SOMEHOW, A YEAR HAS PASSED since the mysterious coronavirus spread to the United States and changed everything as we know it. At first, it seemed like the pause in business would only last a couple weeks. But soon, weeks turned into months, and now here we are, a year later, completely changed as an industry.
There was no shortage of doom and gloom about the state of the economy throughout the year, but many in the security industry fared much better than they originally expected — some, in fact, had their best year yet.
“Security is an essential service and has been in demand, so I think the industry overall handled the pandemic pretty well,” says Pierre Trapanese, chair of the Security Industry Association’s board of directors and CEO of Northland Controls, Milpitas, Calif. “I suspect when the numbers come in, [revenue] will be down a bit, but others have experienced extraordinary growth. My sense of most folks is that while volume may not have been the same, people were extremely busy. I have not seen any sort of significant layoffs in the industry, which is very positive.”
What is certain is that everyone in the security industry has been affected somehow by the pandemic. And, the impacts will likely continue for the foreseeable future.
“There has been a definite slowdown for different products,” says Anna Sliwon-Stewart, senior analyst and research manager, security and building technologies, Omdia, London. “Initially some of us thought the decline wouldn’t be that big because COVID-19 would be temporary, but four or five months in, it became clear that this isn’t going anywhere. The latest issues with the distribution of the vaccine in the U.S. are a prime example of how long it’s going to take to get people vaccinated and back to the level of confidence where they feel comfortable traveling and going back to offices and businesses. We’ll definitely see the actual impact and damage of businesses is significant, though short-term.”
Sliwon-Stewart predicts a nice economic recovery in 2021, and notes that order intake already improved significantly in the last quarter of 2020.
Dennis Holzer, executive director of the PowerHouse Alliance, Pittsburgh, says that his members saw an increase in business over the past year. Security dealers who were previously buying directly from manufacturers were quickly impacted as factory production slowed down; and as a result, he says they turned to distributors like the PowerHouse Alliance. Members have also seen an increase in business from clients demanding new and upgraded technology.
“When I first learned about the pandemic, I wouldn’t have believed that people would allow installers into their homes,” Holzer says. “I thought business would take a huge hit; but in fact, the business didn’t miss a beat. Even now, we are still seeing a huge demand for both product and installers, and that has remained consistent through the year. I thought the demand would eventually ebb, but there is a backlog of projects for installers to get to.”
Timothy Dickson, vice president of sales and marketing at Speco Technologies, Amityville, N.Y., says that while many of their customers were impacted, most were able to adapt very quickly and adjust their strategies to suit the new normal.
“Our sales were negatively impacted during the height of COVID-19, but Speco reacted swiftly in our use of technology to do everything we could to make things easier for our employees and customers,” Dickson says. “We have even experienced tremendous growth together with our partners, especially during the second half of 2020.”
The tumultuousness of the past year certainly benefited the security industry, as it has many times before.
“COVID-19 has highlighted how important security is in securing your assets when everyone is working remotely, or how valuable video surveillance is for situational awareness, and how access control is required when you need to create COVID-safe areas,” says Christine Lanning, president of Integrated Security Technologies, Waipahu, Hawaii.
Celia Besore, executive director of The Monitoring Association (TMA), McLean, Va., is impressed by the way the industry has adapted to new ways of doing business.
“I think it is a testimony to the resilience of the industry as a whole that it found ways to adapt fairly quickly to the challenges,” Besore says. “Some of our members saw increases in business as a result of empty or almost empty premises that needed protection, and residential customers wanting to increase their sense of security while at home.”
Where Was the Work?
Whether business was good or not in the past year largely depended on what vertical a company catered to.
“There was a disruption in terms of opportunities for new business in different verticals,” Sliwon-Stewart says. “While many business premises had to be closed, all of a sudden these businesses that were pretty much always occupied were empty, so these types of facilities required new alarm and video surveillance installations because business owners were worried about any kind of crime or damage to properties. That’s commercial premises — at the same time, in the warehousing vertical, all of a sudden everyone switched to online shopping, and that increased the demand on distribution centers, so they had to come up with better ways to manage work while ensuring employees are safe and healthy.”
