Insider News & Business: December 2012
The effects of Hurricane Sandy, later evolving into Superstorm Sandy, were severe for the security industry as they were for everyone. The combination of blackouts that left alarm systems to rely on backup batteries, the interminable lines at gas stations in New York and New Jersey that put service vehicles out of commission and the strain on cell towers and other communications conspired to make being a security dealer on the East Coast tougher than usual.
As SDM spoke with East Coast dealers affected by the storm, they all seemed to agree that this may have been the worst storm they’ve seen but it won’t be the last. And that learning from their own experiences as well as their peers’ could make all the difference in the future.
Because the severity of the storm was well-publicized and because central stations continually monitor the weather, security companies on the East Coast were able to take measures to prepare for the elevated alarm volumes that were to come in. Companies such as American Alarm, Arlington, Mass., Electronix Systems, Huntington Sta., N.Y., Supreme Security Systems, Union, N.J., Vintage Security, Jessup, Md., and Vision Monitoring, Garden City, N.Y. made sure days in advance to adjust staff schedules and take a worst-case scenario approach to staffing.
Dave Young, vice president of Vision Monitoring, commented, “In a normal week our central station would receive 30,000 signals and operators would handle 7,000. After Sandy struck our central station had 130,000 signals and operators handled 32,000… We housed our staff onsite and made sure that the next shift could get into work. We had overlapping of shifts just in case conditions changed to avoid any interruptions. We also had carpooling plans and were assessing where employees lived depending on the more heavily damaged areas.”
In a crisis situation where power is wiped out in large geographic areas during a storm, the vast majority, if not 100 percent, of signals and calls going into a central station or alarm company are due to AC power loss that either causes the system to shut down completely or go into battery backup mode. The how-do-I-get-the-panel-to-stop-beeping calls go on for days and visiting residential customers to replace backup batteries every few days, or hours in some cases, is not a feasible option when there is no accurate expectation of when power will be restored, dealers said.
Jeff Smith, commercial division manager, Vintage Security, shared that, “Power grids in Maryland are up there with the worst ones in the United States.” With 16,000 customers, the phones rang nonstop 24/7 and the company had its technicians on the phone helping customers silence their alarms. The company made use of its social media platform by posting links and instructions on how to silence alarms on Facebook and Twitter.
Especially in the case of commercial accounts such as jewelry stores, an extended period without power and without a security system can result in major loss. Electronix Security worked with commercial customers by providing patrol and guard tours at regular intervals. “We picked up an attempted break-in at a jewelry store,” said Fred Leonardo, president.
Robert Bitton, chief executive officer of Supreme Security Systems, said some commercial customers requested extra batteries they could replace themselves. “The lesson is that on certain high-risk, key accounts, we may want to offer battery backup of greater power.”
Michael Flink, president of ADI, Melville, N.Y., said the company sold every battery it had on the East Coast, though it quickly replenished inventory coming from its Texas warehouse. Some of the larger ADI customers were placing orders for upwards of 10,000 batteries. Flink reflected that the East Coast has a comparatively higher security system penetration rate than the rest of the country, and the number of affected systems was astronomical.
Michael Ash, president at Garden State Fire & Security Alarm Co., Matawan, N.J. was faced with a blackout at his facility that lasted a week. During that time, the company ran on generators and relied on cell phones for communication and for providing Internet through hot spots. The company’s alarm monitoring is done through third-party central station, SentryNet, located in Pensacola, Fla., and that allowed the company to continue servicing its customers. Because phones and networks were down at the company headquarters, the lines were forwarded to SentryNet. Garden State would then call the central station on cell phones and pick up 10 or 15 service calls at a time.
Fuel shortages and lines 100 cars long were a big issue for alarm dealers who needed to provide fuel for their service vehicles. Bitton related that his technicians could not afford to sit the three- to five-hour lines at the gas stations nearby. “We went to Home Depot and bought all of their little red gas cans. And then we sent a truck 40 miles west and filled up all those cans to pour them into our trucks.”
