This article originally appeared in the January 2024 issue of Security Business magazine. Don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter if you share it.
Against the backdrop of changing economic circumstances, security integrators are seeing how lingering supply chain disruptions, skilled labor shortages, and technology advances are shaping their business, and in turn, their relationships with their distributor partners.
Distributors have always played an important role in helping integrators differentiate themselves in the marketplace, but the challenges that integrators must navigate today are making this relationship even more indispensable. Integrators are increasingly leaning on their distributor partners to keep projects on time and on schedule, leverage existing resources and relationships to improve business outcomes and manage the complexity and potential of emerging technologies.
The increased convergence of OT and IT technology is creating plenty of challenges – as well as opportunities – in the security sector. To overcome these potential roadblocks and seize opportunities, expect a continued strengthening of the dynamic between integrators and distributors in 2024 and beyond – as they come together to remain versatile and agile in the face of an ever-changing security landscape.
Here are three trends that will create new opportunities for integrators and distributors to work more closely together:
Trend: The influence of emerging technologies.
Like many industries, the security industry is witnessing a historical disruption in how technology is being used. Emerging technologies like sensors, artificial intelligence (AI), the Internet of Things (IoT), machine learning, and facial recognition are growing at a rapid pace – a trend expected to continue in the coming years.
In the case of AI, its market share has doubled since 2021, while IoT is projected to become a $3 trillion industry by 2030. When incorporated into security cameras, these technologies can provide numerous opportunities and new use-cases for security professionals. Businesses are also interested in greater capabilities around data analytics to enhance threat detection and response efforts.
Despite the new opportunities that these technologies deliver, there are also challenges. For example, integrators must ensure that all the devices connect and work together seamlessly. If the devices are connected to the internet, integrators also need to understand what bandwidth, data storage, and processing needs their customers might need to consider. Finally, they must also help customers understand and address the cybersecurity and data privacy risks.
This is where distributor partners are stepping in to help. Some have expanded their offerings to include technical and cybersecurity expertise, providing integrators with additional resources to scale their business. With technology rapidly evolving, technical experts at distributors have a unique “360-degree perspective” on the security industry. This provides integrator partners with an unbiased view of new manufacturer partners they may not be already familiar with.
Trend: An increased focus on managed services.
Continued economic uncertainty is leading many integrators to adopt a new business approach, in some cases moving away from traditional hardware-only sales to recurring monthly revenue (RMR) or subscription-based models.
This service-based model enables integrators to drive steady and predictable revenue. The RMR model delivers a win-win for both integrators and their end-users, providing ongoing support and maintenance that improves the customer experience while instilling long-term customer loyalty. This model is seeing a steady uptake, with over half of respondents in the Security Industry Association’s recent Megatrends survey reporting that recurring revenue makes up 20% or more of their gross revenue.
Integrators are turning to distributor partners to support their efforts in providing these types of managed services solutions. Firewalls, intrusion detection, vulnerability management, and cloud monitoring are all essential cybersecurity functions that can be customized and delivered as a service to meet the unique needs of a customer. This can provide incremental benefits to the entire value chain; however, it adds complexity.
With these expanding requirements, distribution partners need to provide new types of support for their integrator partners as the RMR model continues to gain traction. By providing new types of back-office and front-office support for the RMR model, distributors empower integrators to refine and grow their managed services offering through repeatable, scalable processes.
This enables integrators to concentrate on other needs that are core to their operation. As an example, some distributor partners now offer expanded customer service, ensuring that integrators receive 24/7, on-demand support with personalized and proactive solutions for end-users. This exceptional customer service enhances the effectiveness of the RMR model, fostering long-term preference and sustained service purchases.
Trend: Continued changes in labor.
Finding skilled labor is still a challenge for many industries, and the security industry is no exception. However, rapidly advancing technology means security integrators might need additional skills and expertise to understand complicated technologies and how to leverage their capabilities effectively.
As a result, integrators rely on their distributor partners more than ever to provide solutions and expertise that can help them get more done with less.
One way distributors can help is through pre-kitting, a material management strategy used to create pre-packaged and pre-labeled components. Not only does pre-kitting help streamline setup and reduce onsite waste, but it can also make the use of skilled labor more efficient. Rather than waste time on manual assembly functions, for example, a skilled integrator can focus on more critical, labor-intensive tasks.
Some distributor partners can even deploy custom kitting and labeling services for whole order delivery and labeling by project phase and site location, enhancing preparation and maintaining efficiency.
Tara Dunning is Vice President of Global Security Strategy and Sales for Wesco, a distributor of security and other technologies. Request more info about the company at www.securityinfowatch.com/21228504.
