One of SDM's subscribers, self-described as a systems integrator with alarm company roots, claims to have moved away from the traditional alarm system market. Yet having “grown up” on a business model of recurring monthly revenue, this company’s managers continue to seek opportunities for collecting RMR from non-traditional sources, such as remotely managing access control systems for its small commercial and retail accounts.

Business models for the most traditional security dealers – even for systems integrators – are evolving, in part due to the changing nature of today’s customer. The residential alarm market – still primarily event-driven as families are touched by crime – is perhaps the simplest to understand. Every other market segment is more complex and layered.

Some say it’s not really a security need that drives buyers today, but a risk mitigation need – the necessity to limit liability and its associated costs. Take, for example, a grocery store that must pay tens of thousands of dollars into an escrow account each time it is charged with a “slip-and-fall” incident. A chain of such stores may quickly see a return on its investment with a comprehensive video recording solution.

Does the nature of risk mitigation mean that a security company is actually something different than a security company? Not as long as the incentive exists to provide a solution to a need.

Writing this page from the conference called SecurityXchange, it’s plain to see that it doesn’t seem to matter what segment of the market you tag or even how you tag yourself, it’s finding clever solutions for your existing clients that matters most. After all, you’ve spent long hours and great effort to earn your customers’ trust and reliance on your expertise, so don’t stop inventing your business now.

At SecurityXchange, a small but highly prequalified group of vendors are presented with an opportunity for meeting one-on-one, over a three-day period, with a small group of security integrators. Some of the most advanced technology is discussed and demonstrated.

Here, a commercial systems integrator considers taking on a DVR product line aimed at the residential market for its handful of residential accounts. The system is uncomplicated and the few customers this integrator has want an easy solution to remotely monitor their homes.

An alarm dealer considers selling a new IP-based access control system for the middle to low-end of the market, because it gives his clients an easy way to manage their fast-food or retail stores, and provides a way for him to charge a monthly fee.

In the old world, an alarm dealer was a guy who sold burglar alarm systems and collected a monthly monitoring fee. A systems integrator was an organization that only handled cards and cameras. But in the new realm of security, limiting liability is equally as important as protecting people and property; recurring revenue isn’t the sole purview of the alarm dealer; and the greatest progress will come from security companies that don’t limit themselves to conventional business models and technologies.

IN THIS ISSUE

SDM profiles the superstars of central stations, the recipients of the inaugural Central Station Excellence Awards, developed by the Central Station Alarm Association (CSAA) Board of Directors and sponsored by SDM Magazine. The article begins on Page 37.

ONLINE

SDM’s 2006 Guide to Financial Services online lists more than 30 companies that offer various types of capital and financing. Just go to www.sdmmag.com and click on it on the left under the heading “Guides.”