Integration and Intelligence Issues: FOR INTEGRATORs, DEMAND IS PRESENT BUT TECH MAY NOT BE PRACTICAL
January 1, 2007
Trans-Alarm, a subsidiary of Trans-American Security Services LLC is a 40-year-old company, based in Burnsville, Minn., initially focused on alarm systems. Twenty-five years ago, the company branched out into integrating systems such as access control and video surveillance â€” and that work now represents a substantial part of the company’s revenue. Trans-Alarm’s chief executive officer, Terry Mullett, talked with SDM about today’s technology, and business opportunities and challenges.
SDM: What percentage of security systems that you sell is integrated and what types of systems are customers integrating?
Mullett: At least 50 percent are integrated. The typical integrated system scenario usually starts with a request for access control. We would begin with that, and then tie it to an intrusion system that would send an alarm to their access head-end or dual report to our central alarm monitoring station. Additionally, we usually tie the access control to a video system. The fourth system would be fire.
SDM: Who are your typical customers?
Mullett: We try to get into a vertical market, then expand on good references. One of the strong beginning markets for us was commercial property management. Some additional markets that have grown are manufacturing â€” particularly food â€” and healthcare, including hospitals and multi-site clinics.
SDM: What are your biggest challenges today?
Mullett: One is the rate of the evolution of technology. Many times notification of a new technology reaches the marketplace through advertising or trade journals, but integrating it is sometimes difficult because of the lack of standards. As a result, you have demand, but the technology may not be practical. We would consider that bleeding edge, not leading edge. Our challenge is to satisfy the customer’s perceived demand, investigate the practicality of it and proceed at a better, possibly slower, pace.
As an example, remote video services can be challenging. In this arena, you have to be careful what those services are. Are we just backing up storage at another site or are we going to dispatch private security or public authorities based on a video alarm?
SDM: Can you give an example of something you would consider leading edge, rather than bleeding edge?
Mullett: IP cameras and storage devices and alarm monitoring over the Internet. But backing these up is important. We back up Internet-based alarm systems with cellular communicators. The savings to the customer is in the elimination of dedicated phone lines. Also, large multi-site corporations with wide area networks already have a large pipe from site to site. There’s capacity. As long as that network and the Internet are up, you have higher speed transmission of video signals to monitoring or storage devices or the alarm company.
SDM : Are your margins on integrated jobs increasing, decreasing or staying the same?
Mullett: They’re slightly decreasing. More security providers are getting better at marketing and sales. We have more competitors coming from areas that are not traditionally in security, for example, electrical contractors. On new construction, they have a business model channeled through the bidding process to general contractors and construction management. The challenge for them is related to service and maintenance after the sale.
In some cases we’ve come up with financial options to differentiate ourselves. We offer operating leases so the customer doesn’t need to own the system; we own it. The advantage to them is if they don’t have a capital expenditure budget, they may have an annual expense budget that can accommodate a lease. The customer that’s attracted to that kind of service understands the components that go into the leased charge and we’re able to put together a monthly charge that fits their budget.