It’s almost a year since Paul Wong was appointed as managing director of Bosch Security Products UK, and the company has been having the busiest of times integrating acquisitions, Derwent, Extreme CCTV and Forward Vision into the fold.
On top of all that the company has been one of the founders of the open standard for IP, Onvif (Open Network Video Interface Forum).
Then, of course, there has been the small matter of the worldwide economic downturn as a backdrop to everything.
This is what Wong had to say about the big issues affecting the industry.
Bring in third-party testing
I would like to see, as part of the EN50131 standards, independent testing through credible test houses as mandatory.
The standard isn’t tight enough to serve the market’s thirst. EN50131 allows you to self certify.
EN50131 standards are generally, 90 per cent of the time, the most stringent around the globe.
But we feel that end users aren’t getting what they think they’re getting which is damaging to the industry.
Everybody self certifies except for us. We’re the only company that we know of who have gone to independent third party certification houses and got them to certify our products.
We chose what are considered to be the three top independent certification houses, one in the US, one in Germany and one in France and we’ve been certified through each.
We’re calling to other manufacturers to take the same approach. We’re calling on consultants and end users to be aware and we’re calling on end users to also be aware and insist on it.
If I’m paying for a Grade 3 system I want guarantees I’m getting a Grade 3 system. At the moment, all I’ve got is the manufacturer’s word but no evidence.
Going through self certification was an extremely expensive exercise for us and I feel other manufacturers may not want to go in that direction because, (a) they may feel it might expose their products and (b) the cost of associating with it – to go down the independent certification route.
We’re most probably at the upper end of the pricing level but we can confidently say the product does what it’s meant to do according to the standards.
I think a lot of companies wouldn’t welcome mandatory certification.
Our competitors won’t welcome it. It means an increased cost of components, more enhanced design and stricter manufacturing processes, so it comes at a cost.
The sector is being held back by the manufacturers.
Certainly the high end installers would welcome it but most of all the end users would welcome it.
I think it’s the dissatisfaction of end users when their system doesn’t perform as they’d like it, and in so many cases end users have to compromise between their aspirations and what they get and that means there’s no confidence in the industry which most probably affects everybody in the chain.
There are mainly about 17 standards around the globe and some manufacturers took the view that they will have products that meet this standard and that standard so that they can sell into this part of the world … and so on
Bosch’s view is that we will comply to all 17 in one product, so it took the most stringent individual items from all of the standards and said: That’s our benchmark. If we can design a product that meets all these benchmarks then we know we’ve got a product that can sell globally.
We’re also trying to promote Certalarm which is an organisation and a stamp of confidence. If you certify your product with Certalarm you’ll be certified automatically to the 50131 standards.
With Certalarm-approved you don’t have to go through all the test houses. And we’ll put this Certalarm stamp on our products as will some of the manufacturers that choose to go the same route.
Independent certification would be a boost to the market. If people have got confidence in independently certified products they would pay extra for it.
It does mean more cost. The reaction has been that to people who are involved in a cost of ownership type of maintenance contract it’s been a positive because the cost of a call out for them is a fixed fee and if we can save them one call they’ve recovered the additional cost of the equipment.
Everyone’s tightening their belts
The security industry most probably does follow the standard recession trends, however we may be buffered slightly from the peaks and troughs. We don’t suffer them as much as other sectors but we do follow the same trend line.
Once businesses started to get an inkling there were going to be rough times ahead I think everybody started tightening their belt including us.
However where we did put additional resource was into areas where we needed the customer service levels, such as technical back-up and customer service area.
The retail part of the business has really tightened up. Not from the supermarkets but mainly from high street retailers. However on the project side, where Bosch had quite a heavy presence, we’ve seen that that area of our work has been maintained.
Government projects still stand. Local authorities, especially those involved with the Icelandic banks, have tightened their belts.
Infrastructure-type projects especially those surrounding the Olympics are still prevalent.
We’re getting a spin off anyway down to the success of UK integrators being able to secure business overseas
Petro-chemical sector is currently good for us. The utilities is good for us at the moment and education is a growth area for us.
