Strange ********* - ****** **** **********
****** **** *** '******* narrative' ** **** ****** feel ********** ******* ** the ********* * *****:
- *** ****** ** *********
- ****** ******* **** *** scale ** *** *********
- ****** ******* **** ***** companies & ****
- *** **** *********** ****
- **** ********* ****** *********** systems ***** *** **********
- ********* ********** **** **** it *** ********* *** incumbents ** *******
******* ****** ******* *** characteristics ***** ******* * widening ***/*** ****** *** confusion *** ******* ** the ******* *******, ********* to ******. ** ***** is *** ****** ********* versus *** ********* ****.
Data ***** ******* ******
*******, ********* ** ******, the ******* ** **** the **** **** *** average ***** ******* ***** is ***** "****** **** they **** **********." ******* might ** *****, ** said, *** ** ***** be * ****** **** expensive ** ********* * new ********, *** **'* countered ** "***** ************ in **********" *** ******** appreciation *******. ** ** a "***** **** ** be ** *** ********," according ** ******.
****** **** *** "******* narrative" ** *****:
*********, **** ****** *** us ** **** ****, 'yeah, **’* * ***** time ** *** **** the ********.' **** ****** want ******* ** ****** this **** ** ***** for ****.
Most ******* ****** ** **********
****** **** *** * widely-believed-in ******* ****** ***** are **** ** *** "strange *********," *** ****** a "******" **********, *** little ****. *** **** serious ******, *** *** that ******** **** **** a ********* ** ********** complexity. ********* **********--**** ******/*** High ******:
**** *** ** ****. There ** ********** ********** across *** ***** ** our ******** *****. *** rate ** ****** ** faster, *** **** ** overwhelming ** ****. ********* management ************** ********.
Medium *******
****** ****** ***** ******* he ********** ** ** at **** *** ****** in ***********. **** ******** the *********:
- ***--*** ****** ******: "*** is *** ***. *** disruptive. ******* ******** ***** detectors **** **** ****** for ********** *** ******** attractive ********, *** *******--** ** *** ***--******** ***** **** ** well. ** *** ***** it *** ******* ****** with * ******** *** or * **** *** in ***** ****** ****." In ****, ****** ****, the ********* ** *** companies ***** ***** ********** in *** *****, ***** would ******* ********.
- **** ***********--*** ****** ******: "Is ** ****** **** some *** **** ******* will **** *** **** a ********** *********** ******** and **** *** *** of ********? ********, *** not ******." ****** ***** the ********'* ****-*********** ********* and ************ ******** ** counters ** **** ****.
***** ** ** **** that *******-******** ***** ********* have**** ****** ***** *** 1970s, ******* ** *** they *** *** ** the **** ****** ** SimpliSafe ** *********. ********* are ******** ** ********* and ****** ** *** up, **** ** ** likely **** ********* **** continue ** **** **** and **** *********** ****** to *** ** ***** systems **********.
*** ******* ** **** existing *** ** *** unrealized **** ********* *** and **** **, ** there ******, **** ****** and **** ** ****** to *********** *** ******** demands ** *** ******. Traditional ******** ********* *** distributors ** *** ******* with *** **** ********* and ******* ** *****.
Low *******
****** ************* *** ***** 3 ** *** *******:
- ******** (****** *** **** maybe * *% ****** share)--Higher ******, *** ***** low: "***** *** **** good ******* *****. *** two *** ****, ******* and **&* *** ** and **** *** *** because **** ****'* *** target ******* *** ********* caught ** **** ****."
- ****** **********--*** ******: "****** say "*** ****** *** want ******** ******* **** it." *** ****. ***** are ****** ** ************ households *** **** **** technology. *** ********** ******* across *** ***** ** booming *** ****-*** *********** is **** ** *** rise."
- ***** ********* *********--*** ******: "Bigger ** ******. ******, ADT, **** **** ***** you ******* ****’** ****** and *** ***’* *******. The ******** **** ***********. That ** ********* ** a ******, *** ** will *** ******* ******* the ******* ****** ***."