Electronix Security, said Leonardo, had an inside track on when and where gas deliveries were made to the stations to avoid even longer waits or fruitless trips. The other issue, Leonardo added, is that “you needed cash [to get fuel] because the internet service at the local gas stations were down and they couldn’t process credit cards.”
At the time of writing in late November, these companies and hundreds of others were hard at work helping their customers recover full use of their security systems, assessing varying degrees of damage on properties and working with insurance companies to estimate losses. — By Sabrina Gasulla, Associate Editor
ADI, Melville, N.Y., launched its new credit card for customers with a promotion of 180 days without interest. ADI has been “working on this forever,” said ADI president, Michael Flink. The company previously offered an open account for its customers with 30-day turns, but it had been looking to be able to offer a line of credit that allowed customers to take advantage of sales and more importantly, help with cash flow on projects with delayed payment.
The card offers 180 days or six months deferred interest with a minimum purchase of $2,500. After the six months, 23.99 percent APR applies.
ADI recognized that because of the economic crisis, funding from banks to small businesses had been more than difficult to come by, Flink said. The company learned from customers that the same cards they were using to make purchases at ADI, they also used to fuel their vehicles and pay for other materials. In projects that stretched for several months, especially government projects, managing cash flow until pay day proved challenging.
Two years ago, ADI started working with major banks in the United States to find a solution that would allow it to offer more flexible payment terms. “During that process, we found that a revolving charge account offered the most flexibility,” Flink said. The biggest problem ADI faced was getting banks to recognize its medium contractors, which were considered high-risk because of the economic downturn in the construction industry. “We were able to use our own strength and partner with T.D. Bank to offer varying credit lines,” Flink said. He expects current trends will continue with some lines of credit in the $30,000 to $50,000 range and a lot in the $10,000 to $20,000 range.
The card was piloted in a few small markets in September and launched nationwide in October. Starting in January, Flink said, customers will be able to take advantage of sales. Whereas without the card a customer may miss a chance to load up on items on sale, the ADI card card would allow them to stretch the payments over six months without paying any extra charges. — By Sabrina Gasulla, Associate Editor
Axis Communications, Chelmsford, Mass., received The Wall Street Journal Technology Innovation Award in the Physical Security category for its Lightfinder technology.
A quick look at past winners puts this award into perspective. Previous winners have been IBM’s Watson supercomputer, Intel’s 3D transistor and a new form of artificial hand.
As one judge, Scott Anthony, managing director of Innosight Ventures, put it, “A number of the applicants have the potential to literally change the world.” That’s great company to be in.
Lightfinder enables IP-based, digital surveillance cameras to see detail and color during difficult lighting conditions, including at night. Colors are maintained in low light with no need for artificial illumination, which provides business owners, law enforcement and security personnel with key details for identification as compared to typical day/night surveillance cameras that switch to black and white video in low light.
Read “Behind the Technology: Lightfinder” on sdmmag.com for an exclusive Q & A with key Lightfinder developers, including Martin Gren, Axis Communications co-founder, Johan Paulsson, Axis chief technology officer, and Andres Vigren, Axis product manager, Fixed Network Cameras. You’ll also find an exclusive “before and after” demonstration video.
Axis launched Lightfinder globally in 2011 with the introduction of the AXIS Q1602 network camera, and has since rolled out the feature in its other product lines, including AXIS P33 Fixed Dome Network Camera Series and AXIS P13 Network Camera Series. Additionally, Axis recently combined Lightfinder with its advanced “dynamic capture” wide dynamic range technology with the launch of AXIS P3384-V/-VE Fixed Dome Network Camera.
Axis with Lightfinder was the only winner in the Physical Security category of The Wall Street Journal Technology Innovation Awards.
Other awards that Axis received for Lightfinder include the Private Security Award (2012) and ASIS Accolades (2011).
Tyco Integrated Security (TycoIS) acquired Atlanta-based Carter Brothers’ Fire and Life Safety business for an undisclosed amount. Following the sale, Carter Brothers will transfer its commercial security business to one of its affiliates.
