Some folks in the security industry may agree that there is a fine line between the goals of an integrator and those of a Value-Added Reseller (VAR). Others who define themselves as both obviously see the big picture of looking at the needs of their customer. With the industry and technology only continuing to evolve, it is important to understand what benefits an end-user is looking for—knowing this criteria will distinguish those as being among the best-of-the-best.
Do you consider yourself an integrator or a VAR? How do you differentiate between the two?
Daniel Miclette, vice president of International Sales, Alertex Inc., Ottawa, Ontario: We are an integrator and manufacturer of an innovative advanced wireless detection system for the prevention of theft, vandalism and sabotage. Currently, we are not a VAR, however, we may introduce other products in the future which we may eventually evolve into being a VAR.
Michael S. Blumenson, president and CTO, Digital Surveillance Solutions, Buffalo, N.Y.: An integrator utilizes off-the-shelf products to create high functioning systems that solve problems customers are experiencing. A VAR adds a ‘special ingredient’ to a product or a system to increase the value of that product for the customer. We consider our company to be both a systems integration company and a VAR. We certainly combine many different kinds of products to create systems but we also add a methodology to how we engage with our customers.
John H. Kostelac, sales and engineering manager, Northwestern Ohio Security Systems, Columbus, Ohio: We consider ourselves a combination of the two. A security integrator is a company that takes different standalone security systems and makes them work together through physical or logical communication. This is one of the greatest value-adds that security integrators bring to the table. A value added reseller is a company that takes a product, adds some sort of value as defined by their customers and resells the product. The question should be to define value-add?
Todd Vojta, president, Paragon Solutions Group Inc., Corcoran, Minn.: We feel that VARs are very hardware-oriented companies. Their primary mission is to push the sales and installation of the primary product lines they have and then offer some customization to make the product more personable to the client (new skins, integration with a certain product, etc.). It is our belief that true integrators come at the problem with a different approach. We look at the needs of the client, choose the best product suite for the client to solve the problem and proceed forward with an installation that includes a fully converged solution.
Richard Beckers, president, Pinnacle Technologies, Shelby Township, Minn.: A system integrator is a person or company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together. A value-added reseller is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete turnkey solution. I propose that a value-added integrator (VAI) is a company that specializes in bringing together component subsystems from multiple disciplines, in our case data, voice, and video, then adds some feature(s) that allow these previously independent solutions to talk to one another. This makes it possible to centrally manage the system and provide a significant benefit to the end-user.
Lorinda Church, president and general counsel, The Spy Place Franchising, Fort Wayne, Ind.: As an integrator and a VAR, we package equipment together. This allows the consumer without a technical background to enjoy top of the line features without needing the technical knowledge to determine what equipment is needed or compatible with each other. At the same time, we offer post sales technical support to the consumer as well as professional installation of these integrated systems to all clients.
What type of integrator or VAR do you think will be most successful in the security industry as technology continues to evolve?
Miclette: Integrator or VARs who will be most successful in the security industry will be those using advanced technology and pioneering into areas that are not directly associated with the mainstream security products. Solutions should include encompassing direct communications for long-range wireless, combining a variety of security and environmental technologies--using the Internet will be the “new plateau” for tomorrow’s innovations.
Blumenson: It’s important to keep an open view of our industry and allow new players and new technology to influence how we design and build systems. It’s also true that regardless of technology evolution, the relationship with the customer is still the single biggest factor in whether or not a system’s implementation is successful.
Kostelac: One that can easily and quickly recognize and adapt to the changes in technology, which will ultimately give them a leg up on the learning curve. This recognition and adaptation requires an integrator to be forward thinking, be able to make decisions very quickly (decentralized) and have the technical staff onboard to pull this all together. This will allow you to continue to compete against new competitive threats.
Vojta: The integrators and VARs that are doing well today will probably continue to be the pioneers in the market moving forward. We’ve found that the data companies who have added security product lines to their offerings are ideally suited to handle the changing market landscape. Traditional security vendors often have difficulty bridging the gap between analog and IP technology. The trend that’s being witnessed currently with the exodus of analog security customers and their transitioning to IP technology is only sure to accelerate.
