8.3.20 – SDM
With a rapidly changing security landscape, opportunities for contract services abound as customers want solutions that can grow and change with their businesses.
Recurring revenue within the alarm industry has been the lifeblood of alarm dealers for decades. On the integration side of the physical security industry, however, many security integrators have historically had little or no recurring revenue. That continues to change as more systems integrators view recurring revenue as a strategy to help their companies weather individual storms of recessions, economic dips, and other market influencers. On top of that, what’s happening around the world due to the coronavirus pandemic has only accelerated security integrators’ push to become true managed services providers and long-term partners with their clients, as demand for services such as remote monitoring and on-demand analytics are high right now, say those in the industry. There are several opportunities for security integrators to offer security services; and the “as-a-service” model can come in many forms from hosted and/or managed video or access control to app or remote access abilities to maintenance or professional services to IT and cyber security services. And, the experts SDM spoke with overwhelmingly believe that now is the time to ramp up these offerings.
The security integrator that chases after the next installation versus offering a basket of services to the existing customer will fade away, predicts Avi Lupo, co-president of DICE, Bay City, Mich. “RMR is the lifeblood of the industry. It’s not a nice to have, it’s a must have. They must understand and make the shift that they are not selling a product; they are a service provider. That outcome is everything from professional services, design, the technology and more. It’s not a one-time installation. That will move from this world.”
A Tale of One Integrator Moving Into Managed Services
About three years ago, Ollivier Corp., Los Angeles, Calif., ranked No. 45 on the 2020 Top Systems Integrators Report, had little recurring revenue. “We had just completed an acquisition and we knew we needed to be healthy as a company to survive times like this,” recalls Louis Boulgarides, president and CEO of the company.
After working for a large integrator with a healthy recurring revenue model, Boulgarides said he knew how important it was to shift to a similar model. So the company hired a director of managed services and aimed to ramp up its services and gain that recurring revenue. Today, the company offers cloud hosted and managed access control, service plans, cloud video, contracted IT services, cyber security and more.
“One of the keys was to have someone be that advocate for managed services, because traditional salespeople have a hard time speaking to it and selling it,” he says. “The first step for any integrator company is to make a commitment to managed services. You just don’t come out of the gate selling $1 million in managed services revenue. It’s slow and the leader has to be 100 percent behind it without wavering.”
Boulgarides says that having leadership commit to services and having an advocate for the services side of the business are absolutely essential to make such a program work. The next step is having a realistic compensation program for salespeople. “A very simple compensation program is important,” he says. At Ollivier Corp., salespeople get rewarded immediately for a services contract and get a little boost each year that the client stays in year one, two and three.
The last consideration, Boulgarides says, is finding the right solution partners so that you can meet a customer’s service needs. “Be really careful and do your due diligence. Offering the wrong product or service can kill a managed services division real fast. And it’s an ongoing process because technology is moving so fast. You’ve got to have a dynamic relationship with true partners so you can stay ahead of everything.”
The ability to offer clients integrated physical security systems that can grow and change with a company is most easily done by already being the service provider to the end user that can aid them in their changing needs. “[The as-a-service model] gives integrators the ability to connect with the client and offer upgrades, analytics, additions and flexibility,” says Clifford Dice, CEO and president of DICE.
“We really believe that you should package your security solution together to make it known to the customer that they are receiving a big picture, not just a part. It allows customers to see that the service goes hand in hand with the product and it gives the customers the whole picture.” — Sara Eslamlou, head of business development at ParSecurity Inc.
“Right now, as we are all trying to get back to the office, there is a lot of uncertainty in how physical security can play a role in this new world of safety and can augment suggested coronavirus-related policy changes,” says Haniel Lynn, CEO of Kastle Systems, an integrator and managed security services provider for commercial businesses, ranked No. 7 on the 2020 Top Systems Integrators Report. “A managed services approach is perfectly suited in this situation, where customers are looking for a holistic solution that can integrate systems, technologies and processes together while providing the continued services to support issues and decisions with data as needed.” The company recently launched its KastleSafeSpaces offering to clients, which helps automate virus-screening and contact-tracing processes with access control and video analytics technologies.
