This article originally appeared in the November 2023 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
As a journalist covering the security integration industry while roaming the show floor at GSX in Dallas six weeks ago, I found myself pushing a narrative. But really, I was looking for perspective. Are security integration business models truly changing, or is it simply noise?
There was no shortage of opinions as I asked around, and the managed services model was certainly one of the hottest topics on the show floor. As I spoke to vendors and integrators alike, I don’t think there was a person I didn’t speak to about it in some way.
There isn’t enough space here to cover it all, but here’s a quick sampling:
Eagle Eye Networks President Ken Francis has long been a proponent of the cloud and managed services, and he told me he recently took on a role as the new chair of the Security Industry Association’s Executive Advisory Board to help integrators and manufacturers navigate these changes to business models.
“Changes in the industry right now are forcing integrators to need to change the model of their business, and if they don’t, they are going to antiquate themselves – it is transform or die,” Francis said. “You can either say I don’t care about the cloud, or you can ask what you need to know to take advantage of it. We believe that [Eagle Eye and Brivo] are doing a lot to contribute, but many manufacturers in the industry are not following quickly enough in helping the integrator cross that chasm.”
Fresh off his company’s unification with STANLEY, Securitas Technology Global President Tony Byerly reminded me that the managed services model has always been a key component of the company, dating all the way back to the old Diebold days. That said, he stressed that the common acceptance of managed services in the IT world has led to more favorable reception in security.
“Of course, it depends on the user’s appetite and interest, but with the advancements in security protocols, [end-users] are much more comfortable with [managed service] models. If you think about the IT world, they got comfortable with this model. There are a lot of things that play into what the right plan is for a customer at the right time; but, in general, most people, even if they are not already starting to make the move, there is a lot of interest in understanding what the migration path would be.”
Still, many integrators are not ready to make the shift. Ryan Schonfeld, the founder and CEO of HiveWatch, highlighted some of the difficulties of integrators selling managed services.
“The integrator still has some work to do on evolving their models to support managed services,” he said. “The challenge that we’ve seen historically with the integrators’ recurring models is that their incentive structure for the sales folks are still tied to project-based sales. RMR should be what every integrator wants, because it helps their valuation and really, it is money while you sleep. But the structures that they put in place for salespeople don’t incentivize them to focus on selling RMR…so they just keep selling project-based deals because they [would raher] get paid right now.”
Paul Rothman is Editor-in-Chief of Security Business magazine. Email him your comments and questions at [email protected]. Access the current issue, full archives and apply for a free subscription at www.securitybusinessmag.com.