Supported by 10 branch offices across the country, Carter Brothers’ Fire and Life Safety business installs, services and maintains fire alarm systems nationwide, and will be integrated into TycoIS, one of the three separate businesses formed when parent company Tyco International completed its split in September of this year. The two companies have worked closely in the past, as Carter Brothers has done project installation for both TycoIS and ADT for a decade.
So what does the acquisition mean for TycoIS, which (at the time still known by its former ADT moniker) held the top spot in SDM’s 2012 Top Systems Integrators Report? First and foremost, the breadth and depth of the fire business will allow TycoIS to expand and enhance its offerings.
“We have worked with Carter Brothers for over 10 years and our new company is strongly focused on service revenue,” Brian McDonald, chief operating officer of TycoIS, told SDM. “The Carter Brothers fire business has a strong service base with more than 2,400 customers in 10 cities and offers a nice fit with our existing business, as well as a great opportunity to provide these customers with our additional products and services.”
According to McDonald, in addition to his company’s first-hand knowledge of the Carter Brothers fire business, the business unit also brought to the table a number of additional positives that made it a very attractive acquisition target for TycoIS.
“This acquisition offers a strong service base of approximately 2,400 service and monitoring customers. It’s a nice fit with our structure and our strategic focus on service revenue,” he said. ”Many Tyco Integrated Security branches already offer EST equipment and service to our customers, so this expands that capability.”
As a result of the transaction, Carter Brothers, the No. 12 company on the 2012 Top Systems Integrator Report, will no longer be working with TycoIS, according to John Carter, president of Carter Brothers, who founded the company with his brother, NFL receiver Cris Carter, in 2001.
“This transaction successfully concludes the Carter Brothers’ relationship with TycoIS,” John Carter said in a statement. “Our Fire & Life Safety business is an excellent strategic fit with TycoIS. The business can leverage TycoIS’ scale and resources, such as their Centers of Excellence for installation and service.” — By Derek Rice, Contributing Writer
Pinnacle Security, Orem, Utah, agreed to pay a $1 million fine as part of a settlement, said the Illinois state department.
According to the Illinois Department of Financial and Professional Regulation, Pinnacle allowed unlicensed personnel as well as employees with criminal records to sell its security systems door-to-door in Illinois. Furthermore, Pinnacle was accused by the IDFPR of using “unfair and deceptive” sales practices.
Per a press release, “The investigation conducted by IDPFR included issuing subpoenas for all employees working in Illinois and found that 700 of the 1,100 were not licensed by the state. Further, several of the employees listed on the employee roster had been charged with or convicted of felonies, including larceny, robbery, theft, conspiracy to commit burglary, aggravated criminal sexual abuse, assault, domestic battery, and possession of controlled substances, any of which would have been cause to deny a license, had an application been filed.”
Pinnacle did not comment on the accuracy of these claims. But Stuart Dean, vice president of corporate communications for the company, stated: “Pinnacle Security has worked closely to address the generally historical issues related to licensing requirements of our sales representatives that allegedly took place as early as 2006.”
The state reported that $250,000 of that $1 million fine has already been paid by Pinnacle. Other conditions of the settlement would render Pinnacle unable to make new sales in Illinois for two years, supervision of Pinnacle’s monitoring and service practices and a probationary period of five years.
Pinnacle Security, Orem, Utah, formed an alliance with Monitronics via a sale of a portion of its existing account portfolio and an agreement for future account sales.
The goal of this agreement is to enable growth for both companies, with Pinnacle as the sales engine and Monitronics servicing the new accounts. The agreement to purchase some existing accounts has no residual service obligation, no holdback and no account guarantees. These are all built into a 33x net multiple.
“This strategic relationship with Pinnacle Security will be an asset to Monitronics, driving sales and revenue,” said Mike Haislip, president and chief executive officer, Monitronics Security. “Pinnacle will offer us additional high-quality customer accounts and a strong, committed sales team that will provide both companies with opportunities to increase market share. We are excited to announce this news.”
