Ask any security integrator what they think the most challenging vertical market is to break into, and odds are good that you will hear one of two answers: government or critical infrastructure. The sheer amount of red tape in both markets – including certification, training and regulations – is enough to turn even the largest and most organized integrators to a less-regulated vertical.
But where many integrators see a near-insurmountable obstacle, dedicated ones see a massive opportunity. Such is the case for NextGen Security, which has leveraged its extensive security industry backgrounds and expertise in just four years to harness the critical infrastructure vertical – in the process becoming SD&I’s fastest-growing security systems integrator.
“Things took off quickly,” says company president Ryan Loughin, who is a founding owner of the company with CEO Frank Brewer; along with founding principals Dwight Smith (Senior VP of Finance & Administration), Ryan Rieger (VP in charge of the Petrochemical & Energy Division) and Steve Greis (VP in charge of the company’s Southwest region).
“We were very fortunate to do a lot of the right things when we founded NextGen,” Loughin continues. “We have a special expertise in the petrochemical and energy vertical, and that was really the core foundation.”
Of course, that foundation in the petrochemical/energy sector has blossomed into an integration firm that handles vertical markets including utilities, government, oil and gas, pharmaceuticals, technology manufacturing, food manufacturing, healthcare and higher education. The company’s experts are routinely tasked with creating comprehensive, end-to-end, integrated solutions that meet site-specific and regulatory requirements.
One thing that sets NextGen apart is its expertise and backgrounds in the regulatory minefield that end-users in each of the verticals they serve are dealing with daily. Their experts have extensive regulatory knowledge and years of hands-on experience with complicated regulations such as Chemical Facility Anti-Terrorism Standards (CFATS); North American Electric Reliability Corporation Critical Infrastructure Protection (NERC-CIP); Maritime Transportation Security Act (MTSA); and Transportation Worker Identification Credential (TWIC).
In addition to being experts in the alphabet soup of chemical, transportation and other government regulations, it takes special company credentialing to work in this type of market. “When you step into an oil refinery or a chemical plant, it is OSHA to the core,” Loughin explains. “A company that doesn’t have the proper credentials and programs in place wouldn’t get onto the site to begin with.”
For NextGen, that credentialing starts with the U.S. Department of Homeland Security’s SAFETY Act. “It took two years of time, money and hours to accomplish it, but our SAFETY Act designation really set us apart from everyone,” Loughin says. “We are covered cradle to grave for all the services we provide, and you would be hard-pressed to find another integrator in the country with that broad of a designation under DHS.”
The SAFETY Act is often misunderstood. It is actually an acronym for the “Support Anti-terrorism by Fostering Effective Technologies Act” – a federal law intended to protect entities from the liability they may face following a terrorist event. The Act’s liability protections apply to physical or cyber attacks on a facility or its occupants. If the end-user deploys SAFETY Act-approved products, technologies or services, it automatically affords liability protection and federal immunity from lawsuits stemming from an act of terrorism.
“There are specific products that get the (SAFETY Act) designation just for a single product – we are designated for our entire service process, from design and implementation all the way to the maintenance and support after the fact,” Loughin explains. “If we design and implement a system – regardless of what products we use – it falls under our designation.”
This leg up from a regulatory expertise and certification perspective has propelled NextGen to a 60-percent average growth rate over the past three years. But to understand where all this expertise came from, it takes a closer look at the company’s background and formation.
The Proper Foundation
Despite NextGen’s young age, the company’s founding members brought more than 100 years of security integration expertise to the table. It starts with CEO Frank Brewer, who began his security career at ADT in the early 1980s and eventually founded and served as CEO for Security Services and Technologies (SST), which later merged with another company to form FirstService Security (acquired by Tyco/ADT in 2008).
“I started an integration company because I felt that the market was underserved relative to high-level, relatively sophisticated commercial customers,” Brewer explains.
