company on Kens list no one takes you seriously.

1, New York has no money to fund and administer this program, read the papers they are laying off people everywhere.

2, Even if it were passed NYS has no standing outside their borders, no money to travel and prosecute and therefore cannot enforce this, the only people that will get this is the good guys that already have licensing and good employee screening and training, the rest of the companies will not get licensed and no one will care or be able to do anything about it.

3, The ordinance is poorly written in my opinion, having things like 69-EE, Section 5, Page 6 were principals SHALL be held responsible for the actions committed by their operators is a huge mistake, if you have not read the entire thing you need to.

4, To the group that thinks that legislating competition away is the answer, this is a mistake, dealers are very sophisticated today, saying that there is a threat of having central stations in India will take over is a farce, and if you really are concerned next time you call your bank and get an out of the country call center are you going to pull out of the bank, the world is changing but market forces are much better suited to deal with these concerns.

5, Everyone I have spoke with in the monitoring industry is committed to having cleared, smart and trained operators working, but what we don’t need is to license the same person 100’s of times in all the states and communities in North America, what we want is one federal monitoring license.

It only makes sense, the feds have the best resources to background check, they have standing everywhere in the country. We can still register with the states even pay a fee for this for those states looking for revenue.

Having a federal requirement assures everything you want to accomplish in 6e, makes it enforceable and makes it easier for the national monitoring companies.

Morgan Hertel

Vice President and General Manager

Mace CS

What's your opinion? Voice it here, or better yet, go to the NYBFAA meeting on Feb. 10 or at least draft your POV in a letter or email for the NYBFAA. Get educated by reading the proposal and stay informed. Get involved and make a difference now--when your efforts matter--and not after the decisions have been made when there's nothing to be done.

Securing Congress

 - 
Friday, January 21, 2011

Members of the House of Representative have been given the OK the spend up to $10,000 to improve the physical security systems in their district offices, something that's obviously on the mind of many following the Jan. 8 tragedy in Tuscon, where Rep. Gabrielle Giffords and 18 others were shot, and six people were killed.

The pre-approval is only for one security installation and monitoring company, ADT, according to a story in Roll Call.  Members of Congress who want to spend more than $10,000 or use a company other than ADT must seek special approval from the House Sargeant-at-Arms.

ADT, the story notes, is on the GSA schedule.

From the story: "A spokeswoman for House Sergeant-at-Arms Bill Livingood said he is not showing preference for ADT because he is “precluded from endorsing any one company or product.”

“However, ADT is a nationwide company that is on the [General Services Administration] schedule,” spokeswoman Kerri Hanley said in an e-mail. “They can provide a standardized level of equipment and performance to all Members in all districts. ADT provides similar services to the Senate and courts and understands the nuances of protecting high profile clients.”

Indeed, as SSN reported in 2002 and 2006, ADT got a contract in 2002 to secure U.S. courthouses  and in 2006, following the murder of family members of a federal judge, ADT was given a contract to install and monitor security systems in the homes of federal judges.ADT subsequently got the contract to monitor the systems as well.

Members of Congress haven't hesitated to use other security companies, however, and the report says that members have opted to use Per Mar Security, Alliance Security Systems and Guardian Protection Services and First Solutions, Inc.

Here's a link to the story.

 

 

Smart meters smart for security industry?

 - 
Thursday, January 20, 2011

Smart meters are in the news because electric utilities around the nation are busy installing the devices on homes and businesses to enable better collection of power-use data and to save money.

And smart meters are also increasingly making news in the security industry—for a variety of reasons.

For example, smart meters just made headlines on the Security Systems News web site because APX Alarm recently acquired a company that installs smart meters for utilities. The acquisition of Meter Solutions, which APX announced Jan. 12,  is the first acquistion in APX’s 11-year history.

Alex Dunn, APX COO, explained why that Utah-based security company bought the smart meter installer, saying it would create a new channel to increase customers, leading with energy management and then upgrading them to other services such as security.

