Volume 4 | December 8, 2022
4 Things As We Close Out 2022
First, recently I had a company sign up for the corporate package for the Access Control Executive Brief. Very exciting (personally). What I do for that package, outside of give permission to share freely within their company, is write up my thoughts, ideas, opinions, and research on an agreed-upon topic, and we then meet for one hour to discuss further. In full disclosure, this type of engagement (written + video call) was an experiment, but it has turned out fantastic, so I am rolling it out as a standard offering. Here is a link to the details.
The conversation with this client triggered me to write the article below about the video reader market. This product category is poised to explode as our industry goes more mainstream and focuses on vertical solutions.
Second, my quick thoughts and analysis on ASSA ABLOY acquiring the Hardware and Home Improvement division of Spectrum Brands and selling Emtek, August, and Yale businesses to Fortune Brands.
Third, I have also included additional information and data on the 2023 Access Control Predictions (they went viral on LinkedIn).
Fourth and definitely not least, I partnered with James Dice of Nexus Labs on a blog series discussing the intersection of access control and smart buildings. Please check out the article by clicking here or on the fantastic image Bert Hart created showing the difference between our $10B, $70B, and possible $100B+ opportunity as an industry. As part of the partnership with Nexus Labs, they offer Access Control Executive Brief subscribers a 10% discount on their membership. I am part of this amazing community and highly recommend you join. Use this link to sign up https://www.nexuslabs.online/odess.
There is a good chance this is the last Access Control Executive Brief for 2022. If that is the case, have a healthy and happy holiday and New Year! I am excited about 2023. I have many amazing things planned and am looking forward to an entire year of working on this.
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!
The Case for Video Readers
We must first examine how we got here to discuss what is coming.
Historically, we had "One Truth," which was "keep bad people out." Nowadays, the access control industry comprises two truths in motion simultaneously. As you know, I call these "Old Truths" and "New Truths."
As a refresher or for those of you who are new to my writing:
The Old Truths: Today and Yesterday access control from 1973, a cottage industry focused on high security, whose only job is to keep bad people out. This Old Truth started at airports, government facilities, labs, and schools and has been "horizontally" brought to market regardless of fit. This Old Truth is a $10B cottage industry (excluding China).
The New Truths: Today and Tomorrow access control centered on safety and security and does a great job of keeping bad people out but also focuses on conveniences and value beyond locking and unlocking. This New Truth is the mainstream market and is about Enterprise Software. This New Truth is a $70B market (excluding China. Side note: there is a $100B ESG+R opportunity. Another story for another time).
Some companies in our industry have been about the New Truth for some time. But, unfortunately, the market at scale was just not ready for it. It is now. Our industry is/was stuck in high-security, channel-only mindsets, and end users have yet to be fully aware of what else access control could do for them. But the good news is, there is a sea change happening right now, and those who approach the market with fresh eyes have all the opportunity to lead the change.
In many ways, that is what the video reader represents. As you look at what products and services you should bring to market, you should focus on the less defined market. The mainstream market. The larger market exists in Enterprise, Multifamily, and Commercial Real Estate. This market concentrates on conveniences, leveraging the value beyond locking and unlocking. You need to take the approach and ask yourself, "What hardware do we need to create that supports our software strategy?" Unfortunately, most companies build the other way. And most blogs that cover our industry give you a false sense of where the market is and where it is going. They ask, "what software do we need to build to support our hardware?" And that is why most players in our industry will continue to be lifestyle businesses and will continue to be unspectacular at best. They focus on the cottage.
In summary, you need to ask, "what hardware do you need to build to support your Enterprise Software offering?" And if you ask that question, then the answer is clear. You 100% need to build a video reader.
Below are my quick thoughts on how, why, and for what reason:
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The video reader is a case of when not if. Every company at some point in the access control industry will have a video reader. Companies such as Openpath and Brivo already have one. "Nontraditional" access control companies already do: Axis, ButterflyMX, Liftmaster, Ring, etc., all do as well. Brivo and Openpath didn't do it sooner because, in my opinion, they have taken the traditional channel route and mirrored what legacy players have (today and yesterday). If you were to ask them if they wish they would have done this sooner, I believe they both would say, "yes." When I was at Brivo, we often sold "every door needs a reader and a camera." Classic peanut butter and jelly value proposition story. They make each other better, and frankly, customers want it. In many ways, they expect it.
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The markets where a video reader is prime for adoption are Enterprise, Commercial Real Estate, Life Sciences, and Education (K-12) markets. All are growing markets poised for Enterprise Software solutions and fit nicely into this product's value proposition.
