Why product development as a service works

A new option in technology development for security technology manufacturers

With the ever-changing landscape of technology, many security equipment manufacturers are finding they don't have the right technology or they lack internal critical resources and skills sets to fully realize their future business needs. Furthermore, time-to-market, high development costs, geography, and other factors compound this issue. For example, the security industry finds itself at a cross-road where there is an emerging need for network technologies combined with the integration of access control, IP network video, and intrusion solutions. Nonetheless, traditional access control, intrusion and video OEMs (Original Equipment Manufacturers), while processing solid core competencies in their respective business areas, understandably, lack the core resources and technologies to fully implement their product development needs. Often times, the missing core resources and technologies relate to IP networking, streaming IP video, web-based and client-server based software applications, DSPs (Digital Signal Processors), FPGAs (Field Programmable Gate Arrays), and embedded applications.

Sub-optimal choices to augment OEM core resources and technology needs

Traditionally, barring the time consuming and costly process of hiring internal resources, security equipment manufacturers have had little choice related to augmenting their organizations with badly needed technology and resources. Prior to starting Security Industry Services, Inc. in 2006, I led formidable engineering and R&D teams within major OEMs within the consumer electronics and security industry markets; the options to augment my organizations were primarily restricted to two very sub-optimal choices:

1) Hire contractor resources either locally, or hire "off-shore" or domestic staffing/teams.

2) Obtain technology and solutions such as video server components, network technologies, etc via small companies that sell and/or license reference designs.

Surprisingly, these two sub-optimal choices are still the prevalent solutions to augment OEM product development organizations till this day. While sitting in the shoes of the OEMs, I found these solutions were wrought with problems.

The pitfalls of contractors and staffing solutions include the following:

• Numerous laws confront OEMs to restrict the on-going usage of contractors for more than one to two years. Further, by definition, hiring staffing and contractor firms (or individuals) is temporary. Subsequently, in the midst of product development, often times your most critical contract resources end up leaving at the most inopportune times. To make matters worse, at the end of the project, the contractors leave with critical know-how.

• For contracting solutions, total ownership of the outcome of the overall product is unfavorably distributed to temporary resources that are not committed for the OEMs long-term success.

• Contractors are typically a full-time, 40 hours commitment which can be costly.

Although hiring contractors and staffing firms was unfavorable for me in the past, licensing reference designs from design suppliers presents another set of less favorable issues:

• Walking in the security OEMs shoes, it was apparent that the design suppliers often provided pieces of the technology but lacked the overall experience in launching complete and successful differentiated security products. What was needed: experience to fully appreciate the OEM's "big picture" needs including ownership/accountability, understanding of the full end-to-end customer requirements on how the product would be used, plus an understanding of the OEM's processes, project management responsibility, and other critical wing-to-wing necessities to ensure a successful launch.

• Large up-front NRE (non-recurring engineering) fees were charged.

• In the end, the same core reference designs were available to competitors, thus making product differentiation difficult.

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