However, most of the news about smart meters in the industry is not so positive.

For instance, in the fall edition of the CSAA Dispatch, a publication of the Central Station Alarm Association, an article raises concerns about smart meters. It notes that news reports say that property owners have been experiencing problems with their other electronics, including security alarms.

Among questions the article says should be considered are: “What happens to home alarms when smart meters interfere? and “Are homes left vulnerable to break-ins?” Also, the article questions whether smart meters can lead to more false alarms, costing municipalities and property owners money (if alarm owners are fined for false alarms.)

In Maine, such concerns as smart meters interfering with security alarms has led Central Maine Power to allow customers to temporarily opt out from installation.

That option will continue until the state’s Public Utilities Commission decides whether CMP's policy of no opt-outs is reasonable or discriminatory. The utility opposes a permanent opt out, saying that if some customers don’t participate, it creates a void in the grid.

CMP has offered to install meters away from areas of concern in a home or business, but says individual customers would have to bear the cost, which could range from $750 to $5,000, according to a story today in the Portland Press Herald. A meeting between the PUC, the utility and intervenors is scheduled for next week, the paper said.

Communications with APX suggest there may be a way around such problems. APX said it hasn't encountered any interference issues between smart meters and that company's systems.

Dunn said in a statement: “An advantage of APX products is that our home security panel and smart meters use complimentary technologies that communicate with one another, eliminating concerns of possible interference."

 

 

Exhibiting at ISC West?

 - 
Thursday, January 20, 2011

Are you exhibiting a new product in your booth at ISC West?

Would you like your new product to be featured in SSN's new show product listing? If you've got two new products, you can send 'em both and we'll feature one in the March issue as part of our pre-show coverage, and one in the April issue, which is the official ISC West show issue.

Click here for a the link to submit your new products. All of the instructions are there, including where to sending photos, how to label them, "ABC Company for March" etc is there. If you have any questions, give me a call.

Oh, and we're firm on the deadlines: January 25 for the March issue and February 25 for the April issue.

Get in the know! Free webinars from CSAA aim to educate

 - 
Thursday, January 20, 2011

It's a "Tale of Two Toms" from competing NRTLS! (yes, it's a Dickens reference... I was an English major... What do you expect?)

CSAA's executive director Steve Doyle said it wasn't intentional that the two webinars were two competing NRTLs back to back. "We always reach out and try and see who would be most appropriate, and this is just the way it lined up," Steve said.

There're two free webinars coming your way in the near future. They promise to provide oodles of info and probably entertain as well. One is moderated by Intertek's Tom Connaughton and the other by UL's Tom Presnak. Both Webinars will be available for later viewing.

The CSAA has two webinars on tap for the immediate future. The first is slated for  Feb. 23 at 2 pm EST. It will be presented by recently CSAA-approved NRTL Intertek and is titled "Third Party Listings for Central Stations."

Seems appropriate that they would want to educate the masses on their choices for options when it comes to what third-party listing means, and the benefits that it provides to a business and to the industry.

The webinar will be presented by Thomas Connaughton, global business manager of life safety and security for Intertek. Tom and Intertek fought the battle for recognition for a while (here he his sitting down with SSN editor--then managing editor--Martha Entwistle at ESX '09). I sat down with Tom at ESX in Pittsburgh last June. He's a heck of a nice guy and very passionate about what he does.

CSAA says "You'll learn about your choices in selecting a listing agency (NRTLs) and how you can partner with them to reduce the stress of the listing and auditing process. Attendees of the webinar will take away a basic understanding of the standards, requirements and listing process, and learn about the common pitfalls." 

The second webinar is due to take place on March 23, at 2 pm EST, and will be presented by UL's Tom Presnak. Titled "Understanding Your Local AHJ and Creating An Effective Working Relationship," CSAA says the webinar "will help to provide insight into best practices in working with the local AHJs, the steps you can take to improve your working relationship with AJHs, and tools/programs at your disposal that can provide you the best odds of long-term success."

