OPERATIONAL SECURITY SYSTEMS, INC. (OSS)
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1 OPERATIONAL SECURITY SYSTEMS, INC. (OSS) About the Company Operational Security Systems (OSS) is a $10 million systems integrator headquartered in Atlanta, Ga., with a branch office in Orlando, Fla. Founded in 1972, OSS primarily serves customers in the southeastern United States, but also has worked on a variety of projects across the country, in the Caribbean, and in Europe. Annual technology specified by the company in 2015 was estimated at approximately $6 million. Types of Work Install 68% Service 30% Monitoring 2% Product Areas Access Control 30% Video Surveillance 58% Fire Systems 1% Intrusion Detection (alarms) 5% Building Automation Communication Systems 1% IT Infrastructure 2% Perimeter 3% Safe/Vaults/etc. While the company handles projects for a diverse array of commercial enterprises, its largest verticals are education/universities/government. Most projects are in the $20,000 to $200,000 range, however, the company has handled integration projects up to $2.5 million. The integrated systems installed by OSS usually have access control and video components and often have elements of intrusion detection, along with intercom systems. The company differentiates itself as an integrator of more involved projects for commercial customers and maintains that edge with experienced project managers and engineers who are well-versed in computer and IT systems and have the skill sets to handle complex systems. The company s ratio of engineers to total employees is very high by industry standards, with more degreed engineers on staff than most integrators. Focusing on Better Security through Engineering, the company continues to customize its internal systems to make OSS more efficient. 1 P a g e
2 Vertical Markets Airports Commercial Buildings 5% Education 20% Financial/Banking 15% Gaming Government 10% Healthcare 14% Industrial 5% Pharmaceutical Residential 1% Transportation Utilities 30% Other End user customers number about revenues are projected to increase from previous years due to improved market conditions. While OSS customers are looking for high definition video and video analytics and requesting systems and technologies that will save them money, the pent-up demand due to previously restricted budgets is opening up. The company sees that while cost is important, value is increasingly taken into account today. About Attendee Jim Coleman, president and founder of Operational Security Systems, is responsible for setting the strategic direction of the company and making sure departments are helping the company grow into its strategic initiatives. He is involved in building and maintaining manufacturer relationships. Coleman serves on several manufacturer advisory boards, participates in higher level meetings, and attends manufacturer conferences. He has been with the company and in the security industry for more than four decades and has a Bachelor of Science in electrical engineering. Coleman is the past president of Security-Net, headquartered in Exton, Pa. Established in 1993, Security-Net is known in the security integration industry for combining innovative and advanced technology products backed by best-in-class service to deliver intelligent security system solutions for customers in private industry and the government sector. Coleman has also served on the SecurityXchange Advisory Board for 15 years. Security Industry Challenges 1. As the industry matures, the integration industry is experiencing consolidation and redirection and integrators are being purchased by guard companies, door/hardware companies and other integrators. As larger companies come into the integration business and profits continue to be challenged, the smaller integrators have a harder time thriving. 2. Large end users have become increasingly knowledgeable of industry details and some have trended toward self performing aspects of traditional integrator functions. 3. Legacy video manufacturers have been challenged by low-cost offerings by Pacific Rim companies. Cybersecurity Concerns Cybersecurity is on clients minds, often from a perspective of fear, uncertainty and doubt. Keeping design and as-built documents secure is a challenge to integrators. Keeping products hardened to compromise is a challenge to manufacturers. We both need to be discussing best practices and the range of precautions needed to match our client base needs. Our suspicion that the rapidly growing lifestyle market, with web enabled everything will have its share of cybersecurity embarrassments before they develop sufficient hardened practices and protocols. 2 P a g e
3 Technology Consideration Process The company centralizes new manufacturer relationships to keep calls on project managers and salespeople at a minimum. The process of making contact with a manufacturer generally originates with a vendor rep contacting OSS by phone or mail. As new vendors seek to establish relationships with OSS, they are referred directly to Coleman. The company has existing relationships with many manufacturers of security products and selectively adds or changes when another manufacturer offers a product with a unique and/or differentiating feature. This opens a window to other manufacturers when the industry is moving in a new direction and OSS wants to participate by using new offerings in that area. The company purchases from both small and large manufacturers. Coleman is well apprised of developments in areas that may have future applications for OSS. He has seen an increasing number of manufacturers selling through distributors and not working directly with