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Afternoon entertainment

Wednesday, October 7, 2009
Because the child in me can't pass up embedding a video about catching a naked burglar on a security camera: Favorite quote: "You can see the crack in his butt; you can see the front part of his organ."

Where else you gonna go for vendor-neutral info on video and RMR?

Wednesday, October 7, 2009
I was talking to RSI Video Technologies president Keith Jentoft the other day (actually my day today began with a chat with Keith as well), and he was telling me about a project he'd been working on with ESA (that's the new-fangled NBFAA, for those of you who haven't been paying attention). It seems the parties involved have been working on a "Technology Interest Group." Jentoft assured me the endeavor would be vendor-neutral and packed full of useful info to help traditional burg folks to start reaping some of the benefit of video. The first category explored at the wiki is video-verified alarm systems. I actually wrote a story with input from Jentoft and Sandra Jones and Company principle Sandy Jones. Look for that story on SSN's next newswire tomorrow (I'll update this post with a link when it's available). from the wiki:
The first category to be addressed is Video Verified Alarms as this is a small incremental step in both technology and business model from the traditional intrusion alarm business. We hope to complete all sections soon. We are especially looking for actual real-life input from central stations and dealers to bring value to the 'Best Practices' section under each of the three technologies covered in Video Verified Alarm Systems.
They're looking for real, live input from bona fide security industry folks, so drop on by and participate. And maybe earn some money and be part of the next big trend...

Gallagher: 'We're a bit like a flea attacking an elephant'

Wednesday, October 7, 2009
While I was poking around for any sort of update on the GE Security potential sale, I came across an enthusiastic article from New Zealand's National Business Review, gushing over Gallagher's ad in the Wall Street Journal. National pride clearly runs hot for the kiwis, and the NBR is pretty impressed with Gallagher's gumption:
Hot on the heels of winning New Zealand Trade and Enterprise’s international business leader of the year award, Bill Gallagher could finally be breaking the back of the US security market. The Hamilton entrepreneur’s Gallagher Security Management Systems took on Uncle Sam last week, taking advantage of widely-reported rumours GE Security was selling its security division and placing an ad in the Wall Street Journal to woo the conglomerate’s customers – just in time for last week’s ASIS security trade show in Annaheim.
Um, "breaking the back of the US security market"? I'm thinking that's a bit much. And I love how they equate GE Security with "Uncle Sam." They can be forgiven, probably, for not being that hip to the security marketplace in general. I like this paragraph a lot:
But the company, which designs and manufactures Cardax electronic access control and intruder alarm systems and PowerFence perimeter security systems, was now happily taking on the likes of GE, Honeywell and Snyder.
How did Honeywell get involved? And did they mean this Snyder? A 400-person guard firm in Danvers, Massachusetts? Or maybe that's Schneider? Luckily, Gallagher, himself, is a little more contrite and humble. A little:
While it might have created more talk than anything else, it seemed that was enough to please Mr Gallagher. “We really got the controversy going,” he said. “We’re a bit like a flea attacking an elephant.”