Lynn tells SDM that end users need security integrators to be their partners to help support them with technical and management expertise, particularly as the world continues to change, and the as-a-service model lends itself to that long-term relationship perfectly. Beyond that, Lynn says there is a big opportunity for integrators with cloud-based systems to offer end users the biggest value from services. “[Cloud-based access control] is more readily accessible virtually by other business operating systems that are cloud based as well (like HRIS software), avoiding the need to build custom infrastructure between physical on-site servers to share data. They also need to adopt use of non-proprietary access platforms that offer an open interface to plug and play with other building system platforms so that user identity data credentials can be managed from one source, but be recognized across platforms. As an example, if the HR department of a business records a positive COVID-19 test in their records and simultaneously revokes office access credentials of that individual — this can only happen when two platforms (HR and access control) share data between them.”
When discussing security services such as video and access storage or management, many experts mention cloud and services almost interchangeably, as cloud deployments perfectly lend themselves to a service model — not only because they allow for easier upgrades, updates, additional feature sets, off-site storage and remote capabilities, but because they follow the continued adoption of cloud services and subscription models of consumers in their daily lives in almost everything else from music to movies to photos to phone to IT and cyber services.
Sara Eslamlou, head of business development at ParSecurity Inc., Golden Valley, Minn. (featured on this month’s cover), says that her company saw an opportunity for and began offering cloud video services about a year ago to complement its long-standing video monitoring services and video management offerings. The adoption for cloud among customers is still small but steadily growing, she says. “We saw the trend and we’ve always been about being an innovative, custom integrator,” she says. Eslamlou says that ParSecurity’s small to medium-sized business clients are looking for ways to remotely secure and access their businesses, as well as do some building automation such as lighting and temperature control — and the cloud perfectly lends itself to app connectivity, remote monitoring and flexibility.
Eslamlou says that the opportunity for services is huge in security. However, if you don’t package the service as part of the initial deployment — particularly in the case of cloud, it’s a lot harder to try to sell to a customer after a project has been completed. “We really believe that you should package your security solution together to make it known to the customer that they are receiving a big picture, not just a part. It allows customers to see that the service goes hand in hand with the product and it gives the customers the whole picture,” she says.
“Security integrators need to get in the door and have the conversations that will build equity and make their brands more valuable. They’ve got to change the mindset of selling and get in the habit of putting a return on investment on what they are selling, whether that be with predictive maintenance, cloud-based solutions or more.” — Dan Dunkel, PSA Security Network
James Hoang, partnering and integration manager at Speco Technologies, Amityville, N.Y., says that in order to stay competitive and meet demand from clients, security integrators need to offer services now more than ever. “People want flexibility of management and mobile solutions, for example. Integrators can’t just sit in one place; they need to make sure they follow the trends of where things are going in order to stay valuable.” Hoang says the current trends and demand call for flexible solutions and mobile or remote access. “We’ll also see analytics on the cloud driving services even further as customers add analytics to their operations as needed,” he says.
The ‘as-a-service’ model comes in endless forms; and just like end users can pick and choose what they need and what makes sense to them, integrators can choose the services they want to offer and the infrastructure and bandwidth they have to support them.
“I think you are only limited to your corporate philosophy and I think over time that will change as well,” says Chris Larcinese, vertical marketing manager for Bosch Security and Safety Systems, Fairport, N.Y. “The good news is the as-a-service model should make the customer stickier. It allows for system engagement and it may be part of [the customer’s] monthly operational expenses but it should give them the right tools to make their lives easier. It allows the integrator to be more proactive and gives them the opportunity to engage with that customer and look for new opportunities.” He says, for example, a cloud-based as-a-service solution makes it easy for integrators to offer new capabilities and feature sets to customers as they come out, delivering more value to the customer while in turn earning recurring revenue.
5 Ways to Speak the IT Language When Selling Managed Services
Taking a service-based approach hasn’t always been the norm for security integrators, but the shift from traditional project-based sales is making it a necessity. For so long, security decisions were made by security leaders; but as the lines blur between IT and physical security, and as more security devices need to find a home on the network, it’s crucial for integrators to work alongside both departments.
This means speaking the IT language:
Streamline processes. One thing that IT leaders need is the ability to streamline the process for network management and oversight. This means that IT departments will be looking for tools and solutions that make things like the addition of cameras and other IoT devices to the network easier with fewer steps.
