In the wake of convergence, traditional security integrators and VARs face increasing competition from IT players who are diversifying into the security market. Some of the major IT giants have made inroads into the security market, going after a host of the most technologically advanced projects. Building management companies are also targeting the security sector aggressively, offering advanced IP-based integrated systems, while telecommunications operators are starting to offer remote monitoring and Alarm Receiving Center services. At the lower-end of the market, local IT and IP installers are starting to target smaller businesses and niche segments such as schools or retail.
Security integrators and VARs are being squeezed both at the top and the bottom by competitors who are attempting to leverage their IT and IP capabilities to gain a position in the security market. Unencumbered by legacy technology and old ways of doing business, these new players can fully exploit their superior skills in software, IP and networking as they target the most profitable and high-tech market segments and customers.
For many observers–especially those coming from the IT- and IP-sides of the industry, the convergence scenario described above has been expected to lead no less than a major disruption in the structure of the industry. With the shift to digital platforms, security work in companies was expected to come under the auspices of IT managers, who would rather source their security solutions from efficient IT companies. Some went as far as predicting the imminent demise of those traditional security players who failed to jump on the digital bandwagon in time.
However, a few years into the process of convergence, this scenario has not played out. While IT players were all over the security industry in 2006, making bold statements of intent, their actual impact has so far been relatively modest, especially in the high-end of the security integration market. Indeed, rather than the defeat of traditional players, the past few years has seen the rise and fall of some high-profile, new-breed, IT- and network-savvy integrators.
So why didn’t IT take over as quickly as expected? There are several reasons why IT players have had a hard time encroaching on the incumbent security integrator’s territory.
First, the actual impact of IT and IP technology and the pace of change has not been as rapid as many first expected. Conservative and discriminate security end-users demand solutions that have been rigorously tried and tested in actual field settings, not the latest and greatest gadgets and gizmos that the IT folks are so fond of. In contrast to the IT market–where hardware and software is replaced and updated frequently–investments in security systems are long term. Hence, product replacement cycles even for more advanced systems such as video surveillance can run as long as a decade, explaining why the security sector is one of the few technology industries where a wait-and-see approach can be a winning strategy.
Second, the convergence of IT and security is not just about technology. It is also about the meeting of two separate business logics, with very different go-to-market strategies. The convoluted process of selling an integrated security system--often involving a plethora of decision makers such as consultants, specifiers, integrators, installers and subcontractors--can be very non-transparent to outsiders. Just identifying the right target for a sales pitch, let alone devising an effective marketing and channel strategy has been a major challenge for IT integrators who have attempted to enter the security market. In addition, collaborating with security integrators and dividing up the work has not been a realistic option. As IT players seek to leverage their capabilities in the most profitable and technologically advanced market segments, they find themselves competing head-to-head with security integrators who want to move away from lower-margin installation work to providing more complex, integrated systems and value-added solutions and services.