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Venture capital update

Tuesday, April 21, 2009
Coming on the heels of news that venture capitalists have bought out GE Capital's stake in SAFE Security (we'll have more on that soon), I wanted to give security-industry readers a little more perspective on the venture capital landscape. I'm stealing this from the excellent Dan Primack at PeHUB, whom I've referenced before. This time, however, the information comes from the PeHUB wire, which I can't seem to link to, so I'll just quote the good stuff. Basically, nobody was doling out money in Q1:
Q1 VC Numbers: Oh, The Horror ... Venture capitalists disbursed just $3 billion into 549 companies last quarter, according to data released over the weekend by the MoneyTree three (PwC, NVCA & Thomson Reuters). That’s a 47% dollar drop from the $5.7 billion disbursed in Q4, and a 61% drop from the $7.74 billion disbursed in Q1 2008. The number of companies funded didn’t decrease quite as dramatically — suggesting that lowered valuations partially helped drive down the dollar numbers — but still were off 36% and 43.8%, respectively.
This just underscores why I find funding announcements in security so interesting right now. These VCs are being careful with their money, and it shows a bit of faith in a company or technology when they dole out cash to the likes of Aoptix or Orsus or Red Shift or
Every major industry sector experienced double-digit declines, while the percentage of first-time fundings stayed constant at around 20% (although the value of such deals fell by 48%).
It's a testament to just how small the security industry remains that the National Venture Capital Association doesn't even break security out as an industry sector. It's smashed somewhere into these categories: Biotechnology Business Products and Services Computers and Peripherals Consumer Products and Services Electronics/Instrumentation Financial Services Healthcare Services Industrial/Energy IT Services Media and Entertainment Medical Devices and Equipment Networking and Equipment Other Retailing/Distribution Semiconductors Software Telecommunications Is security an "other"?
The quarter’s busiest firm was Oak Investment Partners, which made 12 investments. Other (quasi) busybodies included SV Life Sciences (11), Draper Fisher Jurvetson (11), Venrock (11), Highland Capital Partners (10), Menlo Ventures (10) and Polaris Venture Partners (10).
Interesting that some of the "busy" firms have security ties. Oak was a CoVi investor (not sure how that worked out for them). Polaris and Highland were in on the last Imprivata round. Menlo was in on Intransa and helped Bioscrypt with the A4 deal. Seems like that's good news for the industry. They guys doing deals are familiar with the security biz. But that's really a layman's analysis on my part.

SIAC launces new website

Monday, April 20, 2009
The Security Industry Alarm Coalition announced April 14 the launch of a new, easier to navigate website. According to a SIAC press release, the new site "allows for easier navigation and information gathering." According to SIAC executive director, Stan Martin the site is the culmination of a year's hard work. "We've been working on this update for close to a year now, to make sure we included a wide set of tools to help all the groups we work closely with. Information, technology and effective alarm reduction techniques are constantly evolving, and we wanted our web page to stay current with these changes." The new site features information on important topics like verified response, alarm systems standards, how to create an alarm user awareness school for your municipality, and a model ordinance for both intrusion and fire as approved by the National Burglar & Fire Alarm Association and the False Alarm Reduction Association. The new site is also more accessible to alarm system owners since "succesful alarm dispatch management begins with the end-user." End-user focused learning tools include "5 Quick Tips for Proper Alarm Use," "Be Aware of Unlicensed Door to Door Sales People," and "How to Sell a House with an Alarm System."

