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by: Martha Entwistle - Wednesday, March 2, 2016

Systems integrator SEi has moved to it new headquarters in Omaha, Neb. and launched a new Remote Services division, which will support SEi's growing managed services business.

SEi has "been doing managed access control for 30 years if not more," SEi EVP Tom Hruby said. But now it's doing more cloud hosting. With its managed access control business growing and its "hosted video seeing a huge uptick" there are more customer service questions too.

"The remote services group deals with issues connected with managed services," Hruby said. Questions often arise when a user updates a phone. They'll need information on code changes, setting up their iPhone app, or tablets or web interfaces, among other things.

Creating this new division is all part of SEi's focus on "the experience economy." Hruby said "Customers today will pay more for experience than services," Hruby said. "When they pay for a service, they have experience expectations. If we don't meet those expectations, they'll go pay for the service somewhere else."

"We focus on the experience at SEi; we call it 'The SEi difference," he said.

When it moved into new headquarters, SEi wanted to expand its central station, "create a great place to work and do business, ... add all new technology and furniture," he said.

SEi's new headquarters here—it's first move since it was founded in the '70s—is double the size of its former headquarters. It has room for 65 employees, warehouse space and its new U.L. listed central station is now called SEi's  Customer Care Center. 

In business for more than 45 years, SEi has 167 employees and 16,000 customers. Its 2015 total revenue was $27.6 million with $850,000 RMR.

 

 

 

 

by: Martha Entwistle - Wednesday, February 24, 2016

Honeywell is reportedly shopping its Building Solutions Group, according to a report today in the Wall Street Journal. The Honeywell Building Solutions business, which the WSJ says is worth between $3 billion and $4 billion, provides security systems integration and other services to commercial buildings globally.  

It is a separate business unit from Honeywell Security and Fire (HSF), but they are both part of the Automation and Control Solutions unit. Alex Ismail is the president and CEO of the $14 billion Honeywell Automation and Control Solutions division.

The Wall Street Journal says Honeywell has hired Goldman Sachs Group to work on the sale, which has been ongoing for about three months.

Earlier this week, reports surfaced that Honeywell was in talks to merge with UTC. While those reports were followed by comments from UTC that they deal would run into trouble with anti-trust regulations, the Wall Street Journal today said “Honeywell has signaled that it isn’t ready to give up yet on a merger with United Technologies, which would be one of the biggest deals at a time when such activity is booming.”

Would Honeywell sell the building solutions business if it does merge with UTC? The Wall Street Journal report asked that question to itself and answered “I don’t know.” It also added this editorial caveat: “In any event, as always, there may be no deal at all.” 

According the WSJ report, Honeywell is working with Centerview Partners and Lazard on the UTC deal, while UTC is working with J.P. Morgan Chase & Co

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by: Martha Entwistle - Wednesday, February 17, 2016

Billion dollar deals are not exactly daily news in the physical security industry, except in the past three weeks, that is.

Two of the biggest deals in the history of the security industry have been announced in the past three weeks. On Jan. 25 Johnson Controls announced a deal to merge with Tyco.

Yesterday, Apollo Global Management, a $170 billion private equity company, announced it has an agreement in hand to acquire Tyco's former sister company, ADT, for $6.9 billion. Here’s that story.

Apollo first entered the security industry last May when it purchased Protection 1 and ASG.

When the Apollo/ADT deal closes, Apollo plans to combine ADT with Protection 1 under the leadership of Protection 1 CEO Tim Whall.

When JCI announced that it plans to merge with Tyco it said it will lose the Tyco name. Good idea. Even though Dennis Koslowski and his $600 shower curtain and $2 million birthday parties on Sardinia are long gone, the Tyco name is forever linked to ridiculous excess and greed.

On the other hand we have ADT. The combined ADT/Protection 1 company plans to operate “primarily under the ADT brand.”  Not everyone loves ADT of course, but the name is synonymous with security and as someone said to me yesterday: People know the ADT name, whether you like them or not, you feel like you can trust them.

I haven’t had a chance to speak to Protection 1 yet, but in a canned quote in the news release Whall talked about the promise of the combined commercial business.

I spoke to Jeff Kessler of Imperial Capital yesterday and he noted that ADT is really still getting its commercial business off the ground. Protection 1 can help them a lot, he said.

He noted that Tim Whall’s team “invented the scorecard for the industry” idea back when he was at HSM.