***** ** ** **** that ******* (******* **** / ****** ****) *** AT&T (******* **** / exited ****) **** *** in *** **** ***, there ** ******* ******** them **** ****** *****. And ***** *** ******* others *** **** ****** in *** *** ***** well, ********* *** **** in *** **** *****:
- ******* (******* ** ****)
- ********* (******* ** ****)
- *******/**** ****** (******* ** 2011)
- *** (******* ** ****)
- ******* **** (******* ** 2013)
Fear ***** *** ** **********
****** ***** **** **** though ** ********* *** threats ** ****** ***-***********, the ********, ** *******, feels ********** *** **** can ****** *** **** of ******* **** *** industry:
** **** ***** ** this ********. *’* * little ********* ***** ***** existential *******.
*****, ******* ******* ** not, *** **** **** effect. ********** ***** *** less *** ** ****** in ** ******** **** feels *****.
ADT & ****** ***************
****** ************'* ***** ***** ***** is ****************** **** *******-******** ****** ** ****** Home ********. ****** **** **** given **** *******'* ***********, though, *** ******* ********** were ********:
** ******' ******, **** companies *** *** *** same ********** ***** ***** companies *** *** **** simply ********** ******** ******* from *********** ******.
******* *** *** ****** Home ******** ** ******* any *** ************. ** you **** ** *** suite ** ******** ****'** offering, ****'** *** ***** with * ****** **** package. ****'** *** ** understanding ** *** ***** and * ***** **** that *** ***** *********.
*******, ****** **** *** was ******** ******** ***** and ******** *********. ** said **** *********' ******** were ********** ** *********** issues, *** ** ******* from *** ** *** of *** ***** ******* he ***********.
******* ** *** *** brand **** ** ****** Home ******** ** ****** to **** ** *** of *** ******** ** debatable, ***** ***** *** been********* ****** *** ***** name ************* ******* ***** *** put *** *******,********************* **** ******** *******.
Multiples *******
****** **** **** ******* multiples **** ******* **** a ** ******** ** M&A. *** ***** ********** in ****, ************* ******** ** ********* **** ** ************** ** * *** of ***** ******** *****.
********, ****** **** **** most ************ ** *** industry ***** *** ******* between *** *** *** RMR. ** **** **** while ** *** * "spooky ****" ** *** industry, ** *** * good ****, ** ****:
*** ******* ** **** the ******** ** ***** trading **** ******** ****** for *** *** ***** players. ** ***** ** that **'** ******** ** see ** ********** ****** of ************ ****** ***** down ** *** *** to *** *****.
*** ******* **** *** above **** ** **** when *** ** *** industry's ******* ******* *** performing ** ****** ********* to *** *******, ** is ****** **** ********* could **** **** ** a **** ** **** away ******* ** * lack ** *** *********, a **** ** *** innovation *** * **** of ******.
Commoditization ** ********, *** ******* ** * *******
****** **** *** ******** would *** ****** ************ as ** ***** **** and **** ****** ***** ubiquity:
***'** ***** ** **** all ***** ****** ** data ****** **** *** filter--you--at ***** ***** ***** and *** ******** ** going ** ****** *** to **** * ******** decision ** ************ ** the ********'* ****** ** protect ***** ****** ** their ******. ** **** not ****** * *********. There **** ** ***** pressure, *** ****, *** it ** * ******** service.
** * ******, *** video ************ ******** ** already ************ ********* ******* *** **** storage. *******, ******** *** still ***** ** ** able ** ** **** at * *******. *** panelists ** *** ***** Monitoring ***** ** *** 1 ***** ** ****** about *** **** ** mary ***** **** **** to ******* **** ***** to *** ******** *** realize ***** ******* *******. (Solink,*******,***** ***).
Growth ** ********
****** **** *** ******** industry ******* *** **** growth ** ***** ******* over *** **** ** years ** ~*% ****, marked ** ** *% climb **** $** ******* in **** ** $** Billion ** **** *** then * **** ** slightly **** ****** **** around ****. **** *** followed ** * *% climb **** $** ******* in **** ** $** Billion ***** ** *** in ****, ** **** in *** ******* **** the ****** *****:
**** $** ******* *** split **% / **% between ******* *** ***** Revenue, *** ********** *** Service ******* ** ****.
Move ****** *******
******** ** ******** *****, the ***** *** **** shifting **** ****** ********** and ******* (** ****, the ***** *** **% Install *** **% ********** and *******), ******* * trend **** **** ******** and ****** *******, ** seen ** *** ********* excerpt **** *** ****** report:
********** *** ******* ******** were ** *% **** 2017 ** ****. **** reflects * ****** ******* from ******** *****--*% ****** in ****, *% ****** in ****, *% ****** in ****.