Jack Johnson, vice president of Star Asset Security, Orlando, Fla., agrees that the manufacturing vertical proved to be a cash cow during the pandemic.
“Everybody was nervous as the large corporations were shutting down their campuses, but what we found in the manufacturing and regulatory space is it turned out to be an advantage that allowed us to work,” Johnson says. “They’re looking for technologies to help them manage during and after COVID-19.”
Brent Edmunds, CEO of Stone Security, Salt Lake City (SDM’s 2020 Integrator of the Year) says he feels lucky to be involved in a variety of verticals, “It all depends on the vertical — on one spectrum, clients have full-on spending freezes, postponing all projects, while others are rapidly expanding their existing systems and starting new projects.”
As industries were designated as either “essential” or “non-essential,” business in the retail sector took a swift dive, and some of those companies were no longer able to pay for security services. Fast food businesses, with their low-contact drive-thrus, did very well, on the other hand.
“We certainly have dealers who support certain segments of retail that are now concerned — they’ve lost accounts, and they many never come back,” says Justin Bailey, president of AvantGuard Monitoring, Ogden, Utah. “There are others heavily involved in fast food, and these guys are doing great — that’s been an industry that’s thrived.”
The need for video surveillance solutions was high as many buildings sat empty; but empty buildings meant budgets focused on cost-cutting — causing many small- and medium-sized businesses to turn to cheap DIY solutions.
“For medium-sized businesses where there is some existing access control system, there are plenty of DIY security systems with video functionalities that can serve as a temporary protection measure, especially if you don’t have the financing to put in all the infrastructure,” Sliwon-Stewart says. “Companies like Ring and SimpliSafe are perfect solutions for a small shop or hair salon, because you can keep an eye on it from your home. The user may have access to the camera without paying hardly anything.”
Commercial office space also took a hit. When non-essential workers were told to work from home for what was expected to be a short amount of time, companies realized how well some jobs could be done remotely. When non-essential employees are allowed to return to office spaces, it is likely that many businesses will have already decided to close their physical workspaces.
Empty buildings also provided the perfect opportunity to make security upgrades without bothering tenants, though.
“With near empty buildings and workspaces, it was convenient to get projects completed efficiently, and this benefited both security integrators and clients,” says Jim Pinto, principal of Key Security Designs, Danville, Calif. “In our core market, commercial real estate, the impact of COVID-19 is still being played out. Building owners are doing everything possible to provide a safe working environment. How tenants respond with their modified working practices will certainly affect occupancy and leases.”
The true impact on the commercial market likely won’t be known until the country reopens more.
“Commercial space and office space will be changed forever, which will affect commercial installers and integrators,” Bailey says. “I think the need for commercial space will shrink throughout the country; but I think in those spaces where there are more employees working from home, there will be a lot of situations where people are in the office two to three days a week, which will bring more of a need for access control and video to keep an eye on the space. There’s opportunity for integrators there to bring those more modern systems in.”
Mission critical industries were also left in need of new security solutions once the pandemic started, according to Chris Bainter, vice president of business development at FLIR Systems, Arlington, Va.
“The spread of the novel coronavirus had an immediate impact on our customers,” Bainter says. “Many of these customers were considered mission critical. Those customers were quickly looking to find solutions that would enable them to maintain operations while protecting the health and safety of employees, partners and customers — everything from personal protective equipment to new tools and technology, including thermal imaging technology designed to take accurate elevated skin temperature readings.”
The residential market was also a huge opportunity for dealers and integrators. Not only were homeowners busy remodeling new and old homes, but the restlessness of the nation made people feel unsafe.
“The residential security market [was able to thrive] because the whole idea of lockdowns and economic downturns created a general anxiety about what’s going to happen to their family and home, which seems strange since people are staying home now,” Sliwon-Stewart says. “The issue is that people are worried crime might go up, and while some faced significant economic hardships, others saw this as an opportunity to buy a house and start renovating it.”
The most in-demand technology for these homeowners was video surveillance and video monitoring.
“The entire security category took off due to the pandemic, but surveillance camera installations in particular have increased a great deal,” Holzer says. “As consumers spent more time at home, they looked for new ways to protect the home and their families. A surveillance camera at the front door of the house gives homeowners a quick and easy way to stay updated on activity both inside and outside the home.”