Sounds like a good piece of education. Presnak is a 25-plus-year veteran of Underwriters Laboratories who performs evaluations and audits of fire alarm companies throughout the United States. 

"We have gotten very much involved in standards and with AHJs and with education," Steve said. "We've learned that as we got into the business of doing Facebook and Wikis that participation in social media and online education is staggering."

CSAA's new director of marketing and communications Monique Silverio said the importance of education couldn't be overestimated. "One of the nice things about these webinars is that we're able to tap into the expertise of our members," Monique said. "They have this knowledge and they want to share this knowledge." Monique replaced former CSAA director of marketing and communications Celia Besore.

I covered the last UL led CSAA webinar on UL 2050, which was presented by UL's Pete Tallman (also a heck of a nice guy).

For more information about the new CSAA webinars, contact Monique at 703-242-4670, ext. 16.

Next ontap, according to Monique, will be a webinar related to social media in May. Stay tuned for more info as it becomes available. 

Defrauding ADT and Verizon results in 15-year sentence

 - 
Wednesday, January 19, 2011

Saw this story published today by the Spartanburg Herald-Journal about the consequences a South Carolina man now faces after trying to hoodwink ADT and a wireless provider:

“SPARTANBURG, S.C.–A Woodruff man received a 15-year prison sentence and five years probation Tuesday after admitting he bilked two nationally known companies out of equipment valued at more than $265,000.

Richard E. Lyons, 26, pleaded guilty to seven counts of breach of trust with fraudulent intent.

Circuit Judge Derham Cole's sentence includes $237,000 in restitution, according to the 7th Circuit Solicitor's Office.

Between Aug. 13, 2009, and April 5, Lyons ordered equipment from ADT Home Security and Verizon Wireless, authorities said.

The property, which ranged in value from $2,000 to more than $91,000, was delivered to addresses in Woodruff. Lyons attempted to pay for some of the deliveries with fraudulent checks. He represented himself to be affiliated with two companies at various points.

ADT reported the crime to Woodruff police in May. During their probe, police recovered about $30,000 worth of stolen property. When he was arrested in July, Lyons attempted to explain his actions in a two-page written police statement. In court on Tuesday, Lyons told Judge Cole he committed the crimes to support his drug habit.”

 

Select Security takes from the big boys

 - 
Thursday, January 13, 2011

Select Security, a super-regional alarm company based in Lancaster, Pa., successfully experimented with a summer model program last summer to beat the big boys at their own game. This summer, the company is going a step further: It is not only repeating its summer sales program but has hired a sales representative from one of the big companies to run it.

I’ve written previously about how Select Security president Patrick Egan went to Utah, home of the big summer model companies, and hired some college students to sell alarm systems for Select Security door to door in Pennsylvania.

This summer, Select Security plans to have even more teams of college student summer sales staff—and it now has hired one of Pinnacle Security’s former sales reps to run the program.

Select Security announced Jan. 13 that Derek Taylor, who formerly worked for Pinnacle, an Orem, Utah-based company that does summer-model sales nationwide, joined Select Security as of Monday this week as Select Security's Residential Program Sales Manager.

“We’re excited,” Egan told me. He said the company ran an ad and Taylor applied and “came out shining.”

“He’s had some real strong individual performance and he knows the (door-to-door) model very, very well … and we think he’s going to build a good team,” Egan said.

Taylor will work out of the company’s corporate office in Lancaster, but will begin recruiting efforts in Utah, starting next week, Egan said.

“He’ll be joining us in Provo…he’s already got lots of people lined up for us to see,” Egan said. He added that Taylor also would be recruiting around the country. “He’s got a whole bunch of other areas he wants to recruit in,” Egan said.

Taylor, 26, told me he’s been in the industry about five years. He said he saw Select Security's ad on Craiglist and said he’s eager to work with the company because they operate year round and are successful.