Talk features. When you’re purchasing a new technology, you’re all about the features they provide, right? Same goes for IT leaders tasked with evaluating managed services options. Typically, they’re drawn to low-maintenance, high-speed, low-drag or latency products that easily integrate with other systems. Offering managed services that provide a feature-rich option will be a benefit to your business.
Show value. In some cases, IT departments may have bigger budgets to spend, but that doesn’t mean that all talk of return on investment (ROI) goes out the window. On the contrary, when talking cross-departmentally, being able to highlight ROI and total cost of ownership through a managed service approach will set you apart from your competitors. For example, in a GSOC environment, the ability to highlight advantages of an outsourced operations center as it relates to lower labor costs and added oversight can help drive home ROI.
Know cyber security. It goes without saying that one of the main goals of any IT department is keeping the network safe and secure from threats, which means providing thoughtful answers and recommendations on products that provide secure data transmission, regular threat vulnerability assessments, system monitoring and a proactive approach to potential threats. The right managed service provider can be instrumental in helping make the case for all of these.
Focus on teamwork. At the end of the day, the goal is the same: keep the organization safe. Whether you’re an IT leader or physical security leader, the two departments share a common vision and aim toward ongoing risk assessment. It’s not about selling a product; it’s about establishing a partnership and offering a service rooted in a shared end goal. Managed, outsourced security services provide both departments with the tools and resources they need to achieve this goal by offering a way to not only protect critical assets and people, but provide continued network protection and threat assessments.
Security integrators must demonstrate the added value and benefit to both IT and physical security departments that are considering a managed service. Speaking the language is a necessary first step in making the sale and establishing a strong, ongoing relationship. — Contributed by Ryan Schonfeld, founder and CEO, RAS Watch
With all of the options and creativity that abound, experts suggest security services should be custom from one integrator to the next and never a one-size-fits-all approach. If security companies focus on building long-term relationships and focus on the value services can bring to their customers, the opportunities are endless.
No matter the programs offered, Ryan Schonfeld, CEO of security-operations-as-a-service provider RAS Watch, El Segundo, Calif., believes integrators need to approach their customers as service providers, period, because subscription models are the future of physical security. “I think every proposal should have some ‘as-a-service’ offering on it,” he says. “The reality is, very few customers have the ability or capability to do things themselves. Health monitoring, for example, can be very low cost with a high-impact return for the user. Perhaps the end user can do three services in-house but they need to outsource two to save money or time.”
Some of the main benefits to communicate to the customer when outsourcing certain security services include peace of mind; automatic technology upgrades and updates; new feature sets; worry-free maintenance and system health; and more. “Integrators need to make it clear when services are adding value to their customer’s business,” Schonfeld says. “You need to be ready to have that conversation about long-term cost savings and ROI. Those are the metrics that will get you conversation number two and shorten the sales cycle.”
Shifting From the “How” to the “Why” in Selling Managed Services
So much of my background comes from being an end user and working as an integrator. Managed services aren’t new for so many of us; but selling them can be challenging. Especially when you may be essentially trying to fit a square peg in a round hole, as many customers are used to buying technology, having it installed and then being left to “run” it.
One of the biggest things that must shift when a security integrator begins to offer managed services is the understanding of the customer and the challenges they face. The idea is shifting your thinking from the “how” (the product) to the “why” (the problem being solved). There are a few steps involved in this process:
Listen. Before you ever mention a product or service — and arguably, before you ever talk about what you have to offer — a critical part in reaching the end-user customer is by listening. Listen to their story, mission, values and how they do what they do. Ensure you can grasp the concept of their business and its model for success. This critical information can tell you so much more about their needs than any RFP can.
Understand the challenges. Once you have a firm grasp of who the customer is, begin asking questions. What are the biggest challenges they face as an organization overall? What about the challenges they have with security? Who makes the decisions? Do they have an IT department? How are changes made to technology or purchases made? When an end customer is ideally suited to a managed service, it usually means they don’t have a lot of internal support to keep up with updates, manage the amount of data housed on a network or oversee day-to-day operations.
Take a pause. While many integrators can make the determination that a customer would benefit from a managed service quickly, it’s important to take a pause and really consider the fit. Allow customers to ask questions about the use of managed services, the implications and the cost so that they can determine if this is a good fit for their organization.
