SMART CITIES

Kenton Williston: Welcome to the IoT Chat, a production of insight.tech. I’m Kenton Williston, the editor in chief of insight.tech and your host for today’s podcast. Let’s get into the conversation.

In today’s podcast, we’ll talk about the rapidly evolving security sector. We’ll discuss the collision between physical and cybersecurity and the ways that the industry is moving beyond hardware-based solutions to a services-based model. And we’ll consider what the concept of safety means in our new reality. Above all, we’ll examine the role system integrators are playing in these changes and what SIs can do to help their customers address emerging needs.

But before we get started, a quick note that we’ll continue this conversation in our monthly Twitter chat, which kicks off August 12^th at 10 am Pacific. We’d love to have you join us. Just use the hashtag #IoTDevChat to participate.

I’m joined today by Tim Brooks, VP of sales and vendor management, for PSA network. Tim, what the heck is the PSA network and what is your role?

Tim Brooks: Thanks, Kenton. It’s great to be on this podcast with you, thanks for inviting me. So PSA network is a best-in-breed consortium of physical security integrators and AV integrators. We offer a variety of services and support and best practices and thought leadership to help the integrators in both of these spaces be successful, grow, stay current with new technologies and new trends. Myself, I manage the vendors and the sales channel for the security side. And then I work very closely with the AV team as well as there’s increasing amounts of crossover between the product lines, especially over the last 90 days in the COVID era with technologies that are touching both spaces.

Kenton Williston: And speaking of obviously, the focus of the security industry has shifted a lot in the last few months. For example, there’s been a lot of rethinking about how we occupy public spaces like transportation hubs. So I’m wondering if you’re seeing some shift in market demand, new applications, new sectors that are rethinking your approach to securing and safety.

Tim Brooks: Oh, most definitely. Most definitely. It’s just been amazing from thermal cameras for temperature sensing or skin temperature, elevated skin temperature testing to space management. On the AV side of our business, a number of those integrators are in office furnishings and space utilization. They’ve spent the last 20 years helping tenants figure out how to put as many people into a space as possible. And now they’re faced with the challenge of undoing all that.

Their clients are asking them, how can we provide for adequate social distancing and still let people do their jobs. With new artificial intelligence that helps figure out how many people are in a place and the ability to adjust that and give alerts based on a modest social distancing to extreme social distancing. That just requires a lot of advanced processing. And thankfully, that type of product is available from a hardware standpoint to drive that type of processor intensive processing.

Kenton Williston: Yeah. So clearly the there’s no evolution happening here just from the visual element to things. There’s a need, like you said, for more than just having cameras monitoring a space for intruders or things like that, that have been traditionally important. But new applications like social distancing that require real time artificial intelligence. But I imagine there’s a lot happening beyond just the camera domain in the sense that more and more facilities are starting to integrate things like smart locks, HVAC systems, all kinds of other systems across the facility that require a greater level of integration than in the past. I’m wondering how that’s changing the landscape for your members.

Tim Brooks: Yes, there’s a lot of things changing at once. The movement to cloud based access control has been kind of this slow march for the last 10 years or so. We’re really starting to reach that point of the exponential growth curve phase. Some of that has been hurried along because of the current situation, but it was already well on the way. The cloud services are easier. They’re certainly way more secure.

In the early days, some of the early adopters, the systems integrators, were hosting their own managed access control system because the people didn’t trust the cloud. Now again, that’s 10 years ago and now it’s quite obvious that the big cloud providers are very secure and for somebody to try to host it themselves in their own facility, it’s just really foolish from a liability standpoint. But to your first part of your question about the integration of different technologies, very much so cloud access, hosted access, and then manage video where you’re combining maybe you’re looking at a stored image of the person that’s presented their credential.

The person may be using a mobile credential now, way more so as opposed to just a card. There’s contactless entry now, which is a big thing. And then the ability to track somebody that says, that we find out that so and so was infected, now let’s go back over the last four days and see where this person was in the facility so we can alert those people that he or she was in contact with. That’s all part of the increased ramp up speed of adoption of these cloud services and integrated services between video surveillance and access control.