********* ** *** *% Monitoring *** ******* ******* growth ********:
- ****** **** ***** *** more ********
- ****** ******* ***/****
- ****** ** ********** ********* rates
- ***** ******** ** * SECaaS *****
***** *** ************ ******* was ** *%, ****** been ******** ** ****** unit ***** *** **** services ** **** ** an ****** ** ***** commercial ********, ********* ** Barnes.
****** ***** ********, ****** by **** ******* ** insurance *** ********* *******, improvements ** **********, ******** costs, *** ********* ******** sophistication *** *********.
Regional ***** ** ****** ***** *********
****** ***** *** ******** into * ******* ********, each **** ***** *** piece ** *** ****** share ***:
- ***** ***** ********* **** nearly **** *** ******** at **%
- ***** ****** ****** **** the ******** ********* **** include **** ******* ** ADT (**% ** *** national *****), ******** ** MSO's ** ***** ********* ("4 ** * ******* these ****") (*%), *** JCI *** ****** **** at *%.
- ******** ***** ********* **** 12% ** *** ******* security ******** *******.
*** ******* ***** *********** the ********:
****** **** ***** **** the ********** ** ******* alarm ********* **** **** older **** ** ***** old *** ** ** 6% ***** **** **** the ****** *** **%. At *** ********* ** 2019, **** ****** *** at **%.
***** *** ********* *****, family-owned *** ******** **********, Barnes ****. ** ** 30 ***** ***, ****** noted ***** *** * swell ** ***** ********* and ***** ***** ********* are ******* ** ****** cash *** ** *** business ***'* ****** **** to ********.
****** ***** **** *** leading ** ********* ****** share *** ******* *********:
****** ***** ** *** smaller ******* ** ********* and **’* ******* ** how ******* ** ** to ******* * ******** in *****’* ******** ***********. People *** **** ******** to ******** *** *** out.
** **** **** *** reason **** ******* *** getting ******* *** *** that ****, ******, *******, and ****** **** ****** in *** "******* ***** butts."
Stickier ********* = ***** *********
****** ******* ** * small ******* ******* ** performance ** *** ********, noting **** ******** ******* as * ********** ** RMR *** ******* **** 11.6% ** **.*%
****** **** **** *** a ***** ********** **** the ******** *** ****** toward ******* **** ******* contracts. ****** **** **** services *** ** ******** customers, ***** ********** ** is * ******** ********* rate, ** *********** *****:
**** ***** ** ******* with *** ********* ***** of *** ****** ******** players:
Poll / ****
Comments (35)
John Honovich
The data for 2018 probably is pretty solid but that does not mean that the fear is illogical.
The problem is things may very soon be getting a lot worse.
For example, $10 monthly Amazon Ring security system was just announced a few months ago. The AI video-driven tech model (whether it is by Amazon or Deep Sentinel or whatever tech company) is going to grow and get better.
The tech companies could be wrong here but it would not be the first time an industry went from doing fine to falling off a cliff in just a few years. If $10 per month monitoring from tech companies and AI video alarm monitoring expands, the big incumbents like ADT could see their 'data' decline noticeably in the next few years.
From what Dan described to me of this event, I get the feeling that alarm incumbents are a bit blind to what's coming. Or I could be wrong!
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Undisclosed #1
doing better with lower margins?
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Undisclosed #2
It is a good time to be in security, I am just tired of it all. Security the whole concept that something is secure, when I can do so much more. It is time to take away the reigns of this RMR, Integrator, Distribution, Design, Engineering, Consulting and Installation. Take away all of it.
Gone are the card readers, mobile credentials, door contacts, 7aH batteries, gutter boxes, resistor packs and machine labels. All of it gone, including the "enterprise" system SUP, SSA that factory ships with a SQLExpress database.
Unfortunately, I must use some type of cable, for now. I will start with every door having a camera installed both sides, cut thru the wall as one unit, whatever. The camera is mounted at say 5 feet. We will circle back to this.
Welcome to your online social security cypherID, here you are registered for all video analytics, voice recognition, personal IoT device (much more than a cell phone). These cryptographic data bits are your digital DNA unique for each human on earth. Eye, Fingerprint and your Terrestrial DNA is all part of the Human on Record.
