Face Forward and Watch Your Back

For the foreseeable future, the need for security products and services will continue to increase. However, new industry expansion is not likely to mirror the expansion of past years. Security needs drive the industry's growth, but four critical factors...

Mack also said, "And we've seen a more recent trend where companies involved in IT integration work are looking at the intersection of physical and logical security, or the intersection of IT infrastructure with physical security infrastructure, all of which is now operating on the same network with digital systems in the security arena. All of this is causing large IT integrators to focus on acquisitions in the security space."

In 2003, three firms established the Security Growth Conference (www.securitygrowthconference.com), USBX (www.usbx.com), Mitchell, Silberberg & Knupp (www.msk.com), and Security Systems News (www.securitysystemsnews.com). This conference brings together CEOs of the largest global security companies with CEOs and senior executives of the leading independent security companies and members of the financial community for high-level business development, merger and acquisition opportunities, financing and networking.

Participants in this conference were able to observe another trend: an increasing number of companies whose founders and CEOs come from IT company backgrounds, such as NetBotz (www.netbotz.com) and VistaScape (www.vistascape.com). Although not presenting at the conference, DVTel (www.dvtel.com) is another company whose executives come from the world of IT. The personnel of such companies can engage in productive dialog with regard to both security and IT issues, and their product designs and marketing reflect their knowledge.

Convergence Means Opportunity
Mr. Edward Y. Ching, senior technology analyst for Rodman & Renshaw LLC, said in an interview with SecurityStockWatch.com, "I believe that government and corporate enterprises are planning a return to network expansion projects that were put on hold due to the downturn in IT spending from 2001 to 2003. I think that wireless networks, enterprise security and data storage solutions should be high on enterprise IT budget lists." This would provide increased opportunities for upgrades and expansions of physical security networks and systems, too, many as part of corporate IT projects.

Gemplus's U.S. Corporate Security Systems Study, carried out by Frost & Sullivan in December 2003, showed that 30 percent of Fortune 500 companies surveyed are currently using or testing smart cards within their security systems, and 39 percent plan to use smart cards in their corporate security systems within the next three years.

The question remains: Who will see the bulk of the security projects, traditional security systems integrators or their IT competition? Security system manufacturers, integrators and security consultants need to give serious consideration to the trends being examined in this article.

What Manufacturers Can Do
To maintain viability for their companies, many manufacturers need to establish viable positions for their products in building controls and IT, to the extent that their products will be installed, integrated and used by or for IT departments or building controls companies. This includes educating their specifying consultants and systems integrators. What will happen when IT systems integrators come knocking? The response certainly should be based upon a corporate strategy developed with an awareness of the trends identified in this article. For most security companies, such strategies will involve decision-making factors that did not exist when the current corporate strategy was formed.

What Integrators and Consultants Can Do
Physical security systems integrators need to become IT savvy in a hurry. Partnering with an IT systems integrator or network consultant is not a replacement for getting educated. On one recent physical security system project that used the customer's network backbone, a security systems integrator relied completely upon a network consultant to provide the specification for the system's network components. The network portion of the specification omitted some key equipment. The integrator had to absorb the cost of the network equipment, including installation and setup. This cost exceeded the fee of the network consultant, who didn't specify the equipment because the security systems integrator didn't provide the information that would have indicated its need. Mistakes like these by security integrators encourage end users to take a closer look at what IT systems integrators have to offer.