Kenton Williston: So I imagine all of this complexity is creating a lot of different kinds of challenges for system integrators supports. Let me say that again. So I imagine all this complexity is creating a whole array of challenges for system integrators. Everything from just the fundamentals of the technologies that they have to know so many different kinds of technologies now, through coordinating and working with different technology vendors and there may be other folks involved in managing some of these services. Even to just the considerations of getting certified and being able to pass inspections with these increasingly complex systems. Where do you see that the biggest challenges at right now? Is it kind of all of the above? Anything that really stands out to you?

Tim Brooks: Right. Yes. It’s definitely all of the above. The systems integrators have a lot on their plate right now. The pace of change is more rapid than I’ve ever seen in the 30 years I’ve been in the business. The old saying of drinking from a fire hose. That’s really the case right now and it’s hard for them to keep up. It’s an investment that they have to be making in people and building skills in the people or acquiring talent that already has those skills in integration. Now, the good thing is that some of these newer cloud providers or newer companies that are selling integrated video and access control, have actually made it easier.

They’ve actually made it easier because they’re basing it on newer technology and newer algorithms that are easier to set up, easier to operate, and don’t require as much rote learning, if you will. Think about early days of computing and how hard it was to learn how to do it versus today, when you turn something on and there’s a self-guided set ups to get you set up and running. A lot of the newer manufacturer partners, service providers, are making it a lot easier. They’re lowering the barrier of entry. But the challenges still remain of getting your people trained and have the ability and skills to thrive in this new environment. Because there’s a lot of maybe older thinking or older people that maybe struggle with some of these newer technologies. They’re used to programmed field panels that they sit down with and plug in a computer to it directly and spend two hours going through page after page of menus. And now they can do a setup wizard and get it done almost automatically.

Kenton Williston: So what do you think the right way to solve that challenge is? Is it mostly bringing in new talent, like you said? Is it is about training the folks that you’ve got? Is it some combination of those two?

Tim Brooks: Yeah. Some combination for sure. People that are willing to learn and adapt and recognize the need to learn and adapt not only to help their customers in their company, but for their own professional development and survival.

So as the integrator and the integrator employee or professional is seeking to improve their own skills, there are a lot of resources available. And fortunately, we can help them greatly in that area with education resources that we have. That’s one of our foundations of our value proposition is education. So there are a lot of avenues that they can go down to help and acquire new skills that will help them be relevant and compete in this new environment.

Kenton Williston: Yeah. So clearly there’s an opportunity here for the individual workers to get into new spaces and learn new talents. I’m wondering how that looks at the level of the SI’s as an organization overall. Because it seems to me, while there’s a lot of new challenging demands that are coming from folks in this space, this also means there’s a lot of new opportunities. So this is like a growth opportunity, more like a change opportunity?

Tim Brooks: Right. Well it’s really kind of a transition. It’s both. You asked really good questions and the answer is, so far as it seems to have been both. But it is kind of a transition from the heavy, front end, hardware based solution, with some type of small, monthly or quarterly or annual SLA or maintenance agreement, to now smaller upfront hardware fees, smaller installation fees, and then more significant ongoing fees for software licensing and ability to use all of the services that the product has available. And so it is a transition and it’s as well as new opportunity because with this lower cost of entry, it’s making this type of high-tech security solution available and attractive to clients that in the past may not have considered it because it was out of their price range.

Kenton Williston: Right. So it’s beneficial from both sides. The client gets a lower installed cost for a solution, while the vendor gets something that is easier to deploy, easier to manage and gives them a recurring revenue stream. So everybody comes out on top there.

Tim Brooks: Yeah. If I could provide one example, there’s a company here in Denver that makes wireless lock control that they grew up out of the home rental vacation rental space. And now they’re moving into commercial space. But they can literally spin up a new reseller in a matter of hours and they don’t have to send anybody out in the field to deploy this product.

Imagine the size of the market that opens up to you when you don’t have to have a fleet of trucks parked in your parking lot that your technician show up every morning and you give them their list of assignments and they go out and sit in traffic and drive out to go reprogram this or add a card reader here. If they can do all of this remotely from a laptop, they can do it at home in a lockdown situation. Imagine how much more opportunity there is.

