NSCA Profile: CEO Speaks On How A/V And Security Are Converging

The NSCA (or National Systems Contractor Association) is one of a few associations that represent systems integrators, with NSCA being especially focused on audio / visual (A/V) and security.

We spoke with the NSCA's CEO, Chuck Wilson, about who the NSCA is, what benefits they offer, how they relate to organizations such as ESA and SIA, and how they see A/V and security converging.

NSCA's Chuck Wilson is also the Chairman of the Partner Alliance for Safer Schools (PASS) (see our interview and profile). Starting this April, he will hand the NSCA CEO position to Thomas LeBlanc, a former editor of Commercial Integrator Magazine and a current executive director at NSCA. Wilson will then focus his efforts on the education foundation within NSCA to encourage younger talents to join the industry.

Executive Summary

NSCA positions itself primarily to help integrators grow through its online resources and twice-annual events. While it is more well-known for working with A/V integrators, NSCA says it works with integrators that do both A/V and security.

For convergence of A/V and security, NSCA sees two primary factors: the growing importance of mass notification systems crosses the line between A/V and security, while the ongoing trend for both A/V and security to be on IT networks reduces historical technical barriers. Still, NSCA emphasizes that A/V integrators tend to be concerned about life safety issues with security work, and security integrators tend to be concerned about delivering quality audio.

More A/V integrators are pursuing expansion into security than security integrators into A/V, says the NSCA CEO. One reason for this is that margins (gross and net) are higher in security than A/V, so A/V integrators have more financial motivation to pursue greater profits than the other way around.

A/V and Security Integration Converging

Wilson said he observes within NSCA's members and the market they serve that A/V and security integration works are "coming together":

What's really interesting about that is that we're seeing things especially on the school safety side and at university campuses and many end-user facilities, we're seeing this [trend of] A/V and security coming together.

Wilson further gave examples of how this convergence is happening in mass notification systems and emphasizes communications between audio-visual, alarm, and security systems to make emergency response more efficient:

It's coming together. I can use schools as an example, but at large school campus. There is an emergency communications and mass notification system. Those are traditionally done by audio-video system integrators or companies that do the fire alarm that has an attachment to the voice paging systems and the automated systems that would tell you to take cover or to evacuate or whatever the situation is.

The idea there on the communication side is, let's communicate what's going on. At transit stations and airports, the A/V integrators do the messaging boards. You can go into an airport or a university, and you'll see displays all over the place [on] wayfinding and how to get from here to there.

There's integration [and] convergence happening where we can turn that menu board in the cafeteria over into an emergency communications routing plan, where it instantly flips from one application to the other. In the emergency paging systems, what we're looking for in all cases is for intelligible audio to go out to be clearly able to communicate to people what the situation is and what they need to do.

Due to these interconnected use cases and applications, integrators in A/V and security are starting to enter the other side of the business, Wilson said:

We've got companies that are doing the security, the surveillance access alarm systems, they're also bridging over into the world of emergency communications. And likewise, the emergency communications integrators are getting involved in in access control and other technologies on the security side. If you think about it, why not? It's really amazing to see how many security people want to talk to us about A/V and how many A/V people want to learn about security now.

Both A/V and Security Systems Operate on IP Networks

Another key technology enabling easier integration between security and A/V systems is that they all operate on IP Networks nowadays. Wilson expanded:

Everything is moved over to an IP architecture. We're all on that network. We have the ability, through APIs and applications, to create continuity between the systems and to be able to make things happen quicker.

Risks and Compliance in Converging

Despite this convenience in converging, risks exist for integrators entering an unfamiliar market, especially when there are different compliances to follow. Wilson elaborated on what NSCA has done to educate its members who want to venture into the other side of the market:

Some of these manufacturers are looking at all the connectivity and all the different integration methods between these systems. What we do on our side [is] to make sure that it's all code compliant.

We can't just use an app to call a nurse in a hospital. Let's say there are URLs in all sorts of standards that govern the integrity, battery backup, and all these kinds of failsafe measures. We're governed by a lot of different things on the security life safety side, but we're helping our members understand not just the opportunities but what the real risks are in doing this. [Emphasis added]

It's a whole different level. When a security company gets into fire alarm, there's a whole different risk profile that you pick up and that's what we're really good at. It's making sure that people understand the risk-reward side.

Worries About Entering the Other Side of the Integration World

When "converging," both A/V integrators and security integrators have worries about performance and business risks on the other side. Wilson, who once did both A/V and security integration, described this phenomenon that surprised him:

What's so interesting about that is the A/V people are thinking, "Oh my gosh, what kind of risk is there, and what's my insurance provider going to say? What if I mess something up? What if somebody gets hurt or something doesn't work, and it's my fault? They're worried about that.

On the security side, when getting into A/V, they're like, what if it doesn't sound good? What if we don't know where to put things?

It's so funny to see how that. I've done both my whole career. In my old company, we did security and A/V. It never dawned on me that apprehension that one side has over the other, but it's interesting to watch how it goes both ways.

