The Changing Landscape

Oct. 27, 2008
How dealers, integratros and VARs are installing security

For years we’ve been hearing about convergence and the changing landscape of physical security installations. At first it might have seemed futuristic or limited to a small portion of the market, but now the idea of physical security systems being implemented across Internet protocol (IP) networks is far more than an idea. It’s a reality that has permeated the market and is here to stay.

Today’s security dealers and integrators are already adapting, either by learning about IP-based systems and devices, or by partnering with those who know. But naturally the convergence of these two worlds—on one side the traditional installers of physical security, and on the other side the traditional information technology (IT) departments who manage computer networks—has led many to wonder whether this business relationship is cooperative or competitive. The truth, it seems, lies somewhere in the middle.

To complicate matters further, not only are the roles of the traditional security dealer changing, but what they call themselves seems to be evolving as well. Increasing numbers of dealers now consider themselves integrators; and as the IT side gains more influence, another term which is more common on the IT side is now showing up among security installers: value-added reseller (VAR).
To get a better handle on what’s happening today with the increasing influence of IP networks on physical security installations, Security Dealer & Integrator spoke with Cisco, Lenel and some integrators from different parts of the country.

How are security installations changing?

“Simply put, the biggest change is with information and IP-centered systems,” said Josh Phillips, director of Marketing, Lenel, Pittsford, N.Y. “Security integrators are becoming increasingly focused on how the systems layer into the network environment and the considerations that accompany the deployment of systems with assistance from IT. More IP devices are going to market being purpose-built for security. That says a lot about the adoption of IP. More and more customers are seeking sophisticated software applications that address their unique business needs. Properly leveraging technology to address those needs is paramount to achieving a successful installation, because often it’s not as much about the hardware as it is about the software.”

Kelly Carlberg, worldwide business development manager, Emerging Technologies, Cisco, San Jose, Calif., prefers the term “implemented” to “installed” when it comes to physical security these days. “Video surveillance and access control used to be installed. Today we are implementing solutions,” he explained. “Sleight of hand or a real difference in real practice? We see physical security as information that can be shared between multiple applications across a network. The real difference is how we use the information. We want to leverage this information to make HR, IT, Operations and business decisions in real time. A door opening is used for more then an alarm contact. This has changed how ‘physical security’ is installed.”

Mark Fischer, vice president and chief technology officer, NationWide Digital Monitoring Co., Freeport, N.Y., agreed that many security applications also are being utilized as management tools via the network. He has noticed the biggest changes in security installations within the past year or two as Voice over IP (VoIP) has become increasingly popular and manufacturers have come up with IP solutions for the AMPS Sunset Clause. “Up until then there were Internet products available and DVR’s that were on the Internet, but within these past 18 months there seems to be a dramatic change.”

Jason Stoddard, camera/access department manager, Alarm Detection Systems Inc., Aurora, Ill., noted that he’s seeing many security installations planned around a building’s network closets such as MDF (main distribution frame) and IDF (intermediate distribution frame) rooms. “Since the majority of our equipment ends up connected to the network anyway, it makes a lot of sense to locate it in these rooms which are generally secure and temperature controlled,” he said. “We’re also seeing a shift towards PoE (Power over Ethernet)-enabled and ‘edge’ type devices which really simplify wiring. Twisted pair wiring (CAT6) is beginning to be a possibility for more and more systems.”

Who has the advantage?
As security dealers and integrators find themselves increasingly learning about IP networks and partnering with IT professionals, some people wonder whether these same IT professionals could start learning more about physical security and thus pose direct competition. Does one side have an advantage over the other, or will they be able to partner and co-exist in the security market?

“The security installers have a slight edge in this race,” said Lenel’s Phillips. “They’re equipped with the resource infrastructure and local certifications necessary to perform work. More importantly, their years of experience enable them to assess a customer’s security needs, whereas the IT integrators often do not have that native ability. However, for both types of organizations, being competitive starts with hiring people who know what they are doing in the adjacent market. Assuming that the business is being adjusted to strategically tackle new opportunities, operational considerations must be made if the integrator expects to fully leverage the new resources. Cooperation is an alternative. Often a security integrator and an IT integrator find they’re pursuing the same project. Depending on how things progress, a partnership could blossom.”

