Volume 35

Volume 35 | December 5, 2023

Welcome to Brief #35, My Thoughts on the Gallagher Security and Genetec 2024 Market Reports!

When I thought I was done and ready to send out Brief 35, I woke at 4:45 am, rolled out of bed, did a quick check of my phone as my wife was still traveling and to make sure there were no emergencies before I started the day, happy to see there are not, I do a quick check of the Brief scheduled to go out and to see if there is any news… boom… dormakaba decides it is time for another CEO change (see the press release here and more on why I think the change happened below). But buried near the bottom of the press release is the biggest news: 

"Change in COO position" 

I can not underscore how shocked I am to see that. I recently said this on stage at ACS23, where Alex Housten spoke. I not only thought he was the next CEO of dormakaba, but I have known Alex for years and have always found him to be one of, if not the best, leaders in our industry. Young, aggressive, pragmatic, and usually correct. I congratulate him on the move as I am sure it is for good personal and family reasons, but I am also sad to see him leave our industry. We need more Alex Houstens in our industry, not less. I have sent a few messages to learn more about these changes. I will let you all know what I find out.

In the end, and putting aside Alex's news, I think the dormakaba changes come down to one thing, and it was in the press release way at the bottom:

Outlook

For the 2023/24 financial year, dormakaba continues to expect organic growth to be in line with its 3-5% mid-term guidance and profitability with a sequential improvement above 2022/23 performance.

You can't survive as a CEO with 3-5% growth. 

Back to the Brief…

I am finishing up my write-ups from the recent trip to India. I spent the week participating in 4 events (2 in New Delhi and 2 in Bangalore), where I met 200+ end users, integrators, and ecosystem partners from all over the country. I can't thank Veris, Hipla, Spintly, and IDCube enough for the opportunity. I plan to break it up into two Briefs just like I did the Australia/New Zealand trip. The first is on my impressions of the Indian market, and the second is on the four companies and the events they hosted. Overall, the initial sentiment is that the Indian market is enormous, very complex, gracious, has fantastic food, is busting at the seams with opportunity, and is a global juggernaut that will have international brands with formidable resources. Why do I believe all of that to be true? You'll have to read the Briefs.

Speaking of that, onto Brief #35.

If, for any reason, I am not meeting your expectations, please feel free to let me know.

Thank you!

PS: I am sure some of you may forward this on but please do so sparingly and encourage others to sign up here. Thank you!

PSS: If you plan to be at Intersec in Dubai January 16 - 18 or want to be, please let me know, as I will be curating and activating the Thought Leadership Pavilion. It will be 2 full days of presentations, conversations, content creation, and a new spin on this conference. It is one of the biggest and best shows. Thank you, Rick Caruthers, CEO of Galaxy Control Systems, for being the first to sign up. Here is an image of the Thought Leadership Pavilion:

My Thoughts on the Gallagher Security and Genetec 2024 Market Reports

The image above is a barbershop scene where a customer asks the barber a question. Why a barbershop? What are they talking about? And why are we discussing a barbershop when this Brief is about security reports? More on that below.

Recently, both Gallagher Security (today) and Genetec (last week) released "2024 Reports." Gallagher Security focuses on Trends, while Genetec focuses on the State of the Industry. The Gallagher Security Industry Trends Report 2024 and the Genetec 4th annual State of Physical Security 2024: Embracing Technology and New Ways of Working reports offer insights into current trends and challenges in the physical security industry.

Thank you, Gallagher Security, for sending me the report so I can read it and comment before its release.

The insights are great, and reading them is worth the time. The breadth, depth, and care they are given are greatly appreciated and showcase their global scale and well-funded marketing departments. In an industry that needs to create content like this more, thank you to both companies for prioritizing the resources and time to bring reports like this to market.

But that said, I think they struggle from the same unfortunate market awareness that other reports, industry "analysts," and bloggers do when assessing the access control industry. The adage "Ask a barber if you need a haircut, the answer will always be yes" seems relevant. It is important to view these reports through the lens of which they were created. I am by no means disqualifying the information. If anything, I am qualifying it for the segment it serves and asking that we keep in mind the broader market it does not capture. Genetec and Gallagher serve the high-security market globally.

Without knowing the exact makeup and type of business the responders represent, I assume they are who we think they are: the high-security legacy market. This group of responders represents a majority segment of the legacy industry and a good percentage of the market moving forward, including schools, universities, hospitals, multinational enterprises, and more. Still, it does not represent all of the market potential, and it does not represent the majority of the changing definition or expectation of "physical security."

The reports should be used as one data point in an overall fluctuating and growing redefinition of "the security industry."

With that in mind, here's a summary of each report and an "Access Control Executive Brief take" at the end.

The Gallagher Security Industry Trends Report 2024 Summary

Executive Summary: The report focuses on the technological crossroads facing organizations in 2024, with growth being a key aim but hindered by several challenges.

Challenges from COVID-19 and Ongoing Conflicts: Acknowledges the continuing impact of the pandemic and international conflicts on supply chains, labor markets, and cyberattacks.

Security Budgets: The reports predict increased security budgets, primarily allocated to fortifying existing systems and potentially exploring new technologies.