Start the relationship. I shy away from the phrase ‘make the sale’ because that’s not what the goal is of the managed service sales process. Instead, the ongoing nature of the ‘sale’ is about forming a relationship and ensuring that both parties have a stake in the success of it. For the integrator, it’s critical to keep the end user happy with the level of service being provided, starting with the set-up of the service and all the way through ongoing support. For the end user, it’s important to communicate regularly to ensure their needs are being met as new features are added, updates are conducted, and any issues are addressed in a timely manner.
The new way of doing business is shifting thinking and taking what the end user’s challenges are (the WHY) and seeing if you can offer them the HOW to get it done. The way forward for the modern integrator offering a managed service is shifting focus to how the customer needs to be treated: as a true partner in every sense of the word. — Contributed by Nigel Waterton, CRO, Arcules
Before the coronavirus, Dan Dunkel, managing director – managed security services practice at PSA Security Network, Westminster, Colo., says that business was going well for so many security integrators that they just didn’t have time to look into ramping up services to create more recurring revenue. “They might have said, I need to do something, but we’re busy. [Now] they need to see which direction the puck is going and follow it. The integrators that follow the new technology and the new selling models are the smart ones and the ones that don’t will go away.”
“If I can fix customers’ sites remotely, for example, and not drive a truck out to fix a customer site, I reduce the cost to my business and anything I generate, I get to keep more of. All integrators should be thinking about that.” — Ken Francis, Eagle Eye Networks
Dunkel reports that one of PSA’s partner companies that sells cloud solutions told him that many of the integrators they have signed up in the last several months have been IT and other managed services providers, not necessarily security integrators. “Security integrators have got to be mindful that other integrators are cutting into the security integration market and reaching out to our providers,” he says. “Security integrators need to get in the door and have the conversations that will build equity and make their brands more valuable. They’ve got to change the mindset of selling and get in the habit of putting a return on investment on what they are selling, whether that be with predictive maintenance, cloud-based solutions or more.”
And value is what security services are all about: monetarily for the integrator and the long-term health of their business and for the end user to reap the benefits of a long-term partnership and solutions that can be maximized and maintained more efficiently and proactively over time. For a systems integrator to get on board, however, a fundamental mind shift from the top down is required.
“It really starts with the leadership being the agent of change,” says Paul Metzheiser, managing partner at TAMCO, Clearwater, Fla. The technology asset management company helps on the financial end of contracts to enable integrators to sell multi-year services contracts. “They have to make sure that security services are a part of the culture, the fabric of the company, and they have to consistently offer them. It’s a strategy to be proactive and if you’re waiting to find the person to sell services to, you will wait. You have to make it a part of every conversation to really see an increase.”
The benefits the end user sees from a service model are significant, and integrators should be sure to educate the customer on those benefits, says Steve Van Till, co-founder and CEO of Brivo, Bethesda, Md. “It’s a lot easier for integrators to sell security as a service than they may think,” he says, citing cloud solutions as a prime example. “Automatic feature updates are certainly a hallmark benefit,” he explains. “The financial profile is also much lower than a traditional on-prem fee structure that inevitably will include service of the system, dealing with cyber security, licensing fees and the hidden fees of lifetime maintenance of the equipment.”
Interface Security Systems, Earth City, Mo., ranked No. 26 on the 2020 Top Systems Integrators Report, has built up its services offerings over the past two and half decades as technology has changed and as they’ve seen security continue to migrate toward network connections. “Not every customer needs everything we offer; but even the basic levels of services add value to the customer with reliable service, and the expertise from us so that you don’t have to hire out and maintain systems yourself,” says Tom Hesterman, SVP products and solutions engineering at the company. “A bundled service is very predictable for the customer and they can see the value of being freed up to do other things.”
New Business Opportunities Fueled by Collaboration & Open Standards
The Internet of Things (IoT) is finding its intake into the security and safety industry. Developments around the IoT, if observed from a distance, carry along products and solutions with a closer fit for its eventual users. Connectivity makes life easier for users, leading to opportunities such as remote and predictive maintenance.
If one observes the security and safety market in parallel from the inside out, it becomes subject to another, impactful transformation: Traditional ‘pipeline’ business models where one supplier develops and produces an entire solution under one brand name is starting to shift toward an ecosystem economy where multiple stakeholders offer all the elements required to meet varying customer needs.
Finding ways to collaborate in an ecosystem economy requires manufacturers to consider new topics, such as: Which open standards can I use when developing hardware and software solutions? How are these standards developed and can they be influenced? Who manages and owns these standards and the underlying ecosystem?