Glad to see that you were forced to register (you dinosaur you), however everyone else is born into this technology. Now let's start by ripping out all that security infrastructure cabling, aiphones, lenel, hikvision. Rip it all out and please recycle. Burn that SUP and never worry about that technician that cannot use a digital multi-meter to trouble shoot EOL resistors again. Let's send that aging account rep back to school to find another means to feed his family other than selling overpriced low technology security systems. You can add enterprise security systems If you like. Fire that security engineer, what is he doing? marking up a riser chart for rex detector labels? figuring out the camera brackets for some vague RFP? Let him go, things are soon to standardize. Trunk-slammers, give it up...you never install to code and come up with some funky spliced solution. Perhaps it is time for you to invest in a food truck. Project Managers, you're safe as there is always some miserable hole of a project, could be anything! that you can be thrown in to manage.
Those cameras.... both sides of the doors? every door? yes. Let's go to 2029 and ask yourself what do you see? What has Alexa become? Is bandwidth no longer an issue? Video AI is crazy, no longer a trip line you draw in a camera field(lol). Everything is tied together(internet). Each building is a Sentient AI, it knows who you are and has the ability to service your every need.
Each door locked or unlocked has the video and audio ability to authenticate your face, voice, cell phone and even biometrics. Tailgating is captured and each and every one is ticketed for building violation code (100-bit coin first offense). The door handle LED and audible let you know you can access or cannot access the door. Again, we need to build a battery powered device to live on the door, no coring, feed thru hinges...come on guys that is totally the T-Rex security sales guy we need to abolish.
It is ok to let your mind wander and think about your rights, bunker down and say it will never happen, but it will. Smart youth need to make smart systems to kill off all the legacy manufacturers and technology needs to unify our life into the Matrix.
Back to some more esoteric fun thoughts. Let's say you tailgate into somewhere you do not belong. If there is no human guard to dispatch, then a robot will come and remove you from the area. The robot knows who you are, can fine you and you must comply. Just leave to an area, it's that simple. This keeps people in check, if you want to rebel then that robot can lock all your financials until you face to face with an officer (skype, Alexa). Repeat offenders go to jail, this will stop a lot you tough old dinosaurs that want technology but cannot abide by it. Even homeless people are issued a cell device, free service and places to charge it are abundant.
Uber will have cars you can just get it from anywhere and go anywhere, like Alexa it already knows who you are and how to take your money for the services used. Hotels, airplanes you can just ask to get in the que and reservations are made. Remember, every door will have a camera, capable of biometrics, AI video and audio this is the standard.
Of course, our lock technology will increase, most likely to some blue tooth battery pack on the door itself. Batteries that need to be charged phone home to the robot battery janitor can replace the batteries as needed.
You are the credential, your DNA fused with AI technology is forever unique and is used for everything. I know all the non-hackers are going to talk about hacking, all I can say is this: The cryptology that is coming will require another like AI to even think about interfacing. Hacking will be near impossible from a keyboard and Parrot OS using skid.
Alexa, Siri, Cortana, Watson and Ok Google are the new high digital priests of The Milky Way cyberspace. Want to know where your kids are at? just ask. Need to know if they are late to class, failing on subjects? just ask. Do you want the latest IPVM hikvision review? try asking. Enough with the type, click, scroll and sort UI. Alexa, how many access violations have there been today in the London office? Alexa, fetch me a Peet's Coffee.
All you old farts think the internet was a big thing, it was only the beginning. Robots are the future and with technology built into the door, elevator, car, shipping dock, movie theater and home they will control everything but not everyone. It all started with the microwave, digital alarm clock and Sony Walkman. Devices such as these helped us in basic ways they just need to be improved and updated to march into the year 2050.
Yes, this is a good time to be in security, the comet is coming for all those legacy access controlasaurs, vmsaurs and hd-analogosauruses. A good time indeed.
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Lee Jones
02/12/19 08:30pm
Again, I was disappointed in the Michael Barnes crystal ball. However, he is excused when we remember he is a promoter, rather than a prognosticator. We now know silence is not a good cover.
And, I have been labeled “the endless-loop” due to my repetitive messages about one of the biggest threats to the traditional alarm industry that nobody wants to talk about. Aka SLOW or NO police response to calls for help from remote monitoring firms, due to diminished credibility… aka a threat to the core component of the industry. We estimate that the majority of the remote-monitored deterrent type customers in the US, over 15 million, are unaware that they have been quietly downgraded from a “police call” to “customer call” when their expensive alarm system is “activated”. Several states have already legislated / banned monitoring firms from calling the police first. What will your business model look like with full disclosure?
ADT, as a public company, could be asked by SEC for such delayed full disclosure. Also, maybe reason for ADT stock @ single digits.
