The security systems integration market has been largely defined in recent years by a substantial increase in consolidation. Companies like Convergint Technologies and ADT Commercial have significantly increased their manpower resources and geographic footprint through a bevy of acquisitions.
While it may seem like the barriers to entry have never been higher to entering the industry, a new company, Sage Integration, is looking to carve out its own piece of the pie by taking a more customer-centric approach to security installation. The firm was borne out of the purchase and merger of two regional integration companies, AYSCO Security Consultants, based in Kent, Ohio, and Atlanta-based DTS Security. These acquisitions were spearheaded by Eric Frasier, the CEO of Sage Integration, who formerly served as Managing Director at Alliance Bernstein Investments as well as President of Ameritrust, and his business partners.
According to John Nemerofsky, Sage’s Chief Operating Officer and a former Senior VP at Stanley Security Systems, Frasier and a partner made an investment in a video analytics firm, WorldCam Analytics, just over two years ago and secured a large contract for a nationwide chain of automotive service centers. They soon realized, however, that many of the integration firms they reached out to help with the installs did not have the skills necessary to deploy their systems properly.
“He interviewed 18 security systems integrators and out of the 18 he selected six. Each of those six integrators were given three test stores, all 18 failed miserably,” Nemerofsky says. “They couldn’t get them to work so he and his partner at the time said, ‘We need to run full speed into this industry or run away from it.’ They did some more due diligence, studying the industry and decided to take on another equity partner and make an investment in the business.”
Focus on the Customer
Rick Leighton, Vice President of Sales for Sage who formerly served as President of DTS, says what really separates Sage from much of the competition is the close relationship that they have with each of their customers. This has become even more important considering the COVID-19 outbreak that is currently rocking businesses around the globe to their core.
“We’re a part of their first-level response teams; from a protection standpoint, service standpoint and a strategic standpoint, we’re engaged with all of those activities with both our customers and our prospects,” Leighton says. “Our prospects reach out to us just as much as our customers do about creating this efficiency because everyone is going to be challenged to do more with less. Even for our best customers, they’ve asked us to split up our teams and have a red and a blue team just so we can have a natural backup in play.”
Leighton adds that Sage also has the unique ability to take both technical and security operations expertise to create the efficiencies that end-users are looking for.
“Having one without the other is a disservice to the customer. We see a lot of integrators out there that go with the philosophy of, ‘Hey, we’ll just push more technology onto the customer.’ We obviously want to make sales and those sales, generally, are based around some type of device but without the right operational procedures and without the ability to use that data effectively, it’s not well served,” he says. “By being thoughtful of the customer’s need and really being part of their team, it allows us to take a really unique spot in the marketplace.”
Growth Challenges
Among the challenges facing the company as it looks to grow, according to Nemerofsky, is finding M&A candidates that are both a cultural and strategic fit.
“Eric and I have looked at about a dozen acquisitions over the last handful of months and getting a good cultural match, so that they believe in putting the employees first, making them the tip of the spear, and that have the same customer strategies. The rest of the acquisition then just becomes a math equation if we got those two things first,” he says.
Aside from finding the right partners, Nemerofsky says they also want to recruit and hire an “all-star” team of employees. “Every hire has to be the best at their position,” he adds. “We don’t want to put in place that ‘D’ player, so finding that and recruiting that is a challenge we’re excited about but it’s a challenge.”
Despite the obstacles posed by going up against more established brands in the industry, Frasier says their goal is to generate $100 million in revenue by the end of 2021.
“We have a great existing customer base of Fortune 500 companies that have been loyal to us. We expect half of that revenue by 2021 to come from those existing customers,” Frasier explains. “The remaining $50 million would come from a combination of M&A and organic (growth).”
With regards to specific vertical markets that the company plans to target, Leighton says that Sage is heavily engaged in critical infrastructure and is also focusing on corporate headquarters and higher education campuses.
Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].