Security Has Higher Margins Than A/V

In NSCA's survey and financial analysis, A/V integration typically delivers a lower margin than security integration, and nurse call notification systems often imply the highest margin, Wilson said:

When we do our financial analysis of the industry, we break out what their primary technology is that they provide and what market they provide it to. We see that A/V is typically at a lower margin.

The highest margins are still on the security side. Not so much fire alarm, but on the security, life safety side of things, especially nurse call systems, things where we have a very sophisticated system that requires someone highly skilled on the programming side and the implementation side and who understands how to work with nursing teams, or on the education side, how to work with the security office. That's where the margins are at right now. [Emphasis added]

More A/V Integrators Entering Security Than The Other Way Around

Driven by the higher margin and demand in the security space, more A/V integrators are the ones "converging" A/V and security, not the other way around, Wilson expanded:

The security market has everybody's interest. They see from our sessions that security and life safety are in great need and demand. I see more A/V companies that have network expertise getting into security than I do seeing a security integrator going into A/V. [Emphasis added]

M&A Trends in Both Security and A/V

Besides convergence between A/V and security, Wilson also observes the trend of systems integrators consolidating into bigger ones via acquisitions:

The mergers and acquisitions are going on. We're caught up in that whole deal where, all of a sudden, we have ten members in this state to find out that someone has come in and acquired them.

Wilson further raised questions about how the system integration space will evolve amid this consolidation trend:

We're constantly managing our database to make it accurate with who's buying who. It's happening all over the place, and I think a big trend is going to be what the future looks like for an A/P or security & life safety integration company that has 20 to 150 employees. What's their niche, or what does their future look like compared to private equity-owned companies?

NSCA's Member: Half in A/V, Half in Security

Zooming in to NSCA itself, Wilson elaborated on its membership makeup, with half in A/V and the other half across many subsectors of the security industry:

NSCA is made up of about 1000 system integration companies. Roughly half of them would say they're an A/V integrator. The other half would say they are security, life safety, emergency communications, paging systems, and healthcare communication. In the healthcare facility, our members do many nurse call systems, which is technically life safety. [Emphasis added]

We do a lot to help them understand what codes apply to two different low-voltage systems. We cover the gamut of everything from division 27 in the MasterFormat Specifications, which is communications technology, and division 28, which is security, life safety, access, and surveillance.

Our members are what we would classify as systems integrators. It is not specific to A/V or security or lifesafety, or fire, alarm, or that kind of thing.

NSCA Member Profiles

NSCA has integrator members in a wide range of sizes:

Large integrators like Convergint are our members, and we have very small integrators as well, with five or ten employees.

Nevertheless, Wilson said that most of NSCA's members work in commercial spaces:

We have very few crossover members. We don't have a lot of companies that would be working in retail spaces or areas like convenience stores. What our members focus on is hospitals, government agencies, and large education facilities, universities, more of that large commercial system integration piece.

NSCA's Value: Help Companies Run Business Better

Besides sharing thoughts on where the market is going, Wilson also explained to IPVM what NSCA delivers to its members - advising them on integrator business operations and regional regulations:

Our tagline is your voice, your business resource, and your trusted advisor. What we do is that we help companies run their business better from a financial standpoint, [including] leadership training, setting up the organizational structure, providing them with best practices and everything on how to really run the business.

Wilson also elaborated on the three most demanded benefits, among others, members receive from NSCA. The first one is its industry financial research and reports; Wilson expanded:

We do a lot of research. Part of the education foundation that we run, provides funding for surveys, research projects. Our no.1 tool year in and year out is our Financial Analysis of the Industry.

We survey members of all sizes and all around North America to benchmark what their cost of doing business is. [Such as], "Here's your material cost; here's your selling price; here's your labor cost; here's your expenses."

Every member can look at their company and overlay that with a company of similar size and a similar region to see if they're way out of whack or they're over performing in terms of profitability [and other metrics].

The second perk NSCA provides to its members is its guide for regional licenses and regulations, Wilson added:

The second is our Guide to State Licensing. If you think about security, communications technology, life safety, and fire alarms, in every state and even at the federal level, [there are] different regulatory environments and different licenses that are required for system installers or designers.

Our Guide to State Licensing goes through every state and it talks about how we have to be licensed in order to do that type of work that we do.

The third benefit that is popular among NSCA members is its Labor Installation Standard, which provides information on typical work length for specific types of jobs, Wilson said:

We also have a really awesome tool that is a guideline that says how long it takes to [install]. We tear apart every subsystem in MasterFormat Specifications divisions 27 and 28. All the communications and security and everything.

Here [comes] the labor unit survey, [indicating] how long it takes to put in an IP camera in a normal environment, [or] a difficult project [where] you have to use a lift...etc.

We track tag-track the data from our members [and see] how long it should take you to put in that [product]. [Members] can [then] compare their own performance of their crews. They can track their performance to see if they're ahead of or behind industry averages on that. It's a great training tool to make sure that you're putting the proper amount of time on every project.