Kenton Williston: Yeah. So I think that’s a pretty exciting transition, but I think it also brings with it a new kind of challenge in that all of these cloud-connected systems, like you said before, there needs to be a high level of trust. So I’m sure cyber security has become an increasingly important concern for your members. So what do you see as the forefront in that area?

Tim Brooks: Yes. Most definitely. We’re kind of lagging in that area to be honest, compared to where we are with the adoption of cloud services for traditional physical security. Cloud access, managed access, smart video, managed video, or maybe even some advanced, deep learning algorithms in video surveillance. In the area of cyber, there’s still just a lot of, it’s fear primarily. Fear of the unknown, fear of lawsuits, fear of liability. And in some cases the attitude is we’re safer if we don’t do anything. If we do something, we might make them make a mistake and now we’re liable.

So the good thing is that the physical security integrators have awakened to the need to at least protect their own systems that they put in and not strictly rely on the local IT department at their client to provide cover for them. If they put 250 smart IP cameras on the network and they put IP based door controllers and IP Wi-Fi locks, they have a responsibility to maintain the cyber security of those. Otherwise, now they are liable because those IoT devices become the platform for botnet attacks. There’s many cases where IP cameras became the source of the botnet attack.

The integrators recognize that they’re not exempt from liability. They need to embrace it and learn about it and be better, just be better. There are new tools available now. There are services available for endpoint monitoring and some of them are quite simple, quite elegant, quite reasonable that can really help the systems integrator not become a full on MDR managed detection and response provider, but we have sources for that as well, but they can, they can deal with the more prevalent threats and give themselves a good coverage in that regard.

Kenton Williston: Yeah. So I really liked the point you’re making about how some of these things may be easier than folks expect. I’m thinking there’s a lot of value here, especially for smaller systems integrators. There’s a lot of complexity going on. A lot of rapidly moving changes. What would be your recommendations to one of these smaller SI’s about how they should wrangle with all this new complexity and for that matter, what they need to be thinking about to even have that visibility and credibility to get some of these increasingly complicated big jobs.

Tim Brooks: Yeah. For the smaller integrator, I mean in all honesty, those big jobs are super competitive and every big integrator out there is competing for them. At the end of the day, while they may be a nice logo to have on your website, you can make a lot more money with more smaller jobs that have more ongoing recurring monthly revenue. You can be a real hero and it’s not as flooded a market.

The public sector bid jobs and things like that, people come out of the woodwork to chase those and it’s hard to be profitable, especially if you don’t have a lot of experience in those. My recommendation is focused on the mid-tier and SMB market if you want to have a lot of growth, because that’s where the focus is over the next 18 to 24 to 36 months. We’re going to see tremendous growth in that area because the systems are more affordable and there’s a lower cost of entry.

There’s financing opportunities so that you can put a system in at a doctor’s office, for example for virtually no money down and just give them a monthly payment to include all ongoing software support, maintenance, and even technology refreshes every three to five years.  truly going from a full CAPEX to a full OPEX model that the PC world has been in for years, IT world has been in for years, and the physical security had not been in that space because the upfront hardware costs were so high. It was really hard to make a model like that work, but now it’s getting easier.

Kenton Williston: Awesome. That’s very exciting. But of course, that leads me to the question of, what exactly systems integrators should do to take advantage of all these opportunities? So you have some best practices they could follow?

Tim Brooks: Certainly that’s a big part of the value of PSA and our community is we offer, as I mentioned earlier, education, tremendous education resources, online virtual, in person. At some point again, we’ll have in-person education. But in the meantime, we’re doing virtual and online learning. But we also have a number of resources for best practices. We have peer-driven committees that have regularly scheduled meetings on six different disciplines, sales and marketing operations, cyber security, managed services, et cetera. All of those resources are shared within our community. So these are true industry professionals within that discipline that share their best practices. That’s a tremendous, tremendous resource. We have formalized peer exchange groups with a professional moderator that have regularly scheduled meetings and conference calls. Again, like I said, face to face events that we’ll be having again, at some point in the future, we hope.