The Open Security & Safety Alliance (OSSA) created an open ecosystem for the security and safety industry where everyone can join and participate. Its mission is to enhance trust and create new business opportunities by fueling innovation and agreeing on standards and common approaches. As a first step, OSSA published its Technology Stack for video security devices. It anchors OSSA’s philosophy and describes how to create a precise level of harmony across video security cameras. In more detail, OSSA envisions that the majority of the video security devices from different brands work by using common application programming interfaces (APIs); a common and vendor-agnostic operating system (OS); and by supporting one common IoT infrastructure to match supply and demand in the market. Video security manufacturers, software vendors and other relevant stakeholders also agree to implement OSSA standards and approaches defined for industry challenges such as data security, product performance and easy consumption of data across multiple devices.
This OSSA-approach is already being adopted and leads to the first “driven by OSSA” video security cameras from different brands. These cameras will enable security integrators to shop online for an array of vendor agnostic software apps, and select and upload to the camera those that best meet their client’s expectations.
The open ecosystem economy will fuel innovation by facilitating the industry to tap into the enormous data potential offered by the IoT. It is this data together with the OSSA-enabled connectivity that form ‘the new oil’ for our industry to empower new services. These transformations will allow for service-models like remote configuration, commissioning and maintenance. This will bring peace of mind for end users, while providing recurring revenue opportunities for security integrators. Further business potential for systems integrators and other stakeholders like application developers would be to develop their own software applications that can convert data into valuable and customer-specific insights, for example. Afterwards, all that remains is adding these apps to the cameras. — Contributed by Gijs van den Heuvel, Alliance Marketing Expert for Bosch Security Systems and Co-Marketing Committee Chair for the Open Security & Safety Alliance (OSSA)
Interface Security Systems offers a large variety of services, including many different types of video monitoring; doing business audits from its central command centers; managed access control, network security, recurring maintenance and service, and more.
Here are six key as-a-service opportunities in the security space that integrators should consider, according to experts:
“Pay attention to what your partners are charging you so you can, in turn, charge the customer adequately. The more aware you are of this, the more successful you will be.” — Jon Adams, DMP
- Wearables & Video
There are a number of opportunities that Hesterman sees for integrators and managed services providers in the service space right now, including wearables and video monitoring services.
“The most recent opportunity I see is with personal protection devices, remote escorts and panic buttons, whether on a wearable or mobile device,” Hesterman says. “They can help as you think about what’s going on with COVID-19. A lot of business has shifted from inside certain facilities to outside the facilities and businesses need to protect beyond the walls of their business for curbside delivery and parking lot protection and more.”
ParSecurity has been offering video monitoring services for a number of years to its business clients. If a customer is looking for specific video evidence or wants video from a certain timeframe, ParSecurity staff will sort through and find the footage the client is looking for and send it directly to them. Eslamlou of ParSecurity says that the recent anti-racism riots and protests around Minnesota and the country have put the company’s video monitoring and cloud services at center focus and demonstrated its value to many of their clients. “We had a few clients have their NVRs burned or ruined. The cloud demonstrated its importance right away. It’s almost a bulletproof way to still have that video evidence that is so important right now,” she said.
- Access Control
Another area where security services are ripe for opportunity, say those in the industry, is access control. “People are looking at their access control systems and saying, ‘Hey, we want to do more with this; can we check temperatures, or automate protocols?’ At the end of the day, if the integrator is educating the customer on those additional services, they become easier to sell,” says Eric Widlitz, vice president of North American sales, Vanderbilt Industries, Parsippany, N.J. “It’s about the mindset of believing you are a services provider, not a system installer; and the more training you do on that, the more successful you are going to be at the end of the day,” he says.
“Access control as a service offers a large upside,” says Chris Randall, director of sales, Americas, AMAG Technology, Hawthorne, Calif. The company offers several cloud-hosted services, including a hosted credential management tool. By offering hosted services from a trusted vendor partner, security integrators can reap the benefits of recurring revenue, without absorbing the infrastructure cost.
