The Physical Security Industry is a Mess… (What an Opportunity!)

by Dan Dunkel - President, New Era Associates

Published in Today's Systems Integrator

Think about the deployment of physical security applications for a moment: What comes to mind? Is it an open or closed environment? Shared information or proprietary? Interoperable or unmanageable? In short, it’s a mess.

Once again the physical security industry is repeating IT history by emulating every other corporate or agency department that gave up on closed, proprietary hardware centric thinking and became “a customer of the IT department.” Executives realized years ago the cost saving and productivity benefits of standard IT infrastructures and software platforms. To understand the convergence opportunity, the physical security industry needs to learn IP networking, storage and software as a complementary business strategy.

Jeff Kessler, senior vice president of Lehman Brothers, is a man who studies the physical security industry. When he says, “Convergence is real,” you should listen. The problem is that this industry is very slow to change direction and habits. The July 2007 issue of SDM “The Biggest and the Best” of the top system integrators provides a convergence blueprint. Look at the selection criteria: Derive more then 50 percent of revenues from the sale, design/engineering, installation and service of multi-technology electronic security systems (access control, verification, video surveillance, alarms and network based technologies). Based on the above: Where are the gaps in your organization?

Another reason for the mess is that your sales organizations are asking the right questions of the wrong people. The sales teams read about convergence and ask their physical security managers and directors if it is a real trend? When they say, “No, it’s years away,” (wishful thinking) the sales teams bring the information back to the headquarters as fact. How ridiculous. Worse, this plays in to your new “IT competitors” hands. While you deny convergence, the message these IT sales teams bring to the senior managements (several levels up the organization) is the need to “create a holistic security policy and deploy it across the IT infrastructure.” This equates to storage system, software and IP network sales, as well as recurring consulting dollars. While some of your organizations are smaller and not accustomed to selling at these levels, this is where partnering strategies come into play. You add value as a team member. For those physical security integrator organizations aspiring to make a difference, this is a great opportunity. Yet some of you turn your backs on convergence and have unknowingly initiated your eventual decline. You can’t make up the ground you lost in 2007.

The sad fact is that your physical security customers need you now; at the exact time you are dismissing the market opportunity. Again, read your IT history, understand middleware. This software allows information generated by disparate applications (video, access control, intrusion detection, alarms) to be consolidated and coordinated into a command and control system. By offering this functionality to the physical security group, you allow them to control their destiny from an operational standpoint, while handing the infrastructure responsibility off to the IT department. Hint: The IT department is overworked and understaffed and has no interest in learning physical security applications. They would welcome your help in bringing your silos into the corporate or agency fold.

Alternatively, the relationship turns adversarial. Fight IT and their answer will be, “Video kills my network.” Of course, the IT industry has been built on network bandwidth, so this is actually ridiculous, but they know that the physical security industry does not understand this, so why do they want you on their network in the first place? Do you think the Cisco reps said, “Ok, never mind…” when they heard this objection 18+ years ago? Now Cisco is the network consultant. What IT is really saying is, “I have no time for this until the executive staff tells me I do.” At that point, bandwidth is a budget issue. It is also the least of your worries because most of your industry does not have a convergence message for the executive level that speaks to security policy, R.O.I., compliance and security as a business value.

The other reason your industry is a mess is you are reluctant to partner. Either with IT companies (they might compete with us!) as well as internal IT departments, or by embracing new start up companies providing new solutions (they are too small). The issue is that the IT people will compete with you if you ignore them (but they will also partner with you), and every company was a small start up at one time. Get over it. For example, the start-ups have the physical security middleware solutions you need to succeed.

Security convergence is creating an inflection point in the traditional physical security industry. You can embrace it or be consumed by it, but it is not going away.

Once upon a time there was a BIG company that pioneered the IT industry. It got rich selling hardware and proprietary systems. But one day that strategy would not scale any longer. Hardware margins declined rapidly. Competitors introduced more open and interoperable systems. The company was 6 weeks away from a financial bail out. The situation was dire. What to do? The company hired someone from the outside for the first time in its long history. His innovative thinking created the consulting services model to “get all these separate systems working together and sharing information.” That was 14 years ago. Today IBM Global Services generates over 50 BILLION in annual revenues.

Read IT history. What looks like a mess is a golden opportunity provided you embrace new thinking and execute!