Battlefield Verticals-Which Domain Will Triumph?

With the current financial crisis, it seems everyone is doing whatever they can to cut costs and limit expenses and vertical markets too may be feeling the crunch. Security professionals in government and critical infrastructure, education, healthcare and security in sports stadiums and public venues concur that deciding which vertical is most profitable depends greatly on who is able to deliver the most value and scalability to the customer.

“These customers are looking for somebody to really understand their business,” said Martin Guay, president of Niscayah, Duluth , Ga. “I think the customer is really focused on the outcome. They are asking: ‘what is the product doing to support their businesses and their future?' It's very difficult to take one product or technology and supply it across all verticals no matter how good it is because some products are just better suited to one vertical than another.”

Some in the industry may purport that government has a definite advantage and better chance at growth over say, the education market. And that may be true since overall profit in a particular vertical does play an important role in the success of that vertical—and how deep their security endeavors actually will be allowed to go.

“From a profitability standpoint, you always have to look at service,” said Steve Birkmeier, vice president of Arteco Vision Systems, St. Louis , Mo. “Surveillance as a service is gaining a lot of momentum right now and it is obvious to see why. The more value to the customer, the more profitable it will become.”

Customer's demands are influencing the need for more technological developments from companies addressing these verticals, and that in return helps providers focus on their customer relations as well as other aspects.

“Return on Investment (ROI), regardless of what vertical you are in, is a big deal,” explained Jeff Floreno, director of Security Operations and Strategy, Wren Solutions, Jefferson City , Mo. “Those are the types of things that start to distinguish the security companies from each other--being able to provide products and services that are going to have strong ROI.”

As it stands, worldwide vertical market IT spending alone is projected to total $2.7 trillion in 2009, a 0.5 per cent increase from 2008, according to worldwide IT research and consulting firm Gartner Inc., Stamford, Conn. Utilities, healthcare and government verticals are expected to be the strongest-growing segments of the market in 2009. Still, the utilities industry is poised to outpace most of the other verticals in 2009 with a 2.9 percent growth, following on the heels of a 7.7 percent growth rate in 2008. The healthcare industry, which grew 8.3 percent worldwide in 2008, is expected to follow this year with 2.2 percent growth in 2009.

While that's not direct security spending, because of the state of integration and convergence and the need to put security components and solutions on the network, it's a sure bet some of this will trickle down to the physical protection segment.

“We think the best way to go right now is to specialize in verticals so you can really understand the customer, including all the compliance issues and business drivers,” said Guay. “Some customers aren't spending on new systems or capital equipment, but they always have a need for somebody to take care of their existing needs. We really believe in vertical markets and specialization.”

Critical infrastructure and government

With President Barack Obama on board, security in government is now more important then ever, considering the global stimulus package just signed into law, according to Mark Barry, president of GE Security, Bradenton , Fla. The stimulus package includes significant investment in infrastructure projects and many of the building upgrade provisions provide security-related installation opportunities.

“We offer a strong portfolio of security and fire solutions that are well-suited to address the future technology and security infrastructure implications of the bill and have created a team to address these emerging needs and opportunities,” continued Barry.

Perry Levine, senior director of Business Development and Security Products, Siemens Building Technologies, Buffalo Grove , Ill. , concurred on the influence of the stimulus funding.

“I would think that with the stimulus package coming out, we're going to see infrastructure as being one of the verticals that will have some movement,” said Levine.

For systems integrator Adesta, Omaha , Neb. , the fastest growing vertical will be the quasi government space, specifically the installation of municipal security surveillance systems for cities, according to Rob Hile, vice president of Business Development.

“The economic stimulus package is really going to get to this area--to put up surveillance cameras and systems that will help with drug intervention and mass evacuation,” continued Hile.

Another important vertical is the industrial segment. CCTV, intrusion monitoring, sensing

devices for fences, outdoor perimeter control and detection, long-range cameras in ports--all these aspects are part of providing security for such industrial applications as seaports, airports and other government and/or industrial locations.

The government vertical is also about focusing on the requirements of Controlled Substances and Alcohol Testing (CSAT) regulations for chemical manufacturing plants, according to Dan Moceri, chief executive officer, Convergent Technologies, Winston-Salem , N.C.


Education moves ahead

With their fourth School Security Research Series already underway, Wren Solutions focuses this research series in the Northeast and as a result surveys schools on everything from emergency preparedness to methods to combat campus threats.

“One common thread we have seen so far is the comfort level that the schools have in dealing with threats,” explained Floreno. “In what we've seen from the last three surveys, it's surprising that 20 to 28 percent of schools are extremely confident in their ability to deal with threats while 15 percent of schools feel they can significantly improve their process in dealing with threats.”

Although the education market is typically slower in adopting new technologies, according to Tom O'Connor, sales manager of Fire and Security Systems, Richardson Technology Systems Inc. (TSI), Suwanee , Ga. , the need for security is definitely there.

“We see the larger school systems transitioning themselves to both card access and CCTV surveillance,” said O'Connor. “There are also some grant programs for funding of video in educational facilities.”

Another component of security and safety in schools has to do with communication: i.e., intercom systems as well as emergency and mass communication and notification.

“Every time we have a catastrophe in a college such as a shooting, things change again,” said Moceri. “So where you typically saw the fire alarm system being the emergency communication system, now that's migrating into mass notification systems and what you're seeing is that the fire systems are more evolved and have two-way voice. There are also more software technologies in schools-text messaging, cell phones, e-mail alerts and more.”