integrators. Because distribution works differently in the IT world than in security, Coleman says integrators have seen a big change in the way manufacturers go to market, as industry distributors take a larger role in establishing relationships with manufacturers. The company works with about 50 access control, video, etc., manufacturers, including Tyco, Schneider Electric, Panasonic, Genetech and Honeywell. It builds relationships on a personal level, based on interactions with each manufacturer. With so much consolidation in the industry and changes in people, Coleman seeks personal relationships with multiple people at a manufacturer via manufacturer conferences, meetings, trade shows, and other venues. The company s best relationships are with manufacturers that: Will be around for a while. Have technologies that will solve problems today. Have innovative products that provide access to new revenue streams. Have products that are interoperable with widely used standards and offer OSS the opportunity to differentiate itself in the marketplace. Coleman has attended every SecurityXchange. Every year I go in with an open mind and end up learning about people and companies I didn t know about before and learning new things about people and companies I did know, he says. Product Category Interests Access Control Biometrics o In the past year we have tried some facial recognition with positive results. o Latest in facial recognition and fingerprint technology. Cards & Readers o How do we convince customers they need to improve their card technology? o Addressing 125K cloning concerns. IP Based Access/PoE Edge Technology o This is being requested by clients whose security is driven by their IT departments. Integrated/Intelligent Locks o This technology is becoming a bigger part of the landscape. o In need of manufacturer updates to be sure they know the best ways to support these products. 3 P a g e
4 Long Range Reader (UHF, RFID) o Interested in Bluetooth technology. o Increasing client demands for ability to read multiple people/credentials inside of a car going through an entrance gate. Identity Management o Seeing more interest in the logical side of access control. o Beginning to see early interest by corporate and institutional clients. o What are some of the innovations in ID management? Mobile Access/NFC (Near Field Communications) o Seeing lots of interest in doing some trial applications. o The stick that drives you to try this is the 125K cloning problem, and the carrot is the mobile access capability. o Need to become more fluent in the nuances of this technology. Asset Tracking - GPS, RFID Some customer interest in using industrial RFID for security applications. Central Station Solutions Seeing technology refresh projects with existing clients who are interested in command control capabilities. How do you do the integration so that when events happen, the right information is presented to the end user in the right sequence? Design includes intercom but not radio dispatch communications. Cloud Based Solutions Most existing clients remain reticent to put security in the cloud. Interested in being exposed to the offerings to stay current on what is available and successful, particularly which niches of the market seem to be receptive to cloud-based solutions. Distributor Open to specialty distributors, e.g. distributors that specialize in RF data links or locking hardware. Emergency Communications IP intercom and exterior emergency phones: high-end offerings and lower-end with not much in between, so new product offerings in that middle space are of interest. Lighting Exterior LED lighting to address low light inefficiencies Interested in how to use LED lighting for energy savings for client parking lots and new construction. Companies interested in or holding LEED certifications require this and are willing to pay a premium. Locks & Doors Any advances in intelligent locks. Site Perimeter Security Solutions Of particular interest are vibration detection and geophone detectors that use digital signal processing to decide whether incoming data is worthy of attention. Power Supply Solutions and Monitoring Intelligent power supplies and remote diagnostics. 4 P a g e
5 Software Incident Management o Would like to expand knowledge of this type of software. Video Analytics o Intellectual property libraries. o How do you use video analytics in a crowded marketplace to solve people s business, as well as security problems? License Plate Recognition o What are the latest and most effective features now available? Visitor Management o Anything new in this area? Storage Servers/Cloud Storage o Help dispelling client concerns about the safety of cloud storage. NVRs /Servers/Edge Storage o Any advances in this technology. Video Surveillance Increasing knowledge base in all categories is of interest. o IP/HD Cameras o Infrared Cameras o Wireless Cameras Wireless Systems Mesh Routers, Bridges, Broadband Connectivity Innovations in wireless systems. Emerging Technologies Being able to talk knowledgeably about robotics, their value propositions and how they work, is useful. Drones offer another good conversation piece if you can talk knowledgeably. What are the regulatory concerns, the cost parameters, uses as a security tool, etc.? Other technologies I am interested in better understanding which emerging technologies will be disruptive to the physical security marketplace. Which technologies will allow integrators to differentiate themselves in an evolving market environment? These may be technologies that allow new business models to appear and thrive. 5 P a g e
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