Some ASIS numbers released, analyzed

Tuesday, October 6, 2009
While we wait for audited numbers, ASIS has released preliminary attendance figures for the recent show in Anaheim: 19,300 attendees. They say that's down "single digits." Here's where you can find their audited numbers going back a few years (pdf warning). Last year it was 21,126. So, my math puts that at 8.6 percent down. Not much room left in the single digits. According to this release, they first broke 19,000 in 2004, which was at the time the most in the event's 50-year history. They also had 842 booths that year, too, however, which is many more than the 715 they're reporting this year. Maybe that's why Cisco's Steve Collen said Cisco had significantly more leads this year from the show than last year: more people for fewer booths? I personally think the far superior venue got people circulating much better, so that more people saw more vendors. In 2002, just a year after Sept. 11, the event drew 17,650, also a record at the time, along with 725 vendors. While a lot of people are focusing on the attendance figure, it's got to be a little scary that ASIS drew fewer vendors than in the first year after Sept. 11. Actually, I think the attendance figure is very good. I think the economy is terrible, more terrible than some people realize, and I think travel and education budgets have been slashed like crazy. You'll also notice that this article about conventions coming to Orange County only even predicted 16,000 for ASIS. So, back in January, optimism was running even lower than September's reality. What will be interesting is to see in the audited numbers how the attendance breaks down. Built in the attendance number is generally some 9,000 or so exhibitors and sponsors. As a percentage, they were 41.4 percent in 2006, 39.6 percent in 2007, and 40.8 percent in 2008. With 23,708 attendees, 2007 is looking like the apex. Where the nadir will be is the question. If it's 2009, ASIS should consider itself lucky. For context, here's how ISC West's audits (pdf alert) have broken down: 2006 - 24,379 attendees, 36.7 percent exhibitors, etc. 2007 - 26,562 attendees, 37.8 percent exhibitors, etc. 2008 - 26,362 attendees, 37.5 percent exhibitors, etc. 2009 - 23,097 attendees, 35.2 percent exhibitors, etc. However, ISC West is a very different show in terms of make-up of the attendee-attendees. The audits break them down into "conference attendees" (those who pay for the education, etc.) and "exhibit-only attendees." While ASIS has been over 4,000 each of the last three years, ISC's high was 1,189 in 2006, and this year had just 674 conference attendees. Ouch. That will be a very interesting number for ASIS when the audit comes out: Did their core people still pay to come? That would validate the "there were less tire-kickers" crowd. Did the core stay away? That would support the slashed-budget crowd.

What's new with newcomers 2GIG and ETL/Intertek?

Tuesday, October 6, 2009
Read on for the latest on two security newcomers: ETL Intertek and 2GIG Technologies. 2GIG is Honeywell vets Lance Dean and Scott Simon's start-up company. Lance and Scott are making a new alarm panel called GO!Control. It's a "self-contained, all in one security and home management system panel" with a fancy LCD touchscreen. Here's a story I wrote about them., and here's a link to their site. Yesterday, 2GIG announced that GO!Control has been ETL certified. ETL/Intertek is the newest NRTL in town, taking on UL and FM in the security and fire space, and by all reports, making some waves. NRTL, for the uninitiated, rhymes with turtle, and is the way the cool people refer to Nationally Recognized Testing Laboratories. Here's the 2GIG/ETL Intertek press release.

Retailers differentiating with supply chain management

Tuesday, October 6, 2009
Wanted to point out a cool white paper released today by the Retail Industry Leaders Association and Auburn University, focusing on supply chain management. Find it here, but beware the immediate pdf download (why this new trend toward pdf downloads, I'm not sure). The conclusion the paper reaches is this (SCM stands for supply chain management):
As the retail industry seeks to weather the storm of bad news regarding the global economy and weak consumer spending, CEOs and directors are counting on SCM to sustain profitability. Though revenues are stagnant in many retail organizations, costs are viewed as controllable. In particular, the expenses falling under the control of SCM executives are receiving strong attention from the top of the organization. SCM executives now find themselves in the spotlight and must perform their brand of magic to save the show. They must pull multiple rabbits out of the hat, cutting inventory levels while maintaining high in-stock availability, reducing transportation expenses in a time of unprecedented fuel price volatility, and building consensus when others seek to protect their silos and turf. Certainly, it is nearly impossible to perform these “tricks” without extensive preparation and precise execution.
How can "security" help these SCM executives look like magicians? Security is not even mentioned in the paper, which makes me think there's an opportunity there. For example, the paper notes this about RFID:
[N]ewer initiatives have not had as great an impact on performance. It will take time for retailers to fully harness the potential of sustainability efforts and RFID technology.
So, it would seem that Lojack's recent partnership with NC4 makes a lot of sense. If constant awareness and protection of the supply chain can evince tangible savings, this white paper makes it clear that SCM types are going to be all over it like white on rice. But it's also going to take an education effort. It's clear that SCM executives are not focusing on security, or technology in general, to solve problems and create efficiencies. As with the capabilities of security systems as a whole, often the end users are thinking of the solution because they don't know it exists. Make sure they know it exists.