For security integrators that develop, support and host their own cloud environments, including managed access control, Randall says that they’ve got to consider the amount of time and effort it takes to maintain updates, patches and management. “No matter what you offer, you’ve got to be prepared to respond to that work once you sell it. If you are hosting on your own, you must be prepared to turn into a 24/7 business,” he says. But regardless, of the services or the model in which integrators offer those services, Randall says the result is all positive. “A significant benefit for the integrator is they are closer to the customer. They have the ability to create a stronger partnership with the end user customer and build that continuity. For the end user, they can use their operational budget versus a capital investment, and they can be less worried about things like maintenance, patches, updates and upgrades.”
Nolan Mondrow, CEO of RemoteLock, Denver, believes that security integrators need to be a one-stop shop of services over time. But a good place to start, he says, is with managed access control as a service and particularly with mobile credentials right now. Mobile credentials are trending, Mondrow says, with interest from multi-tenant facilities and other organizations that have different user types.
“Offerings such as access control as a service enable end users to benefit right away, but it’s incumbent upon the integrator to layer on other services to increase that RMR. Integrators have to dip their toe in the water now with something they are most capable of and then get good at billing and selling subscription services in general. Then they can start that expansion and it will be a natural progression,” Mondrow advises.
While Brad McMullen, general manager at 3xLOGIC, Fishers, Ind., sees a number of opportunities within security services right now, one of the biggest opportunities he sees is taking access control to the masses with cloud. “When you talk about cloud, it certainly allows the end user to scale at their own pace. They can expand or decrease storage, scale back or add services as they need them and don’t need them. … In other words, the cost effectiveness of flexibility is one of the biggest reasons to take a look,” McMullen says. He adds that with cloud access as a service, integrators can open up access control to more potential customers than ever before that would have previously shied away from on-prem deployments due to limited numbers of doors, but have a need for the real benefits of managed access on their premises. Examples are quick-serve restaurants, small office buildings or convenience stores.
“The biggest benefit to these locations is the visibility of who is entering or trying to enter and where. A cloud-based access as a service is a very affordable option to put on one or two doors without needing a heavy on-premise solution,” McMullen adds.
- Unified Central Platform
A centralized security platform is another area where those in the industry say there is opportunity for integrators to sell security as a service, in essence taking the management, maintenance and infrastructure of security off the end user’s plate, and allowing that to be just another operational expense, such as outsourcing IT. “A unified central security platform as a service already allows for increased situational awareness and allows integrators to link that data even further and make it useful for both security and other parts of a business,” says Nigel Waterton, chief revenue officer at Arcules, Irvine, Calif.
Security as a Service: Why, What & How?
Security as a service is more important now than ever.
Historically, the vast majority of security integrators have relied on project-based sales generating one-time revenue to fuel the success and growth of their businesses. Even those that have maintenance and support options rarely sell multiyear service contracts. The obvious implication of this sales model is that owners can only carry their business for as long as the one-time revenue can cover expenses. Then they absolutely must win that next sale. This often creates an unpredictable and stressful business environment with a constant pressure to sell.
Unfortunately, for those integrators that do not pay attention to today’s market drivers, this situation will only become more problematic. As the combination of communications, network infrastructure and security technologies continue to merge and evolve, there is a steady stream of new competition for integrators as more technology professionals sell security solutions.
In addition, our cultural transformation to a subscription-based economy has impacted everything, including how customers prefer to pay for and manage technology needs, like security systems. Ownership has lost its luster and customers are implementing solutions that allow them to use technology, to avoid the burdens and responsibilities of ownership, and to have flexibility to manage changing needs over time.
What is Security as a Service?
A security as-a-service solution combines the installation, technology equipment, software and other system components, along with integrator maintenance and support services, all under a simple use-based monthly payment for the customer. This approach addresses the challenges mentioned above in many ways, particularly by aligning with customer needs. In addition, it allows integrators to remove themselves from one time commodity sales, create real value, and generate recurring revenue through multiyear service commitments which will complement one-time sales.
How Can Integrators Adopt a Security as-a-Service Model?
Even for those security integrators that recognize the logic, or even the necessity, of making a pivot to this type of model, most are simply not sure how to do so. The first obvious challenge is how to manage their own upfront expense of installing solutions, but allowing customers to pay monthly. Some figure out how to leverage a financing partner to help with this piece of the puzzle yet still fall short of seeing any meaningful success.
