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Will DIY, MIY make huge gains?

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Wednesday, July 29, 2015

What’s the future normal for home security? According to an article from Business Insider, it’s DIY and MIY, all from Silicon Valley giants Google and Apple along with telecom big names.

What do you think?

I speak to resi dealers five days a week. They tell me that DIY is often a selling point for them and that it works very well for some of their customers—especially in helping homeowners understand their systems better—but that MIY, on the other hand, is not beneficial. What happens if you’re an MIYer and you’re 1,000 miles away from home on vacation or a business trip?

Traditional home security systems are still the mainstay, but not for long, according to the report from Citi, the primary source in the Business Insider article. Even though traditional systems/companies currently make up 93 percent of the home security market and DIY/yet professionally monitored make up 4.7 percent, Citi says in the article, that’s all going to change.

Google’s Nest and Dropcam and Apple’s HomeKit control 2.3 percent of the market.

That 2.3 percent market share will grow to 34 percent in the next five years, Citi says, with the traditional professional systems dropping to 61.6 percent.

How will this play out? Do you agree with the Citi study? I’m interested in your opinions for future articles in Security Systems News. Please let me know. Comment, email me at acanfield@securitysystemsnews.com or call me at 207-846-0600. Thanks!

 

 

 

Entering PERS: problematic or practical?

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Wednesday, July 22, 2015

PERS. It’s come up a lot lately—everywhere I look it seems that I’m hearing about new angles to the market, and new contenders. One thing I’ve also heard plenty of is that it’s not a space for everyone. But some seem to be finding it a very sensible new market.

Just recently the cellphone provider Consumer Cellular entered the market, choosing this as a logical space to make its first step outside of cell phones. I think it’s interesting that a market avoided by some can be an easy fit for others.

Another newcomer is Blue Star. The company took a look at a certain area it saw as underserved: the veteran community and their families. Now, Blue Star is looking to triple sales by the fall.

It was even a lively discussion at ESX. AvantGuard’s COO Justin Bailey said that mPERS is a quickly growing market. PERS isn’t for everyone, panelists said, because it can take a toll on your operators that you need to be prepared for. Daniel Oppenheim, VP for Affiliated Monitoring, said that it might be best left to those centrals that can handle it.

Now, the Medical Alert Monitoring Association is looking toward its annual meeting, catering specifically to the medical alarm space.

So, it seems that the PERS market is particular, a very specific niche in the industry of monitoring, but there is space for those companies willing to look into the space and work their way into it.

A conversation with BluB0X

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Wednesday, July 22, 2015

In the course of putting together the educational program for our new Cloud+ conference, I've been talking cloud almost every day and last week I met a new cloud provider called BluB0X.

The company is new, but the folks behind BluB0X have been doing cloud for a long time--the executives and some of the team are the people who founded TouchCom. Remember Touchcom? It was acquired by G4S in 2008. Here's a story about that deal.

I had a great conversation with BluB0X CEO Patrick Barry and COO Patrick de Cavaignac of BluB0X yesterday.

Barry told me the principals of BluB0X "took everything we learned in the 15 years building the previous [Touchcom] product and applied modern requirements and modern technology."  A significant difference is that Touchcom sold direct to end users whereas BluB0X is working with the channel. Another difference is that BluB0X focuses soley on security. "There is no facility management [component], BluB0X focuses on access control, alarm management, video, biometrics and visitor management," Barry said. 

De Cavaignac added that BluB0X also does elevator systems integrating into the destination control systems.

Barry said security has gone through three technology cycles--we're now now at the fourth technology cycle, he said

This fourth cycle, what BluB0X calls "Security 4.0," is the foundation of BluB0X's manufacturing philosophy. Barry said Security 4.0 comprises six technologies that are changing the security industry and which BluB0X is built around. They are: cloud/wireless; mobile devices; multi-factor biometrics; everything unified on a Mercury platform (the largest installed platform, Barry noted); open, standard, IP-based; and lots of analytics.

BluB0X is ramping up quickly, Barry said. It has several new customers. The company exhibited at ISC West and will be at ASIS in September. The company recently hired Siemens' veteran Perry Levine to do business development.

Want to demo the product? Barry said it's very easy to do. Because it's in the cloud, BluB0X provides a login and password "and they can use the demo site. ... They can try it before they buy it," Barry said.