Source: Lee Jones; Support Services Group
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Michael Barnes
IPVM/Dan:
Thank you for attending the conference. We appreciate your support and coverage!!
Mike Barnes
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Michael Barnes
ADT because I am bullish and as a hedge...Brinks is a long-shot bet, for sure.
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Michael Barnes
This is a nuanced topic, hard to do it justice in this type of forum. This year was our 24th annual conference. At every one of them we debated about whether to highlight the false alarm issue. That is, highlight as a potential existential threat to the industry and/or its configuration/model. In each an every one of those 24 years, we have discussed it, but not highlighted as such. Also, in each of these years alarm sales have increased (excepting during the Great Recession) and the public/private interface hasn't melted down. The industry today is almost 3 times the size it was when we first held the conference. Not to say this isn't an issue. But I have come to view it not as a flaw, but a feature.
The total number of devices, especially including cameras and their trillions of pixels of data, are generating a rapidly increasing flow of information, all of which is potentially helpful/useful/valuable. First responders (and others) want this information, this will never change. But, lacking unlimited resources, there is an inherent need to filter...and public sector dollars rightfully seek for that to happen, as much as possible, before it reaches them. Pushing the private sector to do the filtering, with the associated market driven forces driving innovation and efficiency makes sense, and is also likely to not change. Figuring out the proper allocation of responsibilities and dollars is a natural friction point, but again there is nothing unique about this (i.e. many other sectors such as health care, and education have similar issues/friction).
Further, in the last 24 years, the price of systems have declined, the capability has increased, the number being used has increased (~3x). It is more affordable than ever, and the imbedded (voting and taxpaying) base involves a much larger demographic than ever, with penetration increasing (which, inherently means farther down the socio-economic spectrum). Additionally, almost half of the market are businesses and institutions, who have huge influence on public sector policy. [NOTE: the notion that only the rich have them or can afford them is no longer true]
The notion that systems don't work is false. They do, unquestionably. Maybe not as often as they should, and maybe with too many false positives. The mandate to use smoke alarms, including the need for professional monitoring in some applications is a both a testament to the actual and potential capability, and also this countries political will to devote resources to encouraging the use of technology and processes to gather useful data, have it effectively processed and filtered, and then have public sector response. Advances in sensing technology, imaging/video, and smart filtering are huge, with costs declining. Throw in drones, and Uber drivers, and one can see a bright future for the ability to intelligently sift through the "fire hose" volume of data and hand off to the public sector only that which is most likely to truly require action. BUT, even if the industry could somehow achieve a 99% success rate (which it never will), the public sector would, and arguably should, continue to demand improvements. They are, after-all, the purchasing agent for the actionable data, spending our collective tax dollars. I am happy they are driving a hard bargain.
Lastly, the industry has huge flexibility. Routinely in many segments (most notably certain commercial applications) response is private, even for fire. Huge variances in system capability, response protocols, and price points, with an equally large range of solutions...with the delta increasing. I don't see a tipping point that applies to a huge segment (or all) of the industry, and/or an inherent structural problem that results in a meltdown. At any given time, there will be pockets where the friction generates some heat, you bet. But, nothing approaching a systemic, existential threat to the industry. From my vantage, as long as the data is valuable (NOTE: the smartest people in the world have systems protecting them, by choice, both in their homes and at work), the public sector is wanting to fulfill the mandate placed on them by taxpayers to serve and protect, the amount of data generated needs filtering, and the end-user is willing to pay for some or all of the filtering costs...the current structure, and its associated friction survives. It is a muddle. Just like it always has been.
That is as short as I can make my view on the specific issue. For anyone that has made it this far, I would like to make two more points. First, the narrative I often hear connected to this issue, which I think is most problematic and dangerous is that the current structural arrangement has the alarm industry making money using public sector resources in some corrupt or unfair way. Not true. I think anyone would be hard pressed to point to a public sector service that every taxpayer benefits from equally, or in proportion to their taxes paid, or [insert variable]. The problem is that the narrative that the alarm industry is built on a house of cards deters capital and/or makes it more expensive, to the detriment of the industry (and, yes, to me as well). The debate around this structural arrangement is good and healthy, but a narrative that implies it has been settled is dangerous.
This leads me to my second point. Lee Jones was an early mentor/role model and has continuously helped me understand the industry for over 30 years. I value and respect his view, and would suggest that readers do the same. On the vast majority of industry issues we agree. On this one we don't.
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