But more time at home also meant more time for consumers to figure out how to install solutions themselves.
“The pandemic has brought a consumer interest surge in DIY solutions,” says Chris Carney, CEO and founder of abode, Palo Alto, Calif. “As people began to spend more time at home, their interest in solutions they could shop, buy, implement and install themselves soared.”
Turning Lemons Into Lemonade
The year was certainly a challenge for everyone, but those who were able to adapt and innovate came out of it better than ever.
“For the most part, the security industry was able to address challenges brought about by the COVID-19 pandemic and was able to shift resources to prioritize necessary business functions,” says Per Björkdahl, chairman of the ONVIF steering committee and director of business development for Axis Communications, Chelmsford, Mass. “Business across the board suffered with the inability to install and maintain systems due to occupancy restrictions and tightening budgets, making [new] security investments less urgent — it’s been a tricky situation to navigate. However, the security industry was also able to make use of existing technologies, such as contactless and biometric solutions, to help solve pandemic problems.”
Michael Reyes, regional vice president, Guidepost Solutions, New York City, agrees. “Those who accepted that change was inevitable were able to thrive,” he says. “All businesses had to shift the way they were thinking about how they conduct their work. The security industry was called upon to find novel ways to solve problems. Those companies that had the ability to shift to meet their clients’ needs, while facing their own internal challenges, were the most successful.”
There were plenty of new opportunities within the security industry as the pandemic continued on. Those in the industry were labeled as “essential,” and more than proved deserving of the label, finding solutions to many of the challenges COVID-19 presented.
“Those products that took the extra step to protect people grew in popularity,” Reyes says. “Security consulting services also grew in popularity as companies saw the need to rely on outside security consultants to help them make sound business decisions through an understanding of the capabilities and limitations of available security technology.”
Temperature detection devices were likely the most talked about security technology — at least at the start of the pandemic. This provided a different source of revenue for security professionals, as other areas of their business may have suffered.
“As a result of the pandemic, FLIR experienced a decrease in demand from our traditional customers tied to the impacts of COVID-19,” Bainter says. “However, with our thermal imaging technology and its ability to detect and visualize infrared heat radiation, we had existing products designed to help identify elevated skin temperature that could denote a fever with further medical testing. Through this technology, FLIR has been able to play a small but significant role in helping to curb the spread of the disease at mission critical businesses, from factories and airports, to grocery stores and bank branches.”
FLIR may have seen the pandemic coming before most — Bainter says that the demand for FLIR thermal screening tools followed the path of the outbreak, first arising in Asia, then in Europe and the Americas. “Unlike previous pandemics that were more regional, such as Ebola and SARS, we quickly saw the global nature of COVID-19 and how it was going to have a much larger and longer demand cycle for our technology,” Bainter says.
Before the pandemic, FLIR’s cameras were already in use for elevated skin temperature screening in South Korea, Japan and Taiwan, along with other East Asian countries. Now that usage has gone global, Bainter expects to see the continued use of the technology across the world, even after the coronavirus threat lessens.
As different products claiming to detect elevated temperatures popped up everywhere, FLIR’s long-standing reputation with the product was an advantage to the integrators who installed it.
“As an integrator, over the years you learn in our industry that you can really hurt your business by taking on something bleeding edge and finding it’s not ready for primetime,” Johnson says. “Unfortunately we were put into situations where there was no wait and see, and our strategy was to work with vendors that have been here a long time. Fever sensing was a wild card because everybody and their brother was promoting it, but not many met the medical device regulations.”
Johnson and the rest of the Star Asset team did their due diligence and researched different product offerings, eventually deciding to go with FLIR.
Understanding that integrators were being rushed to make decisions that may typically take years, FLIR provided them with online tools to educate and train end users on the temperature measurement cameras.
“We worked hard to explain how the technology works and best practices to ensure accurate and repeatable results,” Bainter says. “Furthermore, we helped provide education on what FLIR EST cameras cannot do, so customers understood better when and how to deploy our technology as part of a comprehensive environment, health and safety program.”
Thermal detection may have been the most obvious new technology to arise out of the pandemic, but other technologies saw boosts as well.
