Commanding the Intersection
If Adesta did not exist, “there wouldn’t be a company offering a truly converged solution, along with the strong project management capabilities and superior service Adesta can offer,” says Adesta’s president, Bob Sommerfeld. “Our customers would miss having a partner that could envision, design and build systems to meet all their needs â€” regardless of the size, complexity or location of their project.”
WHO IS ADESTA?Some may ask how this relatively new company ascended so rapidly in the marketplace. In 2004, Adesta ranked No. 42 on SDM’s Top Systems Integrators Report, based on its 2003 revenues of $10.9 million (the portion from integrated security systems; total company revenue was $20 million). This year Adesta ranked as the 16th largest systems integrator in the United States, based on 2007 revenues of $53 million for security-related work. (Total company revenue was $78 million.)
Sommerfeld estimates 2008 revenue will land at more than $90 million, with approximately $60 million being security-related. It’s amazing growth for an enterprise that started out just five years ago with 150 employees.
Adesta got its start 20 years ago as Kiewit Network Technologies, in Omaha, Neb. In 1992 the company became MFS Network Technologies, and then changed its name to Adesta in 2002, when a financial partnership of Adesta management and McCarthy Group acquired the assets and employees of the company.
The original partnership still exists. Equity partner McCarthy Group currently owns a majority of Adesta, and a group of employees has minority interest. But gradually the percentages of ownership have shifted, Sommerfeld explains. “One of our goals was to have an essentially employee-owned company, so we continue to reduce our financial partner’s ownership position and replace it with employee ownership,” he says. “Our philosophy is that employees that are owners are more engaged employees. In addition to that, our employees get to share in the growth and success of the company.”
Today, Adesta is more than 400 people strong. “We have hired, trained, assimilated and integrated a large number of people in a short time,” Sommerfeld says. Professional career opportunities range from sales, marketing, engineering, estimating, project management, and construction management to accounting and other positions. Employees are offered competitive wages and benefits that even include tuition reimbursement, professional certification reimbursement and health club membership reimbursement.
Not only do members of the management team â€” but all of the employees â€” espouse the Adesta promise: Adesta employees strive to deliver innovation and integrity in everything they do. In planning, design, engineering, technology selection, customer service, safety and more, Adesta pushes expectations to give you safer, more effective and more affordable infrastructure for today and years to come.
THE INFRASTRUCTUREThe word that stands out prominently in that promise is “infrastructure.” It stems from the core of what Adesta offers, and how its operations are structured.
Adesta is not just about security. It operates three major divisions â€” Communications, Security and Broadband â€” and increasingly there is crossover, or convergence, among these divisions. “We were doing converging before convergence became a buzzword,” Sommerfeld relates.
The Communications division, comprised of regional operations that do maintenance and monitoring for communications networks, offers fiber optic infrastructure and ITS systems. The Broadband division is focused on two areas: wireless and fiber to the home or to the premises. The Security division focuses on critical infrastructure, which includes a complete offering of integrated physical security services.
“Having telecommunications and broadband capabilities available to us organically provides us with an incredible advantage with respect to competitiveness and our ability to successfully manage the deployment of large-scale security system projects,” says Tom Gillette, vice president of security operations.
“We are not a telecommunications firm doing security work on the side,” Gillette stresses. “We bring a vast amount of expertise to the table in all three of our core competencies.”
Adesta has deployed more than two million fiber miles in more than 140 metropolitan and rural areas and completed more than 1,000 large scale electronic security projects in the United States, Europe, Asia, Central America, and the Middle East.
“More and more we will find projects â€” particularly on the security side â€” that have significant communications and IT infrastructure that are components of that project,” Sommerfeld describes. “The primary purpose overriding that project might be security-related, but the technology and infrastructure that the applications ride on might be fiber or wireless. It’s not uncommon for us to have a security project, but provide supplemental staffing and engineering talent from the other two divisions to implement a wireless or fiber network to go with it.
“On the other hand, we also may have a communications customer who also has security requirements. That is how we share resources. We feel we have the talent and capability to do an all-encompassing project that includes the data communications and security applications,” he says.