Back to School!

Monday, October 5, 2009
I just wanted to remind readers of SSN of some of the upcoming opportunities for education in the security industry field. I've written over the past couple weeks about several opportunities, including A CSAA-sponsored webinar this week on Oct. 8, which will focus on beating attrition and increasing RMR, an online PERS primer from Visonic, the company that held intensive PERS boot camps earlier this year, and training to become CSAA Five Diamond certified. The best part about all of these upcoming initiatives is that they are all completely, 100 percent, absolutely FREE. You don't get anything free these days except bad advice, usually, so the value is pretty dang hard to overestimate. Why not take full advantage of these opportunities and help to better yourself and the industry?

Stanley bags one of the larger remaining Sonitrol pieces

Monday, October 5, 2009
Not surprisingly, Stanley is continuing to gobble up the Sonitrol franchises that remain out there. It's part of the strategy and it makes sense. They liked the Sonitrol model enough to pay $275 million for it, so why not buy up the franchises, increase the economy of scale, etc.? The announcement today is that Stanley has purchased one of the larger remaining pieces (by my count there are now roughly 90 franchises left), scooping up (ha! scooping up! sorry, inside joke) Sonitrol Cascades, Sonitrol of South Oregon, Sonitrol of Spokane and Sonitrol of Yakima--collectively operating as Sonitrol Cascades--from Vyanet Capital Group, L.L.C. Here's the full release. No link available:
Naperville, IL – October 5, 2009 – Stanley Convergent Security Solutions, Inc. announces the purchase of four Sonitrol franchises: Sonitrol Cascades, Sonitrol of South Oregon, Sonitrol of Spokane and Sonitrol of Yakima collectively operating as Sonitrol Cascades from Vyanet Capital Group, L.L.C. Sonitrol of Cascades is one of the top ten Sonitrol franchises in the U.S., based on recurring revenue in 2008, and was reported as the 41st largest security company in the United States overall (based on Security Dealer Magazine’s “SDM 100” annual ranking). The sale includes mostly commercial accounts including education, local government, property management, banking, retail, restaurant and other customers being serviced throughout Oregon and Washington state. Terms of the sale were not disclosed.
Okay. I admit it. I quoted that whole paragraph because I think it's funny that Security Dealer is getting credit for doing SDM's SDM 100. Does anyone know what SDM stands for anymore? Two minutes of googling turned up Security Distributing & Marketing Magazine (I kept getting "Security Device Manager"). I had honestly forgot, if I ever actually knew. They, like ASIS, have done a good job of just going by the letters. Everyone knows SDM. But, apparently, they don't know what it stands for. Congrats to Security Dealer for getting a little credit, even if they did somewhat recently change their name to Security Dealer and Integrator. Anyway, didn't mean to steal Stanley's thunder.
“This transaction is a natural fit for us since our 2008 acquisition of Sonitrol Corporation for $275 million. The Sonitrol Cascades franchise acquisitions are a great opportunity for us to expand our operations in Washington and Oregon. We’re excited to be adding such a quality organization to Stanley CSS. Sonitrol Cascades has an accomplished group of customers throughout the Northwest,” stated Tony Byerly, President - North America, Stanley Convergent Security Solutions, Inc.
They love throwing that $275 million number around. I guess I would, too, if I bought something for $275 million. They don't tell you what they bought the four franchises for, though...
Stanley CSS will expand its direct coverage for Sonitrol products and services to include the Eugene & Medford, Oregon and Spokane & Yakima, Washington areas. Stanley CSS’ stated strategy is to mainstream advanced Sonitrol audio verification technology and services across North America through its corporate locations and franchise partners.
And I can attest to the fact that they haven't just bought Sonitrol and rested on their laurels and let Sonitrol bring in the cash. As ASIS they were showing off a pretty cool new panel that allows for both Sonitrol-based intrusion and two doors of access control. They're combining Sonitrol's capabilities with the old HSM customer care and reporting features and have a pretty powerful base on which to build. The coolest part of that they were talking about at ASIS is a tracking service for your technician, like you get with UPS or FedEx. I'm guessing end users would like constant updates of just when the guy coming to fix the security system will arrive. Now, if only they could license that capability to the cable company...