It offers the standard cloud benefits of "one version, the current version that gets upgraded once a month, whereas the typical manufacturer upgrades once a year," Barry said.

Barry is also very excited about the product's ability to run on any mobile device. It's different, he said, because "it's readable whatever the dimension of the screen is ... you can run our software from a computer or when you're walking down the street with your smartphone." Many software programs work on mobile devices via apps, he said. That can be problematic because the interface looks different, there's a lot less power with the apps, and you have to keep updating the apps.

I will have more, later, in a story on BluB0X.

 

Two Navy SEALS with MBAs seek platform for security company

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Wednesday, July 15, 2015

A news release come across my desk yesterday about Horsemen Partners, a new investment firm run by a couple guys who want to buy a security company as a platform for growth. Let’s just say I’ve seen this kind of news release before, but, this one caught my eye because of these guys’ background: They’re both business school grads and former Navy SEALs.

They’ve got backing to buy a security company, but my question was why security? Why do they want to get into this business?

I spoke to one of Horsemen Partners’ principals, Sam Alaimo. this morning. Alaimo said he and his partner, Mike Lahiff, could have invested in any number of industries, and they did take a close look at some health care-related businesses, but they settled on security for financial and personal reasons.

“We like the growth prospects, we like the [ongoing] evolution of the security industry and we like the people in the industry,” Aliamo told me.

Alaimo and Lahiff got to know security technology, specifically video monitoring and sensor technology, while serving as Navy SEALs in Afghanistan. Serving in a remote area, they saw the benefit of security technology in Afghanistan and were able to leverage these capabilities to safeguard Americans, locals, and other innocent people in the area.

“The technology has endless capacity if utilized correctly,” he said.

Horsemen Partners is looking to buy a platform for growth in the security industry. They will be active operators in the business, but they’re open to negotiation on several items such as whether the current owner retires completely or stays on in some capacity.

Geographic location is not important. Lahiff and Alaimo will relocate, “whether it’s Billlings, Montana or Austin, Texas,” Alaimo said. And, Horsemen is also not set on a certain type of security business. Alaimo said that eventually whatever business they buy will do alarm systems installations, alarm monitoring, some systems integration, sensor technology and video monitoring—but the business as it stands now “does not have to do it all, it could be any one of these,” Alaimo said.

What Alaimo and Lahiff are looking for is an independent, well-run business that has potential to keep growing. They want a company that’s been cash-flow positive for the past three years, with $5- to $30 million in revenue and some RMR.

“We’re not ADT rolling up a business, we’re two guys who want to buy a private business and take care of it. We’ll stick with the company’s core capabilities but also bring in more—some systems integration, DIY—depending on its capabilities, what is has now and also where the market heads,” Alaimo said.

Horsemen is backed by institutional and individual investors. such as: Anacapa Partners; Search Fund Partners; The Cambria Group Relay Investments; Rich Augustyn & Larry Dunn of NIP Group, a specialized business insurance and risk management intermediary; Tom Cassutt, managing partner of TD Investment Company and David Lazier, managing partner of TD Investment Company;  Doug Tudor
managing partner of Ravenscourt Partners;  Bob Oster a professional economist and banker and private investor; Tim Ludwig, a private investor; A.J. Wasserstein, CEO of Onesource Water; Matthew Burr, general partner at Matland Capital; and, Matt Estep managing partner and founder of Bosworth Capital Partners. The investment company's web site has more information.

 

New tech, like the cloud, coming to central stations

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Wednesday, July 15, 2015

Even a few weeks past it, I’m still thinking about ESX and what resonated with me about some of the panels. One in particular, “Central Station Technology—The Latest and Greatest,” has kept me thinking.

Panelists included Jay Hauhn, CSAA’s executive director, Jens Kolind, VP of external partnerships for IBS, and Chris Larcinese, cloud-based services market manager in the Americas for Bosch Security Systems. Joe Miskulin, proprietary central station manager for State Farm, served as the moderator.

First off, Kolind brought up the cloud. He said it brings certain technological efficiencies, such as when upgrading systems or not needing as big an IT staff on hand.

Hauhn said, “The promise of cloud is quite attractive.” This is especially true for proprietary centrals, he said, and predicted the number of proprietary monitoring centers would increase.

An attendee asked about the risks of using the cloud. Jens answered, saying that there is a larger risk of a data breach. Those looking to the cloud should make sure that the cloud provider is encrypting important information, he said.