Within the Labor Installation Standard, NSCA provides guidance on prevailing wages specifically as wee, according to Wilson:

We also do a lot of work in the areas of labor laws and especially prevailing wage. Our members oftentimes find themselves on a prevailing wage project, and they don't always know how to determine if it is a prevailing wage project before they put their price on it. It will have a wild price swing from a non-prevailing wage to a prevailing wage. So we help provide guidance on things like that. We do the research for them and let them know what type of project it is based on.

NSCA In-Person Events

NSCA holds two in-person events a year, including its Business and Leadership Conference, which focuses on business operations and discussion around the broader economy, and the Pivot to Profit conference, which focuses on the newer generation of talents. Wilson elaborated on the 2024 Business and Leadership Conference, which had 444 people attending in late February:

We just got off of a wildly successful [event] called the Business and Leadership Conference. We had a sold-out audience there. We had security integrators. We had communication systems [and] A/V systems integrators that all come together to listen to, our chief economists talk about what we think the future is going to look like in terms of inflation and all the issues with interest rates and the cost of funding projects. We go into leadership, things like accountability [and] building culture. AI was a big topic this year, of course, with everybody interested in how that's going to impact everyone's jobs and in the integration world.

It was fascinating to listen to some of these world-renowned experts talk about where we think the industry is headed so we can get out in front of that and build our organizations based on not just the skill sets we need today but those that will lead in the future.

NSCA is now changing the name of its other in-person event every October, Pivot to Profit, into the Excellence in Business Operations Conference, Wilson said, adding that this conference is for companies to identify younger leaders in the industry:

What it's designed for is the next generation of leaders coming into a company so our members will be able to identify a rising star, a new manager, or a new leader that they want to bring into the management of the company. Next Generation leaders are developing the conference for the future leader, so it's going to be a way for us to reach out to a younger audience, bringing people in that will take the place of people in my generation as we transition out, so we're pretty excited about that too.

Complementing Shows in A/V: CEDIA Expo and InfoComm

Besides NSCA's shows, There are two other major industry trade shows within A/V integration, including the InfoComm in June and the CEDIA Expo in September. Wilson further explained the difference between the two:

The CEDIA is the big one on the residential A/V side. Infocomm in June will be the big one for the professional A/V side. That's where they go and look at new technology and new displays, new digital signage. [Emphasis added]

A/V Integration Industry Overview

Other industry organizations within the A/V space include AVIXA (Audio Visual and Integrated Experience Association), which holds the InfoComm show, and industry media rAVe, Commercial Integrator (combined with the security integration media Security, Sales and Integration), and SCN (System Contractor News). Among them, SCN releases the "SCN Top 50" every year, ranking A/V integration companies in a similar manner to its equivalent SDM 100 in the security integration space.

NSCA Shows' Specialty: Not Focusing on Technology but just How to Run the Business

Unlike trade shows such as InfoComm, CEDIA Expo, and ISC West, which focus on technology and manufacturers, NSCA's two shows are more for members to opt out of technology and focus on how to "run a company," Wilson said:

We say ISC West and the Infocomm show. You have all these trade shows, and that is your opportunity to look at innovation and new products. What is really interesting is we ask our members to come to this conference, and to not look at technology for three days. [Emphasis added]

What we're saying here is, let's step back from that for a moment and let's just talk about what are the best ways to run a company that does the technology that we do. The key to this thing is to set aside being a technology person. I love the technology, but for a second, let's step back and let's figure out if there is a better way to run our business, a better way to organize the structure of our company, a better way to use outsourced labor. That's really what this conference is all about.

Comparison with PSA

NSCA members mostly focus in the commercial space, and there are not many NSCA members servicing alarm systems, Wilson said, pointing out the organization's main difference with PSA, the other "integrator consortium" mostly made up of integrators on the security side:

Very few of them do just alarm systems. We don't have any residential at all. We look at our art area as professional commercial type [of] facilities. That's how we've always looked at PSA on the alarm dealer side versus NSCA on the super high-end, commercial systems integration side.

The two integrator organizations collaborate weekly on government affairs discussions as well, Wilson said:

PSA's government affairs group is really strong as well. We get together every Friday with a group of systems-based associations to talk about all these bills that we were tracking, and we end up on the same side of pretty much every bill that we see.

Partnership with SIA

NSCA is also partnering with SIA (The Security Industry Association) on legislation, Wilson said:

We have a great relationship with SIA and we help form paths together. We're bound by that from the initial stages. How I envision SIA is we have a great relationship and spend a lot of time collaborating on legislation. They're really good at federal legislation. We're really good on the state level with more local codes, compliance, permitting, process ordinances, and things of that nature.

Also, Wilson said that while SIA and PSA focus more on discussing technology and representing the manufacturers in the industry, NSCA focuses on integrators and their business operations:

SIA and others were very good from working with manufacturers and then working on the technology side.

They seem to represent a lot of manufacturers in the security [and] life safety space, we tend to represent mostly integrators in that space.