It may sound cliché, but there has perhaps never been a more challenging time to be a security manufacturer. From increased industry consolidation and pricing pressures to the evolution of security technology itself – transitioning from independent systems and devices to interconnected solutions – today’s manufacturers must address a wide range of potential threats to their businesses in order to remain competitive.
All this also comes at a time when the industry continues to see sustained growth. According to Memoori’s most recent report on the physical security business, the combined market for video surveillance, access control and intrusion detection products has grown at a compound annual growth rate (CAGR) of 6.41 percent over the last eight years. In addition, the UK-based research firm predicts that the market will reach just over $41 billion in 2022, growing at a CAGR of 7.2 percent. So while the industry confronts numerous challenges, there remain tremendous opportunities.
One executive who has lived through the security market’s ebbs and flows is Mitchell Kane, President of Vanderbilt. Comprised of the former access control company Geoffrey Industries, in addition to the Schlage SMS access control and video systems division of Ingersoll Rand, Vanderbilt itself is a byproduct of industry consolidation. We recently caught up with Kane to discuss how he’s seen the access control industry evolve during his career that spans four decades in the market and where it will go from here.
Q: How did you get your start in security and how has your career evolved through the years?
Kane: I fell into the industry in the 1970s, and it was less strategic in nature than it is today. At the time, there was an opportunity to install CCTV cameras, but that small start has led to a 40-year career in this industry. Over the years, I've served as a partner of Integrated Access Systems/Geoffrey Industries, which was later acquired by Ingersoll Rand. Then, in 2012, Vanderbilt was formed as an access control/video surveillance business unit spin-off from Ingersoll Rand and today, I serve as president of the company.
Q: In parallel with your career, how have you seen the industry itself grow and evolve during the same time period? Has your impression of the electronic access control market changed during that span?
Kane: I have seen many, many changes over the years but what I have found to be most challenging – and exciting – was the shift from hardware to software. When I started in the industry, there were few security consultants and “systems integration” firms were a rarity. Most security companies installed fire and burglar alarm systems; CCTV was an emerging technology. Banks still used film cameras. The market was basically hardware-centric. But as systems became more critical to business operations, clients developed a need to be able to integrate one system with another (CCTV, alarm, access control).
Our company was strategic in adapting and commercializing integrated systems. We engineered offerings where hardware and software were integrated to create a custom security solution to meet our clients' specific needs. In the early days, we adapted this approach, which proved to be a huge differentiator. Of course, now software holds all the value in today’s marketplace and integration has become much easier through collaboration and standards. We’ve come a long way in the last 30 years and it’s benefited the client and the integration community greatly.
Q: M&A within the industry has been a big topic of late. What kind of challenges and opportunities does this increased corporate maneuvering present to the industry as a whole?
Kane: I don't think I can speak for other businesses, but for our business, the acquisitions that ACRE has made have made sense to the overall strategic goal of the company. As far as challenges, as with any M&A activity, there's always a challenge to continue to deliver superior solutions even in the midst of change within an organization. Brand building can also be a challenge, as Vanderbilt has undergone several reiterations over the years with the addition of the Siemens Security Products business, as well as Access Control Technologies (ACT). We've done well with taking the core of each of these businesses and adding it to our repertoire in the various regions we serve, but there are always challenges involved. The opportunities lie in the expansion of our reach to new and emerging markets across the globe.
Q: How have your own expectations of company growth and product expansion been met or changed since Vanderbilt came under the ACRE umbrella and how has the parent organization’s own acquisitions and divestitures impacted your business?
Kane: As I mentioned previously, Vanderbilt has been in a position to really expand its reach with the addition of ACT and Siemens. In Europe, the addition of Siemens really opened us up to the intrusion world, which isn't a focus in the North American market. The addition of ACT to the Vanderbilt fold allowed us to venture into the world of cloud-based solutions, which was a strategic move for us and allowed us to round out our access control offering. The addition of ComNet and divestiture of Mercury Security were also part of a vision that Joe Grillo had for the ACRE company and the opportunities presented themselves at the right time. Working with Mercury technology allowed Vanderbilt to adopt many of the open-platform initiatives for which they became known, and we are only just beginning in our relationship with ComNet.
Q: What technologies and trends do you believe will influence the market the most over the next decade?
Kane: As an industry, I think the future rests on convergence, and I’m not talking about technology convergence here. I think we need to go beyond that concept and truly think about how our customers need to collaborate internally to combat today’s security and business challenges. If you look at the access control market, it has experienced a number of integrations in areas such as video surveillance and video management software in an effort to better protect businesses and enterprise applications.
But nowhere is the integration scope more progressive than the collaboration between those that set and manage corporate network policy (i.e. IT executives) and security teams, particularly in regard to access control. Helping our customers shift access control from a siloed system within the security department to one that is a collaboration between network security, trained IT specialists and CIOs positions the overall organization to offer valuable input when it comes to security decisions. This also helps to mitigate any potential cybersecurity threats. We are all aware that the cybersecurity of an access control product or technology is crucial. The growing use of the Internet of Things (IoT) comes with a heightened concern for cyber threats, and IT professionals can make certain that proper data safety protocols are being followed.
Q: As you mentioned, cybersecurity has obviously been a growing concern across the board in the industry. Do you believe the industry and the access control sector, in particular, has done an adequate job of addressing the threats posed to physical security systems? What more needs to be done?
Kane: It really comes down to individual manufacturers and the efforts they put in from day one of product development that will truly make a difference in protecting organizations from the threat of a cybersecurity breach. Vanderbilt has used this approach in the development and introduction of new connected access control and intrusion devices, and we will continue to do so, as it has allowed us to find ways to ensure the protection of data being collected. As an industry, I believe there needs to be more focus on streamlining cybersecurity standards across access control platforms and offering more guidance to manufacturers on how to achieve the highest levels of protection.
Q: Taking all of these various technology and business trends into consideration, how do you believe the access control market is going to look in the future? Do you expect we will have about the same number of vendors and similar type offerings in the near-term or do you see big changes ahead?
Kane: I believe cloud-based solutions are gaining a significant increase in acceptability. In 2014, IHS Markit forecasted that the Access-Control-as-a-Service market would top $530 million by 2018 and $1.8 billion by 2025. Users are becoming more comfortable with the idea of the cloud, and therefore, cloud-based products are now more widely accepted across the security industry. This model offers significant benefits as users can see real benefit from not having to worry about servers or locally installed software, and access control expenditures can shift from Capex to Opex. Vanderbilt believed in the future of this technology, acquiring Access Control Technologies (ACT) to bring a cloud-based offering to our portfolio and we are now delivering this platform to the U.S. market.