Staffing and Training: Major challenges are recruitment and retention, especially of skilled technical staff.

Cloud Solutions and Cybersecurity: Emphasizes the importance of transitioning to cloud-based solutions and fortifying cybersecurity, focusing on upgrades to existing systems and staff education. 

Data Management and AI: Highlights the potential of tapping into security data for operational benefits, with AI expected to play a significant role in improving data management processes.

Genetec State of Physical Security 2024: Embracing Technology and New Ways of Working Summary

Executive Summary: Emphasizes the rapid adoption of new technology, accelerated cloud connectivity, increasing cybersecurity concerns, and lingering supply chain and HR challenges.

Cloud Adoption: Notes a significant increase in cloud or hybrid-cloud adoption in physical security environments, with 44% of end users indicating a quarter of their environment is cloud-based.

Cybersecurity Focus: Highlights that cybersecurity vulnerabilities were the top challenge in 2023, with many organizations deploying related tools and improving strategies.

HR and Supply Chain Issues: Reports worsening HR challenges and ongoing supply chain problems, affecting project timelines and causing delays.

OPEX Budgets: Indicates an increase or stability in OPEX budgets, with a focus on video surveillance.

Remote Connectivity and IT Involvement: 64% of end users have physical security systems allowing remote connectivity, with increased collaboration between IT and physical security teams.

Sophisticated and Integrated: One additional comparison that stood out to me was that both reports agree on the industry's direction towards more sophisticated and integrated security solutions, acknowledging the challenges and opportunities in adapting to a rapidly evolving landscape.

The Access Control Executive Brief take on the highlighted topics found in the two reports:

📈 On Growth: As I travel and speak to the global access control and smart lock industry, I agree that growth is the overriding desire, but not all growth is the same. Some see growth as exponential that stretches you and focuses on the next 30 years (for example, cloud, mobile, and AI as architecture and products and services creating value for customers using them), and others dream in increments, holding onto yesterday (example: cloud, mobile, and AI as a feature of the onsite system preferences or existing install base). Those focused on the exponential will be ahead of those who hesitate to evolve. 2023 is the start of the next 30 years of our industry, not just the following year.

🤺 On Challenges in the Market: while there are challenges, there are also opportunities from COVID-19. Specifically the acceleration of transformations such as enterprise software, an influx of capital, consolidation, reduced moats of international markets, and impacts of online communities. The most significant impact is the $70B to $100B market opportunity. So, while there are challenges, the resulting changes are net positive.

💰 On Security Budgets: all that is true, but the bigger budget will go to the broader enterprise software companies that make the access control industry a feature of a more significant value proposition.

✏️ On Staffing and Training: Manufacturers need to do more here than discuss it. What else can be done? Dedicated and collective resources at scale with an imagination of what certification and training can be that goes beyond access to product. Imagine if our industry's public and profitable private companies dedicated stock buyback budgets and a percentage of yearly bonuses to solving this problem with substantial resources. Money will solve it.

😷 On Cybersecurity: This will need to be standard practice at some point. How are we not here yet as an industry? As we redefine expectations of an enterprise system, cybersecurity is a core discipline and standard moving forward.

☁️ On Cloud: the biggest takeaway is something that we have been writing and speaking about often: the high security and enterprise market, which our industry primarily serves, is hybrid. The quicker we move to that architecture, the better we will all be. Cloud is part of remote connectivity and IT.

📊 On Data and AI: I found this one interesting as AI is, like cloud and mobile, architectures that create broad value as applied to the entire business. It's not a feature or a widget. Same with data. Data was formerly unstructured, undervalued, and underappreciated as a business tool. Moving forward, that is an old truth.

🎩 On More Sophisticated and Integrated Security Solutions: my only change would be that it's about more sophisticated and integrated solutions with security at the center. It's the space we can occupy… if we desire.

Ask Different Barbers, and You Will Find Out What is Missing.

I find it interesting to see the following topics missing that I know are trends and impacting the current and future state of the industry. Why are they excluded from their reports? Because they needed to ask different barbers. If they were to broaden their sample set, they would also find the rest of these true. How do I know? Because many of you and many others are telling me it is so. There are a total of "16 things that matter" in my "Unlocking the Inevitable" presentation that I have been giving and as members posted in the Slack group. You can also find it here. 14 of the 16 trends missing from both reports that are shaping the industry are below:

1. Margin Stacking

2. Online + Offline (Omni Market)

3. Mobile, Cloud, and AI-First (Companies)

4. Shift From the Door to the Person

5. User Experience

6. Single Pane of Glass

7. Importance of Community

8. Video Access Control

9. A Fit for Purpose

10. Consolidation

11. Historical Moats Being Reduced Globally

12. Impact of high interest, low office occupancy rates, and the rise of the neighborhood

13. A Redefined Channel

14. Managers Out, Leaders In

It is also essential to not ignore these additional trends impacting our industry:

• Enterprise Software vs IT Convergence

• The influx of PE and Strategic Capital into the Market

• Refined "Data" as a Business

• Trust and Comfort

What are these trends' impacts, and what will they be?