“I want to work with Patrick and the guys and take a residential program to new heights and to new levels,” Taylor said.

Egan said sales representatives will have an advantage working for a traditional security company like his, which does business throughout Pennsylvania. "They're going into our markets," he said. "They're going to be selling our name, they're not selling for an out-of-state company. It should be an easier sale and easier close."

Partner up, partner! Or miss the boat...

 - 
Thursday, January 13, 2011

I love it when my stories and blogs get comments... I recently did some writing about Verizon debuting their first home automation/security solution. I also wrote about them poking around at ESX last year, and that got a lot of commentary.

My recent writings about Verizon also prompted some reader comments. Actually, my most recent blog on Verizon was me publishing some remarks from ESX chairman George DeMarco. He had a lot to say, and one reader prepared a lengthy response.

First, however the commentary on the Verizon story.

Lee Jones of Support Services Group forecasted a similar result for Verizon as for other telcos and cable TV providers who've tried home security in the past.

"Current CATV and Telco management have a short memory. They forgot why they got out of the private security business during the early 80's. Overwhelming customer relations issues and more lawsuits than they ever experienced in their entire core business," Jones said. "They also forgot that local law enforcement is the critical third leg of the tripod, which is weaker now than when they made their exit. In my opinion the next generation of the alarm industry will be the benefactors, by the rewards for their massive investments and for cleaning up their huge mess."

Valid points. Others I've spoken with have also said that telcos regulary forget how complicated it is to be in the security business.

Commenting on my DeMarco blog post, Neil Licht from International Electronics, Inc., had a lot to say.

"This may not be a 'popular' answer but it seems to need a realistic answer re: Telcos in the security space.

I'll focus on 2 things. 1. Technology and the Telco's advantages, and 2. So what do we do in the face of this challenge? Technology, simple linked connectivity via web, IP - its was inevitable that the already tech connected and savvy Verizon would do this," Neil said. "Telco entry into the Security space is very different today than the past attempts from utilites like telcos because, as Verizon's fios bundles show, Telcos now have the easy and wide spread ownership over connectivity, necessary infrastructure, networking power, bandwidth management, wired, fios (fiber), international reach, wireless capability, understanding and managing types of services and signals like video, digital, analog and integrating them as 'if then.' For Verizon et al, its simply just another IP-network deployment to be added over their existing infrastructure."

This is an interesting point, and one that was made to me by NextAlarm's Tom Reed. Tom told me back in a November 2010 call that it would all come down to who controled the portal.

"I believe at the end of the day it’s either going to be big service providers or big retail who are going to be the portals for allt he IP services going into the home. We want to be the security guy in there," Tom said. "All we want to be is the guy with the alarm. And today, if we have to partner and help to make that happen, we’ll partner and share cloud capability ... NextAlarm’s never going to control the portal… it’s always going to be Comcast. It’s going to control phone, cable, internet, IP, smartgrid, security, home automation. Whoever is controlling the pipe into the homewill control the portal for all these services."

Neil goes on:

"We can relate to this as the task because of how we have shifted our systems deployment through the IT side of our customer's connectivity and networking so Verizon's comfort with knowing that's all they need to do should not surprise us," Neil said. "With offerings like bundled fios connection, verizon simply means adding just another channel. They already are expert in specifically identifying subscribers and managing them. In this case, unlike the past, it really may be a simple matter of adding the option and then harvesting it through their existing capabilities in managing data via IT-networking."

DeMarco also mentioned the simple process of Verizon leveraging their sizeable, built-in audience.

"I'm not sure that a fight against this trend can be mounted or succeed. Given the changes in connectivity, IP involvement, network structures, interoperability, enormity of managing so many varied bandwidth issues, CCTV, you name it that are now how security management systems get the job done, the Telcos now already own and have all that interconnected technology management in place. Video, ISP, web, wireless, land line, even wireless hot spots that replace the 'cable-fios' set top boxes, phones in place, lines in place plus the server and cloud capacity to make it all work," Neil said. "In fact, the wireless phone with the new G4 network has the infrastructure to easily join into the security management zone, carry and manage all of these signals accurately, tap into annunciate, notify, interface commands to systems, record, archive recall video or other activity on demand fast and allow for immediate annunciation/interactivity/integrated reaction."

