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Industry makes united stand in Illinois

Thursday, March 17, 2011

Recent steps in Illinois to combat a legislative proposal to give public fire districts a monopoly over fire alarm monitoring are a good example of what the industry can do when it unites around an issue.

Opponents of the legislation, led by the Illinois Electronic Security Association, over the past week said they dissuaded one legislator to drop her co-sponsorship of the bill and also held a rally yesterday in the state capital that drew close to 100 participants, who then lobbied legislators personally against the bill.

“Today was a very good step forward for the industry,” Kevin Lehan, executive director of IESA, told me yesterday after IESA’s Legislative Day rally and lobbying effort in Springfield.

IESA wasted no time mobilizing after HB 1301, entitled the “Fire District Antitrust Exemption,” was formally introduced in the General Assembly on Feb. 8.

Lehan has described the bill as “an overstepping of government. This is a cash grab and nothing more.” It would allow public fire districts to mandate that all customers in the district use the district’s monitoring business, and the customers would pay their monitoring fees to the district.

Actions IESA took included urging members to call their legislators, and it also lined up other business groups, such as the Illinois Chamber of Commerce, to come out in opposition to the measure.

That helped when the IESA learned last week that the bill, sponsored by Republican Rep. Donald Moffitt, had just gained a Democratic chief co-sponsor, Rep. Lisa Dugan.

“We were feeling pretty good about ourselves,” Lehan told me about IESA’s initial efforts to get the bill killed.

But then, he told me, “Last week on the 10th of March, another representative, Lisa Dugan, put her name on as a co-sponsor so we found out very shortly after … and Rep. Dugan is a IBEW [International Brotherhood of Electrical Workers] member and she also is also a [former] Chamber of Commerce president in her area … The Illinois Chamber of Commerce is opposed to 1301 and she had a lot of IBEW members contact her as well.”

As a consequence, Lehan told me, on this past Monday, March 14, “the earliest possible time that she could distance herself, she removed her name as a sponsor.”

I couldn’t reach Dugan for comment this morning, but a spokeswoman for her said the legislator’s name appearing on the bill was a clerical error because Dugan had not intended to support it.

So, is the legislation dead? “We do believe it will just languish in the form of 1301, and die in committee,” Lehan told me.

However, he cautioned, this legislative session doesn’t end until May 31 and there are other bills dealing with fire protection districts to which some legislator might attach the same language as found in HB 1301.

“Until they hit the gavel and close this session anything can happen in Springfield,” Lehan said. “So we’ll remain every vigilant to a handful of bills that do impact the fire protection district.”


UTC inspires with relief effort

Wednesday, March 16, 2011

One can feel helpless watching the horrific events in Japan unfold: earthquake, tsunami, and now the threat of nuclear meltdown. But I also feel inspired seeing the world community taking action and reaching out to help. Now count United Technologies Corp., parent company of UTC Fire & Security, among that group.

UTC this week contributed $1 million to support humanitarian relief efforts in Japan, according to a business newswire.

UTC, based in Hartford, Conn., also will match 100 percent of employee contributions to Red Cross relief efforts, to a maximum of $500,000, PR Newswire said.

 “Our thoughts and prayers are with those affected by this terrible disaster,” UTC chairman & chief executive officer Louis Chenevert said in a statement. “United Technologies has been in Japan for more than 100 years, and we are deeply committed to our employees and partnerships there.  We are thankful that all UTC employees are safe and want to offer this support to those affected by this tragedy.”

United Technologies is a diversified company providing high technology products and services to the global aerospace and building industries. Among UTC’s products are UTC Fire & Security detection and response systems.


One central station's dealer incentives include a chance to win a new Camaro!

Tuesday, March 15, 2011

I was contacted recently by Armstrong's GM Dan Small about some new initiatives they're taking up in the Great White North to help out their dealers and treat them right.

"Armstrong’s Communication Ltd. is adding some new services for our dealers, as well as having a major yearlong contest," Dan told me in an email. I called  him up and we talked for a bit.

Armstrong's is a Canadian central staiton with offices in Dartmouth, Nova Scotia, and Moncton and Coal Creek, New Brunswick. They monitor accounts in every province of Canada. I wrote about them a few years back when they started their FAST dealer financing program.

So what's new with Dan Small et al?

