Firm getting ‘more traditional’ about security

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Wednesday, October 1, 2003

AUSTIN, Texas - Technology and monitoring service provider Security Broadband is in talks with several security industry players about distributing its products and services through the security channel, rather than relying heavily on its cable partners.

Between bankruptcy and consolidation in the cable industry, some of Security Broadband’s partners in the cable industry have not fared well in recent months. Because of this, President and Chief Executive Officer William Glasgow said his company has been looking for complementary partnerships in the security industry.

“The cable industry went through a period of retrenchment and basically our working with them was slowed down considerably,” Glasgow said. “At the same time, we began being contacted by players in the security industry who were interested in selling our products and services.”

The company started in 1999 with $13 million in funding from a number of investors, including cable providers Cox Communications, Comcast Corp., Adelphia Communications and Cable-vision Corp. In 2001, the company picked up an additional $45 million in second-round financing.

Because discussions with potential security industry partners are only in preliminary stages, Glasgow said he could not identify companies by name. He also said there is no firm timeline for completing any deals.

Tony Smith, president of Security Finance Associates, said Security Broadband is refocusing and “getting into the security industry in a more traditional format,” something the company hasn’t done in its short lifetime.

“To the contrary, they were ignoring anyone in the security industry” when it came to partnerships, he said.

What effect Security Broadband’s new direction will have on the industry isn’t clear at the moment, Smith said.

“It’s nice to have a player in the industry who has $15 million [left in its corporate coffers] to spend in some traditional fashion, but they really never had an effect on the industry to begin with. They were an anomaly,” Smith said.

For several months now, Security Broadband has been working on how its products and services might look from a branding perspective if they were to be sold by another company.

“We’ve got hardware that’s proprietary, we’ve got an interactive portal and the third piece of it is the monitoring piece,” Glasgow said. “Our goal is to try to get the security industry and/or the cable industry to embrace the end-to-end solution and they can pick and choose which pieces of it they do and which pieces we do.”

One of the challenges the company has faced in this process is how to market its hardware and services to various segments of the security industry.

“You’ve got different paradigms with different folks – you’ve got folks who like to sell and install and then sell the contract and you’ve got some who like to sell and install and just outsource the monitoring,” he said. “We’ve got to figure out how to work with the various groups, and that’s new to us. That’s something we’ve got to figure out. What works best in which environment?”

In the end, Glasgow said, the company will offer some blend of hardware and central monitoring, although that, like the timeframe for any deals, is not set in stone.

“We have a monitoring center, but we’re also looking at the possibility of licensing that technology out,” he said.

Adding to Security Broadband’s complications is the fact that the company has also battled its share of bankruptcy rumors in recent months, but Glasgow said those rumors are definitely not true.

“As Mark Twain said, ‘Rumors of my demise are greatly exaggerated,’” Glasgow said.