Reporting from PSA-Tec

May 26, 2010

Reporting from PSA-Tec…

It’s only my first day of attending PSA-Tec® in Rosemont, Ill., but I’ve already gained knowledge! 

First impression of the mood here is that the industry in general is cautious and very calculating about the direction in which their companies are going. The feeling all around is that the industry knows it has to change to embrace services and adopt a service ‘mentality’ and that’s a bit hard to swallow for some—but it’s a necessity now that profit margins from sales, installation and monitoring have shrunk. The world of IT, IP, networks, software, cloud computing and more is a big learning curve for many.

“PSA has this knowledge and all you have to do is ask,” said Bill Bozeman CPP, CHS and president and CEO of PSA. Bozeman, who was sitting in on the “Economic  Outlook for the Electronic Security Industry,” session said the in-depth topics at this year’s conference deal with all types of information integrators need to know to address the changing face of the industry.

Jeff Kessler, a managing director for Imperial Capital’s New York office, gave great insights into the market and also focused on the changing state of the industry, the move by integrators to become service companies, and the new services security integrators are going to have to provide going forward to be successful.

Kessler said the security industry generates some $255 billion in annual revenue and that although he said he continues to see things going up it’s not likely to bounce back to where the market was prior to the financial fallout several years back.  “Things will come back but it won’t be a major bounce back. You’re going to have to change a little to get the business. That’s evident by the topics that are being presented here at PSA-Tec,” he told the audience.   He talked about the rise of managed services in video and access control and managed remote services and said these offerings are starting to gain traction. He added that when integrators can offer more services and value, they become an important source of “stickiness to the customer.” Other takeaways:

  • There’s a rise of IT distributors in the security industry and questions concerning whether these companies are also installing in addition to supplying product.
  • The IT IQ of the industry is increasing and integrators have to know how to show ROI to the end user.
  • There’s continued horizontal collapse of the video industry toward a consolidation of solutions.    
  • The model of the IT industry--low margins, low installation costs and high margins on services--is coming into the industry.
  • Many third party and wholesale monitoring companies are investing a substantial amount of capital in technology to offer new services and feed market demand.  
  • Non security services, such as business management, software and RFID are other ways to grow the business.  

I’m sure there will be more to report tomorrow, so watch this space. --- Deborah L. O’Mara, editor in chief, Security Dealer & Integrator magazine  

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