"It has been a wild couple of years.  Growth has been great and we have been working very hard," Dan told me. "We're promoting products and services to all our dealers." Small told me they were promoting discounted products and services from provider partners to their dealers--everything from software and hardware to insurance. "We're not doing any buying or anything, but we're telling product and service providers, 'If you'll give us a bulk discount, we'll promote your product to our dealers as a promotion. It'll get on our website, it'll get out to our dealers, we'll do a mailer.' We're just trying to say, 'Here's another reason, another advantage to using Armstrong's.'"

Dan also said Armstrong's is coming up with some other creative dealer incentives, as well.

"Technologically, we're all about the same. And that really has leveled the playing field. So you need to be a little more creative these days in saying, 'This is why you should use me," Dan said. "So we're doing a contest as well. We did one 10 years ago that was really succseful in which we gave away a van. This isn't really designed to help switch new dealers over to us--if it does, that's great--but what's it's designed to do is to get our dealers who maybe have a few drifter accounts left spread out at other centrals. And the dealer just never gets around to reprogramming those accounts. This contest has been motivating them to transfer all their accounts over. For every account they bring over, they get one ballot toward the car."

The car Dan's talking about is brand new Chevy Camaro. They've been running the contest since November 1. Avid readers of this blog will recall the security industry hijinks that ensued when SSN associate publisher Gregg Shapiro and I traveled down to Dallas last summer for a security roadtrip during which we found ourselves in a bitchin' Camaro, pictured below.


I wrote about some other creative dealer incentives a while ago as well when I covered AlarmWATCH's NFL-themed dealer contest.

Dan also talked a little bit about how the industry had been changing.

"Our industry has had to change our mind set," Dan said. "Years ago, it was: 'Let’s keep all the information to ourselves.' Now it’s: 'How fast can we get the info out?'"

True enought, Dan. I've been talking with a lot of security industry folks lately who are beginning to realize that they had better adapt to changing technology and changing end users quickly or find themselves scrathing their heads, wondering where their businesses have gone.

Pivot3 gets kudos in WSJ ranking

Tuesday, March 15, 2011

Serverless storage company Pivot3 has been selected by the Wall Street as a “top venture backed company” in the newpaper’s “Next Big Thing” ranking.

Pivot ranked 37th out of 5,740 companies that were considered.

To be eligible for the ranking, a company must have raised an equity round in the past three years and have a valuation of $1 billion or less. 

The company’s ranking “is determined through analysis of the track record of the company’s founders and management, and investors on its board. It also evaluates the amount of capital raised in the last three years and the percentage change in a company's valuation in the last year. Wall Street Journal and Dow Jones VentureWire reporters and editors also provide perspective and expertise,” according to the WSJ press release.

According to a release, Pivot3 raised more than $78 million in venture capital since its founding in 2003.

Last month, Lee Caswell, Pivot3 co-founder and chief marketing officer, told me that the company (which doesn’t publicly release its financials) doubled its revenue for the fourth year in a row. “IMS [Research] says we’re now number one of the IP SAN products for the surveillance industry ... And IMS predicts IP SANs will be the fastest growing segment of the storage market for video security, growing at 97 percent year over year,” he said.

I spoke to Lee Caswell yesterday and will have more in a story later, but he told me that Pivot3 completed the process with the WSJ about a month ago, and that Pivot3 is the only video surveillance company on the list. The recognition obviously “gives the company a big boost in the visibility,” he said.

“It has a real impact for us,” he said. “The readers of the Wall Street Journal have not been our customers to date, and yet, the technology has applications to those customers who are looking at next-generation [uses of the technology] like virtual desktops ... which apply across all verticals like financial services and K-12.”

The barrier to entry for having something that’s “unique and disruptive in the storage area is very, very high,” he said. And if you can do something different, “it’s extremely valuable.”

For the most part, the investors have been “siloed, in that some understand storage and some understand servers.”

Storage, he said is a $20 billion business and the server market is a $25 billion business. “If you put then together and [can pull value from both sides, that’s something that interests investors.]”

Last month I reported on a new deal Pivot3 has with Dell where Dell hardware will be combined with Pivot3’s software and branded under Pivot3.