Jared Chappell, president and founder of Pinnacle Security, said, “With this relationship, Pinnacle is increasing its operating flexibility and significantly lowering its debt load. At a time when competitors are taking on additional risk and increasing their debt, this improved capital position represents the best direction for Pinnacle and allows the company to pursue significant new growth opportunities.”
Observint Technologies, Austin, Texas, expanded its portfolio of integrated systems products and technologies with the acquisition of Infinias, a supplier of network-based access control hardware and software solutions. The acquisition complements Observint’s offering of professional video and audio surveillance systems products marketed under the LG, DIGIOP and 3S brands, and enables the delivery of networked integrated security solutions at virtually every level of application, the company stated in a press release.
Infinias will retain product development, technical resources and customer facing functions such as sales and support in Indianapolis. Marketing, finance and operations functions will be managed from Observint’s global headquarters in Austin.
Per Mar Security Services, Davenport, Iowa, acquired Streff Security in Cedar Rapids, Iowa. The company, which entered the security industry two years ago, was owned and operated by Nick Streff, Sr., Nick Streff, Jr., and Matt Shaver. Streff Security is a division of Streff Electric Inc. Streff Electric will continue to provide service in the electrical contractor business.
Streff Security offered full electronic security such as burglary, fire, CCTV and access control systems. Per Mar will continue to offer these services and the operation will move into its existing Cedar Rapids office, which will ensure that exceptional service continues to be provided to Streff’s former customer base, the company said. This acquisition will add approximately 250 alarm accounts to the Cedar Rapids operation where Brian Duffy, electronic security general manager, will oversee the transition.
Per Mar Security Services operates from 20 branch offices throughout the Midwest, in Iowa, Illinois, Indiana, Wisconsin, Minnesota and Nebraska. For information, visit www.permarsecurity.com.
The Partnership for Priority Video Alarm Response group held its official inaugural meeting during the Electronic Security Expo held this year in Nashville. At that meeting, ESX attendees including many influential members of the industry learned about the organization. PPVAR, explained founder Keith Jentoft, president of Videofied along with board members Steve Walker, vice president at Stanley Convergent Security Solutions, and Don Young, chief information officer at Protection 1, seeks to establish and build relationships with law enforcement and insurance companies through the promotion of priority response policies for video alarms. While some have lumped this effort into the false alarm reduction category, its members are looking for a different result: more arrests.
During that meeting, a primary point of discussion was whether PPVAR would continue to operate as an independent organization or whether it would be absorbed by an established industry organization like CSAA or ESA, in order to ensure that the message sent to law enforcement and insurers was cohesive and representative of the whole industry.
In an exclusive interview with SDM, Young commented, “There was a strong appetite to make PPVAR fit within an association. And if there was going to be a fit at all, CSAA would be it.” In the following months, Young took it upon himself to attend the International Association of Chiefs of Police conference held in September to hear their perspective first-hand and be able to educate his fellow CSAA board members. “Some comments challenged whether PPVAR would make a difference to law enforcement. I decided to get on the plane, fly to San Diego and attend the IACP meeting to find out for myself. It was a great choice to go there because I came back with all of my assumptions validated. There is no doubt in my mind about the impact the group will have,” Young said.
Expectation then turned to CSAA’s annual meeting held in Hawaii in October of this year, when CSAA would formally announce whether PPVAR could become part of the association. One of the big points of contention in the weeks leading up to that meeting was whether the CSAA was ready to become a proponent of priority response for video verified alarms and what that would mean for people in the industry who did not offer this kind of service.
During the board of directors meeting in Hawaii, the Executive Committee announced that PPVAR could not be part of CSAA and the issue would not be debated or voted on by its members, as some expected it would. The committee decided to form a sub-committee for video verification technology instead of adding PPVAR.
“We were asked by the board of CSAA to hold off on making any decisions to operate independently of CSAA until it was time to discuss and vote on the issue in Hawaii,” Young said. “Although I understand the Executive Committee’s prerogative to make this decision I was surprised to learn that there would be no discussion of it with the members.”
The board meeting was adjourned on that decision, though some 15 members remained for 45 minutes to debate the future of the group and its place in the industry, Young said. “In the end, those who wanted to join were disappointed that CSAA wasn’t sponsoring it.”