Clearly, Verizon has a technology edge... And, like Tom said last November, they're already in a position where they're more in control of the new pipeline (broadband) into the home.

Neil continued:

Point 2. So what do we do now? What Verizon et al do not own is the knowledge and specific licensing for low voltage home or commercial security. What they do not own is the sales analytical skills to design, tailor, create and then sell the need-solution services that physical security management is all about. They surely do not have the people side of a central station monitoring-response ability in place or infrastructure in place nor would they want to spend money to build it. Can you see them trying to understand codes, AHJ's and UL listed central stations or other requirements?" Neil asks. Good point, Neil. One thing I learned in undergoing CSAA's operator training is how important human/human interaction is in the security industry.

"We have and offer that expertise and infrastructure and can partner as the provider and even manager of that side of things so they don't have to expend a fortune trying to do so. That's a giant joint venture ROI-Profit-Time to Market partnering chip in this whole equation re Verizon going into the security business and its our chip. In one sense, we own the key to Verizon's ability to gear up and make a profit without having to hire a gazillion people. Let's go use it proactively via partnering and this chip being the reason for and how we make that partnership happen. If I were seeing this trend, I would be going to my telco and proactively partnering, offering my security expertise as their key to what they are missing (above). That lets them do the tech innovations and remain in their comfort-expertise zone and YOU-We still do the expert provider side of the success equation, our comfort-expertise zone. In fact, this may even be something that should be industry wide initiative that can assure continuing value and growth for us who are in the alarm, physical security industry instead of a giant head on clash."

Kind of reminds me of George DeMarco's warning: Eventually, they're going to get it right, unless the rest of the industry steps in and seizes the opportunities for partnerships.

Neil says as much in his concluding remarks:

"Rather than fight the 'giant' and their capabilities and cash availability, we instead pro actively go create this win-win partnership with the Telcos. Technology is the key and Telcos have all of it under 'one roof' working together, managed together, interoperable together and converged together. What they do not have is the true understanding of what security is all about, what consumers need and we do. In essence then, we have and hold what they need for success."

You heard the man: Get out there and sell your relevance. Seek out and exploit the partnership possibilities.

 

Verizon's home security cards revealed--Commentary from a security industry luminary

 - 
Thursday, January 6, 2011

I have been following Verizon's nudgings around the security industry since I met one of the company's marketing folks at ESX in June. And now that they've unveiled their new Verizon Home Monitoring and Control solution at CES in Vegas, I've got the story on that as well (just take a look at our top story on today's newswire).

In my research on the solution and in my interviews of the key players and industry commentators, I turned to security industry mainstay, George DeMarco who is the chairman of ESX.

George assured me he'd been talking about this kind of thing for quite a while and promised to get back to me as soon as he'd had a chance to do a little looking around of his own. As promised, George got back to me in an email at midnight of Jan. 6, the day CES dawned in Vegas. As luck would have it, I just happened to be going through my work email at the time (George and I are THAT devoted to security!) I've included select portions of George's remarks in my general Verizon story, but I felt that his response--more than just a simple few remarks--constituted a cogent and thought-provoking look at the way the winds are blowing. So compelling was George's response that I've decided to include it in its entirety below. Please enjoy George DeMarco's take on the changing state of the security industry, and what we should all be thinking about.

The electronic security industry has been going through a metamorphosis for some time. This is a result, in my opinion, of the advent of Fortune 500, multi-national and large, well-funded companies over the last ten years. Recently, we had Ascent Media, a content provider for media and entertainment services, entering the security monitoring business in a huge way. Now we have Verizon, with a market cap of $106 billion, announcing their official entrance into the "connected home" arena, offering cameras, motion sensors, smart door and window locks and energy efficient devices.