By the 2008 acquisition, SST/FirstService had grown to be a $200 million company that specialized in – you guessed it – petrochemical and energy clients. Loughin, in fact, joined SST right out of college. Brewer took a few years off from the industry before coming back together with Loughin, who had stayed with Tyco/ADT. “Frank and I came back together in 2012 to form NextGen Security for a lot of the same reasons that Frank started SST in 1994,” Loughin says. “There was a lot of demand and very little supply in the complex client integration market.”
With so much experience in launching a security integration company, Brewer knew just what to do. “If you look at NextGen, it is no different than an architect or a building – you start with the foundation,” he says. “We took great care in how we structured this company. The landscape is littered with companies that failed because they didn’t start with a good foundation.”
For Brewer, the proper foundation meant starting with a company that is properly funded so it can do any size large project; then, forming a group of individuals who all have equity in the business. Finally, bringing in expertise from an engineering and operations standpoint was essential. “Once you have that in place and add in investment into the back office for billing and project management, you marry all that and your systems will work so well that you can deliver much better than the average integrator,” Brewer says, “and away it goes.”
For NextGen, the obvious key to success is specialization. “From a business perspective, you look at a lot of integration companies and they are doing everything from alarm monitoring to fire alarms to access control and video surveillance,” Brewer explains. “We are really focused on offering specialized products for the markets we follow. We don’t want to be spread over too large a group of customers.”
Thanks to its foundation and past experience with major clients in the petrochemical and oil and gas industries, it wasn’t difficult for NextGen to hit the ground running. “When we were at SST, we built a real solid reputation, and once people realized that expertise was at NextGen, the business followed,” Loughin says. “It doesn’t take long in what I would consider a small circle for people to start hearing about how well we service our clients. It’s the Kevin Costner theory: Build it and they will come.”
Today, NextGen has risen to more than 80 employees, has a Houston regional office in addition to its Exton, Pa., home office, and provides services in 20 states.
Building Through Culture
Like any successful integration company, NextGen is built on a corporate philosophy of customer service. Brewer knows that everybody says they provide superior customer service – it is proving it that sometimes becomes difficult. His company culture revolves around five stakeholders in his company:
1. Customers: “If you treat a customer they way you would like to be treated as a customer, that’s a win, even if you make a mistake,” Brewer says. “That means you fix the mistake, you don’t run from problems, and you get things done in a timely manner. The customer is the obvious one.”
2. Employees: “We’ve all been one, and if you treat your employees how you would like to be treated as an employee, you are going to do well,” Brewer explains. “That means you are going to attract and keep good people.
3. Suppliers: “If you treat your suppliers the way you want to be treated – you pay your bills on time, you do what you say you are going to do, if they give you a lead, you follow up – they are going to work really hard for you,” Brewer says.
4. Shareholders: You must be accountable to the people who own the business, Brewer stresses.
5. Community: Brewer calls NextGen a philanthropic company, and it gives a percentage of its profits every year to different causes based on employee vote.
“If you do all of those things, it is almost impossible to fail,” Brewer says.
Adds Loughin: “In doing all those things, you create a culture within the company that really turns into the fuel that powers all the growth.”
While fast growth has been a fortunate byproduct of Brewer’s philosophy, he is careful to couch expectations, as growing too quickly can have a downside. “I’d love to have a $100 million year, but I’m not willing to get there at the cost of changing our culture or the service that we provide our customers or our employees,” Brewer says. “I don’t believe in growth for the sake of growth. You see these companies that buy five or 10 competitors in a very short amount of time and roll them into one – it rarely works.”
For NextGen, that means sticking to the organic growth that has worked over four extremely successful years. “In the time it took to build up a great reputation, it takes half the time to build up a bad one,” Loughin says. “Our goal is to maintain that reputation and do it the right way.”
Paul Rothman is Editor in Chief of Security Dealer & Integrator (SD&I) magazine. Access the current issue, along with full archives and subscribe link at www.secdealer.com. To learn more about SD&I’s sixth annual Fast50 and year about this year’s and previous yearly ranking and market research, please visit www.securityinfowatch.com/sdifast50.