When it comes to capability, Adesta’s entire team certainly has the experience and qualifications to “walk the walk.” The 10-person management team â€” which includes experienced professionals from the telecommunications, construction, and security industries â€” has 228 combined years of industry experience.
“Having related experts in Adesta’s core business creates efficiencies in cost, time and overall value. These experts understand turnkey projects and construction management, therefore, minimizing risk and providing expected results,” relates Rob Hile, Adesta’s vice president of business development.
The technical staff holds a vast array of degrees and certifications that cover network technology (CompTIA, Microsoft, CISSP, Cisco and Novell), project management, and hundreds of manufacturer-specific courses.
BUILT FOR CONVERGENCEThe convergence element of the business begins with Adesta’s name. It comes from the Latin root word, adeo, the derivatives of which involve “going to” or “coming from” somewhere â€” and also “coming together.”
Another way to look at how the company embodies convergence is through the meaning of its value proposition: Our competitive edge continues to be where our customers’ communication and security requirements intersect.
“Adesta is unique in that we can provide our customers with expertise in both areas of the solutions equation â€” security and communication,” Hile describes. “As we move forward, we see more and more customers realizing the need for their security systems to have a reliable communications backbone at its core in order to maximize efficiency and reliability. Our company has the unique ability to understand the infrastructure requirements, applicable new technologies, and the functional cost and time efficiencies that must be considered when successfully installing two complex, yet diverse networks simultaneously.”
Convergence within Adesta’s security division takes the form of unique, turnkey solutions that are “innovative, flexible and cost-efficient,” Hile notes. “Our customers are primarily large in scale and complexity with multiple facilities or large areas of land or water to secure. Our primary target markets are ports and waterways, transportation, energy, public safety; and federal, state and local government.”
As examples, Adesta has done security work recently for two California ports â€” Long Beach and Los Angeles. The Port of Los Angeles project was performed as two separate contracts with a combined value of more than $10 million.
“The ports were funded by homeland security. They are some of the largest ports in the world in terms of trade, commerce and container shipments. Those projects are all-encompassing,” Sommerfeld says. “They have fiber backbones and wireless networks. They include access control, video surveillance, video analytics, intrusion detection, radar and sonar, along with command and control and incident management.
“They cover nearly all of the current security-related technologies, which further demonstrates how broad our integration capabilities are â€” to take that many separate and complex systems of their own and integrate it into what is one large security network,” Sommerfeld says.
Adesta was one of the first systems integration companies to earn the prominent certification and designation of Qualified Anti-Terrorism Technology under the Support Anti-terrorism by Fostering Effective Technologies (SAFETY) Act of 2002 for its design, engineering, construction, integration, maintenance and training services.
As its secondary market, Adesta strategically targets large commercial security opportunities on a regional basis, as well as education and public/private transportation markets. The firm recently announced a contract worth nearly $6 million for an urban transit security project with the San Francisco Bay Area Rapid Transit District (BART). The venture involves the installation of strategically located cameras, which will be connected to BART’s existing communications infrastructure. “This project highlights our capabilities as a truly converged systems integrator with both telecommunications and physical security capabilities,” Hile says.
Adesta’s project capabilities are handled by its 12 regional offices in United States, located in Albany, N.Y.; Middletown, Conn.; South Plainfield, N.J.; Atlanta; Huntsville, Ala.; Chicago; Omaha, Neb.; Houston; Denver; Oakland, Calif.; and Los Angeles. In late September, Adesta celebrated the grand opening of its new Washington D.C. regional office, located in Springfield, Va.
Each of these regional offices are centers of expertise, staffed by professionals who take great pride in creating the best solutions for their customers. “I have been in this business for over 30 years and have never seen the level of esprit de corps and pride displayed by the employees of this firm,” Gillette says. “This environment fosters a mindset that only the highest level of professionalism and the provision of quality products and services is acceptable.”
ELEMENTS OF PROFITDeveloping robust customer relationships doesn’t happen automatically. Adesta’s staff works to develop them at every level. Adesta’s approach to client services â€” having management involvement, empowered project teams, consistent and effective communication, as well as superior technical capabilities â€” have translated into a stable, profitable organization.
“We had the most profitable year in our company’s history in 2007. We recorded earnings of approximately $4.2 million on revenue of approximately $78 million. We continued to experience strong growth and profit for the fifth consecutive year,” says Hile.
