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SaaS and new tech industry players to dominate landscape next year

Access control is expected to be the growth leader through 2015 and Software as a Service (SaaS) will emerge as a popular model for organizations looking to cut their security costs next year, according to experts speaking at a conference exploring the future of the security industry.


November 11, 2009
By Jennifer Brown

“The more you focus on Software as a Service the better it will be for your business,” said Richard Chace, CEO of the Security Industry Association speaking at the 14th annual Securing New Ground conference in New York this week.

According to industry observer Sandra Jones of Chardon, Ohio-based Sandra Jones and Company,
the three biggest influences on the security market in 2010 will be
Software as a Service (SaaS), the Internet and remote video technology
as it can be applied to the alarm industry for video verification. She
says the technology will serve to help improve the industry’s
relationship with law enforcement.

By adding video verification to their customer accounts, Jones says dealers can see significant additional profit generation.

“It gives customers a premium service, and law enforcement is willing to roll if it’s verified,” she said.

Jones said SaaS, which is offered by companies such as Brivo, will
become “the new normal” as organizations with slashed budgets see the
value in a “pay-as-you-go model.” The model also creates a much-desired
recurring revenue stream for integrators and dealers.

“This year it was all about the economy and along with legislation and
standards, SaaS will change things for the customer,” she said.

Jones says the ability for security industry vendors to leverage the
Internet to deliver services to their customers will change the
relationship they have with them and add value to alarm services, which
have been seeing flat or shrinking revenue.

“The Internet will do for integrators what the digital dialer did for
alarm dealers,” she said. “It will create real recurring revenue for
remote video.”

Chace went on to list what SIA has identified as the top drivers for
2010 and it included the influence of IT integrators, distributors and
suppliers — a recurring theme in the presentations at Securing New
Ground. New players, such as Ingram Micro are causing those in the
security industry to sit up and take notice.

On Nov. 3 Ingram Micro launched a physical security division that will
cover alarm and fire, monitoring services, access control and video
surveillance. The company has identified the market as a significant
play for its channel partners in the U.S. and in Canada. Brands such as
Axis Communications, Cisco, Sony and Panasonic will be distributed,
according to Ingram.

In a press statement released last week, the company’s president said
Ingram has had its eye on the security market for some time.

"We’ve been watching the growing convergence of IT security and
physical security and have established this division in anticipation of
their eventual synthesis," said Keith Bradley, President, Ingram Micro
North America, in a statement issued by the company. "The launch of
this security division is another example of our continuing efforts to
expand our reach and bring value and focus to new and adjacent markets."

Tech Data, Ingram Micro’s main rival in the tech arena, has had a physical security division for three years now.
Speaking at the Securing New Ground conference, Anixter
president and CEO Robert Eck said he is confident his company could
compete against the entrance of Ingram and others due to Anixter’s
commitment to after sales solution support.

“They’re very good at taking a phone call and supplying boxes and they
will have an impact on business, but their business model is basically
a brokerage model. They don’t offer much solutions support,” said Eck.

Other influences the security industry will face next year will include
the evolution of technologies such as video analytics — a technology
Chace says is “often over-sold.”

In terms of issues that keep security executives up at night, Chace
said they point to training and retraining of good employees as the
biggest challenge in the next five years.

They need to train employees to talk “realistically to customers about the limitations of their products.”

He said education and certifications would also become top drivers for companies in 2010.

Others speaking at the conference believe the economy will continue to impact the market in 2010.

“The economy will have the biggest impact. It’s become very hard to
predict revenues each month,” said Mark Provinsal, executive
vice-president of Dedicated Micros.
“We used to use the POS reports of our partners but we can’t really do
that anymore because they are shrinking inventory. The economy has to
show signs of recovery.”