Viewing the Industry

At the same time as you are focused on administering and growing the routine operations and challenges of your business, we, due to the type of business that we operate, have the comfort of seeing the market from a unique and wholesome aspect. We have the advantage of learning about what is coming to the market as consultants, new entrants from the IT and government markets, integrators, investors, as well as manufacturers. Furthermore we also conduct "voice of the customer" investigations and, through these activities, realize the concerns and challenges facing the majority of your consumers.

Unfortunately, according to the view from our perspective we can accurately judge that there is a terrible storm moving in your direction.

It is obviously clear that there has been and always will be change in the security industry. Periodic changes do not affect us that much and we can all adjust to them pretty easily, however what's exceptional now is that the entire industry seems to be in instability. Modification is happening in every segment and at every level of the consumer's market. The market shifts will only work in your favor if you recognize the evolution, adapt to the changes and use them to your advantage. If you do this you will be able to ride out the storm and thrive in the subsequent tranquility.

Projections and expectations of the constantly changing market dynamics can help you refine your plans, enhance aspects of your business or just provide you a diverse standpoint.

What do you see when you look at the waves of alteration?

It is All about the New Customer

The role of a security director has obviously shifted since the tragic events of 9/11. The security director has become an important member of a security purchasing team, which at the present incorporates human resource managers, facility managers, fire/life safety providers and IT department representatives. This group of individuals is primarily concerned about the solutions you make available and the value proposition versus pieces, hardware and parts.

Everything downstream, ranging from what the members of the channel provide, to how they must work together to provide the total solutions customers demand, is impacted by this fundamental change at the customer level. With all of this in perspective, you have a new patron.

The Development of Channels

As mentioned before, the customer is actually the end user. The mainstream has been selling to the reseller channel and having resellers influence what technologies and products are getting utilized on a specific project of concern. At the present there are more organizations that are global or national in nature, demanding brands they know and depend on. Not to mention that buying entire companies in one shot is also a common business practice in our times, especially in the technology and security companies.

If you look at how suppliers market today this trend becomes more apparent. At the present time, user are adopting the names of the companies and brand the average consumers trust and rely on, such as Stanley GE, Honeywell, Bosch, ADT, and Brinks. Some may wonder if this means that manufacturers are moving to cut out the channel and sell direct. On the whole, this would not be the case. However this recovering marketing method adjusts who owns the customers and who develops leads. Furthermore, it modifies the selling of products to a more devoted relationship between the manufacturer and the dealers/integrators.

Manufacturers are now becoming seamless solution providers by partnering, creating alliances, affiliations and "coopetition" due to the fact that solutions are the end goal of the customer. Coopetition is a blend of competition and cooperation. The suppliers that still refuse to cooperate with their competitors to find the best product for the customer will either have to find their growth through acquisitions, spend a disproportionate amount of money on R&D, or eventually go out of business.

The Technology of Internet Protocol

Every form of technology has been impacted by the digital revolution, the security is no exception. Despite the fact that customers don't actually buy technology, they do buy its benefits and advantages. You will be able to purchase the product at more places as security becomes more software-based. When it comes to the proliferation of IP cameras this becomes more evident. The customers are enabled to use cameras well beyond security applications by using a straightforward IP video directed to a software-controlled PC.

Cameras become just another IP appliance when this method becomes widely accepted.  At the end Security devices become a small part of a larger, interconnected administration system that includes HVAC, communication and other non-security interfaces.

Unless they concentrate on value-added services and benefits, those with the most to lose, will almost always be traditional security integrators and distributors. They will be forced into the razor-thin profits of commodity markets or out of their current role If not providing consultative services and other benefits. Our belief is that dealers, distributors and integrators who combine their market knowledge with an in-depth knowledge of their patron can guard their territory. You can become a valued solutions provider if you can only understand your customers' business challenges and goals.

The National Security

Without talking about the impact of the tragic events of 9/11you simply can't properly explain the transformation of the security industry. This single event drastically changed how we in the United States use and think about the security of our homeland. This is practically the case especially for the federal government, which persists to elevate its multi-billion-dollar budget spendings for security and establish guidelines on how it should be utilized.

This enormous amount of spending has attracted everyone in and outside the security industry with a security service, product, and process to offer. The defense suppliers have been transformed into super incorporators. Not to mention that, non-security manufacturers and integrators are trying to find any passageway into the spending trend. In addition many of the already existing security vendors are repositioning so they can reach into this popular and prosperous business transactions.

Several significant changes have occurred due to this widespread security investment. One of these changes is presented in the adoption of HSPD-12 requiring the establishment of a standard for identification of federal government suppliers and workers. However, how should one interpret this? First of all, there will be close to five million workers shifting cards, readers, and possibly new panels, software and wiring. As soon as this genuine standard is implemented, state and local workers may follow the same procedures, as will their dealers and others individuals related to the business.

Investments and Finances

 As expected the tragic events of 9/11 have elevated consolidation and acquisitions within the industry by the Fortune 100 and international investors, profiting numerous public surveillance corporations.

Not to mention that private companies are also fairing more efficiently with the influx of interest and capital by patrons. There seem to be more investors than large opportunities within the industry based on the abundant calls that we receive.

One can not accurately guess that if we combine all the past five elements will we have be projecting a low point in the security industry, or will it be a starting point to move the industry forward and thrive the assets.