Page 39 - Security Today, January/February 2022

switching to a recurring monthly revenue (RMR)-based business model. RMR is the cloud video surveillance business model, and it is part of a smart, long- term plan for resellers who want to build a strong business.
True cloud video surveillance is sold via subscription. End users pay a per- camera fee, which is based on the camera resolution and how long the video is retained in the cloud. The subscription model, or RMR model, is profitable and sustainable. In addition, when a reseller is ready to sell their business, those with RMR are more valuable.
The Security Industry Association in December put out its annual Megatrends report, where “Cloud and Service Models” is identified as a major trend. In that report, Imperial Capital EVP John Mack explains why RMR is important when it is time to sell a business.
“There are clearly much higher valuations for companies with recurring revenue models. Witness that security integrators with mostly one-time install revenue will trade for 0.5 to 1.5x revenue while recurring-revenue-focused alarm companies will trade for 3 to 5 times annual recurring revenue or ARR,” Mack said. “And then in the high technology SaaS [Software as a Service] businesses which are heavily recurring revenue focused, you can see revenue multiples of over 10x.”
For resellers who are accustomed to one-time install revenue, the transition to an RMR model takes time and planning. As more resellers make the move to cloud and the RMR model, they are taking advantage of vendor training and partner programs to get set up for subscription (RMR) model selling.
The trend list makers of 2022 are onto something. AI and cloud, many agree, will fundamentally change the video surveillance industry for the better. This represents a tremendous opportunity for security resellers who embrace cloud and AI, to position themselves
and their customers for success beyond 2022.
Dean Drako is founder and CEO of Eagle Eye Networks.
Q. Haven’t sensors been used in physical security for decades? How are the new sensors different from the old sensors?
A. Wired door and window sensors have been commonly used in security systems. However, they must be physically wired back to the security or alarm system and need to be installed during construction. Over the past decade, wired sensors have been replaced by small bat- tery-powered wireless sensors, which can be easily placed anywhere on the property and are able to measure many more conditions important for security, safety, and property health.
The newest improvement is 24/7 cloud-based monitoring of the wireless sensors. This gives security directors and property manager’s confidence that their staff will receive an immediate alert to health and security issues in their properties. Data stored on the cloud is used for reporting and compliance, and to analyze and improve property management techniques.
Q. What is the most common use for sensors?
A. Monitoring temperature and humidity, water presence (flood detection), air quality, doors and windows, activity/movement, electric power, and water flow are the most com- mon uses for sensors. The combination of sensors and artificial intelligence, explained below, is increasingly popular.
Q. Are sensors used in new and creative ways? Please give some examples
A. Sensors are an ideal complement to a security camera. The combination can quickly identify the location and cause of a problem and alert the appropriate personnel. For example, if a walk-in freezer door is open, the temperature sensor will send an alert along with video of the open door. This allows staff to visually assess the situation.
Similarly, an activity sensor, which wakes up when it detects movement, can be placed on valuable items that need be moved. When movement is detected security staff receive an alert, which includes a video clip so security staff can determine in real-time if a problem needs to be addressed. The security staff can also easily access the associated live video.
Q. What kind of training is necessary for resellers to learn how to install and/or integrate sensors?
A. Wireless sensors are simple to install. With minimal training, experienced security re- sellers can add cloud-based sensors to their offerings. In addition, sensors are another source of recurring monthly revenue for resellers. There are many different applications for cloud-based sensors, and resellers regularly come up with new ways to combine sen- sors to deliver time- and money-saving solutions.
Of course, resellers will need to be familiar with configuring Wi-Fi access points for the sensor gateway and know how to optimize the wireless range of sensors inside buildings. There are some instances where a licensed electrician should install the sensors, such as when installing power monitoring systems to measure high voltage and current.
Q. How will sensors be used in the future? Does AI come into play at all?
A. “Sensor Fusion” using artificial intelligence (AI) is the future of wireless sensor systems. By combining multiple measurements from separate cloud-based sensors, critical insights are de- livered to property or business owners. The data can predict potential failures in systems or identify problems that are otherwise difficult or impossible to detect. If you have a large building or a multifamily property, for example, you can use a combination of low-cost wireless sound, vibration and temperature sensors to find a water leak or to understand water usage. The main- line water meter only measures overall usage; it does not show per-unit usage. A combination of sensors will share this information economically and easily when a leak has been discovered.
Because power and water are two of the most expensive utilities, better understanding where and how much is used helps business and property owners manage usage and costs. Another application for sensor fusion is education. Using air quality and particulate matter sensors, administrators can detect smoking and vaping in a high school bathroom. These are just a couple examples of sensor fusion; there are many other scenarios, and security resell- ers are continuously discovering new ways to use sensors to complement security systems.
Ray Almgren is the CEO of Swift Sensors.
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