What we are witnessing is the evolution of the industry, being driven by new players focused on penetrating a very large market opportunity or increasing their customer share. Energy savings and remote access into the home will become a huge driver for homeowners in their buying decisions and Verizon recognizes this value proposition for their customer base. It is fast becoming a race to capture the attention of customers interested in convenience, savings and security, and consequently capturing the recurring revenues associated with these services.

ESX chariman George DeMarco

Technology is allowing suppliers and service providers the ability to deliver more desirable products and services that offer more powerful solutions for end-users. I believe these newest non-traditional players are "thinking on the fringes" of the box and are ready to storm the castle so to speak. The question is can companies, such as Verizon, deliver that personal touch expected by so many end-users. And, of course, from a regulatory aspect, is Verizon prepared to go it alone or will they be partnering with the industry. The industry says past history has proved that these companies have failed miserably; however, past history is no guarantee of future performance. From my viewpoint, I think competition is a good thing ... just don't underestimate your competition.

Think about this ... Verizon has 93 million customers nationwide. This number is extremely compelling as they develop their go-to-market strategy and uncover their execution results. How many of their customers own homes?  How much will it cost them for lead generation? How effective will they be penetrating their own customer base? What is their current bundling strategy? What is the percentage of customers that choose all their available services in a bundled offering?

This is where I offer words of caution ... be careful, be very careful. At some point, they will get it right and many alarm dealers and integrators will simply say what the heck happened. The current business environment offers a great opportunity for long-time industry professionals to reevaluate their game plans and consider writing new play books to effectively compete at a higher level, no matter who your competition is, today or tomorrow.

More creative dealer incentives

 - 
Tuesday, January 4, 2011

I wrote a story a while back about Baltimore-based AlarmWATCH doing some creative dealer incentives. They brought competing dealers out for a day of tailgating and football. Now this morning I came across another monitoring company setting up some friendly competition with a cool payoff for dealers.

SentryNet's sending dealers on a cruise to Cozumel...

"SentryNet is planning their annual dealer conference in 2011 and has booked cabins and meeting space on the Carnival Elation for their dealers and the few lucky vendors who sign up.  Dealers are earning their tickets to get on-board by doing what they do anyway; putting accounts on-line with the industry’s best independently owned monitoring station.  They receive bonus points for using enhanced services and attending industry meetings, on a state and national level."

That's cool. Sounds like a nice way to encourage dealers to get out and grow their businesses.

"We have been gathering our dealers annually for the past 16 years in different locations to educate, entertain and celebrate. These annual dealer seminars are usually held at fun locations so we can get together for two or three days. We provide CEUs, with a mini trade show in an atmosphere that encourages our dealers to share success stories and network with colleagues. Many dealers have established and maintained friendships over the years at these meetings. It also gives vendors and dealers a chance to network one on one in a relaxed atmosphere that helps build the personal relationships necessary for doing business together. Vendors usually sign up early to get a good space and a chance to be on the agenda for panel discussions or CEU classes," said SentryNet VP of operations Michael Joseph. "The prime locations are our way of thanking our dealers for their business. Past years have included locations at resorts, casino’s, and historic venues; generally in the southeastern US. Last year’s event was held in Clarksdale, Mississippi, 'the birthplace of the blues and home of Morgan Freemen’s Ground Zero Night Club.'"

The ocean-bound dealer conference will include a mixer and mini tradeshow as well as class time for those dealers and employees who need to attain their NTS CEU’s for licensing renewals.

“We believe this will be our best attended and most remembered conference,”  David Avritt, president and owner of SentryNet said in the release. “We stress to our dealers when you work hard, you have to learn to play hard and in the end you will succeed.  This is just one way we can assist them in the process.”

More information on SentryNet’s 2011 Dealer Conference can be found at SentryNet's site.

 

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