Must be the mustache

Sunday, April 19, 2009
News out of Stanley camp is that they're combining their Canadian and U.S. operations and giving CSS (Convergent Security Solutions) COO Tony Byerly a promotion and calling him president of the whole affair. No link, but here's the release:
Naperville, IL – April 17, 2009 – Tony Byerly, Chief Operating Officer of Stanley Convergent Security Solutions, Inc. (Stanley CSS - U.S.) has been named President of CSS-North America and will assume responsibilities as the leader of the new combined division of Stanley CSS-U.S. and Stanley CSS-Canada.
Truthfully, I didn't realize there was a CSS-Canada. Guess I should pay attention to these things.
“Stanley Convergent Security Solutions is combining two of our divisions (United States and Canada) into one, CSS-North America. We believe this new alignment led by Tony Byerly, will help us create world-class service offerings in the North American markets we serve through the shared knowledge and best practices that come from the combination of both divisions,” states Brett Bontrager, President, Stanley Convergent Security Solutions. “We are excited about this strategic alignment as it will benefit and support the needs of our customers and associates in our North American market.”
More title creep here. President Tony Byerly now works for president Brett Bontrager. Couldn't Byerly still be COO? Or be VP? No, certainly not VP - they give that title out with your MBA now, I think. So, president it is for Tony.
Byerly contributes 20 years of leadership experience to Stanley-CSS in the security market. His executive career has involved working for both private and public corporations, including Fortune 50 companies such as Ameritech, SBC Global Communications, Cambridge Protection Industries, Honeywell Security Monitoring (HSM) and ADT/Tyco International. Most recently, Byerly was retained by the Stanley Works when HSM was acquired in 2007 where he served as Senior Vice President of Sales, Marketing and National Accounts, and was subsequently promoted to Chief Operating Officer in January 2008. During his tenure at HSM his sales and marketing prowess favorably positioned the company as an industry leader in three short years.
He was "retained." As in, "we decided not to fire him when we bought HSM"?
Byerly holds a Bachelor of Arts Degree in Social Science and Business, attending Eureka College as a Ronald W. Reagan Scholar. He lives in Naperville, Illinois with his wife Kari and their three children Daisy, JD and Jonathan. He offices out of the Stanley Convergent Security Solutions, Inc. Field Headquarters in Naperville, IL.
Okay, I admit it. I posted this entire release just so I could wonder aloud about the use of "office" as a verb. Is that common practice and I just missed it? I'll admit I was caught behind the times with "effort" as a verb. I heard some guy on sports talk radio this morning utter the sentence "we're efforting Stephen A. Smith right now," meaning that they're trying to get the loud mouth basketball commenter who just got canned (or maybe "not retained") by ESPN on the phone. When the sports guys have bought into the new use of the word, I'm just a curmudgeon for disliking it, I suppose. I don't want to be all Andy Rooney here, but does the English language not have enough words? We've got way more than anyone else, so I don't see why we've got to make up new ways to use words we've already got. Plus, it's not like it's more Twitterifically efficient or anything: "He offices out of"=17 characters; "He is based at"=14 characters. Maybe he didn't want to be "based" (because it sounded too base). I'm actually all for the ever-evolving nature of the English language, it's just that I sometimes can't figure out why it evolves the way it does. Regardless, I attribute Byerly's ongoing success at least partly to his mustache. At the next ISC West, I think there should be some kind of Best Security Mustache competition, whereby you could stop at the SSN booth, have a photo taken of you rocking your mustache, and then we'll publish the winner in the May paper, and that winner will get a lifetime supply of Firehouse Mustache Wax. (Publisher Tim: Think we can spring for that? I can't imagine you go through more than a tin or two a year. We can put it in the operating budget - no need for it to be a capital item.) Byerly would be among the favorites, along with Honeywell's Joe Sausa.

Australian prison logs lots of false alarms

Friday, April 17, 2009
Hey, I suppose if you're going to be wasting tax payer money, and the valuable time and resources of first responders, it might as well be a police run institution doing the wasting, right? I came across this story this morning at, an ABC News affiliate for Australia, and had a chuckle. The Alexander Maconochie Centre, a new prison located in the town of Hume in the Australian Capital Territory, has been having some problems with it's alarm systems, both security and fire. The story states the security system problems were ironed out before the first batch of inmates were moved in September 2008 (good thing, I would say... don't you want a pretty airtight security system at your local prison?), but the fire alarm system continues to cause problems, apparently activating and necessitating dispatch 33 times since the prison opened. According to corrections minister John Hargreaves "some of the false alarms were triggered by inmates smoking, which is banned in the prison." Huh? First of all, does cigarette smoke normally set off fire alarms? Secondly, if they're not supposed to be smoking in prison, why are they smoking in prison? Aren't the inmates pretty much under lock and key? Isn't pretty much every single one of their actions monitored? I hope so. I love this particular excerpt... It seems to scream out "we need someone to lay down the rules":
Vince McDevitt from the CPSU [Community and Public Sector Union] says the union is in talks with jail management to allow inmates and staff to smoke in designated outdoor areas. Mr McDevitt says it is also important for jail officers to be able to permit inmates to smoke inside the jail, in certain situations. "For instance a prisoner who became agitated or potentially had some mental issues, if they start for example, to head butt the cell bars like a rhinoceros screaming for a cigarette, then the superindentant, it's important that they have a discretionary power to allow an individual to smoke," he said.
Again, I say Huh? Why? That's like when my son doesn't want to eat his peas, but does want ice cream. I tell him "no, that's not allowed," and he throws a tantrum. So it's important that I give him the ice cream so he'll stop his tantrum? That makes absolutely no parenting sense at all. How about this for a different tack: "No, you can't smoke. You're in prison and have lost that right." I guess I just feel that if prisoners sneaking smokes is costing money through false alarm dispatch, they should be stopped from smoking. I mean home and business owners the world over get severe financial penalties at far fewer than 33 false alarms. Just my opinion. I welcome yours.

Private equity still likes security

Friday, April 17, 2009
Yet another PE firm has set up an acquisition company to enter the homeland security marketplace. It's not exactly going to be your standard security integration firm, but I'm sure it will dabble in cameras and access control from time to time.
GRCR has formed Six3 Systems Inc., a Fairfax, Va.-based government services acquisition platform focused on national security and defense intelligence. No financial terms were disclosed. Six3 Systems will be led by Robert Coleman, former CEO of government contractor ManTech International.
What will they acquire? That's the question.

Iveda Solutions earns Safety Act certification

Thursday, April 16, 2009
Iveda Solutions marketing manager Bryce Witcher emailed me yesterday to let me in on some exciting news.
Our experience at ISC West was beneficial to the company. We met so many new prospects that will take our sales people quite a while to get through. Our ‘coming out’ was a success. Also, after our meeting, we found out that we got our Safety Act certification from Homeland Security. That was really cool news.”
SAFETY Act certification comes from Subtitle G of Title VIII of the Homeland Security Act of 2002, also called the Support Antiterrorism by Fostering Effective Technologies Act of 2002, which provides critical incentives for the development and deployment of technologies for potential use for anti-terrorism by providing liability protections for providers of qualified anti-terrorism technologies. It's all about developing tech that can save lives. Again, according to Witcher:
Accordingly, Iveda Solutions provides its customers robust real-time IP video hosting and real-time remote surveillance services designed to be used by multiple first responders in cases of threat from criminal or terrorist activities. The technology is a set of services designed to secure a site through the monitoring of a video security system installed by a third-party partner of Iveda Solutions. The services include the data center, centralized video hosting, and remote monitoring/surveillance. The technology also includes training of the intervention specialists and third-party partner selection criteria. This designation will expire on April 30, 2014. Many companies that work on getting certified know it is a huge project to complete. HUGE. Because of the perceived infancy of the real-time surveillance service sector, we believe we are in the right place at the right time, that this will help us be recognized as a company that can actually provide true real-time remote surveillance. Having the certification shows others that the Department of Homeland Security has recognized Iveda Solutions as utilizing technologies that truly work and are applicable to preventing or combating malicious activity.

