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Investor speculates on Monitronics outlook

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Wednesday, April 23, 2014

Greater visibility, broader market acceptance and (for some central stations) more wholesale monitoring accounts are just some of the benefits often mentioned in connection with the entrance of cablecos and telecoms into security.

A recent Wholesale Monitoring study by the Barnes Associates (co-sponsored by the CSAA and SSN) largely attributed the 19 percent growth the segment enjoyed in 2013 to the influence of the new entrants. To be sure, there seems to be a prevailing belief that the rangy, big-money advertising campaigns of such companies can be the proverbial “rising tide that lifts all boats.”

That’s not to say there’s no ambivalence. That was apparent enough in a recent SSN News Poll that dealt with the topic. A number of readers expressed concern about the long-term viability of smaller players in the home security space, given the influx of these major corporations who have already made inroads into the home through Internet and cable, and thus have that previously established “stickiness.”

That ambivalence was also reflected in a recent analysis by Rajiv Bhatia on Seeking Alpha, a crowdsourced platform for investment-based ideas, who discussed what the new market players could mean for Ascent Capital, the holding company of Monitronics. Bhatia acknowledged that the company faces “increased competition” from the large new cableco/telecom entrants, which he says are gaining traction despite unsuccessful forays into the market in the past.

Regarding Monitronics’ business model, Bhatia offered a mixture of encouraging and somewhat cautionary words:

“While management and sell-side analysts believe that Ascent is better insulated from competition via its dealer-only business model, Ascent faces upward pressure on the multiple it pays for its dealer contracts from competitors. Additionally, its growth through its internal channels is weakening.”

Those multiples, he noted earlier, are based on an RMR multiple of 50. Ascent faces “upward pressure on the multiple it pays to acquire contracts,” he said.

With more than 1 million subscribers, Monitronics trails only ADT in terms of marketshare in the alarm monitoring space. It will be interesting to watch what happens to the market presence of both companies as the cableco/telecom ads continue to appear on our television screens.

Home alarm system of the ‘Blade Runner’ plays role in his murder trial

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Wednesday, April 23, 2014

I’ve written here before about former NFL star Aaron Hernandez, who is charged with killing his friend Odin Lloyd, apparently failing to realize his home security camera was recording him with a gun both hours before—and minutes after—Lloyd was shot to death last summer. Now a home security system could be a key piece of evidence in the murder case against another sports star, the “Blade Runner.”

The security system in the home of Oscar Pistorius, the South African double-amputee track star accused of murdering his girlfriend, came under scrutiny in his trial in Pretoria, South Africa in early April, news reports say.

Pistorius, 27, known as the "Blade Runner" for the high-tech artificial legs he uses, was being grilled by prosecutor Gerrie Nel when, according to Alliance News, “Nel went into details about whether the alarm system at Pistorius' home was in order and whether he had turned it off.”

“A functioning alarm would contribute to discrediting Pistorius' claim he mistook his girlfriend Reeva Steenkamp for a burglar when he shot her dead through the bathroom door in February last year,” Alliance News said. “Pistorius said several times he was unable to remember all the details and complained he was tired.”

The Globe and Mail newspaper reported that Pistorius “acknowledged that he must have deactivated the house’s alarm system when he carried the injured Ms. Steenkamp down his stairs after the shooting, although he said he doesn’t remember it.”

And the Globe and Mail reported: “Nel said the alarm system was functioning and should have alerted him to any intruder. Mr. Pistorius said his external motion-detectors were sometimes removed when the house was painted, and ladders were sometimes left in the garden that could have been used to enter his bathroom window, but he admitted that he hadn’t checked on either on the day before the shooting.”

Pistorius, who lost his legs below the knee because of a congenital abnormality, was the first double-leg amputee to compete against able-bodied athletes in the 2012 London Olympics.

His trial began in March and is expected to continue into May.
 

ISS is growing, expanding and rebranding

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Tuesday, April 22, 2014

ISS is growing, expanding and rebranding

Integrated Security Systems of Miami is getting ready to add 10,000 square feet of space to its headquarters here.

“We’re growing into new territories, but our back office and design center [work] is all done here,” Jeff Nunberg, ISS CEO said.

“We’re finalizing plans with the architect now,” Nunberg said. “In ten months we should have the new space.”

In business since 1962, ISS is a PSA Security owner,  that does CCTV, fire, access, and life safety and mass notification systems. It specializes in design-build projects and has in-house engineering, consultation, AutoCAD, construction and service departments.

ISS has two branch offices and employees “stationed throughout Florida and the Carolinas,” he said. ISS has more than 70 employees; its revenues exceed $20 million,  

The company is also getting a new look. ISS has a new logo that was designed by a student.

Nunberg said he’d spent two years and “tens of thousands of dollars” hiring professional ad agencies to design a logo for his business, but he was not happy with any of the designs.

“I wanted something that hit me emotionally,” he said. “Something iconic, so when you see it, you know it’s us.”

Last November, Nunberg spoke to fashion students at a Florida art college about running a business, as a favor to his cousin who works at the college. “While I was there I asked if they had a graphic art department and she said yes.”

