Back in April, Allied Universal, one of the top guard services providers in the country, formed its Allied Universal Technology Services division by acquiring super-regional security integrator Securadyne Systems, and then acquiring Shetler Security Services of Arizona and Midstate Security of Michigan.
With the moves, Allied Universal – like Securitas and G4S – is looking to become a “one-stop shop” for an end-user’s full security service needs. The move also seemed to signal a slight changing in the landscape of the security integration providers.
At GSX in September, I caught up with Securadyne founder Carey Boethel, who now serves as President of Allied Universal Technology Services, to talk about the company’s go-to-market strategy, the effects on the security integration market and much more:
Traditional guard service providers seem to be branching out because they see an opportunity…what are they seeing, and how is that changing the landscape of the integration market?
Boethel: Obviously it hasn't always been this way. We have seen in the past large guard companies divest their technology business, only then to re-enter the market through acquisition. I think today the strategy is relevant…in large part, a result of cloud, and the notion that today we can do things remotely that we couldn't do 10 years ago. Things like better compression algorithms, and video, and the pervasiveness of the cloud are enablers, and perhaps we are at a point where the enablers are in place, and the market is receptive. End-users haven't always been receptive to buying that way.
You mean one-stop shopping…
Today, (buying that way) is absolutely the case, but certainly every company and every end-user is going to rationalize that differently. In the enterprise space, which is where (we) operate primarily, it is very common; in fact, it is the norm, not the exception, where a customer understands and appreciates the virtues of having a service provider that can provide a number of different solutions.
We believe the best solutions are those that aren't conceived in a silo – guards or technology or investigations or risk assessment – but rather those that transcend them, and the service provider's ability to see all of that holistically and speak to that comprehensively is powerful.
Is that an adjustment for you personally…to look at executive protection and guarding as part of what you do?
It is a big one, both organizationally and personally. I started my career on the consulting side and was reared in multi-lines of business solutions, but most integrators aren’t, and certainly Securadyne Systems wasn't. We are learning that, but it is such a powerful message that is easy for our employees and the end-user to get their heads around.
This business model brings Niscayah to mind…what do you think was learned from them, and how could it be improved?
I tend to not to think back too far in history because the technology has become a game-changer. If you look back their organization was ready for it, but I'm not sure the underlying technologies were conducive to it. We've been monitoring video remotely for a long time, and we've been monitoring alarms even longer; but interactive services, moving voice and video and intelligence out to the edge, and equipping officers with technology – the digital officer – is a relatively new and totally disruptive idea.
Allied Universal is using its Heliaus technology to create that digital officer… does that technology tie into the integration side at all?
It does – it is a product that is all about analyzing inputs and prescribing actions. If you think about the inputs that you can put into an application like that, certainly there are observations by the security professional, like historical crime or weather conditions. We have all these inputs over here on the technology side that we can feed into that – along with intelligence, natural disaster tracking, historical crime and even video analytics. The AI engine in Heliaus is able to make sense of those things and correlate things.
Here’s an example: If there are a series of door forced opens, the AI can begin to identify those as anomalies, reprioritize post orders to put a guard in the presence of where that's happening during the time frames in which it’s happening. It learns and it becomes more prescriptive and more accurate over time as a result.
Are there other technologies out there that are enhancing the guard/integrator role or marrying the two?
Yeah, I think that intelligence is a big part of that – subscription-based intelligence tracking and analysis. It could be business or risk intelligence…any aspect of what the organization thinks is important for your operations.
Certainly like 98% of video is not relevant, but the 2% is critical. The goal is to get that 2% into the hands of a first responder or somebody on the outer edge of an organization’s response mechanism.
At Securadyne, you would sit down with a client and talk in a certain way…how has that changed?
Well, we have a lot more to offer to start with, so if we're doing it right, we are talking about the why behind the concept – that idea of the holistic view being so valuable and not siloed. As a pure-play integrator, we weren't equipped to have that conversation because we didn't have the other things to offer.
We have our Risk Advisory and Consulting Services (RACS), led by Ty Richmond, doing everything from risk assessments, to special deployments, to executive protection. So much of what happens in the integration space is about the now – and RACS enables us to kind of think longer-term and be strategic about it. It takes consulting to a whole new level – it is a broader, more meaningful conversation because it covers more aspects of what corporate security leaders care and worry about.
How has your vertical market reach changed?
We always have been and today very much believe in the notion of security technology helping ensure regulatory compliance – certainly in critical infrastructure applications. I think the difference today is that Allied Universal has opened up new verticals for us, perhaps verticals that as a standalone integrator weren't at the top of the priority list. The presence of guards in a vertical is conducive to cross-pollination. We are being pulled into those verticals, which are new for us, which is exciting.
What cutting-edge technologies have caught your eye that you see yourself possibly deploying more in the future?
We continue to focus on intelligent video – that's not new, but the applications are evolving. We are also enamored with the idea of frictionless access control, although that still needs some time.
Generally, AI and machine learning is on everybody's radar. Everybody's talking about it. I think it is real and meaningful.
Looking at the future of the integration market, the one-stop shop concept is seemingly always evolving. The traditional guard services firms are branching into technology services, do you think more manufacturers might jump into the services market?
I don't know of any service providers today who are migrating towards owning the technology, not to say that they can't or shouldn't co-exist. I think customers want separation between the manufacturer and the service provider because they want flexibility (to choose products).
I look at the service provider community, you've got some really good companies doing really good things and they've got really good partnerships in place with some of the best technologies in the world to shift. To pivot to owning that technology implies an entirely different business model – and we have seen examples in the past where that has not worked.
So with all the consolidation among integrators, what does the landscape of integration business look like in 5 or 10 years?
I think you will continue to see some pretty significant M&A activity among integration companies. There's a lot of capital out there – specifically a lot of private equity. Debt is cheap, so I would expect further consolidation, which on balance, is healthy.
Is there still room for regional integrators and startups?
Always. That just creates a healthy churn, and it’s innovative and nimble and I think it's good for the industry.
I would say that if you look back over the last five to eight years, some really good companies have come up, grown up and matured. There's always going to be the contractors, and then there's going to be the more innovative solutions providers, which are obviously more attractive – whether it be to an acquirer or to an end-user.
It is the ability to create solutions that drives margin – not access to the equipment or an ability to install it. When you can solve real problems, that's how the integrator makes their money, not in the resale of products or in the fulfillment of labor.
So if decide to quit being an editor and opened my own integration firm, how am I supposed to compete with companies like Allied Universal or Convergint?
I think the scale is important. As much as anything it is about position. If you wanted to go out and open your own systems integration firm, I'm not sure the best strategy would be chasing multi-national Fortune 100 accounts and competing against those who have hundreds of branches…but could you create value in a specific segment in your market or your geographic area? Absolutely.
It doesn't have to be a vertical – you could slice that market any way you want. Focus is important – you cannot compete with the scale and the economies of scale, and in some respects, the thought leadership, extensive business development, the market specialty groups – but at the end of the day, it is a service business, and if you can provide a good service to your customer, you can do well. It is about positioning and prioritization and being very selective about when you compete and who you are going to compete with.
It's still a great time to be in the industry, and it is a great time to be at Allied Universal too.
Paul Rothman is Editor-in-Chief of Security Business magazine. Email him at [email protected].