• A Value Arbitrage

• Parts of Our Industry Becoming a Feature

• New Truths

• Winners and Losers

• Both Old and New (for awhile)

• Co-option: Compete + Cooperate

Again, I cover all of these in detail in the video found here, so please check it out to get a deeper level of context of what I mean by each.

2023 is the year we look forward as an industry. There is no better time to be in the access control industry. We just need a broader lens.

Here is list of what we have planned for 2024 (subject to change). If any of these interest you and you want more information on them, just reach out. 

• I will continue writing The Briefs 1-2 times a month. Any feedback? Please let me know. 

• www.acalerts.co will officially launch. I am playing around with the model and want to use video more with it. Do you have news? Think of this as a resource. 

• We will continue to engage on Slack. As one member just wrote me “Lee your Slack has been invaluable. I got a visit set up with [name] too get to know him and see if we can work on synergy. He's going to be visiting my factory and we're going to lunch probably next week. I invited another friend to the AC Executive Brief. That friend wanted me to do a bunch of Zoom calls with some long shot customers. I told him to stop messing around, the players are all on Lee's Slack channels.” 😢

• Global Access Control Topo Map will continue to develop. My plan is to break out the different categories and go more in-depth. What do you think of the new design?

• AC50 Index will launch. We need data and we need to tell our story. I am going to start small but will build.

• AC Enablements is coming. I want to create a community marketplace for reports, marketing services, and more. We have a deep community and if we work together we can leverage all our strengths. 

• AC Experiences will do an event called #accesscontrol. This influencer event will be held at manufacturers facilities. More details to come but it will be a small group around 25 attendees. Time to redefine “specifier” and “influence.” 

• We have 4 “Whitepapers" in the works but they will be different and done our way. First one? The redefinition of enterprise. 

• I will continue to leverage LinkedIn with more programatic posts and to use it as a way to drive more awareness of trends, news, and Access Control Executive members. 

• I plan to get into the market and visit with company’s. I will do this scheduled outside of events and shows. Next up? India 🇮🇳 late November.

• I am going to launch a 10 episode podcast that will cover the “and” of our industry. More to come. 

• I am working on an Ebook titled “The Access Control LinkedIn Blueprint: Crafting a Presence that Stands Out.” My intent is to make it no cost to members with a possible webinar and charge non members to access it. 

• I will continue to document the History of Electronic Access Control. The truth is, this is becoming a lot harder than I anticipated. It will not be out in December and I may refund the money I raised. Regardless, I will continue to work on it. It is extremely hard to get the pioneers of our industry to talk, but I am not discouraged. In fact, I am even more determined. It is just taking longer than I like.

• Here is a preliminary list of conferences and company events where I am speaking. On that, if you would like me to present, moderate, or attend any of your company events, please let me know. 

  • January: Intersec in Dubai with The Thought Leadership Pavilion, podcast and videocast on the show floor, and much more. 

  • March: MIPIM in Cannes. Still working on the details, but we will have a presence. 

  • April: 

    • ISC West in Las Vegas. We will not be doing The Lounge but we have a ton planned. If interested in any of these, please let me know.

      • ACS Pop Up: In-Booth Activation: 

        • Stage interview format

        • Duration: 12-4pm in partner booth

        • In person, live, and recorded interviews/discussions

        • Scheduled guests for 1:1 topics and panels

        • Engagement with the crowd

        • Comprehensive digital marketing and promotion before, during, and after

      • Executive Briefings on Themes

        • Private themed presentations in partner booths

        • Morning sessions (Wednesday & Thursday)

        • Guided booth tours aligned with the theme following presentation

        • Curated list of participants

      • A Happy Hour (TBD)

      • Podcast/Videocast on the Show Floor

        • Scheduled podcasts throughout the show 

        • Engage attendees through on-Site podcasting/videocasting

        • Comprehensive digital marketing and promotion before, during, and after

        • Sign up information available in 2024

    • Expo Seguridad Mexico in Mexico City

    • The Security Event with The Forum in Birmingham UK. The response so far has been amazing. We have 2-3 pods left and 3 full days of Thought Leadership to activate on stage.

  • May:

    • CREtech London where we will have an expanded “Access Control and Smart Lock Village” and create an immersive Connected Experience.

    • ACS Europe. Location TBD

  • August: SIA acceleRISE. We will continue to support this group and it is an honor to be able to sponsor the happy hour every year. 

  • September: 

    • Legic Connect24 in Switzerland 

    • Security Essen in Messe Essen

    • GSX in Orlando

  • October:

    • ACS24 in Washington DC

    • OPTECH in Gaylord National Resort & Convention Center National Harbor, MD

    • Securing New Ground in New York

    • Skydd in Stockholm, Sweden

  • November

    • CREtechNY where we will have an expanded “Access Control and Smart Lock Village” and create an immersive Connected Experience.

    • ISC East in NY

  • December

    • Security Investor Conference in NY

Other events I am thinking about: 

• CONSULT

• Blueprint

• APAC region event

• Latin America event

• Canadian event

• South Africa event

If there are other events or initiatives that you believe would be valuable for you, me, or the community, please let me know.

Click on the images below to see some recent interviews made with executives in our industry: