IT companies say they have done this sometimes at the request of customers, and other times because they see an opportunity for business that is more profitable than IT.
“A number of IT companies are getting into physical security,” reports Jim Hindy, president and CEO of IT integrator Entre BTG Inc., Atlanta. “There seems to be — I don’t want to say a rush to it — but there is more visibility of it.”
Some industry participants maintain that IT has become more commodity-based and less profitable in recent years. They see the security industry as a ripe area for expansion, much as some security dealers and systems integrators have been moving into home control and audio/video in recent years for the same reason.
“Quite honestly, what these products represent to them is higher margins than they can make in the networking world,” stresses Tony Sorrentino, vice president of merchandising for distributor ScanSource Security, Greenville, S.C., about IT integrators. “I think as competition continues to increase from networking servers and products, the world of physical security is becoming even more attractive to them.”
Mike Compton, vice president of sales for Supercircuits, Austin, Texas, is waiting to see whether IT integrators will mark up security products the 10 percent that they use on IT products or the 30 percent that security integrators use.
“If I were an IT integrator, I would love that and I would want to keep my margins high, but the flip side of that is they have shown the ability to work and earn revenue at low hardware margins, so when push comes to shove, they’ve proven it out,” Compton says of IT integrators.
Can IT integrators compete successfully against security dealers and systems integrators who have been installing security equipment for decades? Can security dealers and systems integrators learn IT well enough to configure networks successfully and gain the trust of IT network administrators? A variety of opinion exists on this question.
IT INTEGRATORS WHO DON’T PARTNER
Partnering was suggested to Grant Jensen, owner of IT integrator Up-n-Running Inc., Winona, Minn. “When I first started getting into this, the camera vendor I was working with suggested I get together with some security companies,” Jensen relates. “So I got together with one of them, gave them an education, and they tried doing it on their own, and I never heard from them again. But I got called in by the customer saying, ‘Can you come in and fix this?’
“On the IT side, there is a lot more to pick up than there is for the IT guys to pick up from security,” Jensen maintains. “In the IT world, there’s a lot of ‘gotchas.’”
Currently, Jensen installs mainly surveillance cameras and is not partnering with security dealers or systems integrators. “They’re kind of still in the analog mindset, while these are cheap, and people want cheap,” he concedes. “With my customers, they’re kind of more upper-end and see the value-add, see the long-term cost of ownership. We just need to educate the consumer.”
Jensen would consider partnering with a security company, but he does not think the prospect is promising locally. “I’d be willing to sit down and talk with someone,” he asserts.
Entre BTG Inc. is an IT integrator that has added physical security installation to its services.
“We know how to integrate into current and existing network environments,” Hindy reports. “The only thing that perhaps we’re lacking would be some of the experiences on certain elements of physical security, but we’re very quickly learning that. That piece is probably not the most difficult.”
His company has been installing and maintaining IP cameras, access equipment, intrusion detection equipment and fire control panels for 18 months. He partners with a central station now. “At some point as we get bandwidth, we’ll start to bring that in-house,” he forecasts.
Hindy estimates physical security installation and maintenance is 3 percent of his IT company’s business now but growing at double-digit rates. His employees have been attending security manufacturers’ training sessions.
Offering physical security seemed like a natural progression to Hindy. “It just seemed like it was a natural next step,” he declares. His company had been asked to fix physical security networks.
Hindy recommends segmenting IT networks so security is on a separate segment, but not on a completely separate network.
“So it takes a learning curve and significant efforts to educate the marketplace as to why they ought to be on the same network and managed through the IT department,” Hindy declares. Among the reasons are so IT can back up the security segment of the network and plan for disaster recovery methods.
Entre BTG has not partnered with a security dealer or integrator. “For the most part, very few of them understand the network side of the world,” Hindy maintains.
INTEGRATORS WHO DO PARTNER
RTM Communications, Merrimack, N.H., an IT integrator, has been doing about 5 percent of its business in video surveillance for approximately the last four years and has partnered with security companies for installation of other security products, such as access control.
“I don’t think it’s us competing with them, necessarily, if we can’t find a place where we can work together,” relates Ray Benoit, president and owner. “It sounds all lovey-dovey, but they have a certain expertise in the industry that we don’t have: where best to point the cameras; it might sound like it’s simple and obvious – at the doors – but I believe there’s a bit of an art and a science to that that we have not gained yet.”
Benoit anticipates security companies expanding into IT and IT integrators going more into security. “There will be a place for both of us, and if I’m a good shrewd businessman and I see enough business opportunity that pays for itself, who’s to say I wouldn’t purchase a company that did security for their customer base, and work on converting their customer base from analog to IP systems, as we’ve done with unified communication, such as VoIP and IP telephony?” Benoit asks.
Chicago-based SD-I Inc. is a company with roots in the engineering and IT world that has been installing and integrating physical security systems and partnering with installation companies for approximately the last decade.
“Our background is engineering and IT,” explains Bob Kettell, vice president. “We’ll do very traditional IT work, but physical security is a natural extension for us.
“We really are an IT integrator that specializes in physical security and technology security,” Kettell continues. “The way I look at it the physical security would be access control, video surveillance, perimeter security versus looking at IT security, like virus control.”
“We’re starting to get into intrusion and fire, although we tend to partner more for that type of work,” Kettell concedes. “We would design that component into a more comprehensive security approach for that organization.”
Kettell points out that his company can explain to end users how to monitor the 500 cameras a security company has installed.
“So an installer would set that up and say, ‘Here’s the keys,’ where we come in and say, ‘Here’s the keys, but hopefully we’ve talked to you about how you’re going to use it and monitor it over time,’” he exclaims.
“Most IT firms don’t like to get their hands dirty and go out into an airport or rail station and install a camera,” Kettell asserts. “That’s a different piece of work, but that’s exactly what we do. That is one of our distinguishing factors. We do traditional IT work, but we much prefer security, because we see the need, but we don’t see the competition.”
Kettell thinks partnering is a sound concept. “I think generally speaking, partnering is a logical approach,” he admits. “Even in our model, we have to be able to bridge the gap. We’ll hire electricians to do certain things. But somebody has to manage this, and if you don’t understand all the components, that will put you in a more tenuous position.”
NOT A FOREVER OPPORTUNITY
Tony Varco, vice president of the security division for Convergint Technologies LLC, Schaumburg, Ill., notes that security companies have to be honest with themselves about when they need to partner with an IT company.
“You have to know what you don’t know,” Varco explains. “You really have to take an introspective look at your organization, the people you have, the skill sets you’ve either acquired or developed, and based on what the customer is looking to accomplish, what you need to figure out is, ‘Do I have the skill sets, and the people, and the processes and procedures to meet the demands of this particular customer?’
“If not, you need to go out and supplement that with somebody who does,” he advises. “Every situation is somewhat different; for every customer, the requirements are different; the projects are going to be of various degrees of difficulty.
“It’s not easy — there are many out there who overestimate their skill set, and that could be an absolute recipe for disaster,” Varco concedes. “That’s why I think certainly in the last couple of years and over the next couple years, you’re going to see a lot more teaming.”
But Varco thinks security integrators have to keep learning IT because the partnering will not go on forever once IT integrators learn security through partnering.
“If you feel it will be a teaming opportunity forever, I think you’ll be mistaken,” Varco predicts. “I think teaming will go on for a couple more years, but by and large, you will see a transformation on both sides.”
He also suggests looking to manufacturers and distributors as sources of IT information.
“The other thing we’ve found is there are other partners out there even on the manufacturing side, on the product side, that have IT skills they can bring to the table,” Varco points out. “Oftentimes that’s overlooked.”
Varco also mentions distributors as being a good source of IT networking expertise and training.
DISTRIBUTORS SEE PARTNERING
IT products distributor Tech Data Corp., Clearwater, Fla., sells to both IT and physical security integrators.
“Two years ago, we did see physical security, which is basically the way we define surveillance and access, as a high-growth opportunity for us,” recounts Chuck Bartlett, vice president of networking product marketing. So the distributor created its physical security business unit.
Bob Shouse, senior manager, networking product marketing, for the physical security specialized business unit (SBU), thinks IT integrators eventually may move beyond video surveillance and access products.
“In all honesty, I don’t know if there will be a dividing line,” Shouse says of some IT integrators not offering intrusion and fire alarm installation services. “It depends on what the alarm systems do. I don’t have a crystal ball. I think it will be a blending. If people begin to develop alarm systems that work with IP, that are inexpensive, then there won’t be a dividing line.”
Bartlett thinks the services that go along with alarm systems may be the dividing line. “It probably depends on what services the IT reseller is willing to provide the customer,” he muses. “A lot of the alarm companies provide a lot of the monitoring and different things like that.”
Sorrentino points out that most integrators hesitate to refuse work. “Most dealers are opportunistic,” Sorrentino says as a virtue. “They don’t want to say ‘no’ to an opportunity. If they can find the expertise to win a project, they will do that.”
Offering a variety of services also is valuable to the end user. “Everybody wants one-stop shopping at the end of the day, and if one reseller can provide voice, data, security, sound, that can be a lot easier to work with than trying to piecemeal that out to four or five different types of installers or resellers,” Sorrentino points out.
“So we want security dealers to understand that if they don’t start to adapt to network-based physical security, they’re leaving the door open for new competition to come in,” he continues.
“There have been partnering relationships going on,” Sorrentino reports, adding that his company has referred IT integrators to security integrators and vice versa.
“When we talk to folks, we always tell them the easiest, least painful way to get into the business is to try to partner with somebody, but you have to do your homework at the same time,” Sorrentino cautions. “If it’s a valued end user customer and you’re inviting some new partner to the game that you don’t have experience with, you don’t want to jeopardize that end user relationship because you have something go wrong with that third party who’s helping you out.
“I’ve seen more people trying to learn the technology hire people with the technology than I have with actual partnering taking place,” Sorrentino declares. ‘That’s the reason we launched our IT workshops – to help educate the traditional security dealers on networking.”
Compton is optimistic about security integrators being able to compete favorably against IT integrators.
“Where the investment is being made by traditional security integrators to play more on the network backbone, they know a lot more about security equipment, and if they add that network backbone skill set, I still think they have a leg up on the IT integrator,” Compton declares. “But the IT integrators are getting there quickly, and they tend to have the ear of the IT folks.”
Whatever ultimately happens in the convergence of physical security devices with IT networking, physical security dealers and systems integrators must be open to partnering with IT integrators when a job demands it, but at the same time be learning IT in preparation for a possible day when IT integrators may go their own way into the physical security business.
SIDEBAR: Partnering with PSA
Bill Bozeman, CPP, CHS, president and CEO of the PSA Security Network, Westminster, Colo., has been urging systems integrators to partner with IT companies.
“I thought the solution from the physical security integrator’s point of view was to become network-literate and certified,” Bozeman relates. “I assumed the same thing would happen with IT integrators, that both disciplines would learn each other’s business and really become competitors of sorts, but that isn’t the case.
“What I didn’t realize was how incredibly difficult and expensive it is to do that,” Bozeman concedes. “So quite frankly, I do not see that happening anytime soon. My suggestion is that these guys learn like many other industries how to partner with each other and work together.
“Partnering is absolutely essential,” Bozeman emphasizes. “Companies are so frustrated some are threatening to develop their own team of technically qualified internal staff to do security integrating, engineering and maintenance.”
Calling itself a “collaboration of companies,” most of them IT integrators, 1nService, Bellevue, Wash., works with security integrators on specific jobs.
“We can talk to clients about a holistic approach to security, but we don’t expect to be into the physical security kind of implementation and sourcing of physical security materials,” explains Paul Cronin, CEO of 1nService. “We don’t expect to be a deployment person for those types of materials as well.”
Cronin is senior vice president and part owner of Atrion Networking Inc., Warwick, R.I., a 20-year-old IT integrator. 1nService has been in business 10 years as “an association of technology solution providers, which is a collaborative community of 30 member companies today,” Cronin explains.
“The majority of them are in networking; however there are five companies that are not only networking solution providers but also physical security companies as well,” Cronin reveals. “A collaborative approach is really our go-to-market strategy.”
With this business model, a company maintains its core relationship with its customer but brings in other specialists as needed.
“I think the industry is really beginning to acknowledge this more than they ever have in the past, that it’s OK to say, ‘I can’t do it,’ as long as you can engage others to do it with you,” Cronin notes. “What we have that is very unique is a relationship with our clients. What 1nService allows us to do is maximize and leverage that relationship.”
Cronin thinks security people learning IT is a good idea. “I do think there are some physical security people that will get their people more core-network capable, and I don’t see that as a threat at all,” he asserts.
“There’s too much investment for a physical security company to have the expertise to be able to provide the core consultation that we do,” he continues. “To provide the core infrastructure consulting is very expensive. There’s a certification process that takes time and money. I think it’s potentially something that could further drain the company resources. They may be better off understanding the new products and putting them on the network without trying to be the network owner.”
1nService is working with PSA Security Network members. “Our relationship to begin partnering with PSA began about a year ago, and over the last six or seven months, we’ve put in place some rules for engagement in how to contact each other, what roles we play, and how we’re going to present to a client,” Cronin explains.
“It’s like building a house -- we’re the architect and general contractor in a lot of ways, but I bring in an electrician and plumber, I bring in the floor guy, I bring in those pieces,” Cronin relates. “That is where the industry has evolved to the highly specialized point areas that are needed. But in the end, somebody takes responsibility for the full house.
“The networking consulting companies like Atrion, we own what they call the core,” he concludes. “The core is what all things connect to. The extremities are the things like physical security.”
Diana Hanna, PSA’s national sales manager, has been working with PSA members on their partnering with 1nService members.
“We’re not going to be contracting out with them,” Hanna notes. “We’ll be working on the same projects. We’ll go in hand-in-hand as partners on projects. We could possibly be doing the camera hanging, and they would do the IT products.”