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A market trend leading to why now is a good time for a video reader is consumerization. As the access control industry goes mainstream, the traditional products/services will be coming from the high-end top of the market triangle (again, airports, etc.) but will also see pressure from the bottom of the triangle, from the consumer market. They will meet in the middle, and the expectation will be that systems function like they do at home.
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Expectations that devices do more. What was once a feature is now a bug: The siloed nature of our industry under the pretense that it delivers more security is no longer a reality. Our products need to do more. The days, especially as you go down the market, of having separate systems (eg. Access control and video) are done. It happened in the audio/video industry. It is happening here.
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The product must be priced accordingly. The economics need to make sense. You need to leverage the capabilities and functionality of having a camera included versus being just a hardware reseller like the rest of your competitors. Again, think of more enterprise software with this.
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When you look outside North America and most of Europe, you start to see this as a standard offering. For instance, cameras are a standard for Enterprise and consumer offerings in Japan beyond traditional players.
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QR code intercom is now a thing (here from Unloc and here from EvTrack). Low barrier of entry. Great practical use. Rife with security concerns but expect to see it everywhere. It may be an alternative option to go along with your video reader.
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And in reality, why would you not? Outside of raising the price of a reader and some privacy concerns, it's a natural progression and should have been done long ago. The only reason it wasn't is because of traditional mindsets and the dealer channel.
Keep in mind: Privacy concerns. This is real and needs to be met with good practices, marketing, and a better comms plan.
Use case/Value Proposition in Enterprise, Commercial Real Estate, Multifamily, Life Sciences, and Education market:
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Visitor verification
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Deliver comfort
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Not just for recording but for action and intent
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Facial authentication
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Efficient workflows
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Maintaining a visual record of all occupants across sites.
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Eliminate physical credentials
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Two-way audio and video for non-credentialed users
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Tailgating Detection
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Good point solution
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Reduction of SKUs and complexity when ordering, servicing, and costs
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Ideal for existing customers in verticals such as commercial buildings and schools
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Intercom: initiate calls, communicate with assigned users
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Track occupancy
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Enforce capacity limits
Examples of Companies and Video Readers on the Market:
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Alcatraz and every other "AI reader" company
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Every intercom and gate entry company, such as ButterflyMX, Liftmaster, and Doorking.
Below are my quick thoughts on…
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This move is smart by both companies but very smart by ASSA ABLOY. Trade a A- or B+ line of locks that needs a ton of investment and is probably losing money for an A+/A line of locks that comes w a massive manufacturing facility that OEM/ODMs for many and allows them to control their costs.
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This acquisition will be rough for one “not to be named” company in retail. They now have to deal with a strong ASSA ABLOY presence with a Kwikset low price entry lock and a company in Fortune Brand that is now motivated to make this all work. The existing "rules" are being rewritten in smart locks and retail. It should be fun to watch. We have had many years of no motivation. We now have a ton of motivation injected into the industry. Who is the winner? Consumers.
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I am personally excited to see what they do with Baldwin. Wildly under-resourced and wildly one of the best locks on the market.
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Fortune Brands will need to invest more to make this work, but it will not. History has shown this to be tricky, and their new business needs a ton more investment.
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I bet the Nest x Yale lock is a hot mess of a deal, and they are now out of it. Total speculation, but smart locks are a terrible smart home product, and the desired adoption has never been met.
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ASSA ABLOY keeps the Luxor One and other multi-family products but is now out of the smart home side of the business, which is a loser business (tied to “other” value propositions = winner. Stand alone = loser). This is especially true with Mattercoming. Matter moves value to the ecosystems and commoditizes the hardware. Again, smart locks are terrible smart home products.
All in all, the two winners here are consumers and ASSA ABLOY.
Some Data Behind the 2023 Predictions
As many of you know (and participated), I asked 60+ industry experts from all over the globe, "what do they believe will be the trend or their prediction for access control in 2023?" You can find them all here and here. I had to break it up into two groups because of website limitations. Thank you all that participated and if you have not done so yet, feel free to reply here and let me know. Below is a word cloud, some data, and the top words used within all the predictions. What insights do you take away from all the predictions?
Click on the image below to see what it takes for our industry to go from $10B to $70B and possibly $100B.
I partnered with James Dice of Nexus Labs on a blog series discussing the intersection of access control and smart buildings. As part of the partnership with Nexus Labs, they offer Access Control Executive Brief subscribers a 10% discount on their membership. I am part of this amazing community and highly recommend you join. Use this link to sign up https://www.nexuslabs.online/odess.
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