What remains to be seen at this winter’s CSAA long-term planning meeting is whether CSAA will recognize PPVAR as an association.
One key unresolved issue was made clear at the CSAA annual meeting, when guest Bart Johnson, executive director of the IACP, pointedly asked who he should be communicating with on alarm industry issues such as false alarm reduction and alarm verification. Bob Bean, current president of CSAA responded, “CSAA is the only entity that IACP should communicate with regarding those issues.”
“This response completely confused me,” Young said, “given the decision by the Executive Committee 24 hours earlier to have PPVAR operate independently of CSAA.” PPVAR members strongly believe in the relationships they have already formed with law enforcement and they are already working with the IACP providing information for the new IACP white paper and alarm policy recommendations.
Young noted that he believes CSAA’s and PPVAR’s messages are far from incompatible. The two can coexist, Young said, and it isn’t necessary for two groups to vie for law enforcement’s attention.
Jentoft pointed out to SDM that some of the largest third party monitoring stations have already joined PPVAR including Rapid Response, CMS, COPS, Emergency 24, Affiliated, Acadian, NMC, and MACE. He echoed Young’s observation that law enforcement and insurers are behind the priority response initiative. For law enforcement, confirming a crime in progress to speed up dispatch means it can be more effective at making arrests. Young believes it also may mean the difference between continuing to dispatch to non-priority alarms, albeit on a different time-frame from verified alarms, and opting for a non-response policy to unverified alarms as the cities of Detroit and San Jose, Calif. have done.
As it now stands, PPVAR will continue its work with the goal to raise awareness for security system end users that while security systems are beneficial, video verification is a significant enhancement that law enforcement pays attention to and will respond to faster. Young emphasized that with a message focused on arrests, PPVAR can get law enforcement to give some positive attention to the security industry. “This is not a method for manufacturers to sell products,” Young said. “It’s about helping law enforcement solve a problem that they claim the industry is failing miserably at solving.” — By Sabrina Gasulla, Associate Editor
The Electronic Security Association (ESA) will hold its sixth annual ESA Leadership Summit from Feb. 18 to 21, 2013 at the Rosen Centre Hotel in Orlando, Fla.
Attracting more than 400 owners and senior executives from security and systems integration companies, the Summit offers four days of high-level learning, peer networking and vendor contact. The Summit will provide intensive educational and networking opportunities, along with quality vendor contact, according to the ESA.
This year’s theme, “A Fresh New Perspective,” celebrates the topics the event will cover, as the industry heads from traditional security to a Security+ lifestyle. Attendees will leave this event will a firm grip on new approaches, revenue streams, products/services offered that they can take back to their businesses, ESA said.
The Summit will offer compelling seminars with tracks focused on the latest trends in executive leadership, technology leadership, revenue leadership and a free bundling of courses offering vital skill development in ESA chapter management.
Seminar tracks focus on technology leadership, executive leadership and revenue leadership. The Summit will also offer a free track on ESA chapter management. Topics to be addressed include beyond IP and LANs to cloud-based architectures, interactive services in the light commercial market, must-do digital marketing and lead generation programs, and easy and essential reporting and activity tracking.
These intensive seminar offerings are combined with informative general sessions and association meetings along with networking opportunities, social outings and the Summit’s Showcase Meeting Area, displaying the latest in technology and service offerings for boosting company efficiency and profits.
The event will serve as a launching pad for many of ESA’s newest initiatives, including the announcement of the SECURE+ Award winners and the first in-person meetings for the Executive Management Professionals (EMP) and Integration Leaders Group (ILG). Additionally, the Summit will mark the official launch of ESA’s newest charter chapter, ESA of Florida.
Registration for members and non-members and complete program details can be found at www.esa-summit.com.
The Electronic Security Association of Florida (ESA-FL), the newest chartered chapter of ESA, announced its inaugural officers, who were recently confirmed by its membership.
