Thrive or survive – a critical choice must be made before it is too late. Everyone who knows me, knows that I live, breathe and eat cloud-technology – cloud-based access control to be more specific. They also know that I am very passionate about this adoption and if you met me on the street, I would introduce you to ACaaS as if it were my own child. What is about to happen will change the security industry as we know it today, forcing some to fall from our ranks and others to emerge as powerhouses.
When the dust settles from our industry’s transformation, how will you emerge? Will you thrive or struggle to survive? It is time to decide. Today’s competitive landscape is incredibly dynamic and the industry’s growth thus far has been incredible. The emergence of cloud technology has changed how efficiency, profitability and revenue growth is gauged and has brought new metrics, such as user experience, capabilities and integrations, to the forefront of what influences marketplace decision makers. Analysts are projecting that by 2025, cloud-based access control (ACaaS) will surpass traditional access control in revenue share for the access control segment and that is not even the half of it. Analysts are also predicting that the entire access control market segment, by 2025, will be driven by ACaaS, biometrics, visitor management and wireless locks; furthermore, the access control segment as a whole will surpass the intrusion segment in annual revenue production, muscling its way into second place behind the video segment. Positioning an organisation in the marketplace, right now, to play in this competitive landscape is of profound importance; the life or death of the company may hang in the balance.
As is well known, for whatever the reason, the life safety and building security solutions industry has been apathetic in the adoption of new and/or cutting-edge technology, which will soon start to thin the industry’s ranks. Here are a couple of things for readers to mull over. Think of the last time you were driving somewhere and did not know exactly how to get there – did you pull over to buy a map? When was the last time you went to the store to rent a movie for ‘movie night’? When was the last time you wrote a letter and mailed it? The culprit in all these scenarios is cloud technology. Analysts are projecting that in five years’ time, cloud-based access control will be at a compound annual growth rate (CAGR) of almost 29 percent and organisations need to claim their spot at this table now.
Here is Why
The history of technology, without exception, has consistently demonstrated that at some point all technology eventually matures and takes that next step in the evolution process. This critical window of opportunity is also influenced by the fact that development in transistors – their processing power, capability, foot print and costs – are reaching a critical point simultaneous to the anticipated growth in the ACaaS marketplace. Moore’s Law is the observation that the number of transistors, or rather their performance, in a dense integrated circuit doubles approximately every two years; some argue or revise to 18 months. Additionally, Moore’s Second Law states that as the cost of computer power to the consumer falls, the cost for producers to fulfil Moore’s law follows an opposite trend: R&D, manufacturing and test costs have increased steadily with each new generation of chips. Most semiconductor industry forecasters, including Gordon Moore, expect Moore’s law will end by around 2025–2030. (The evolution of processing power will open the door to new technologies such as bio-processing, synaptic firing processing and other ‘science fiction coming to life’ scenarios, but that is another topic for another day). The critical point at which the development of transistors caps out will lend rise to and create the perfect environment for the prevalence of edge computing, which will complement existing cloud environments.
Edge computing allows data produced by Internet of Things (IoT) devices to be processed closer to where it is created instead of sending it across long routes to data centres or clouds and, when it is combined with the anticipated smaller footprint, higher processing capability and lower cost of transistors, computational processing previously done by servers in cloud environments will now be able to be executed by edge devices at a significantly lower cost, making cost to ownership for access control end-users much more palatable. Sounds great? It is, but organisations will have to have a cloud environment, evolved to support edge devices, operational. Doing this computing closer to the edge of the network lets organisations analyze important data in near real time – an organisational need across many industries, including manufacturing, health care, telecommunications and finance.
What exactly is Edge Computing?
Edge computing is a “mesh network of micro data centers that processes or stores critical data locally and pushes all received data to a central data center or cloud storage repository (today’s cloud environments), in a footprint of less than 100 square feet,” according to research firm IDC. It is typically referred to in IoT use cases, where edge devices would collect data – sometimes massive amounts of it – and send it all to a data centre or cloud for processing. Edge computing triages the data locally, so some of it is processed locally, reducing the backhaul traffic to the central repository. Typically, this is done by the IoT devices transferring the data to a local device that includes computing, storage and network connectivity in a small-form factor. Data is processed at the edge, and all or a portion of it is sent to the central processing or storage repository in a corporate data centre, co-location facility or Infrastructure as a Service (IaaS) cloud.
