Issue link: https://read.dmtmag.com/i/31791
30 MARKET TRENDS www.securitysystemsnews.com JUNE 2011 SECURITY SYSTEMS NEWS MANAGED ACCESS GAINS MOMENTUM Continued from page 29 ID cards. The basic matrix to pricing the system is based on the number of readers, the number of users (how many cards are out there) and how many changes will be handled a month, he said. Recurring rev- enue is based on readers, users and changes. Shaw at the PSA said that com- panies are showing more interest in this area. It’s not necessarily a technological advance that has led to the interest, but was rather more of an industry evolution. People in the industry are slow to adopt new policies, new procedures, and new technologies until they are well proven. “The risks are so high if the tech- nology doesn’t work,” noted Shaw. But the tech has proven out, and the business model has as well, she said. Given the continuing trend of shrinking margins, companies are looking to make profits on the other end through services. “The fact is that margins are being depleted. The hardware margins are starting to fade, they have to find ways to be flexible and make money in other areas of business,” said Shaw. Shaw warned that managed access was not an enterprise-level offer- ing—not something a company would offer to a massive corporation. She advised companies interested in the offering to look to retail opera- tions that have multiple loca- tions. “Don’t onesy, twosy it,” said Shaw. “What types of chains are in your area, headquartered in your geographic area? Expand it that way.” Michael Bradley She compared this model to the well-established burglar alarm sector model. Firms basically give the burglar systems away, amortiz- ing the cost over time through the monthly fees. “This is a model of high quan- tity and lower margins,” said Shaw. “Don’t think you’re going to go into it making the same amount of mar- gin you would have made up front in a traditional setting.” She suggested selling the service first, the technology second. “If they think it’s an add-on, and up-sell, they won’t think twice,” said Shaw. Safeguard Security of Arizona is no stranger to the burglar alarm model—they have more than 20,000 accounts, said president Michael Bradley. The firm has gotten seri- ous about managed access in the last three years, partially thanks to a 2009 acquisition. Safeguard has about 120 accounts in managed access. In the non-enterprise-scale area, Safeguard has gotten to the point where it doesn’t consider managed access to be an option. Put bluntly, if the firm sells an access system to a small client, it’s going to be a managed access solution. “We’re the experts and they expect us to be the experts,” said Bradley. “We don’t just sell stuff for the sake of selling stuff—we actually want to make a difference in their businesses and their lives.” If a client is going to commit to the security level of having an access control system, they should use it well, use it thoroughly and make sure it stays up to date, asserted Bradley. “By taking control of the process, being their trusted advisor, they’re going to get a lot better experience over time,” said Bradley. Bradley sees changes over the last decade in access control and camera systems. Previously, both had been seen as options for big companies. But they’ve recently become an option for small businesses, as well. And both are easily expandable— something that can be leveraged through managed access. A client starts out with two or three doors. Then they add four and five doors. Then a new building. Each step is a bit more recurring revenue, said Bradley. “I like the prolific nature of these things,” said Bradley. “These things keep growing, and you want to be part of that growth.” SSN