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COMMENTARY // Taking the pulse of the government security marketplace
While strolling up and down the aisles at the ASIS New York City Chapter’s security expo at the Javits Center on April 30, I tried to take a quick reading on the current state of the government security marketplace, but frankly the views of half a dozen exhibitors were all over the map.
I wondered whether the economy-wide recession during the past two years was depressing government procurements, or whether the Obama administration’s pump-priming stimulus program had led to an increase in such government purchases.
One industry executive, who requested anonymity, suggested that the urgency felt by the Obama administration to make the stimulus program look successful, had led to something of a “spending frenzy.”
“It’s out of control,” this executive continued, in a far more positive view than most of his colleagues displayed. “It seems to be a question of how fast they can spend the money.”
Bernard Drury, Jr., vice president of sales and marketing for aviation at Henry Bros. Electronics, Inc., perceived a strong impetus for governments to make purchases, but he wasn’t impressed with the thought processes that underlay many of those purchases. “People buy categories, not solutions,” Drury observed.
To illustrate his point, he cited the video analytics niche, the computer software which enables video cameras to detect anomalies and trigger alarms. Drury has seen government buyers receive grant money to purchase video equipment, and then rush out to procure any available video analytics program, before fully investigating the differences between dozens of competing products.
Laurie Aaron, vice president for government and alliances at QuantumSecure, senses an increased tempo in government purchases in recent months, but attributes it to a different phenomenon. She pays a lot of attention to the government’s procurement of access control and identification management systems, in accordance with Homeland Security President Directive-12, known as HSPD-12. Even though she acknowledges that the Bush administration might have pushed those HSPD-12 initiatives more aggressively than the Obama administration, she nonetheless sees the momentum building.
“The HSPD-12 ball is rolling now,” observed Aaron. “So, even though the Obama administration is not pushing it uphill, the ball is definitely rolling.”
In much the same win, Aaron is pleased that the Department of Homeland Security is moving forward with plans to consolidate its headquarters at the St. Elizabeth’s campus in Southeast Washington because she believes that a recent RFP (which includes state-of-the-art access control devices) will have a positive ripple effect throughout the government marketplace.
Of course, most observers tend to see any phenomenon – in this instance, the state of the government security marketplace – from their own perspective. Kevin Olivier, vice president and general manager of BH Security, is a case in point. Olivier is pleased that the stimulus dollars finally seem to be reaching the “mid-market,” where his company operates.
“We go after federal facilities with under half a million square feet,” he said.
In recent months, Olivier has noticed several new projects that are upgrading access control and CCTV systems. “We’re looking at armories in New Jersey that are storing hundreds of rounds of ammunition that are not being monitored in a modern way,” he said.
In past years, expenditures for access control and CCTV upgrades might have been considered “frills” by some government departments, said Olivier. Fire and burglar alarms were deemed necessary, but access control and CCTV were difficult to justify, he explained. However, that thinking now seems to be fading away, he concluded.
Stephen Green, a major accounts manager at Genetec, and Craig Albrecht, a vice president at Security Management Systems, Inc., had a different take on the subject. They attribute some of the uptick in government sales to the always-difficult-to-pinpoint stimulus dollars, but they seemed to agree that a better explanation was the never-ending quest to keep up with your neighbors. As soon as one police department or emergency operations center procures a new access control or video surveillance system, the neighboring jurisdiction begins salivating for the same – or even better – equipment, they explained.
Genetec made some initial sales of its equipment to the Chicago Police Department. Before long, the fire department, office of emergency management and the schools in Chicago were eyeing similar gear.
“There is the expectation in the surveillance market of better and better coverage,” said Albrecht.
Genetec sells systems that enable jurisdictions to “share” information with neighboring agencies, while still retaining control over that information. This becomes a valuable feature, Green explained, because agencies are feeling pressure from their bosses to “share” more freely with their neighboring agencies, but they still don’t want to give up control of their hard-won data.
Jessica Hagstrom, a government sales person with Michael Stapleton Associates, which offers sniffing canines and remote monitoring of X-ray screening equipment, among other services, sees a trend toward the “privatization” of traditionally government functions. She points to the possible privatization of canine guard services as one illustration of this emerging trend.
Finally, at my last stop, I ran into Ben Jakubovic, vice president at Avante International Technology, Inc., who has been involved in the government marketplace for many years. He observed that this is a cyclical business which is often characterized by a “big mismatch” between what a government customer would like to procure and what he has enough money to actually procure. He did not buy the optimism that some people on the show floor seemed to feel.
“It’s not the worst market I’ve seen,” said Jakubovic, “but it’s below average.”
However, even Jakubovic could entertain the possibility that the worst was over.
“The leading indicators seem to be pointing upwards,” he admitted, grudgingly, “but I’ll wait until I start seeing P.O.’s getting cut again.”