by Dan Dunkel - President, New Era Associates
Published in Today's Systems Integrator
This past 4th of July I spent part of the morning emailing many of the luminaries defining the security convergence market. This included senior executives, sales and technical VP's and managers, editors, and consultants representing both IT and physical security firms. Major manufacturers ranged from Panasonic to Pelco and IBM to Cisco. Integrators ran the gantlet from 10M-dollar regional players to 300M global service providers and many in between. All in all I sent out over 75 emails. The nice thing about spending some holiday time making contact is it seems the July 5th response rate was higher then normal.
The email mentioned that I had read somewhere that 50% of the total revenues of the entire physical security industry were spent on guard services. If true, how did they see the traditional role of security guard services evolving with the new convergence trend?
I found it interesting that 90% of the folks not only agreed with the 50% revenues directed to physical guards services statement, but many felt it was much higher.
People feel that physical guard services will always have a place in the security market; however, the guard business is changing drastically. This is not to say there was not some dissent in the ranks. A few folks stated that nothing much would change and that the much stated "convergence model" is all hype. This however was the minority response.
By and large the consensus was that the new era of security guard services would require new skill sets that involved an understanding of and ability to operate with new technologies. Most responses spoke to the areas of integrating services with wireless (handheld) video technologies and analytics software that reduced operator error and false alarm rates and improved productivity. Yes, eliminating some traditional security guard positions was a reality. However, there was a call for reorganization more then layoffs and staff reductions. The new business climate opens many new areas for security firms to enter new businesses. Many major corporations considering moving operations off shore to reduce costs have needs for risk assessment services, security of remote locations and managed security services. Many executives see future security officers playing a larger role in IT Security compliance and higher end investigations.
As you can imagine with any group dynamic, I got some interesting point / counterpoint opinions:
"Tomorrow, highly sophisticated systems in alarm management, video surveillances and proliferation of managed security services in the physical security industry will put 80% of low paid - regular guards out of jobs."
"Of course some video analytic and remote viewing of sites may reduce the need for guard services but I really doubt that there will be any percentage reduction for the guarding business".
"Anyone who still has the business model of "more guards equals more security" is going to be trampled by the economics of highly communications-enabled, mobile guard forces who receive actionable information via PDA's and other wireless communication devices that enhance their ability to cover larger areas more effectively."
"I suspect (and believe) that the size and proportion of the guard force in the security industry will not change substantially, but that technology will allow that force to extend its range, coverage, effectiveness and efficiency."
"In Canada, it's commonplace for a guarding division to be a part of a larger integration company, and vice versa."
"I doubt that there will be much partnering with IT integrators, but we'll have to wait and see on that depending on the degree to which IT integrators penetrate the physical security space."
"Guard companies have acquired and continue to acquire electronic security companies. They see guards being replaced by electronic security and they do not want to lose the business."
"As good as technology is, there are just some places it can't replace guards."
As with any market in transition you have to expect differences of opinions and respect diverse views. History tells us the one constant is change and that victory favors the swift. I would like leave you with some wisdom one-email respondent was kind enough to share with me.
"Ross Perot once told me that products turn into systems and that systems turn into services. There's no doubt that security systems are turning into services but traditional guard services may not get a lot of the business."