The idea behind the scorecard is to find out customers really want (from a security and business improvement perspective) and set up metrics.  Protection 1 (or HSM or Stanley) then measures itself on its ability to meet certain metrics. I’ve written about different iterations of the Tim Whall Scorecard many times.

He noted that Protection 1 has a "very, very disciplined team." (Even with two verys, I'd say that's an understatement.) They've got CMO Jamie Haenggi, CFO Dan Bresingham, and Don Young, who Kessler calls "a superstar, the leading entity in the industry on integrating platforms."

by: Martha Entwistle - Wednesday, February 10, 2016

Unified security solution provider Genetec is going with a “cloud-first strategy,” Genetec’s Christian Morin said this week.

“The bulk of our innovation will be delivered [as a] cloud-based product first,” Morin said.

Popularized a few years ago when in 2011 the U.S. government mandated that federal agencies consider a cloud-based IT systems, the term “cloud first” is heard more, and talked about more favorably in the business community over the past couple of years.

Microsoft CEO Satya Nadella, for example, announced the company’s “mobile-first, cloud-first” strategy in 2014.

As VP Cloud Services at Genetec, Morin has been a vocal evangelist for cloud-based systems. Here’s a link to a story about cloud from TechSec 2015.

The world is moving to the cloud for sound business reasons, Morin said this week. "The marketplace in changing. Integrators are realizing that they need to adapt. If they don’t, they’ll be left behind,” Morin said.

Morin shared several impressive percentages—triple digit growth—related to the company’s Stratocast and other cloud products. Admittedly, it’s hard to know what those figures really represent when there are no revenue figures attached. (The private company declined to share actual revenue figures.) However, Morin shared stories of customers who are using Genetec’s cloud products. Suffice it to say, they are big customers and there are a number of them.

Morin discussed Genetec’s work with the LAPD at the Special Olympics in July, interconnecting a number of different entities such as universities, the convention center and the Staples Center into one command center.

He also described a project with an unnamed big box retailer where Genetec was used to federate 800 stores, each with 50 to 80 cameras.

Customers are looking for Genetec’s access control as a service product, which is currently in beta, he said. “Not a week goes by that a customer doesn’t ask. There’s tremendous market demand especially among large customers who want central access control across many different facilities,” Morin said.

Genetec is having a lot of success with cloud in city surveillance applications—its “Project Green light” in Detroit is a notable example—and Genetec is actively working with groups of stakeholders in many different U.S. cities to pull together similar projects.

Genetec is also in discussion with telecom companies to bundle its commercial cloud services with the telecom’s traditional services. It’s a model that might work very well with city surveillance. The telecom would bring “brand power, network and billing mechanisms” to the plate. How would that work with integrators? Would the telecom be stepping on their business? Unlikely, Morin says. The telecoms don’t want to get involved with fulfillment, he said.

Morin said there are four reasons customers want cloud: you pay as you go; upgrades are the responsibility of Genetec, lessoning the burden on internal IT; simple and easy for integrators; scalability and elasticity.

The two main challenges Genetec faces with cloud is the reluctance of customers to “not see my server anymore” and customers and integrators getting used to the subscription model.

To get integrators and end users accustomed to the subscription model, Genetec will begin offering its on-premises platform Omnicast as a subscription model. The platform will still be the same, it’s just a different payment option.

While Morin is convinced that the move to the cloud will inevitably become a stampede, he said Genetec believes in a hybrid cloud model. “There are many good reasons why some customers don’t want to move everything to the cloud,” he said.  They may want a little cloud or a lot of cloud and they may want the transition to be very slow, he said.

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by: Martha Entwistle - Wednesday, February 3, 2016

The Diebold Securitas deal, announced in October, closed on Monday.

Tony Byerly, former EVP of Diebold Electronic Security, has been tapped to lead the newly named Securitas Electronic Security.

In a statement, Byerly touted the benefits of being part of an $8 billion global security services provider, saying the new parent company brings “scale, stability, focus and resources necessary for us to grow, innovate and reach even higher customer satisfaction and performance levels in the years to come.”

This deal is the latest example of a company combining electronic security services with guarding and other security services. We’ve seen this combination on a very large scale with G4S (which has a NOC and acquired the former Adesta systems integrator business.) And we’ve also seen a number of guard companies and integrators partner in recent years.   