ESA of Florida will be led by security industry veterans including:
• President: Steve Paley, Rapid Security Solutions
• Vice chair: Jeff Martin, AVS Systems
• Treasurer: Doug Bassett, Xfinity Home
• Secretary: Chuck Bellissimo, HPI Security
Members of the ESA of Florida board of directors include:
• Roy Pollack, Devcon Security
• Rick Seymour, CSI Palm Beach
• Scott Slough, Barnes Alarm Systems
• Weston MacDonnell, Rapid Response Monitoring Services
• Mark Okus, Emerson Network Power
“On behalf of the entire board of directors, we’re excited to formally launch the ESA of Florida chapter and begin our program of uniting, connecting and educating the security industry here in the great state of Florida,” Paley said. “We’re working to build a new type of state chapter that’s focused on networking, opportunities to connect with end users, and the sharing of best practices among members.”
Membership in ESA of Florida is now open for both regular members (security integrators) and associate members (vendors and service providers). Until the end of the year, regular membership in ESA of Florida is free for national ESA members who are current with their membership.
To apply for membership, visit www.esa-fl.org/membership.
Legrand North America, West Hartford, Conn., acquired NuVo Technologies, LLC (NuVo), a provider of whole home audio solutions based in Hebron, Ky. NuVo will continue to operate as an independent business within Legrand’s Home Systems division and focus on home audio markets under the NuVo brand name.
The acquisition is consistent with Legrand’s proactive strategy and business objective to acquire market-leading companies that complement its product line portfolio, according to Legrand. It also stated the addition of NuVo’s high-quality, multi-room audio systems strengthens Legrand’s significant audio offering across all of its professional channels.
“The acquisition of NuVo is of strategic importance as it provides us with a leading position in the whole home audio market. We are now able to overtake other industry players and rapidly bring affordable, easy-to-integrate audio solutions to market,” said John Selldorff, president and CEO of Legrand North America.
NuVo and Legrand will leverage their combined technologies to deliver new, best-in-class stand-alone audio systems as well as subsystems of Legrand’s home automation solutions, and NuVo will contribute knowledge in the home audio market, which is based on an 85-year pedigree, Legrand stated.
“Being acquired by Legrand provides us with a vast array of upwards potential,” said David Rodarte, president of NuVo. “It allows us to take advantage of a number of important opportunities in key areas, including Legrand’s already well-established relationships. They will provide us with the opportunity to utilize their vast resources in both people and technological capabilities that will catapult us into the next generation of audio delivery. Additionally, we gain access to a brand that is universally recognized and trusted in the electrical and home technology industries.”
DVTEL Inc., Ridgefield Park, N.J., expanded its executive team with the addition of two seasoned security professionals. Dr. Ed Wassall was named vice president of global marketing and Hans Klein joined the company as vice president of sales and marketing, DVTEL Central and South America. Klein will also serve as general manager, DVTEL Mexico. Together, these seasoned leaders contribute more than 30 years of combined industry experience.
Monitronics International Inc., Dallas, promoted Bruce Mungiguerra to the newly-created position of vice president operations. In this position he oversees all aspects of the company’s dealer and customer operations. His areas of responsibility include customer care, alarm response center, sales, and the Monitronics dealer program.
Mungiguerra joined Monitronics in 2006 with more than 19 years of operations, sales, and call-center leadership experience.
CheckVideo, Reston, Va., a provider of cloud-based intelligent video surveillance and alarm verification solutions, announced the appointment of Chris Brown as vice president. A security industry veteran, Brown drives strategic alliances with key CheckVideo remote monitoring partners and resellers.
“Chris brings proven experience in managing high-growth, video-driven services businesses, and we are very pleased to welcome him to the CheckVideo team,” said John Estrada, CEO, CheckVideo.
JVC Professional Products Company, Wayne, N.J. announced that Masafumi (Masa) Nakano was named vice president of the JVC Security Division. Nakano has extensive experience in video security and surveillance, as well as in-depth knowledge of key vertical markets including the casino industry. The company also announced that John Grabowski has been promoted to national sales and marketing manager for JVC Security Division, and Ian Scott, former vice president of the division, has been promoted to vice president of operations for JVC Professional Products Company.