From the release: “Venture capitalists are always looking for companies with a new idea that will prove powerful enough to explode into the marketplace,” said Alan Murray, deputy managing editor of The Wall Street Journal. “The Next Big Thing highlights companies that we believe are worth watching and have a chance to make waves in their industry.”

And in a prepared statement, Bob Fernander, Pivot3 CEO said the “recognition demonstrates the market potential of Pivot3’s scale-out application platform innovation, which is poised to reverse the 20-year trend of separating servers and storage,” said “Virtualization creates the unique opportunity to re-join server and storage resources in a single scale-out platform to simplify virtual deployments while saving power, cost and rack space.”

Here's the release.


Out of the flames of a century-old tragedy

Monday, March 14, 2011

We’re approaching a tragic and historic anniversary on March 25, 2011—marking the day 100 years ago when a fire at a New York City garment factory killed 146 workers, mostly women and young girls, and gave birth to today’s national fire safety code. If you want to understand the significance of that fire, then and now, read the NFPA Journal’s cover story for March/April 2011.

“What’s changed — and what hasn’t — in the 100 years since the Triangle Waist Co. fire,” is the name of that comprehensive in-depth article  by executive editor Scott Sutherland.

I’ll quote some key passages here to give you an idea of the magnitude of the tragedy and its significance today.

The story describes how on March 25, 1911, “the Triangle Waist Co., a maker of women’s blouses, caught fire and burned in New York City, killing 146 and injuring scores. More than 60 died when they jumped from the building’s upper floors, their final moments witnessed by thousands of horrified onlookers. Triangle remains the deadliest accidental industrial building fire in the nation’s history. It also helped spark profound change in American society, including sweeping reforms that included the adoption and enforcement of a host of workplace safety measures. The development and creation of NFPA 101, Life Safety Code, can be traced directly to the Triangle fire.”

“Of the dead, 129 were women and girls. More than 60 of the victims where teenagers; the youngest were 14.”

“In 1911, technology and practices that could have protected workers — enclosed stairways, fire walls, fire doors, automatic sprinkler systems, fire drills — existed, and in some cases were required, but few building owners bothered to implement them. Design shortcuts were common; the law called for a structure the size of the  [10-story] Asch Building [where the Triangle company was located on the top three floors] to have three stairways accessing each floor, but the architect had received an exemption from the Building Department and provided just two, along with an exterior fire escape at the rear of the building that descended only as far as the second floor. The regulatory emphasis was on constructing buildings that could withstand fire, not protecting their inhabitants. “My building is fireproof,” insisted Joseph P. Asch of his namesake building, which he’d constructed in 1901, to newspaper reporters the day after the fire. He also insisted that the building complied with all New York City codes — though as reformers, journalists, and a growing chorus of politicians were already pointing out, Asch’s claims of compliance were far from a guarantee of a fire-safe building.”

“In 1911, there were no laws requiring fire sprinklers or fire drills in New York City factory buildings, many of them as tall or taller than the Asch Building.” The story says that “by September, 1909, the city numbered 612,000 workers in 30,000 factories, and that by early 1911 about half that total number was employed above the seventh floor. The fire department’s ladders and hoses were generally only effective up to the sixth floor.”

"Eight months after the fire, Triangle’s owners, Max Blanck and Isaac Harris, were acquitted by a jury on charges of manslaughter. The Triangle Waist Co. moved to another building, and in 1913 an inspector in New York City’s newly formed Bureau of Fire Prevention found a door to the factory locked with a chain, during working hours and with 150 workers inside. Blanck was arrested and fined $20. That same year, a garment factory fire in Binghamton, New York, killed 35 workers, drawing immediate comparisons to Triangle.”

“By then, though, the spectacle of Triangle had touched off an intense period of reform. By 1914, the state of New York had enacted dozens of laws that reshaped factory safety, including fire safety, and became a national model. At the urging of a young reformer named Frances Perkins, who would go on to become Secretary of Labor under Franklin Roosevelt, NFPA expanded its mission from protecting buildings to protecting the people who worked in them, and undertook efforts that would eventually result in the creation of the Building Exits Code, the precursor to the Life Safety Code.”

Today, Sutherland writes, “the [Greenwich Village] building is still there, or at least most of it. The Asch Building has since been incorporated into a larger building housing classrooms and offices for New York University, but the facades along Washington Place and Greene Street look much as they did a century ago. On March 25, thousands will gather at the building to commemorate the fire. They’ll imagine the corner as it might have looked in 1911, and they’ll imagine people poised high in the windows, flames billowing behind them.”