NationWide’s Fischer sees it as a cooperative effort. “IT guys typically subcontract out wiring and things like that. They’re interested in administrating the network, so the hardware installation remains the domain of the security installer.”

Fischer also pointed out that smaller alarm companies are finding it difficult to compete in the residential markets—especially in highly populated regions. This is because larger companies, with advances in technology, are able to undercut their prices. However, Fischer noted that one area where new (and small) companies are popping up and having success is in the larger, commercial security installations. “In some ways they’re able to compete better than the larger companies because they have more intimate knowledge of the company that they’re dealing with,” said Fischer.

“I think partnering is going to be key, at least for security dealers who don’t wish to expand into the IT arena,” said ADS’s Stoddard. “I’ve actually had IT consultants reach out to me for help on IP camera systems because they want to help their clients but really don’t want to be in the physical security business. They simply don’t have the experience to design or maintain these systems from a physical perspective. There’s much more to a good security integrator than just understanding how IP addressing and routing works. At the same time, it will make less and less sense for security dealers to run the cable when there is already a contractor running the phone and data cable. Security dealers will do just fine as long as they gain the necessary knowledge and partner when they’re over their head.”

“The same conversations occurred when HR applications converged onto the network,” said Cisco’s Carlberg, referring to the tug-of-war, real or imagined, between IT managers and security managers. “I have yet to meet an IT manager who wanted to own the HR application. What happened is that the IT manager enabled the HR applications across the network. The HR manager still performed their function. We see the same happening here. The last thing the IT manager wants is to understand shrinkage, loss prevention, physical security threat analysis, etc. What the IT manager does want is to provide the infrastructure to connect business functions together, allow collaboration and provide connectivity.”

When asked whether security dealers are resisting change when it comes to learning IP technologies, Tim Greenan, security engineer, Amherst Alarm Inc., Amherst, N.Y., offered this assessment: “Traditional security alarm dealers will become extinct if they continue to stand still and not offer value-added services to their clients,” he explained. “This type of security alarm dealer will be stuck, because of lack of training for the future and new technologies. The world is not going IP, it already has. When they realize that the market requires IP knowledge it will be too late. They resist change because they do not plan for the future. They only live in the past and the present. The future can not be stopped, and when it gets here they will not be equipped with the knowledge needed.”

What’s in a name?
So what do you consider yourself? Do you still refer to yourself as a security dealer? A security integrator? Perhaps a VAR? Something else? Does it even matter?

“Generically I refer to them as ‘security integrators,’ because that’s the business they are in,” said Lenel’s Phillips. “’Dealer’ is a label that has faded from common usage and is now referred to only occasionally. ‘Security VAR’ is a phrase I’ve heard used, but only when contrasted with IT integrators or IT VARs.

“At Lenel, we have always considered our business partners to be value-added resellers,” continued Phillips. “We focus on the ‘value-added’ aspect when considering a new business partner. The only real distinction I see in all of these terms is between dealer and VAR. A dealer is focused on moving product, whereas a VAR is focused on providing solutions. I view security integrator as a general term.”

Amherst Alarm’s Creenan has “security engineer” written on his business card. “My company designs systems for our clients according to their needs and situation. No one system can work for everyone. A competent level of design is needed to properly protect people and property. ‘Security engineer’ came from my training as an electrical engineer and then applying it to security and fire alarm systems and their design. The term ‘security dealer’ is a dying breed like the dinosaur. They can evolve or die. They may resurface as integrators—people who are solution providers.”

“I’m hearing the term ‘security integrator’ a lot lately and it may be a bit over-used. To me, a security integrator has the in-depth product knowledge across all their product lines to be able to tie these systems together in meaningful ways that solve customers’ problems. Simply installing burg, fire, card access and camera systems does not make a company an integrator,” said ADS’s Stoddard. “The term ‘security dealer’ brings to mind an image of a small Mom-and-Pop alarm company. I’ve not really heard the term ‘VAR’ used much but it’s an interesting concept. By definition, the VAR would have to be adding something of value to a system so that its value equals more than the sum of its parts. It’s possible we’ll start to see it used more as services such as managed access control and remote video verification start to take off.”
No matter what you call yourself in front of your customers, the bottom line is that the game has changed. The key is to have your customers know all of the solutions that you offer, and to have the expertise to make those solutions a reality.