Nunberg ended up sponsoring a logo contest. Tiffany Campos, the student-designer of the winning logo received a $1,600 scholarship, and ISS finally got a logo that Nunberg is excited about.

The logo will figure prominently at ISS’s expanded office, on its new Web site, its 60 vehicles, all of its literature and lapel pins and “other trinkets we give out,” he said.

It’s a big project and it’s “reinvigorating employees,” he said. “Change is good.”

“At the end of the day, we’re a service company and it's hard to copy our model, what we deliver,” he said. However, he believes the logo will “help my business stand out even more,” Nunberg said.

 

 

San Diego central earns Five Diamond Certification

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Wednesday, April 16, 2014

Alarm Relay, a UL-listed alarm monitoring company based in San Diego, became the latest central station to earn Five Diamond Certification from the Central Station Alarm Association, the company recently announced. Fewer than 200 central stations in the country have the certification.

Among the most rigorous requirements for completing the Five Diamond program include the commitment to random inspections by a nationally recognized laboratory, such as FM Global, Underwriters’ Laboratories or InterTek/ETL, and central stations must also comply with quality criteria standards developed by those same organizations.

Five Diamond Certification also testifies that 100 percent of central station operators at a given company have been certified through the CSAA online training course, which covers all phases of central station communications with law enforcement, customers, and fire and emergency centers.

For an operator to achieve certification, they must demonstrate (among other things) proficiency in alarm verification, which helps reduce false dispatches, and in communications with Public Safety Answering Points.

That latter requirement is bound to be vitally important as central stations around the country forge more partnerships with PSAPs, allowing the ASAP to PSAP program to expand. 

Guardian hires another Devcon exec

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Wednesday, April 16, 2014

I wrote recently about Barry Bruce becoming Guardian Protection Services’ new senior VP of corporate sales. Bruce formerly was VP of national sales for Devcon Security, the residential security company that ADT acquired last summer.

Now Warrendale, Pa.-based Guardian has hired another former Devcon VP, Guardian announced today.

Michael Brand, who was VP of sales at Devcon, joined Guardian on April 3 to become director of Guardian’s southern region, assuming responsibility for all sales and operations, the company said. The region includes branches in Austin, San Antonio, Tampa, Charlotte and Philadelphia.

Brand was hired by Devcon in 2010 and then worked for ADT after it bought that company. “During his tenure,” Guardian said in a news release, “Mr. Brand held the positions of area manager, regional director and vice president of sales, including responsibilities for sales and field operations for the residential, commercial and HOA (home owners association) business segments.”

Before he joined Devcon, Brand worked for Brink’s, where he was general manager for that company’s Deerfield, Fla. branch, the news release said.

His previous experience includes leading New Jersey and Massachusetts branches of Enterprise Rent-a-Car, and being a sales training coach with AT&T’s broadband division, according to the news release. It said Brand has a B.A. in communication from Hofstra University.

In a prepared statement, Bruce praised his new (and former) colleague: “I have worked with Mike Brand in the past and have great confidence in his capabilities. I have no doubt he will help us achieve new levels of success in our southern region.”

 

A smart move by ISC, SIA and the WSC

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Wednesday, April 16, 2014

This is an old-fashioned industry in too many ways, so I'm always thrilled when I hear news like this: the Security Industry Association, ISC and the Women’s Security Council will be awarding a full scholarship for a woman student enrolled in the new Mercer County Community College security degree program in 2015.

“This scholarship program is made possible with financial support from SIA and ISC and we are incredibly honored by their support and generosity,” Rhianna Daniels, founding committee member of the WSC, told me. “The overall goal of the program is to increase diversity in the industry and allow more women to gain access to the great opportunities available in today's security market.”

The scholarship was announced at the Women’s Security Council reception at ISC West by Ed Several of Reed Exhibitions, which produces ISC events, and Don Erickson, CEO of SIA.

“The lack of women in the security industry is not a new problem, but in this role [CEO of SIA] I really believe it’s something we need to draw more attention to. This is a small example of how we’re doing this,” Erickson said.

The Mercer County Community College security degree program will be launched in the fall of 2015. It is a two-year program that will award degrees in: project management; security integration; product technology and security sales.

A SIA committee came up with the idea for the program last summer. Key participants on that committee are Dave Lyons of System Sensor, Pierre Trapanese of Northland Control Systems and Frank De Fina of Samsung.

De Fina said the industry continues to struggle to find qualified candidates, even though jobs in this industry pay well and offer advancement opportunity.

In addition, De Fina said there’s a “tremendous lack to diversity in the security industry” and said one of the reason organizers chose Mercer County Community College for this program is because it “draws a higher-than-normal percentage of African Americans, Hispanics and women. We need to expose these people to our business,” De Fina said. And this degree program is one way to do it.

SIA has signed a memorandum of understanding with Mercer and is in the process of recruiting industry professionals to teach courses at Mercer.

De Fina pointed out that high grades in the associates degree program at Mercer can lead to a bachelor’s degree. “If you go through the program with a 3.5 GPA or better, you’re assured spot in a four-year program at Rutgers [University],” De Fina said.