How'd The Carlyle Group find DIGIOP?

Thursday, March 10, 2011

The Carlyle Group, which announced this week it bought DIGIOP, a video and data management software provider,  got to know the company through another company it owns, Supercircuits.

The Carlyle Group bought Supercircuits in 2006, and then invested another $10 m in the company in 2009. Here’s a story from 2009 about that investment and about how Supercircuits is able to sell direct to the end user and to the channel.

Rich Mellott, president of DIGIOP, told me that The Carlyle Group got to know the DIGIOP product line because Supercircuits OEMed a product for SCBlack portfolio “and its was the highest volume product on the systems side of the house,” he said. “That’s how we got involved and introduced to The Carlyle Group.”

And Supercircuits was at ISC West last year with the product. Here’s a press release about that.

Mellott said although Supercircuits will sell to anyone, its primary focus is on the end user.

The Carlyle Group wanted to invest in a technology company that had a “channel focus,” he said, and it looked to DIGIOP for that.

Is there a potential conflict here? Mellott said no.

While Carlyle now owns both Supercircuits and DIGIOP, they’re “separately owned businesses with separate business strategies.”

Mellot says that the solution it OEMs to Supercircuits is “very similarly configured to what we sell into the channel, but [the version for the channel] has additional features and options.”

“From our standpoint, our focus will be to cater to the dealer and integrator,” Mellot said. “We don’t have the support structure to cater to the end user, they [Supercircuits] do.”

In addition, DIGIOP has higher level “Tier II and III solutions” it’s developed  and the ability to work with integrated solutions. Plus, “a lot of dealers and integrators want to have a direct relationship with the manufacturer,” he said.

DIGIOP as founded in early 2000 and was owned by its original investors, who are based in Houston, until the Carlyle acquisition. “We now have more capital and capability to be able to invest and grow the business to a level that we’ve not had before,” Mellott said.

There will be a big marketing push, better logistics to make the products more readily available, a new sales force, and “resources to move the technology along in a quicker fashion.”

DIGIOP is also re-launching its Certified Integrator Partner program this spring.

The company will be at ISC West this year, in a suite in the Venetian. The deal was not finalized soon enough to get a prime spot on the show floor for 2011, Mellott said, but they’ll be on the show floor proper in 2012.


American Alarm bolts on

Thursday, March 10, 2011

Acquisition has been the name of the game for American Alarm security systems for some time now—and the Arlington, Mass.-based company announced its latest buy this week: Alert Security Systems of Leicester, Mass., a bolt-on in its Worcester branch's backyard.

Company president Wells Sampson told me that in the past 18 years, American Alarm has made 17 acquisitions. He said many of them have been in the past decade and “especially in the last five years, we’ve put a big push on to accelerate that effort.”

The acquisition of Alert Security, located in a suburb of Worcester, Mass., expands American Alarm’s presence in the middle of the state, Sampson said.

“We built our Worcester office originally through a couple of acquisitions and so now we’re trying to strengthen that Worcester, central Massachusetts operation,” Sampson said in an interview March 9, when the company announced the acquisition.

Alert Security, founded in 1984 by Edward Nelson, was small compared to American Alarm. It provided security systems installation, service and monitoring for more than 100 homes and businesses in Worcester County.

By contrast, American Alarm, which turns 40 this year, is a large independent security systems integration firm, with 140 employees serving about 15,000 residential, commercial and public sector customers in New England. About 60 percent of its business is resi, and it has four branches—three in Massachusetts and one in New Hampshire—and its own UL-listed certified central station in Arlington, Mass.

But Sampson said the purchase was a “win-win-win” for American Alarm, Alert Security and its customers.

He said that for American Alarm, it “increases our customer base in the Worcester market. The more customers we have in a geographic area the more efficient we can be serving customers. We’re already staffed there so we can provide a pretty high service level to those customers and it helps us with our growth plan, growing customers and growing service capabilities.”

Sampson said Nelson was the sole employee of Alert Security, and he benefited too. “He needs to redirect some of this attention to family matters and other professional endeavors and so it sort of frees him up to do that,” Sampson said. Nelson will assist American Alarm as needed, Sampson said.