The panel addressed two interesting sides to the technology coin; what is on the upcoming horizon, and what might be sunsetted.

Larcinese pointed to “wearables” as an emerging technology.

According to Hauhn, new entrants should be the ones to look out for; it is movement’s like DIY or the smart home that will define what is going to be monitored in the future.

This begged the question: what kind of weight does a self monitored dispatch carry? Hauhn said it’s very credible, the home owner might have a better idea of who should or shouldn’t be in that house than the operator.

The ASAP to PSAP is also an emerging trend. Hauhn said that program is cloud-friendly.

As toward what technology might be sunsetted soon, Kolind said the age of IP might inhibit the end of the traditional receiver. 

Digging deeper at TechSec

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Wednesday, July 15, 2015

Exec ed Martha Entwistle and I had an excellent conference call yesterday with SSN’s TechSec Advisory Board. We’re gearing up for the annual conference on new and emerging technology, and our advisors assist us as we determine programming.

One thing I can say at this point is that the educational sessions at the TechSech conference Feb. 2-3 will be different from what you’ve heard over and over again. I attended ISC West and ESX, and the people I met with and the panelists at the sessions I attended were certainly very smart and at the top of their games, reinforcing topics we’ve heard about for months and have written about. But I was left with the questions, “Are there new takes on these persistent topics? What angles haven’t been pursued?” We want to dive deeper at TechSec. And we will.

The conversation Martha and I had with our advisors led to some interesting, topical points. We’ll be announcing the program and panelists soon. You can check out last year’s educational here for a feel of what we’ll be aiming at, bigger and even better in 2016. It will be great, and you can hold me to that!

I especially like how we have some of our past “20 under 40” winners on our advisory board: Ralph Nerette, Sharon Shaw and Jeremy Brecher. (We know how to pick them!) Along with input from longtime industry pros, they provide us with unique perspectives and know what those in the industry want and need to know in today’s fast-changing security environment.

Thanks to each member of our advisory board. Please stay tuned for more info on TechSec, filled with what will be most current and forward-looking hot topics in the industry. 

‘20 under 40’ end-user nominations: One word. Wow

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Wednesday, July 8, 2015

The Security System News’ team has done a preliminary vetting of the nominations for SSN’s “20 under 40” awards, with a full study to come this week. The deadline for nominations was July 1, and thank you, readers, for coming through!

Although we do have two categories, one for integrators, I am primarily responsible for the end user awards.

I say it every year because it’s true: Each year we get such great nominees, so qualified, extremely professional, smart and deserving of being honored in the industry.

We always have a tough time selecting the final 20. We select some of them to participate on panels at TechSec and honor all of them at a ceremony at that annual premier event. The “20 under 40” panels at TechSec are always among the most appreciated by attendees, according to our surveys, because who in the industry doesn’t want to know what these smart, innovative people need and want to do their jobs successfuly?

In order to select the best of the best, we rely on nominators, often calling upon them, again, to expand upon their reasons. We talk to our TechSec Advisory Board. We mull. We agonize. Then we choose.

This year’s nominees are physical security directors at big-name corporations, major retailers and hospitality groups, healthcare institutions, municipalities and utilities—many, many nominated.

Thank you for nominating your best and brightest. Finalists will be contacted soon by me, and I’ll do a profile of each one for Security Systems News, both online and in the print edition. So stay tuned. You’ll want to hear what these pros have to say.

I think the industry is in good hands.

 

Hear it from this Millennial

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Wednesday, July 8, 2015

More and more I’m hearing about the “Millennials;” those born between 1980 and 2000. I fit squarely in that range.

Millennials seem to be the target audience for home automation, some have noted them as the more “technological-savvy” generation. Now, the Millennials are entering the job market. At this year’s ESX I heard UCC’s Mike Lamb, and ADT’s Stephen Smith, share their observations on training this younger generation.  

During Lamb and Smith’s ESX Panel, “Training for Central Station Operators,” I was—as a Millenial—quite alert, asking myself how each technique or perspective applied to me.  

There were quite a few points that I could agree with and—imagining myself in the shoes of a prospective central station operator—would see a lot of value in. Though, there were other points where I differed in opinion.

Lamb said that Millenials like understanding the value in their work. That is certainly something I could agree with, and I don’t think Millenials are the only ones who could benefit from better grasping the value behind what they do.