For Silent Knight, manufacturer of fire alarm control panels and life safety applications, campus applications are an ideal place to deploy IP fire control panels.

“In a campus environment, you can have eight different control panels in eight different buildings acting independently as a fire alarm for each of those buildings, yet all networked together from one location with the use of an annunciator,” explained Jim Spooner, product manager, Silent Knight, Maple Grove, Minn. “With campus applications becoming more popular, there are different ways of communication when you don't have a node-to-node communication on the control panels.”


Healthcare has promise

It's important to remember all the different segments that go into healthcare--it's not just one class fits all, according to Matt Conrad, director of Healthcare Markets, Ingersoll Rand Security Technologies, Montvale, N.J. “Emergency management is a big trend in the big hospitals but the larger growth would be in some of these more rural, smaller hospitals, otherwise known as critical access hospitals, in which there can't be another hospital closer then between 30 and 35 miles,” said Conrad.

The Health Insurance Portability and Accountability Act (HIPPA) is perhaps the strongest driver for logical healthcare security, according to Santosh Antony, research analyst, Frost & Sullivan , New York City. The World Healthcare Security Markets indicates earned revenues of $1.66 billion in 2007 and $5.78 billion by 2014.

Because of HIPPA, a particular doctor is now only able to access data of the patient of which they are monitoring,” explained Antony . “A doctor cannot access data of any other patient. Now, stringent checks are enforced.”

Companies today use biometric technology to simplify such access for doctors. Imprivata allows doctors to carry their own biometric data on a keychain--they just touch the screen of a workstation with this keychain and immediately gain access. In a matter of seconds, the system using this technology would identify which doctor has access to which patient.

Other technological trends in healthcare include WiFi and wireless mesh and Electronic Health Records (EHR).


Sports stadium/public venues

The increase of surveillance systems and security in sports stadiums is inevitable. Video analytics, video management systems, real-time surveillance and remote monitoring all play an essential role in some of the solutions being applied.

Recently the NFL's Miami Dolphins collaborated with GE Security Inc., a unit of GE Enterprise Solutions and Ingersoll Rand Security Technologies Integration Solutions to deploy an advanced IP video surveillance system at the Dolphin Stadium consisting of GE Security's megapixel and PTZ Legend dome cameras.

In partnering with Ingersoll Rand, the surveillance solution allowed the Dolphins Stadium to scale out in five stages on what they were trying to do, according to Ryder Gibson, sales manager of the Florida Security District, GE Security, Bradenton , Fla.

“We worked on the project from roughly eight months to a year to provide an access control solution, bringing in their analog infrastructure to leverage that investment and also to meet their needs for tomorrow,” said Gibson. “While this type of security system is traditionally used for video surveillance, the Dolphins used it to enhance the fan's experience.”

Fans were able to anonymously send a text message from their cell phones to security personnel of the stadium, who would then zoom in on that particular section of the stadium where an unruly fan was disturbing the rest of the stadium-goers, before resolving the issue.

“In stadium security I'm starting to see more of the concept of plug-in video analytics,” said Larry Legere, vertical market sales leader, Sports & Entertainment, GE Security, Bradenton, Fla. “The common analytics I'm seeing right now are trip wire, loitering and object left behind.”

No matter which vertical may present the most growth this year, integrators have to work hard to make sure they know exactly what the customer needs for the particular segment. They have to have a solution that will solve their specific problems, provide a solid return on investment and be flexible enough to allow growth as necessary.



What You Need to Know

Before deciding to apply your products and solutions to a particular vertical, it is important to identify the basics and overall goals you are trying to achieve. Here are some ideas to get you started.

• Understand your customer's business almost to the extent that they do. How do they make money? What keeps them up at night?

• Be flexible to accommodate the various needs of your customer in your vertical.

• Specify your solution or product to the specific vertical niche; avoid creating a generic solution to force- feed across all verticals.

• Position your company so you are a value-add to the customer.


Worldwide IT Spending by Vertical Markets, 2009 (Millions of Dollars)

Industry Total IT Spending Total IT Spending 2008-2009

2009 2008 Growth (%)

Utilities 131,812 128,146 2.9

Healthcare 88,012 86,080 2.2

Government 428,289 419,533 2.1

Communications 371,515 268,341 0.9

Education 59,961 59,341 1.0

Agriculture, Mining 29,658 29,386 0.9

and Construction

Services 192,622 190,304 1.2

Retail Trade 153,755 153,331 0.3

Transportation 105,806 105,085 -0.2

Financial Services 554,388 558,496 -0.7

Wholesale Trade 81,446 81,158 0.4

Manufacturing 479,586 482,723 -0.6

Total 2,676,850 2,662,825 0.5

Source: Gartner (February 2009)


Avigilon secures healthcare facility

The Genomics Institute of the Novartis Research Foundation (GNF), a research sector of healthcare products company Novartis, deployed the Avigilon High Definition surveillance system to deliver better overall protection. GNF installed 12 Avigilon analog encoders, each supporting four analog cameras of the existing surveillance system and one Avigilon 2-megapixel IP camera mounted in the shipping and receiving area. Additional monitors and a security command center make up the rest of Avigilon's security solution at the GNF.

“Now, they have the ability to monitor and maintain integrity of the facility just like the IT department does of the data system that flows through their organization,” said Dave Tynan, vice president of Global Sales, Avigilon.