And the buy is a win for Alert Security’s customers, virtually all of them residential, Sampson said. “We can provide more depth in terms of the numbers of technicians, service and support than a smaller company can provide,” he said. American Alarm can also offer the customers new technologies, different payment options, redundant communications options and video, Sampson said. “It’s more choice, more options, more capabilities,” he said.

Also, he said, American Alarm can offer in-house monitoring to customers—Alert Security had sourced out its monitoring.

“A key point now is that the installation and service and monitoring can be all under one roof, which can give better, seamless customer service,’ Sampson said.

He said that the customers acquired are valuable ones because Nelson, the former owner, ran such a good company. “They’re happy, long-term satisfied customers,” Sampson said.

He declined to be specific about terms of the acquisition but said, “Obviously, that kind of customer base commands a premium set of terms.”

Are there more acquisitions planned for 2011? Stay tuned.

“We’ve always got more in the pipeline,” Sampson said. “We’re a New England-based regional company and we’re looking to expand both in our core branch office territories—that’s the top priority to fold in high quality, good-customer-service type of companies in our existing footprint—and then the next priority is to expand the footprint to additional new England metropolitan city areas.”


Priority response to verified alarms marches on...

Tuesday, March 8, 2011

I got a call and an email from alarm verification's de facto spokesman, Keith Jentoft, president of RSI Video Technologies yesterday. He wanted to let me know that his priority response crusade is going well. He'd just finished up in Boston and was on his way to Idaho. He'd also spent some time in California. Looks like they're falling with what Keith and other proponents like Sonitrol have said is the priority response value proposition.

The big news appears to be that a lot of the southern part of the state is making official announcements of its backing of the priority response model, in which police grant higher response priority to alarms that are proactively verified by some kind of video or audio.

Here's what Keith had to say about Californina:

Boston has already moved forward on this and I just completed making presentations to the PSAPs in the 4 largest counties in southern California:

- Los Angeles County

- Orange County

- Riverside County

- San Bernardino County

All of them are moving forward with the Priority Response program. We go to every meeting with the larger security companies in the area. For the Southern California meetings we had:

- Stanley


- USA (George Gunning, the owner, is the past president of the ESA)

I've been writing about verified alarms and the priority response movement for a while. Keith wanted let me know he'll be conducting a priority response seminar at ISC West next month on Tuesday April 5 in the morning... Not sure if I can make it since I may be in transit at the time, but I'm certainly going to try.

Here's a little of what Keith sent me on his seminar:

I have been very busy on working with the PSAPs (public safety answering points) also known as the 911 dispatch centers. Here are the details on the seminar that I will be making at ISC West on the topic ...

Tuesday, 04/05/2011: 10:15 AM - 11:15 AM

Priority Response: More Arrests, Efficiency, Safety

Priority Response is being embraced by law enforcement as a painless alternative to non-response that delivers more arrests and greater life safety. Using Priority Response, new generic video alarm systems send video clips of what caused alarm for immediate review. This enables dispatchers to assess priority, using confirmation of the alarm. However, in order to be effective in the dispatch center (PSAPs), a policy upgrade is necessary. This presentation will provide case studies of 3 different alarm technologies that are already working. Attendees will learn the new code used in the dispatch center for video alarms, the email address that Central Stations should use to send video clips to PSAP, and how to make a formal policy announcement to the community.

Learning Objectives:

1.  Understand that Priority Response is vendor neutral

2.  Showcase the ability of Priority Response to improve life safety, increase arrests and provide greater crime deterrence.

3.  Learn how to implement Priority Response in the 911 dispatch center with a simple policy change.

Speaker: Keith Jentoft, President, Videofied - RSI Video Technologies

Instead of the cumbersome and difficult process of implementing alarm ordinances, the PSAP manager can simply make a policy decision to grant higher priority response to video intrusion alarms.

Priority response appears to be really moving forward. I've written before, when I did a story on AD Group's Dedicated Micros, that in the UK, priority response is already the standard... What's your opinion? Do you offer some sort of verified solution?

I also just found out from Keith that he'd been invited to speak at an upcoming APCO event. Security folks don't get invited to these things often--let alone asked to speak. I covered some recognition Vector's Pam Petrow got last year for her extensive work on a computer-aided dispatch system—the External Alarm Interface Exchange Standard—for PSAP to central station data exchange.