Also, he had a point that, when given a task, Millenials might be more prone to ask “Why?” This isn’t a sign of disrespect, he said, but instead looking for more understanding.

I definitely agree with that. Approaching a task, I find it very useful to understand where my role or any action plays into the larger plan.

Lamb pointed out that Generation Y is the age of “participation trophies,” which, unfortunately, I can’t disagree with. Lamb had a point that this constant recognition given to many individuals in Generation Y is something to notice and enable in your central station employees; that they like to be recognized if and when they are doing things right. I can see how a little positive reinforcement would encourage confidence in a new employee. Though, I personally wouldn’t want to see this overdone, certainly not to the levels of participation trophies.

Lamb also had a point that younger generations occasionally struggle with professionalism, specifically in writing. An example he gave was with “twitter speak,” using “u” instead of “you,” “r” in place of “are” and so forth. This surprised me the most. Perhaps it is my writing experience separating me from the Generation Y pool of potential operators, but I have always found a professional writing style to be imperative. Lamb, and some of the attendees, said this is a problem of the generation.

Integration begins for Protection 1 and ASG

 - 
Wednesday, July 8, 2015

Let the integration begin.

With Apollo Affiliated Funds closing on both deals with Protection 1 and ASG, I checked in with Jamie Haenggi, Protection 1 CMO about what's next.

In an email interview, Haenggi complimented ASG CEO Joe Nuccio, saying he's "done a nice job building a company of passionate employees that care about the customer, which mirrors the Protection 1 culture." 
 
Haenggi said Protection 1 CEO Tim Whall is out "is out doing what he does—meeting with the employees of ASG, hosting town hall meetings and sharing insights as to how he looks at measuring the business, taking care of the customer and developing the employee.  The senior teams are working together over the next 30-60 days to devise a detailed integration plan.  As you can imagine bringing together two companies this size is no small undertaking and great care is given to ensure little to no disruption."

Indeed, this is a huge undertaking, but my guess is that Tim Whall and team are up to the challenge. If you look at where the two companies overlap geographically they'll have five or six markets where they'll have huge density on the residential side. I've talked to lots of observers, outside of the ASG and Protection 1, who believe that this will mean very nice efficiencies and margin improvement on the residential side. On the commercial side, ASG was focused on small- and medium business and national accounts. These assets should just accelerate what Whall's been working on for the past few years—becoming the largest independent full-service security company around.

 

Fire services trump alarm industry on NFPA vote

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Wednesday, July 1, 2015

On June 25, in Chicago, the NFPA held its annual meeting, but the alarm industry was concerned about two motions on NFPA 72, which would effectively give local municipalities the authority to disallow the use of listed central stations for fire alarm monitoring.

Ultimately, motion 72-8 passed with a vote of 142-80, giving municipalities that discretion. Motion 72-9, which would have removed the line referring to central stations completely, was withdrawn after 72-8 passed.

Kevin Lehan, executive director for the Illinois Electronic Security Associaiton, told Security Systems News that there were some beneficial aspects to the meeting for the alarm industry. “Previously the language said ‘alternate location approved by the authority having jurisdiction.’ Now the language specifically says ‘listed central supervising station.’” Lehan said that this specific mention will help central stations through being now a specific entity as opposed to the previously vague language.

“We were thrilled to be able to get the numbers out that we did.” Lehan said, pointing out that the vote, being on June 25, happened at the same time as ESX. “We mobilized very well, we just have to inform and entice the rest of the alarm installer community to be active in the NFPA going forward.”

“What we learned at this event is that there is a disconnect between the industry and the fire services,” Lehan said. The two sides of the argument, fire departments and the alarm industry were approaching the matter from very different perspectives.

“The fire services, their testimony came across as stating that central stations are unsafe. We have heard for a few years, and this was echoed at that [NFPA] meeting, anecdotal situations whereby the private alarm industry failed in dispatching [without more specific details on the alarm event]. When we ask for specific situations when this has happened, we do not get a response," he said.

“On the private industry side, it’s the same position that we’ve always had, allow us to compete for business. Let UL listed central stations perform to NFPA code standards, and let the market choose service providers,” said Lehan.

Lehan said that the idea of creating a forum for fire services and the alarm industry to communicate better had come up in discussions following the meeting, and that may be further developed in the future, Lehan said. 

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