Changing the analytics standard copy

Thursday, April 16, 2009
When I first entered the market four years ago, all of the talk was about what analytics could do (wicked cool stuff, I assure you). About two years ago, the focus changed to what analytics can't do (hey, guys, we never said it could do really wicked cool stuff, just wicked cool stuff). Every presentation on analytics suddenly included a bunch of slides where the presenter said things like, "which of these guys has a gun under his jacket? We don't know"; or "which of these people is about to rob a bank? Who knows?; or "No, you can't pick a face out of a crowded stadium." Well, maybe this last bit needs to be taken out of standard Power Point presentation or they should make it clear they're speaking for themselves. Check out this blog posting by 3VR head Steve Russell:
After a grueling multi-year testing process, in 3VR SmartRecorders and SmartCams provided between 85 percent and 92 percent accuracy in recognizing and matching faces in a few crowded, highly-trafficked public train stations in Seoul. In each case, the images analyzed were of fast-moving groups of commuters entering or exiting various transit areas en masse.
If you can get past the white text on black background, the rest of the post is pretty interesting, too. So, you can pick out faces in a crowd? I can see how maybe there's an app for that. Sister paper SDN wrote up the story here.

CO detection makes sense for dealers and consumers

Wednesday, April 15, 2009
More and more states are passing legislation requiring mandatory CO detectors in new homes. This is a story that will explain why. It's about a family that was warned about dangerous levels of CO through its CO detector (which, importantly,was connected to the family's monitored alarm system.) The mother was quoted as saying:
"That was the really scary thing," she said. "We all felt fine. There was no smell, nothing."
System Sensor was showing its new (this fall) CO detector at ISC West, which has a test to ensure that it is, in fact, detecting CO. (This is notable because other brands have tests which ensure that the device is powered up, but not that the detection device is working.) CO detectors are an easy add-on for residential security dealers, and one that stands out, I think, as making good sense for families to have. System sensor maintains a nice tally on its Web site about where legislation has been passed Here's a link. Click on the links on the right hand side to find out what's passed or pending in terms of CO legislation.

High technology solution to "key bumping"

Wednesday, April 15, 2009
In one of the more interestingly punctuated press releases I've been sent in a while, I was alerted to the Super Grip Lock, pitched as a solution to the key bumping problem (you know, where people can get past a deadbolt in about five seconds). In case you don't know about key bumping, here's a wacky Japanese video that gives you the idea (I'm sure there are English ones, too, but this one is fun): So, how do you stop criminals when they can just bump your deadbolt? Make sure the deadbolt handle can't turn! I'm thinking even I could install this thing: Of course, the question remains of what good this would actually do. Do robbers really very often target homes where people are there? Aren't they looking for unoccupied homes? I'm not completely sure why you'd want to more strenuously lock yourself in your home unless you had lots of enemies or something, and if they really want to get in because you haven't paid the vig on the $50,000 you borrowed to bet on the Red Sox last night, they'll just kick your door down or something. Maybe people do live in fear of burglars key bumping their homes while they're there and coming in an doing bodily harm to them. Maybe that's why I live in Maine. For those of you with time to kill, here's an instructive video about how to make one of these bump keys (go to YouTube to watch this if you enjoy expletive-filled comments (and who doesn't?)):

Can home security systems be art?

Tuesday, April 14, 2009
Yes. And here's proof in the form of a creepy video of some kids (who by the way, are in need of belts) breaking into a house in Florida. The good news is that the cops caught the thieves. The eight-camera system was sold to the homeowner by Landy Peluso, who owns Monitech Security Services. Landy told a local TV station that he installs hidden cameras in lamps and other places for customers. I have to add something here though. This video reminds me of a modern dance performance. It must be the stage-left and stage-right entrances and exits of the thieves, alternating with various pets, and accompanied by--what is that noise? a parakeet? Plus, like that dance performance, it goes on, and on, an on. If these kids straighten up and fly right, they might find better work in live installation in a museum. I"m not being critical, really. It's a security system that works, and it's like, art, man.