Just a week after announcing its acquisition of Ohio-based integrator Acree Daily, Xentry Systems Integration, a division of Matrix Systems, last Wednesday announced that industry veteran John Nemerofsky has been named as the company’s new president and CEO. Nemerofsky most recently served as senior vice president of sales and marketing at Stanley Security Solutions, a role he assumed when Stanley acquired Niscayah in 2011. Nemerofsky was also the founder and president of Security Services and Technology (SST), which was acquired by First Service in 2008. SIW recently caught up with Nemerofsky to discuss his plans to continue Xentry’s growth, as well as the challenges he sees facing the industry.
SIW: What steps do you plan to take to meet Xentry’s previously stated goals of becoming a "super-regional" integrator?
Nemerofsky: There are a few steps. The first step is, obviously, focusing on our existing client base that has been loyal to us and helped us grow over the last 35 years. For 35 years, Matrix Systems, now Xentry, has sold these clients only access control solutions. Now, with the acquisition of Acree Daily, we’re able to offer our clients video surveillance systems, emergency phones, nurse call systems, fire alarms, so we’re truly a systems integrator that can solve a lot of challenges for our clients as opposed to when we were just Matrix selling access control. Secondly is building the sales team, bringing the sales teams of both Acree Daily and Xentry together and driving (strategies) in the markets we serve in a focused way. Third is our acquisition strategy and all those things together, in the very short-term, will make us a “super-regional,” but I think as we start to look at some of the numbers and the projections over a three-to-five-year period, we will be national in scale and footprint.
SIW: Being around the systems integration business for a numbers of years, what do you see as some of the biggest challenges facing the industry, in general, and what are some of the challenges facing Xentry in the markets you currently serve?
Nemerofsky: I think that the challenges the market faces in general is that a lot of systems integrators have taken on too many technologies. There are too many product lines and it’s very difficult to be an expert at everything. There are companies out there that have grown in size to $40 million or $50 million (in revenue), but they represent seven different access control product lines, seven different video product lines and what that causes you to do is that you’re not very good at quoting them, you’re not an expert at all seven, and surely your people in the field – installers, engineers and trainers – can’t know everything about every software package and every different nuance of systems so it’s challenging for people in the field to deliver. That’s why maybe companies are growing, but they’re not growing their bottom lines.
What Xentry is facing is quite the opposite. As we move into this, we’ve had one technology for a long, long time and a great one in Frontier, so we’ve just been focused on one. The nice thing here is we have expertise in quoting, installing, servicing, and managing that one system for our clients, so our challenge is picking the right partners to move forward because we will have additional product lines to sell into the market and picking the right one or two to move forward with so we can have all of our people trained and quote effectively to the product line with confidence that everything is designed correctly. Then, our installation and service can be best-in-class because we’ve trained on the few products that we’re experts at. Other integrators just keep adding to win certain projects, so that’s what I think the challenges are in front of us today.
SIW: What are some of the vertical markets that you believe you’re currently strong in and what are some sectors in which you would like to grow Xentry’s footprint?
Nemerofsky: Where I think we’re strongest today is in three verticals; the first being healthcare and both Acree Daily and Xentry have done a terrific job in the healthcare market. Inside healthcare now, what Acree Daily will add to Xentry’s place in the market is we will have the ability to sell additional solutions to our clients to solve more of their problems – whether it’s nurse call, fire alarms or video systems – we’re now in a position to bring those to our clients. On the Acree Daily side, we have the ability now to bring in an access control technology they’ve never had, so I think between (Xentry and Acree Daily) in healthcare we’ll really start to solve more problems for our clients that we couldn’t before and really differentiate ourselves from the other competitors in the healthcare market. The other verticals would be higher education, which is another compliance-driven market due to the Clery Act. We’ve done a lot there with clients such as Ohio State University where we have complex systems installed. The third market would be the transportation vertical where we’ve been able to put systems in and solve tough problems at places like Miami International Airport and Fort Lauderdale-Hollywood International Airport.
Those are the first three we’ll focus on and we do have views into financial services as one vertical in the near-term roadmap. Obviously, the high-rise and property management business is on our radar as well as retail further down the road.
SIW: What are some of your plans for growing the business in the markets you currently serve and how do you plan to branch out from there?
Nemerofsky: In the markets we currently serve, there are some internal plans and external plans. Internally, we plan on bringing on a VP of sales to help drive a lot of that business, but we’re really in a great situation and to grow our footprint inside where we are, it’s a little bit about selling our solutions to our existing customer base number one. Helping clients that need better service providers or maybe struggle with their existing providers if they’re international or even regional, with our focus around the aforementioned areas… we see ourselves branching out with those Fortune 500 clients, large healthcare associations in the area and large colleges and universities. I see us growing outside our initial footprint in two ways: the first way is by green-fielding and I think our clients will take us there… growing with our existing clients as we help them solve problems across the country. Secondly, our aggressive acquisition plan is recording several acquisitions as we speak right now and we’re hoping to close our next one.
SIW: How does your experience in leading some of the nation’s largest systems integration firms help you in growing and leading Xentry now?
Nemerofsky: I think, in a lot of ways, as you have been through battles before and other businesses before, you’re a little bit more mature and experienced the next time you go through. With different client experiences or internal experiences, whether you’re working with unions, employees or an acquisition or trying to find clients, you’re experiences in doing it in the past helps you learn so you can do it better in the future. And what I know that will add up to for us is getting to our goals much more quickly. I think we’ve got a pretty rock solid plan on where we want to go, how to get there quickly and create an atmosphere at Xentry where there’s a lot of excitement and a lot of passion for the business because we are creating this growth which creates a stable work environment for people and it creates opportunity.