Kenton Williston: That’s right. So I want to go back to a point you made just a moment ago about how the technology landscape has changed. I think it’s sort of fortunate how things have transpired that we do have so many advanced technologies that are so incredibly helpful with doing things like automating social distancing. But I’m wondering about the bigger picture. I know PSA is involved with Intel is one of its partners. I’m wondering, not only from a technological perspective, but there’s other ways that, that involvement at Intel with PSA and in the safety and security space more broadly has been delivering some benefits in this new climate we’re in.

Tim Brooks: Yes. Most definitely. Intel has been a great partner for us. It’s interesting because Intel is one step removed. None of our systems integrators buy anything directly from Intel. It’s all embedded hardware technology. But they’re influences is felt far and wide and their support of our organization and having them be supporter of our events and seeing the name, it really brings legitimacy to some areas where people think, well, that’s just this physical security space. That’s such a niche market.

When you see names like Intel and now Amazon and others that are more consumer or real high end business names that we’re seeing in the physical security space, people take notice. There is more private equity in the physical security space than there’s ever been. These are really smart people that are looking to invest money in rapidly growing companies and the physical security space is definitely hot right now.

Kenton Williston: So do you have an example of how hot this market is? I’m thinking maybe you’ve got a case study with one of your consortium members and how they’ve been taking advantage of this rapidly changing market.

Tim Brooks:  We have a number of PSA members that have had a really strong growth. We have IST out in Honolulu, Hawaii. They’re a somewhat small company, in the grand scheme of things, but they have a really dynamic culture and they do a lot of work with the US military and federal government. They’ve done a lot of work in the cyber security space, which has really helped them grow their business and build a strong base of recurring revenue to help them ultimately be more profitable and provide more training to their employees and expand and improve the value and quality of services that they provide.

In Texas we have Knight security. They do a lot of work with the public schools, K through 12, and we did a nice project with him for endpoint monitoring of video and cyber, which was basically like we mentioned earlier, a no trucks were needed to be rolled out to the facility to install this. It was all just installed remotely. And it gives the school district the ability to always know that their video is being recorded. If there are problems, quickly identify where the problems are so that they can get the cameras back up and running quickly.

Kenton Williston: Excellent. We’re getting close to the close of our time together. So I’m wondering if there are any closing thoughts you’d like to share with our audience.

Tim Brooks: I think that you had mentioned earlier, and it doesn’t hurt to kind of mention it again, that the IoT devices, it’s really been what’s driving a lot of the growth in our space, the industrial IoT. We see the consumer products that are growing up now that have security in them. That’s raising awareness and for the commercial space where these residential products aren’t really robust enough, maybe from a feature set standpoint, from a overall quality standpoint, but there are nearly closely related products that are being built for the industrial and commercial space that are still basically IoT devices.

And that’s really driving the growth, I think. Away from panels and servers in closets, to a more edge based computing, edge based recording. Some of the surveillance cameras now have all onboard storage requiring no premise-based appliance. That’s really going to, I think, drive he growth over the next two to three years.

Kenton Williston: Excellent. Well, thanks for joining us, Tim. I really appreciate your time. Where can our listeners find you online?

Tim Brooks: Well, our website is PSAsecurity.com and there’s links to all of our social and the online platforms. Can find me on LinkedIn as well, Tim Brooks. And you can hopefully find me at one of our upcoming events. If and when we have one of those.

Kenton Williston: Yes, that’s right. Maybe I’ll even get to meet you myself in person.

Tim Brooks: That would be nice Kenton.

Kenton Williston: All right. Well, thanks again for joining us and thanks to our audience for listening. As always, if you enjoyed listening today, please make sure to support us by subscribing and rating us on your favorite podcast app. And if you want to chat more about security sector, make sure to follow us at insight.tech.

To keep the conversations going, join us August 12^th at 10 am Pacific for our next Twitter chat. We’ll be talking again with the PSA Network and would love to have you join us. Just use the hashtag #IoTDevChat to participate.

This has been the IoT Chat podcast. Join us next time for more conversations with industry leaders at the forefront of IoT design.

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