Although Sommerfeld doesn’t consider that ratio “spectacularly high” from a benchmarking point of view, he says it is a sign of Adesta’s continual financial improvement. “Our profit ratios have improved significantly year over year. We have no debt, we have no debt service. We have funded all of our growth organically. So a lot of what would have been profit dollars have been put back into the company.
“We’ve opened new offices in LA, Houston, and Washington D.C., and made an acquisition of a small company in Atlanta, and thereby opened that office. Those were all funded out of operating income dollars,” he says. “We’ve been careful and fortunate not to acquire any debt whatsoever, which is huge in today’s financial environment. We aren’t impacted by a credit crunch, and our operating capital is all cash.”
To be in this position, Sommerfeld believes, is a result of the integrator’s structured operations as well as its generally conservative outlook.
“I think the advantages that we have in that regard at least primarily revolve around proven processes, procedures and project management techniques. We’re very structured, standardized and consistent in the way we do things. Every project is meticulously planned and scheduled, and one of the things we do particularly well is empower our project management teams to make decisions at the job level; while at the same time we have a streamlined senior management team that is involved and aware of almost every aspect of what’s going on within the different business units as well.”
Another component of its efficiency, Sommerfeld says, is Adesta’s dedicated department that manages conceptual designs, proposals and cost estimates, “so we have a meticulously planned project with a schedule and a budget from day one. We have a sound design and a very good estimate of what the project is going to cost, that I think is superior to the way some companies develop their project cost estimates.”
2009 & BEYONDThis strong financial and operational position makes it possible for Adesta to continue serving the market in the way it has been successful for them. Hile says Adesta’s strategic focus for the near-term is on critical infrastructure markets like ports and waterways; petrochemical, natural gas pipeline and LNG facilities; public and private utilities including water treatment facilities; and Fortune 500 commercial customers.
“Overall, we will continue to seek markets and customers who need our expertise in both communications infrastructure and physical security,” Hile describes.
Long-range strategic plans include a continued focus on homeland security-funded projects. Adesta also plans to pursue a renewed focus on the telecommunications market for fiber optic networks that can be used for surveillance and other security-related technologies.
“We will continue to look at possible acquisition targets that can be integrated into our existing portfolio of service offerings. In addition, as a product-agnostic systems integrator, we will focus on new and emerging technology offerings that will enable us to grow our existing customer base even further,” Hile says.
Some of the ways in which Adesta outshines its competitors, Sommerfeld believes, are subtle. For example, ethical behavior and integrity in relationships are easy to claim at the outset of any business venture, but can be more difficult to sustain over time. Adesta has managed to sustain these qualities.
“If we tell a customer we’re going to do something, then we’re going to do it,” says the Iowa native. “Flashback to the comment about the difficulties of making these complex integrated systems work. But we never give up; we keep at it until we make it work,” Sommerfeld says.
“I think our customers like to work with us â€” I think we’re easy to work with,” he describes. “We don’t make our money or perform on our projects with a “change-order attitude;” we don’t nickel and dime our customers. We treat our customers like partners.”
SIDEBAR: Featured ProjectWhat began as a pilot project between Adesta and American Electric Power (AEP) developed into a full-spectrum, unique partnership. American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than five million customers in 11 states.
When AEP began researching security solution options in 2005, they sought out an experienced systems integrator who understood the products, solutions, how to implement them and how to realize the best value in doing so.
Adesta was chosen to engineer, design and install upgrades to AEP’s physical security measures and intrusion detection systems at several sites. Today Adesta operates as an AEP integration partner by advising on and implementing ongoing security improvements, enhancements and maintenance.
Adesta was recently awarded a contract from AEP to consolidate all security systems with a centralized command-and-control application. This is an expansion of a contract that originated between the two companies in 2005. The current project contains four scopes: critical substation security, enterprise-wide consolidated command and control, ongoing video and intrusion detection system installations, and system-wide preventative and emergency maintenance for all AEP video and intrusion detection system work.
Upon completion, AEP will have perimeter security and assessment capability and a consolidated situational awareness command-and-control system for all security information across the entire organization, and will be able to manage responses on a regional and national basis.