At ISC West 2016, the security industry’s largest annual tradeshow, it was evident the winds of change are blowing within the category of physical security.
For electrical contractors (ECs) with low- voltage divisions offering security, it’s important to note these changes will yield tangible value to the business, closer ties to the information technology (IT) world, and new and exciting ways to present security, video and monitoring services to customers.
Forget the move to internet protocol (IP) cameras and super-high-definition images. Sure, those are still there, but now there are other phenomena that present additional opportunities in numerous product categories.
New options and customer markets
For those who have been involved in the low-voltage industry over the last decade, it’s common that projects don’t command the profit margins they once did. With competition from every corner, including customers who shop online and an influx of low-cost products from overseas, that trend will continue. It’s up to the EC to find ways to deploy security and integrated systems in new areas that add profitability and convenience for customers.
Digital Monitoring Products (DMP), Springfield, Mo., recently unveiled ways to offset dwindling profit margins while entering new markets. Its latest service, The Company Store, has integrated web applications and a product delivery engine, according to Mark Hillenburg, executive director of marketing.
“This gives the installation contractor more access to the new millennial marketplace and the do-it-yourself [DIY] market,” he said. “The consumer can start building their own system online, and the contractor chooses their pricing through an easy administrative dashboard. End-users may navigate the website directly for equipment options and choose their contract, based on what the security installer chooses to offer.”
Customers visit the user-friendly website, which prompts them with the message “Let’s build your system” and then selects their monitoring. Customers get specific about the system, providing names for the zones that DMP then programs automatically through a cloud-hosting service. Should the customer decide to rename the zone, they can do it at the keypad or through the cloud with a DMP browser-based solution Virtual Keypad (www.MyVirtualKeypad.com).
Hillenburg said the idea is to give contractors ready access and participation in the burgeoning DIY market while keeping the customer connected to and invested in the service company. For customers that want more flexible options in professional central station monitoring, there are choices. DMP’s OnDemand Monitoring provides the length of service determined by the customer, without a long-term, multiyear agreement.
OnDemand Monitoring is a configured option that security contractors can also provide through Virtual Keypad on the end-user’s browser. Users schedule the exact monitoring times they want and pay a per-day rate, which the installation company sets. End-users configure their system to monitor on days they will be away from home and have the option to turn off monitoring when they choose.
“Perhaps users want to schedule monitoring only for a day,” Hillenburg said. “It gives the consumer the ability to choose when they want monitoring, during vacation or at other times. We enable the communications to the central station and then can disable it when that time period is over. It’s seamless to the central monitoring station. Users may also decide to migrate to full-service, long-term monitoring if they like the service. It’s a good tool to bridge the gap and either win back people who were thinking of cancelling monitoring altogether or those you want to attract to more comprehensive monitoring.”
It also works for those who install their own system yet want it monitored.
A recent industry report from Gartner Inc., Stamford, Conn., noted that, by 2020, more than 80 percent of software vendors will change their business model from traditional license and maintenance to subscription, regardless of whether the software resides on-premises or in the cloud.
Offering software-based video management systems may have been cost-prohibitive in the past, but that too has changed, opening cost-competitive opportunities. Genetec, based in Montreal, has a subscription program that gives installers and customers pay-as-you-go licensing for its on-premises video management system called Genetec Security Center.
Subscribing customers pay on a monthly or annual basis, as opposed to purchasing the entire system upfront. This also translates into a more palatable monthly operating expense that can be easily budgeted, rather than a large capital outlay that may be unattainable.
Andrew Elvish, vice president of marketing and product management for Genetec, said the subscription program is a game-changer, making it accessible to more customers and markets.
“Previously, we were known as perhaps only playing in the high-end enterprise space, but now the software is available at a security contractor upfront cost of about $3 per camera,” he said.
As part of this subscription model, Genetec also introduced Security Center Compact, an entry-level software platform. It supports up to 25 cameras and provides an easy “no training required” option for customers with basic video management requirements, making it a good fit for smaller sites. Users whose systems grow can update their plan and purchase a higher edition of the software-as-a-service platform.
New options to deploy security services to customers assist the user and provide installing contractors with more ways to generate additional revenue and enter nascent markets.