The truth is, it is not difficult, but there are a handful of critical elements necessary for a security integrator to make the shift to an as-a-service model. The right type of financing to construct a monthly payment that addresses both customer and integrator needs is certainly one of those elements. However, marketing, sales training, and compensation, are among others that are absolutely crucial as well. — Contributed by Paul Metzheiser, managing partner at TAMCO
Waterton sees a future opportunity for service providers with aggregating system data more and more to increase value to the end user. “I think there will be an expectation for the service provider to be more predictive with the data and use it to anticipate problems or better understand the environment for safer schools, safer work environments. It’s a blue ocean out there,” he says.
- Remote maintenance
For installing companies, one of the low-hanging fruits that can be of huge benefit to both the end user and the integrator, is offering system health monitoring and maintenance agreements. And it helps, says Gary House, IT architect at integrator Dem360, Hagerstown, Md., to view yourself as a services-oriented company. “The concept of managed security makes sense. ‘Once a client, always a client’ should be how security companies should think about their customers,” he says.
In addition to managed IT services, Dem360 offers a host of electronic security systems and services, including monitoring, support and maintenance. House says Dem360 has been seeing the overlap between IT and security for a while and the opportunity to be that services provider of both to a client can be invaluable. “Through time, IT and security will continue to converge. Those two disciplines are moving together and you will be forced to adapt so you can demonstrate your experience and help bridge the gap,” he says.
While Dem360 has seen a lot of growth in the cannabis market for security solutions, he says that health checks and maintenance contracts are particularly suited services that meet a very significant need in that market. “In the cannabis space, there are all kinds of regulations and requirements; if you don’t rectify issues as they are happening, you could get your license pulled, for example, so it is super important in that space to do continued health checks and system status and maintain all that equipment to keep it patched, updated and running,” House says. “When we are managing for performance and health of the systems, we can react right away and most of the time quickly rectify any problems, often remotely.”
One of the benefits of a service model, particularly with managed cloud services, health checks and remote maintenance, is that it provides the opportunity to lessen the expense it takes to serve a customer (also called the total cost to serve), notes Ken Francis, president of Eagle Eye Networks, Austin, Texas. “If I can fix customers’ sites remotely, for example, and not drive a truck out to fix a customer site, I reduce the cost to my business and anything I generate, I get to keep more of. All integrators should be thinking about that,” he says.
- Network monitoring & cyber security
Along with maintenance agreements and health checks, network monitoring can be a valuable service to the end user and a meaningful way for security integrators to gain recurring revenue as well, while helping to bridge the gap a bit between security integrators and IT managed services providers. “There is a lot of value there,” says David Montoya, regional manager for business development in the Americas at Paessler AG, Chicago. “Network monitoring allows integrators to easily see everything on their clients’ networks and can detect issues such as a sudden spike in bandwidth, possible cyber-attack, or other issues before they become problematic.”
Montoya cautions, however, that selling offerings in a subscription model require careful consideration in terms of pricing. “That can be a main point of failure that we have seen,” he says. “You’ve got to put a price together in a fair way that’s not too high and not too low, allowing you to be profitable while the user understands exactly what it is they are paying for.”
A growing opportunity with services, says Rich Mellott, director of technology and product management at STANLEY Security, Fishers, Ind., is remote managed cyber security, network security protection and service assurance services. “Cyber protection and network protection are becoming more and more important. It’s a great value-add for those customers that are most vulnerable, particularly in the small to medium business market,” he says.
- Professional services & more
George Martinez, director of product management for cloud solutions, Global Security Products at Johnson Controls, Milwaukee, says they have seen an increase in professional services in several categories as more end users are looking to pay an integrator for specialized consultancy and advanced support specific to meeting their security and business objectives. Security integrators can resell the services provided by Johnson Controls to the customer, he says. “There are customers right now asking for database clean-ups and optimizations, cyber hardening and assistance with system migrations to cloud infrastructure. The integrator may not be well-versed in everything, so our professional services group can help them feel comfortable to deliver a total solution to the customer,” Martinez says.
Being able to offer a wide variety of services allows security integrators to customize their client’s services based on need, which is more successful (and more valuable) than pushing a single service or a one-size-fits-all approach, say the experts.
“We offer services to pretty much every vertical, but different verticals use different services in different ways,” says Brad Konkle, director of integrated solutions at STANLEY Security. For example, small businesses often want cyber security and cloud video and access services. In multi-tenant real estate, cloud access control is taking off because they don’t want that infrastructure on hand. In the enterprise space, there is still a lot of on-prem equipment but they need assurance services to make sure everything is working well. That’s why we have a wide variety of services.”