In his statement, Byerly said Securitas customers can benefit “from on-site security officers to mobile guarding to remote guarding to alarm monitoring and systems integration, as well as other electronic security solutions.”

 

by: Martha Entwistle - Wednesday, January 27, 2016

After spending the past 10 years divesting itself of non-core businesses, Tyco is now going to become part of a much larger company. And, after being a Milwaukee company since 1885, Johnson Controls will now have its official domicile, with Tyco, in Cork, Ireland. Here's a video interview I did with Mark Van Dover of Tyco Integrated Security about being a standalone company.

Tyco and Johnson Controls announced Monday that they would merge. We don’t generally see deals this big in the security industry. I don’t usually hear news about security deals on Marketplace when I’m driving home from work, or read presidential candidates’ remarks on security deals.  

Of course neither Kai Ryssdal nor Hillary Clinton were talking about how JCI and Tyco will merge branch offices or how the combined company will nurture relationships with security integrators, they were talking about the tax-driven nature of the deal.

In moving its headquarters, or at least its tax base, to Ireland, Johnson Controls will save $150 million in taxes it would normally have to pay the U.S. Government. Tyco is experienced with domiciling outside of the U.S. having lived in Bermuda and Switzerland previously.

Tyco CEO George Oliver and JCI CEO Alex Molinaroli said they expect an additional $500 million in "synergies" in the next three years. They expect $150 million in savings in corporate reductions--within the next two years, and within the next three years $350 million in savings as the result of business and operational improvement. 

People I talked to about these projections believe JCI and Tyco are good companies that are capable of reaching that $350 million in savings, but they say it could take longer than three years. 

Once the savings are realized, the new company's challenge will be growth. Both Tyco and JCI have had trouble growing in the past three years. Will the combined company present the security industry with a better integrator? Will the combined company, on the product side, be good at nurturing relationships with integrators?  

During the Monday investors call, Oliver and Molinaroli spoke a lot about the opportunity the combined company has to "provide building products, services and technology that can serve customers' needs holistically."  Molinaroli said the integration at the branch level will not be that complex. JCI is experienced with this kind of consolidation, having done the same when it acquired York, an HVAC company it acquired in 2005. Molinaroli said he was speaking "as someone who came from the branches."

Oliver pointed out complementary capabilities and geographies. One company has a big presence in Asia and the other in Europe, and both have a big presence in North America. 

Oliver said the combined company gives "us a big leadership position in the new market being developed in smart buildings." He added "we see our industry transforming" and the "real opportunity is [with] the Internet of Things and the smart building."

Here's a story from April 2014 when I visited Tyco's Global Center of Excellence in Birmingham, Ala.

I interviewed Oliver, Van Dover and Renae Leary, Tyco VP global accounts. During that visit, Oliver talked about the importance of connected systems and the information that can be derived from those systems. “Integration capability is fundamental to our success,” he said.

A little more from that interview:

Tyco’s enterprise-level security systems include intrusion, access control, video management, fire systems and integrated systems, but the new center will enable Tyco to tie more building systems into solutions for its global customers, he said.

One immediate opportunity is fire. According to Leary, an estimated 20 percent of Tyco’s current global enterprise customers use Tyco for fire as well as security. Tyco aims to get its existing global enterprise customers to all use Tyco for fire. She predicted that the number will increase incrementally as current customers upgrade existing fire systems and/or add new facilities, and as new customers come on board.

While many global customers are still working on integrating access and video, many are starting to want to integrate fire, identity management and PSIM. “Customers are starting to try some of these things,” Leary said. “It’s picking up steam [through] trials and pilot programs.”

The ultimate goal is to have all systems integrated on a single platform for these customers and to provide business intelligence, systems and solutions “to better manage data in real time and act on data immediately,” Leary said.

Leary said that the company’s “core commercial business is still a huge focus for us.” Oliver added that "the new Tyco" is designed to "serve [commercial] customers top to bottom; [we're] very competitive at all levels."

In addition to integrating systems together, adding new technology will also be important to Tyco’s growth and ability to serve businesses large and small, Oliver said.

 

by: Martha Entwistle - Wednesday, January 20, 2016

PSA Security Network, which has been out ahead on the cybersecurity front, has assembled a Cybersecurity Advisory Committee tasked with leading PSA's cyber program "by offering expertise, resources and services to the PSA community."

The "cyber-savvy" group includes people from "a variety of practice areas including physical security manufacturers, integrators, security consultants and engineers, cybersecurity experts and cyber law,"  Bill Bozeman, president and CEO of PSA Security Network, said in a statement.

