Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.
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26 Security Dealer & Integrator / www.SecurityInfoWatch.com October 2016 equity money raises the stakes — and the competition — across the video segment and the entire security indus- try, potentially driving up the value of companies and funding the next gener- ation of technologies and innovation. Take Advantage How can your security business take advantage of this new "age of oppor- tunity" in the industry? e first step is to explore how new technologies and other advances in the secu- rity sector can bene- fit your company, and enable you to play in a much bigger space. As a lender, our team works closely with borrowers to provide financing to build out your business model and capabilities so your company can reach its full potential. Given the pace of innovation within the sector, if your security business is not involved in VSaaS, investigate the opportunity. If you are in the video space, think about how you can go deeper and broader to capitalize on the growing demand before your competition gets there. If you are exploring ways to finance your expansion, look for a financing company or investor that knows the security industry and understands the nuances of new and emerging tech- nologies — including what invest- ments you need to make to benefit from them, and how these technology advances will shape the video segment and the entire security industry in the coming years. ■ » John Robuck is Managing Director of the Security Finance lending practice within Capital One Bank's Commercial and Specialty Finance business. Request more info about Capital One at www.securityinfowatch.com/12070948. servers adhering to proper procedures when they prepare and serve meals? Are they taking the right precautions when they serve steaming hot coffee? Are they charging customers the proper amounts for the food the customers receive? Businesses can also capitalize on insights from video surveillance to gauge customer appetites for new prod- ucts. Instead of simply trying out a new food offering and tracking sales, the same restaurant can add a new, "smart" dimen- sion to a product pilot by monitoring (through video) which customers are buying what prod- ucts in what location at what time of day — all information that is easily available and searchable through new cloud video technology and analytics. VSaaS and Company Value e opportunities and applications for VSaaS are promising, and many inves- tors and lenders are keeping a close eye on this segment of the market. As more companies take advantage of VSaaS, they are generating higher margins and lower client attrition. At Capital One, we are focused on four major trends — developments that will have a critical impact on investment and financing activity in the entire security industry over the next several years: 1 Traditional guard (or manned guard) businesses are investing more in video. ey are not necessar- ily viewing it as a way to replace their guard force; instead, to supplement and enhance the services that guards pro- vide. Video surveillance capabilities will enable these companies to put guards into more places than ever before, which, in turn, will enable VSaaS com- panies to upsell their services, strength- ening their profit margins and scale. The influx of private equity money raises the stakes across the video segment and the entire security industry, potentially driving up the value of companies and funding the next generation of technologies and innovation. Video Surveillance 2 Managed video services are now able to create a long- term recurring revenue stream, as opposed to a one-time sale of equip- ment. is has game-changing impli- cations for VSaaS providers over time. Contractual terms are also evolving as the VSaaS segment grows. Advance rates for monitored video services con- tracts — historically lower than most other security services — have started to increase, as margins have become more comparable to alarm monitoring, for example, and contracts have incor- porated standardized terms. 3 Access control providers are becoming more interested in video surveillance, and for good reason. ese companies realize that video will enable them to expand their business models and offer new services and analytics. As a result, many access control companies are moving to the cloud and layering on cloud-based video solutions. Right now, they gener- ally buy capabilities from VSaaS com- panies outright vs. forming a supplier/ partner relationship; however, as the industry evolves, the relationships and business models may change. 4 Private equity is getting into the game. As VSaaS compa- nies grow in size, they are generating greater interest from larger and more sophisticated investors, such as pri- vate equity firms. e influx of private