Why does Edge Computing Matter?
Edge computing deployments are ideal in a variety of circumstances. One is when IoT devices have poor connectivity and it is not efficient for IoT devices to be constantly connected to a central cloud. Other use cases have to do with latency-sensitive processing of information. Edge computing reduces latency because data does not have to traverse over a network to a data centre or cloud for processing. This is ideal for situations where latencies of milliseconds can be untenable, such as in financial services or manufacturing.
Connecting the Dots
Let’s make a few summary conclusions and put everything together. First, technology evolves and consumers love it. No more maps, no more running to the movie rental store, no more records or record players; consumers can have all of this stuff faster, cheaper and better. In short, customers love technology, especially the enhanced feature sets that come with it. So many industries have already gone through this transformation, so consumers already expect mobility, ease of use and an enhanced user experience, all of which cloud-based access control delivers.
Many other industries have already crawled, stumbled, walked and eventually ran down the cloud-based technology path before the access control industry – in essence, they were cloud-technology’s guinea pig – as a result, the access control industry is taking advantage of what was learned when they went through this process and its migration will happen much faster with less stumbles. Today’s consumer expects technology that is better, faster, easier, intuitive and for less than they were previously paying for their ‘on-premises’ product.
Developments in resistor technology will give birth to devices that are more affordable and more powerful. Smaller footprints on circuit boards will provide room for enhanced capabilities and encryption, using less bandwidth, which will lower cloud environment costs. The aggregate sum of all of this makes the industry segment more efficient, faster, stronger and, considering the lower cost that will eventually come to fruition, bring into the fold an entirely new vertical where access control was previously cost prohibitive. Based on this information, cloud-based access control will have a huge advantage when compared to traditional-based access control and certainly when compared to what is currently in the marketplace.
Made your decision? Here is what the future holds.
- I have a cloud environment or am about to build one. Either way, yes, I am in. The first and most important rule to a successful ACaaS offering: if you do not follow it, do not expect to be successful building a meaningful recurring monthly revenue (RMR) engine. You must lead with your ACaaS offering for all access control opportunities, every sales person in your company, no exceptions. Make a strategic product offering decision that drives every dollar for access control opportunities to your RMR engine, otherwise, your return on investment will be too far out to compete. It is all about cornering market share for what is about to take place. If your ACaaS offering is just another screwdriver in your tool chest of products, you will not be successful in building a meaningful RMR engine, period. Ensure your sales team undergoes training to transition from selling a product to selling a service and ensure they know your ACaaS product offering like the back of their hand. Your sales team will need to become technology consultants, helping clients to formulate a cloud strategy, not just security sales people in order to be competitive in the future. With ACaaS taking an ever-growing market share, projections to 29 percent CAGR in five years, the showcasing of technology, apps, real-time management, aging of existing traditional access control systems, edge devices, lower costs to consumers and, to top it all off, your very own recurring monthly revenue engine that will allow you to be more aggressive on other lines of business since your RMR engine is reducing overhead, the best customer retention history for any offering in any segment in our industry you are a part of the future where access control is concerned. Well done. Enjoy building a legacy that is built for tomorrow.
- I am comfortable selling traditional access control. That is what I know. While ACaaS will not play in certain scenarios and/or markets, such as Homeland Security, CIA, military, there are a couple of things to consider. In five years, traditional-based access control is expected to be at nine percent CAGR and ACaaS at 29 percent. The CAGR of the market you play in is directly related to the growth potential of your company. When you bid against a company that has an ACaaS offering and its associated RMR engine is churning away, they can do the job for less than you can, they can offer a greater stable of feature sets, and can make just as much net profit than you can, if not more, even though their bid is calculated using a lower margin. Clients with aging systems that are prime for upgrade will want to know what new feature sets will come with the upgrade/cost and traditional access control just cannot compete with cloud-based access control. Consumers’ expectations define the demand, not the products you choose to offer and, after so many different industries have already made the migration to cloud-based technology, consumers are already expecting the feature sets and mobility that cloud-based access control can provide. Ask yourself this: Are you offering what you want to sell or are you offering what the consumer wants? Are you acting in your end-user’s best interest? Will what you are selling help the growth of your company?