“We expect that you will see more hands-free devices, biometric options, phone-based tools and more integrated automation as a result [of the pandemic],” says Matthew Schumann, industry manager for building materials at UL, Northbrook, Ill. “The credential will not only unlock the door, but also open the door, turn the lights on and do more with less actual physical touching. Manufacturers will try to develop more hygienic hardware that is easier to keep clean or that has features or materials that resist causes of illness such as viruses and bacteria.”
Touchless access solutions had already been increasing in popularity for years, but the pandemic and accelerated innovation of AI and analytics has further increased adoption.
“It seemed the access world shifted to a touchless environment almost overnight,” says Rick Caruthers, president of Galaxy Control Systems, Walkersville, Md. “We saw and continue to see an increase in mobile and touchless biometric devices being used in the market.”
And that increase will likely continue long after the pandemic, as employees start returning to workplaces.
“These technologies weren’t new to the security industry, but the pandemic opened up additional use cases and new areas of development in different markets,” Björkdahl says. “Touchless solutions, such as mobile credentials and AI-enabled biometric methods of access control, have the ability to continue to grow in a post-pandemic world, as they offer a seamless, more secure and efficient way to gain access.”
Pinto adds, “Any ancillary door egress device like a push button door release is all but going away. These are being replaced with touchless “wave” technology. I suspect we are well on our way to using mobile applications not only to validate access rights at doors, but also to call elevators and select floors in commercial buildings. Issuance of standard access control cards are on the decline.”
Managed services also proved to be a life raft in the pandemic. While some industries may not have made room in their budgets for new systems, they were less likely to cancel ongoing contracts.
“Those companies who already had moved at least part of their sales focus to cloud-based, RMR solutions fared well,” says Ric McCullough, president of PSA Security, Westminster, Colo.
The convergence of the cloud, artificial intelligence and IoT proved to be especially powerful for back-to-work solutions.
“We saw artificial intelligence, IoT and cloud technology grow in mainstream markets, which is something I believe will continue in 2021,” Björkdahl says. “More than ever, we’ll see an emphasis on AI, IoT and cloud as they blend together — each becoming more efficient with the assistance of the other. Cloud is becoming more and more vital, especially as remote monitoring grows in demand, and can really help the overall performance of IoT. As cloud grows in the market, the continued rise of IoT [has] also helped to lay the foundation for AI and video analytics to assist in pandemic solutions, which will be impactful in 2021.”
Looking Towards the Future
Though we have already been living with this “new normal” for a year now, many are still unsure of what to expect for the future — and when exactly the post-pandemic future might begin.
“Some of [the impacts of the pandemic] are intangible, and I’m concerned we haven’t yet seen all the negative ramifications that might come from it,” says Jeff Nigriny, CEO of CertiPath, Reston, Va. “People might have a false sense of productivity from working remotely. Most organizations have traditionally found in-person collaboration is more productive, and for CertiPath, because visitor management is such a big part of what we do, that was a negative for us. If employees aren’t at work, there probably aren’t a lot of visitors either.”
As long as security continues to be considered an essential service, though, business should continue. (See “Finding New Ways to do Business”)
“I’m grateful that we’re in a necessary business, and the security business has proven to be recession-proof many times,” Johnson says. “I feel an uptick already in 2021. We did generate a decent backlog, thankfully, because of some of our very loyal customers that we made a point of getting closer to this past year.”
While we wait for the flood gates to open, treading with caution is key in these next (and hopefully final) few months of uncertainty.
“Integrators and dealers should continue to be cautious and watch what they spend their resources on so they don’t overextend themselves in the short term, but they should also be preparing for a wave of demand,” Trapanese says. “Make sure your house is in order before the next wave of demand comes over.”
And one thing is for certain: no matter how challenging the past year may have been, the industry should be proud of the way it stepped up and provided essential services to communities in sometimes scary circumstances.
“While the pandemic seems to have decimated some industries, I believe the pandemic confirmed the value of our industry,” Besore says. “Regardless of the circumstances, our members continued to provide the services that their clients depend on. Early on, there were restrictions on access to premises, either because of stay-at-home orders or because of concerns from occupants on contagion. But our members adapted to new ways of doing business.”