With cloud-based deployments, Konkle says that particularly with COVID-19, STANLEY has seen an increased interest in contact tracing and visitor management, and selling the solution as a cloud service gives the integrator and the end user the flexibility to implement those scenarios much more quickly and cost effectively. “With cloud-based deployments, we can get visitor management up and running quickly. It also allows the user to upscale and downscale their services as needed, really important during these times,” he adds.
Where to Begin
Making the jump to offer security services is not without headaches. Security integrators must consider compensation changes for salespeople, along with training and infrastructure to support any ongoing relationships that the integrator builds.
“Integrators will have to get used to monetizing some aspects of their sales over the period of a subscription rather than upon installation,” says John L. Moss, chief product officer, LenelS2, Palm Beach Gardens, Fla. In addition, when adding cloud services, he adds, “Learning how to analyze the safety of that data and how to explain it to the end user’s IT team are probably the most complex differences between services and traditional product implementations.”
One way to begin, says Aaron Heiner Simpson, president and CTO at Stone Security, Salt Lake City, Utah, ranked No. 23 on the 2020 Top Systems Integrators Report, is to focus on the solutions you are offering your customers. “That’s our job as an integrator,” he says. He adds that security integrators need to have infrastructure to support a service model and a commitment from the team involved. “It’s a shift in the mindset in how it is handled, educated and supported. The sales team needs to get comfortable selling that way and we’ve got to be experts at what we offer. If you can’t support the recurring model then it can be a nightmare to manage,” he says.
Heiner Simpson says that future-proofing the solution for the end user opens up the door for higher adoption rates of different services and features down the road. “For example, I think we will see more and more pay-as-you-go analytics, those simplified add-ons that an end user can turn on and off. There is a lot of value there and people will be willing to pay for them in an a la carte fashion.”
Internal compensation structure is an important consideration to be successful at offering security services, and so too is pricing structure for what the end user is paying and what the integrator is paying the vendor partner if applicable, says Jon Adams, executive director of business development at Digital Monitoring Products (DMP), Springfield, Mo. A lot of vendor companies may offer similar services and some features cost a fee and some are free, he says. For example, for a security dealer or integrator to access DMP’s dealer app and access panel info and manage user codes, that service is free to the integrator. If they set up services in the app, then the integrator pays a fee to DMP. “It’s important to know what it is [the integrator is paying for] and it’s important to be able to explain to the end user what it is they are paying for,” Adams says. “Pay attention to what your partners are charging you so you can, in turn, charge the customer adequately. The more aware you are of this, the more successful you will be.”
Adams says that with some service offerings, a tiered pricing approach to the end user can allow integrators to charge based on which features they enable or hide for the customer.
Another piece of advice when it comes to the sales process is to focus on the entire project or outcome as a service, says Nadia Boujenoui, vice president, customer experience at Genetec, Montreal. “We are seeing more movement away from one-time engagement and movement toward the outcome as a service, which may include long-term service contracts and service-level agreements that are really driven by a specific outcome to achieve a positive impact on the end user’s business,” she says. Boujenoui says that focus on the outcome and really having metrics and KPIs to meet along the way not only drives that partnership and facilitates a long-term relationship between the vendor, the systems integrator and the end user, but also allows the end user to benefit from the latest and greatest technology as it is released along the way.
In the end, many systems integrators are already customer-driven, says Fawzia Atcha, vice president of Imron Corp., Irvine, Calif. And the jump to offer a healthy host of services really does have that same drive in mind. “Software as a service was introduced many moons ago, but fast forward to the pandemic and that has been a catalyst to move in a new direction that I think will be a point of no return,” Atcha says. “In five years’ time, everything will be in the cloud or be a managed service in some form or another. It’s easier to make the customer happy, easier to provide a complete system and it makes the customer’s experience more efficient from womb to tomb.”
Eric Moe, director of sales at Milestone Systems, Portland, Ore., adds, “New customer acquisition is a huge effort. With a service model you stay engaged in the account and facilitate yourself as a trusted advisor and that’s the status you are really looking to maintain. It gives you a seat at the table, that input and ability to talk. And it allows you to speak to the external and internal security vulnerabilities and influences at their company and be there to evolve that process in a positive way.”