Both the scholarship and the degree program are smart moves for the security industry. Congratulations to SIA, ISC and the WSC.

Tyco expands in Alabama

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Monday, April 14, 2014

I’m here in Alabama, my first time in this state, for a Tyco event—the ribbon-cutting ceremony for it new Global Center of Excellence (GCoE) in Birmingham. The event starts in an hour, so I’ll have more info later: Below is some stuff from the press release.

“The GCoE enables multinational companies to streamline and standardize their security systems around the world. The GCoE develops standards, technical specifications and detailed work plans that enable consistent security installations globally, while also providing customers with remote system audit services to verify functionality and compliance to corporate standards.

With the increasing number of global clients supported by the GCoE, the expansion of the center will allow Tyco to better serve clients with a single point of contact for their global security needs. Fortune 500 customers are seeking to streamline and standardize their global integrated security systems by consolidating the number of local system integrators they work with worldwide. Managing multiple integrators across hundreds of locations can lead to operational redundancies, quality degradation, compliance issues, and increased costs.
The center will also play a key role in the company’s effort to create comprehensive solutions for customers that encompass a range of building systems.

The new 24,000 square foot facility currently houses 90 employees, including certified design engineers, computer-aided design operators, program managers, system engineers and other specialists, who design and document global security standards for enterprise-level intrusion security, access control, video management, fire systems and integration. The GCoE’s diverse team has multiple competencies, including fluency in 14 languages, and is well-versed in the business and cultural nuances required to successfully conduct business in the 38 countries the center supports, so customer standards and technical specifications can be maintained and updated as needed."

Possible defect halts sales of Google’s Nest smoke detector

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Wednesday, April 9, 2014

It was big news early this year when Google decided to buy Nest Labs, a  California-based maker of smart smoke detectors and thermostats, for $3.2 billion. But now it appears that Nest Lab’s intelligent new smoke/carbon monoxide detector isn’t as smart as billed. News reports say sales of the device have been stopped because it’s possible users can deactivate it without meaning to do so.

The smoke/CO detector, called Nest Protect, is so smart it can talk to home residents to warn them if there’s a fire or dangerous levels. But now a feature of the device that allows users to simply wave at it to turn it off has been identified as a potential problem and sales have been halted, Reuters reported this week.

Here’s more of what that news service had to say:
 

Nest co-founder and Chief Executive Tony Faddell said that, under a unique set of circumstances the alarm's "Nest Wave" feature, which allows a user to switch off the device with a wave of the hand, could be inadvertently activated.

Faddell, one of the creators of Apple Inc.’s iPod, apologized in the blogpost for a problem that was discovered during recent laboratory testing. He added that no customer had complained so far.

"We observed a unique combination of circumstances that caused us to question whether the Nest Wave could be unintentionally activated. This could delay an alarm going off if there was a real fire," he said. "The fact that it could even potentially happen is extremely important to me and I want to address it immediately."

He did not specify that set of circumstances.

Nest will immediately disable the Wave feature—one of many innovative design elements that has won the company and its devices acclaim—in all smoke alarms that are Wi-Fi-connected while it works on a software update to fix the possible defect. It said the fix, plus regulatory approvals, could take two to three months to complete.

Customers without Wi-Fi-connected devices should either disable it or return it for a full refund, the company added.

Security experts have said the industry should take note of Google’s Nest Labs buy, saying this first venture by Google into the connected home could portend more Google home automation products and possibly a security offering.
 

 

 

Securadyne expands in the Heartland

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Wednesday, April 9, 2014

Intelligent Access Systems—a rapidly growing systems integrator that was acquired by Securadyne in January—has made a move in the Midwest, expanding into Cincinnati and tri-state region (comprising Ohio, Kentucky and Indiana).

IAS employee Kevin Grice has relocated to the area and hired Cincinnati native and industry veteran, Jeremy Brewer.

Securadyne Systems’ branch network is now in more than 15 locations, from Texas to Maine.

Founded by Ron Oetjen in 2004, IAS specializes in integration for critical infrastructure, health care, and higher education vertical markets. Oetjen now serves as SVP of Securadyne Systems

I saw Ron in the serpentine cab line at McCarron last week and asked him about a Twitter comment I’d seen about Jeremy Brewer—but I didn’t have a chance to speak to him at any length at the show. I have a call into Ron to get talk more about this move and to see what else is planned in the next month.

Monitronics, Security Networks enter final phase of integration

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Wednesday, April 9, 2014

Several months after Monitronics acquired Security Networks in a $507 million deal, the company has officially incorporated the more than 200 Security Networks dealer affiliates into the Monitronics dealer program, the company recently announced.

This phase, which will go down as one of the final steps of the integration process, brings the number of Monitronics dealers to about 620, making it one of the largest networks in the country. The company says it will provide monitoring services to more than 1 million customers out of its Dallas-based central station.

Bruce Mungiguerra, Monitronics’ VP of operations, said in the statement that merging businesses is “never easy,” but that “the hard work of many groups across both companies has kept things as organized and efficient as possible.”

Also being brought into the Monitronics fold are 60 field technicians who previously serviced Security Networks accounts across several regions, bolstering the company’s network of field service dealers.

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