Beckers: There is no doubt in my mind that it will be the most technically savvy that endure as the security industry evolves. IT knowledge is necessary to implement today’s IP-based security solution. The fastest way to get the IT capabilities that you need is to partner with a trusted IT savvy integrator. That way, the true security professionals can do what they do best in terms of contributing to the design from a protection and surveillance perspective. The IT integrator can design, implement and support the back-end servers, storage and software that are necessary.
Church: To succeed in this difficult economy and to be successful in the security industry is not about technology but about diversification and the ability to offer a total security solution for clients. We have seen the need to broaden the horizons of our franchisees and do so through diversity of our business model, which is a paradigm shift from the typical integrator or VAR model within the security and surveillance industry. Branding and identification is going to be an important part of the future.
How have you changed in your installation characteristics, technology and education to bring you to the next level in your business?
Miclette: Change is important to the survival of VARs, especially if the products and services are less costly and more intelligent. The characteristics of products today in conjunction with the Internet have a long way to go--probably 10 years before the technology levels off to where it should be will be labeled as innovative. Most large companies are just beginning to realize the new market potential is via the Internet.
Blumenson: We learned to clearly delineate the roles and responsibilities of the system life cycle at the beginning of a project. We set expectations, timelines and seek buy-in from the customer. This is all done in a Statement of Work (SOW) that we and the customer sign. On the education front, all of our people are engaged in obtaining certifications on various product lines we believe are relevant; we are also working on ASIS certifications.
Kostelac: We actively search for the best solutions and one key ingredient to two of the best solutions we have found is an open architecture. We used to sell proprietary systems with our focus on new technologies; this has driven us to re-educate our entire technical staff by getting them the certifications needed so that we are on the same level as our networking counterparts.
Vojta: We came into security very recently (in the past two years). We’ve been able to put in place processes and installation characteristics while hand-picking our technology as we entered the market. This ability to take a calculated approach, without relying on past relationships, allowed us to choose best-of-breed equipment.
Beckers: From our perspective we were more challenged by not having been physical security-minded professionals. We were always the IT guys talking acronyms while our friends and relatives looked at us with that “deer-in-the-headlights” look. Not so when it came to security topics. So we joined groups like ASIS and started training our people as physical security professionals so that they could speak to our clients with confidence when it pertained to discussions of this type.
Church: For years we walked the aisles of trade shows, studied the catalogs of new products and spent resources on research and development hoping to find the new technology that would change our business and increase our revenue. We learned that no matter how innovative or exciting a product was, technology alone is not the answer to success. Saying no to clients is saying no to ourselves.
What will the security industry landscape look like (major players) five to 10 years from now?
Miclette: Over the next decade the security industry will be flourishing as theft increases due to the harsh global economy. Environmental monitoring will be especially important due to energy related products and the concentration of low-powered solutions everywhere. There will be the same or less companies due to the consolidation of the industry just like the cellular market which has evolved. Any future technology will depend greatly on the innovative use of wireless and Internet-based products.
Blumenson: We expect to see more of the small- to medium-sized IP-based security companies continue to get swallowed up by the bigger more traditional players. There will be room for smaller players to start up and operate as the pace of innovation in IP-based security continues at a rapid rate as it’s just too difficult for the large players to adapt quickly to change.
Kostelac: From the integrator standpoint you will see a few major players like we see now such as ADT and SimplexGrinnell, and a lot less regional players. The reasons the regional players will decline are they won’t be able to adapt to the changing environment and/or they will try to adapt too late.
Vojta: The pioneers and innovators in the IP security industry will grow in market share and those of us who support their products will benefit. Clients will reap the fruits of our labor as their systems become more converged and intelligent and the business system becomes a business system, not a cost center.
Beckers: The industry is going to be all about convergence, consolidation, and centralization. The data, voice and video solutions will be converged onto a robust IP-based network that will allow for the consolidation of server and storage on the back-end. If you are talking about the integrator landscape I think you can look back to the telecom industry.
Church: We see the industry consolidating larger companies through mergers and takeovers. Independent dealerships are going to have a more difficult time holding onto their share of the security and surveillance market. The franchise model allows independent entrepreneurs to operate their own small business within a network of franchises and create top-of-mind recognition.