Raising some serious cash in Provo

Monday, October 5, 2009
The sun isn't even up in Utah yet, but ApxAlarm's Stuart Dean announced this morning that Apx has raised a chunk of change. It closed on a new credit facility, which brings its cash on hand to $440 million. The facility is led by Goldman Sachs and will be used to "fuel growth in the next few years." What's that mean exactly? I'll let you know as soon as I get a chance to talk to Apx today. It's only about 6:30 a.m. in the Rockies right now. images-11 COO Alex Dunn, in a prepared statement, says that securing a loan of this size in today's economic environment is notable. From the release:
“The fact that we raised a credit facility of $440 million in the current economic environment validates that we are one of the premiere residential security companies in North America,” said APX Alarm Chief Operating Officer, Alex Dunn. “This is a real credit to our management team and the thousands of employees who provide world class service to our customers.”
Last year, at about this time, Apx closed on a $215 million credit facility, also led by Goldman Sachs. Apx used the bulk of that facilty to fund subscriber growth. Here's that story. I'll know more after my call today. In the meantime, here's the release.

LaSalle corruption scandal comes to an end

Friday, October 2, 2009
The story is old enough now that LaSalle Bank isn't even LaSalle Bank anymore, but its former security director, George Konjuch, has finally copped to charges that he defrauded the bank by taking kick-backs in exchange for funneling work to INS Integrated Security Solutions, at the time headed by Armando Navarrete. We first reported on this back when the news of the charges broke in December of 2007. At the time, Navarrete's lawyer made this argument:
"This is not a conspiracy case," Smith argued. "You can't be a conspirator with someone that's extorting you." Smith said Navarrete was doing security work for which he was contracted, something his firm has been doing for more than 35 years, with a UL-listed monitoring center in Wood Dale, Ill., and then Konjuch started asking for small gifts--$200 here, help with paying for a wedding there--with the implication that the continuing contract depended on it. "When do you say 'no' to somebody who says what business you get and what business you don't get?" wondered Smith. "When it got to $40,000 a month, Navarrete wondered, 'How do I get out of this?' at which point all hell breaks loose."
Unfortunately, that argument didn't sway a jury. Navarette was convicted of bank fraud, bribery and illegally hiding bank transactions in July and is now in jail. Navarette at least never wavered in his story:
Navarrete admitted paying $1.3 million to George Konjuch, vice president of physical security at LaSalle Bank in Chicago. The cash payments in envelopes came from multiple withdrawals to avoid required disclosure of transactions over $10,000. In addition, prosecutors said, Navarrete gave Konjuch $20,000 in free security equipment at his home, $15,000 in free landscaping and snow removal, a $10,000 cashier's check for his daughter's wedding, and paid his way to Las Vegas for joint gambling junkets. But Navarrete testified that Konjuch extorted him, demanding the money or threatening to cut off his business.
Konjuch wasn't shy, that's for sure. Unfortunately for Navarrete, of the $45 million he billed out to Konjuch, "A witness for the prosecution compared the invoices to those of other companies and INS bills to other banks, and testified that $30 million of the payments were unjustified." Oops. Part of me feels for Navarrete, though, especially after reading this paragraph:
His client is a Cuban immigrant who served five years in the U.S. Air Force, then worked on jet fighters for Lockheed, before getting a job as a cash machine technician with INS, then becoming operations manager and buying the company in 1997.
The guy pulled himself up by his bootstraps. Unfortunately, it seems like maybe he got accustomed to those bootstraps being of the finest leather and went a little too far in his quest for the American dream. If we're going to grade these guys as scumbags, I'm giving Konjuch a solid 10 (after all, he's in charge of protecting people and assets, and he used that position to illegally pay for his daughter's wedding! Is this guy auditioning for the dad role in Say Anything 2?), but Navarrete is only a 7 at most. Offering a bribe is bad, but taking it is worse.