Here's what Keith had to say to me in an email last night:

"This just happened yesterday.  I was just invited to speak at the national convention of APCO.  This is the association of all of the PSAPs (911 centers) around the country who actually receive the calls from the central stations and dispatch law enforcement to the alarms.  I don’t think that the alarm industry has ever been invited to speak at an APCO event."

Let me know what your thoughts are on priority response.

Infinova ready to buy?

Monday, March 7, 2011

Camera manufacturer Infinova, which went public in December with a $300 million IPO in China,  announced today that it’s hired someone to lead the acquisition strategy: Stephen G. Cannellos. Cannellos, whose title is VP of strategic business development has worked at Assa Abloy, Tyco and Software House and GE. According to the release, he’s shown “success at three venture-backed technology start-ups.”

I inquired about those start-ups and heard heard back from Cannellos via email. The start-ups he was involved with were: "Apollo computer (Computers, Network, Operating systems),Voicetek Corporation (Telecom), Cognition (Mechanical Computer Aided Engineering systems).I did my own start-up, EXOS Systems, in the Integrated GPS and Access Control system market after leaving Tyco.  That was with angel investors and my own."

Infinova CEO Jeffrey Liu told me in December that the company had just started looking for acquisitions but that “another small manufacturer would be likely.”

From the release: “We are starting to look for suitable technology companies to form partnerships and alliances that will advance Infinova solutions and acquisition of complementary companies to grow our market share.  We look forward to Stephan helping us accomplish this,” Liu said in a prepared statement.

Infinova has 290 engineers. Its goal is to “enable end-users to extend the life of their existing analog equipment by having it co-exist with their new IP video equipment, Infinova provides core equipment for video control rooms, megapixel, IP and analog surveillance cameras, specialized cameras, fiber optic communications products and customized systems.”


Proposed N.J. legislation ‘anti-competitive?’

Thursday, March 3, 2011

TRENTON, N.J.—Hot on the heels of the New York licensing flap over Article 6-E, proposed legislation in New Jersey that looks to restrict doing business in the state to alarm companies that have business offices here has at least one alarm company owner concerned.

“This is being done quickly and quietly,” said Peter Rogers, COO of McLean, Va.-based FrontPoint Security of A-2394. “What it really comes down to is making life more difficult for any out-of-state competitors. Think of all the companies in New York or Pennsylvania, or Delaware and even farther afield who are following all the rules, but suddenly they can’t operate. It’s anti-competitive and bad for consumers.”

FrontPoint is licensed to do business in New Jersey, but maintains no brick-and-mortar presence there.

The NJBFAA said it proposed the legislation to protect consumers from out-of-state companies that could potentially operate “under the radar.”

“The benefit from this is that it will substantiate the regulations to make sure that permitting for jobs is being properly done by a business qualifier or a licensed individual and to provide onsite supervision,” NJBFAA president Rich Trevelise said. “That way if an issue comes up on a project it can be addressed in a timely fashion by an onsite license holder.”

Eric Pritchard, attorney with Kleinbard Bell & Brecker, said A-2394 is not groundbreaking.

“States are permitted to regulate these sorts of activities, and in fact many do regulate security and fire services,” he said. “Many states have requirements like that being considered in New Jersey.”

The legislation continues to go through revisions and gain momentum. Particularly onerous according to Rogers is a recent amendment that removes a clause allowing out-of-state companies to do business if they at least maintain a power of attorney in New Jersey.

What will be the impact of this legislation if it passes?

“The question becomes, what’s driving this. And from an outsider’s perspective this will be viewed as an anti-competitive effort on the part of those within the state. The impact will certainly be that it lessens competition,” Pritchard said. “Part of what I’ve been told is that what’s driving this is regulating the summer programs. I have tell you, if I represented a summer model company that was trying to do business in New Jersey, I don’t think it would be that difficult to comply with this law. I think this will lead to office-sharing arrangements—which exist in other states already—where a number of alarm companies get together and rent space or pay a service fee to a service provider to act as the local office. It happens in all industries all the time in all states.”

What’s next for A-2394?

“We passed the first milestone in mid-February when it made it through the assembly,” Trevelise said. “The next step is for it to go to the Senate.” The NJBFAA said it welcomes all comments from the industry.