Physical Security As Dan Dunkel Sees It

There is a lot written these days about cybersecurity and the Internet of Things (IoT) regarding their impact on security integrators. I put the situation into the context of digital risk — our societal movement into the age of ones and zeros — which has redefined the concept of both business and personal security. This essentially means everything connected to the internet (devices and humans) has to be secured; everyone and everything is more or less continuously connected today, with a growth trajectory that is almost unimaginable. This has created a revenue opportunity which integrators across multiple market sectors find compelling.

I’ve spent 37 years in high technology, physical security and cybersecurity firms, from boot strap startups to Fortune 50 organizations. I have seen billion-dollar companies within global industries go bust missing emerging technology cycles. Numerous industries are experiencing them today, and these cycles are moving faster then ever before based on factors including chip advancement, software development, network speed and data scale.

The physical security industry has been conservative and technology risk averse as a culture. The three year technology refresh cycle of the IT industry is not typically present in the physical security market DNA — this is one issue. A lack of focus on securing what you sell (think IP-connected cameras) is another. Lastly, human nature being what it is, the physical security integrator exhibits Status Que Bias — a cognitive rationale that explains our preference for familiarity. Many of us tend to resist change and prefer the current state of affairs. While this is perhaps understandable when business has a history of being very good, it is a bad idea in technology transition cycles.

The fact is that the low end of the physical security market is quickly commoditizing hardware and connecting to cloud services. Apple recently announced camera sales in their stores. DIY deployments are also finding their way into SMB as cost effective security solution alternatives. The residential to small business security transition cycle is underway.

At the enterprise level, the IT integrator — who historically owns the corporate network relationship — is leveraging an IoT strategy to connect, manage and secure every device attached to it. In fact, the IT integrator sees their competition being the Managed Security Service Provider (MSSP) and increasingly the cybersecurity sales channel, not the physical security integrator. Cyber firm Palo Alto Networks surveyed 1,200 customers in 2019 and found that while security cameras were only 5 percent of the network connected devices, they were responsible for 33 percent of the security breaches. The CIO and CISO are aware that surveillance cameras are a major risk factor, and are quickly having their vendors correct it. Palo Alto bought IoT startup Zing Box to address this customer requirement.

It appears that when it comes to leveraging the incredible market opportunity that IoT represents, the physical security integrator is generally not embracing it aggressively. This is surprising given the experience that these integrators have installing surveillance cameras, access control panels, fire and burglar alarm systems, monitoring center services, etc. This is a physical security integrator sweet spot, and tailor made for continuous device updates, providing everything from proactive maintenance checks to immediate security patching, which all drive monthly recurring revenues.

In my career I have seen three great business leaders. Jack Welsch at GE was famous for being number one or two in every market he served; Steve Jobs was legendary for his vison on technical innovation at Apple and Pixar; and John Chambers of Cisco was adept at catching technology transition cycles. He once said “The internet changed the way we worked, lived, learned and played in a way that no one could have imagined. The industry is on the precipice of an explosion of IoT-related products and services coming to market, and I expect the Internet of Things will be bigger than the internet.”

I would take his word for it. Consider how technology is accelerating in the age of digital transformation, why this is changing your business and what is required to remain competitive. Status Que Bias is not the answer. The physical security integrator should have a strategy to leverage the huge opportunity that John Chambers believes exists in the IoT market. That is how I see it as well.