Andrew Lanning, committee chairman, co-founder, Integrated Security Technologies; Paul Cronin, SVP, Atrion Networking; Salvatore D’Agostino, founder and CEO, IDmachines; Dan Dunkel,VP-strategic partners, Eagle Eye Networks; Wayne Smith, president, Tech Systems; Rodney Thayer, security consultant, Smithee, Spelvin, Agnew and Plinge; Darnell Washington, president/CEO, SecureXperts; David Willson, attorney; Bill Bozeman, president and CEO, PSA Security Network.

by: Martha Entwistle - Wednesday, January 13, 2016

Video surveillance company Avigilon on Tuesday adopted a "shareholder rights" plan, an anti-takeover measure that's sometimes called a "poison pill." The plan has been accepted by the Toronto Stock Exchange, but it needs to be approved by shareholders within six months. Avigilon plans to present the plan at is 2016 annual meeting.

Avigilon said it "is not aware of any proposed take-over bid at this time."

We've seen some major video surveillance acquisitions recently with Axis and Milestone being acquired by Canon, and recently, FLIR buying DVTEL.

One can see how Avigilon may be attracting attention from a larger entity looking to get into physical security. Avigilon has well-regarded video and access control technology, including the former VideoIQ portfolio. It owns a lot of video analytics IP, and I hear it has very good relationships with integrators. Plus its stock is down considerably. Yesterday its stock closed at $12.90; Avigilon's 52-week range is $11.20 to $25.62.

It's also had a lot of movement internally with managers. Here's a blog I wrote about that.

Under Avigilon's proposed shareholder rights plan, one "right" will be issued for each Avigilon common share. The rights can only be exercised if an aquirer announces an intention to acquire shares that would take their holding to "at least 20 percent of Avigilon's outstanding share capital." The rights would allow shareholders, "other than the acquirer, to purchase additional shares at a substantial discount." A "permitted take-over bid" would not trigger the rights plan. 

 

by: Martha Entwistle - Wednesday, January 6, 2016

Body parts battle?

Yes, among the highlights of TechSec this year will be a session we've dubbed "Battle of the body parts," and not just because it's a catchy title. We're going to have a little competition at TechSec.

I've been hearing from more and more integrators that biometrics are coming of age. They're more affordable and they're more reliable, you've told me.

So, we decided to take a look at which biometric technique works best and where the promise still exceed the reality.

SecuritySpecifiers' Ray Coulombe will lead the session and he's gathered experts on four biometric technologies—facial recognition, eye scan, fingerprint, and hand geometry—to speak. Those representatives will state their cases. These will not be manufacturer' pitches. Those are not allowed at TechSec and would be booed off the stage. Rather they'll be biometrics experts talking about specific technology fundamentals (rather than their companies or products), advantages and best application areas.

To help figure out who wins the battle we'll have a panel of judges drawn from our "20 under 40" award winners.

Face, eye, finger, hand ... Come to Delray Beach, Fla. Feb. 2-3 to find out which body part is victorious in 2016. Here's a link to the program.

And, stay tuned for the announcement of our super cool keynote speaker early next week.

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by: Martha Entwistle - Wednesday, December 16, 2015

NORTH CANTON, Ohio—While Diebold Electronic Security waits on the close of one deal—its acquisition by Securitas—it has closed another: a 500-location national account deal.

The national integrator will provide intrusion, fire, access and monitoring services as well as its online customer portal, SecureStat, for Rack Room Shoes, a national footwear chain that also owns Off Broadway Shoe Warehouse. Diebold will also provide an enterprise video and access control system for the company’s newly expanded corporate headquarters in Charlotte. Rack Room Shoes made the announcement Dec. 14.

Diebold has “the vision, knowledge and resources to be that partner, truly vested in Rack Room Shoes and our loss prevention strategies and results," Johnny Turner, director, loss prevention, Rack Room Shoes, said in a prepared statement.

Tony Byerly, EVP, electronic security, Diebold said in a prepared statement: “As a national retailer, Rack Room Shoes needs a security provider that focuses solely on the unique needs of business customers with the resources to deliver monitoring services and the necessary standardization of technology, solutions and processes across the United States."

When the Diebold/Securitas deal is closed, the contract will be transitioned to Securitas. The deal is expected to close early in 2016.
 

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