I think we’ve been lucky in that maybe the areas that have been hit so far are not the areas we’ve been so involved in.
We’re not heavily involved in the in High Street retail.
One of the areas we were hit though, where we were heavily involved, was in the financial sector. We were involved with some of the financial houses and have contracts to provide security.
In most cases, we’re dealing in sectors where quality/performance is the main driver and price comes second. That doesn’t mean price comes last, it’s still a high priority but you have to meet the performance and quality criteria before you can move on to price.
If you look at the construction sector – offices or apartments, where they want to put security in the building but it doesn’t have to meet a certain criteria, just a certain function, you’ll be battling on price all the way.
If it’s a developer who wants to sell-on the facility using security as an added value item to achieve a better price he’d have more of a short term goal.
If it’s the owner of the building who leases out, he has more of a longer term interest.
If they go for a cheaper option they most probably won’t have the same (CCTV) image in year five as on day one. So then they weigh up what the costs are to them based on their internal objectives.
If they’ve got a three year plan then they can most probably go with the cheaper option. It’s different if they’ve got a longer term plan, especially where you see maintenance and installation costs to be higher than normal, for example on a supermarket shop floor where they don’t want to close their shop floor down in a 24-hour operation just to repair cameras.
However if you do want to do that, you have to employ someone to come in the evening, place cameras, or maybe refocus because there’s been a focal shift. They’re paying an engineer time and a half to do that so the cost of ownership starts to increase.
Where they are considering cost of ownership we have a strong argument and where they’re not we’re in a price situation where the Far East can easily price us out. That’s why we focus in the areas we do because we know our argument means something to this customer base.
Why installers’ credit is cut
To the installers that were exposed to debt there’s been a definite issue with their bank credit lines. There’s been an issue for some that have a good credit history.
Some customers aren’t maximising their debt allowance with the banks.
For instance, the bank has got some debt that’s allocated to a good company but that good company isn’t utilising that debt.
Because that debt’s been allocated to that customer, the banker can’t use it elsewhere.
If he can’t use it elsewhere it means he’s got outstanding debt that he’s not making any return on.
So the banks are going to the good companies and saying ‘I’m going to reduce your limits because now I can take this level of debt and use it somewhere else where they will use it.’
There are certain cases where we are having to come up with arrangements, but most of our business goes through distribution and, therefore, distribution are fairly much the buffer between us and our key partners.
A lot of people use distribution as a bank so were not as exposed to that element of business.
IP and the Onvif forum
There’s definitely a place for analogue. Some commentators have hailed IP as the saviour of the world, but there’s a place for both.
Every project should be taken on its own merits.
In a small retail outlet, they can throw some coax up and install an analogue system that’s going to give a good image etc etc.
Maybe they don’t want the hassle that goes round with having to maintain IP based hardware and map codes and all that sort of thing.
We could all go on in our own ways and go in completely different directions, which would mean that the take-up of IP would be less because you’re tied into a manufacturer or system.
Would that company be around in five years?
But Onvif (the Open Network Video Interface Forum, launched by Bosch, Sony and Axis) is what PAL and NTSC was to analogue.
It also means that someone who invests in IP knows that investment has longevity. I can take the camera off and put someone else’s camera on and I’m not having to rip the whole lot out and start again.
So it’s important for an organisation like Onvif to be developed to start this process. It’s inevitable. It was going to happen anyway.
You could quite possibly see, as with PAL and NTSC, a rest of the world version and a North American version.
Even if there were two standards in the world, that would be a positive thing.
CCTV and the future…
I think the CCTV industry has allowed itself to get into the position of defending itself from criticism.
We don’t regulate ourselves, from an installation point of view, as much as the intruder section does.
I can turn up with a ladder and screwdriver and sell a CCTV system, no questions asked. I could quite easily give you a very good picture today and within twelve months the picture you’ve got is horrendous because the components and the design that’s gone into it is less than others.
So I can see how the police and other agencies could be very disappointed with the results from some systems.
The industry needs to regulate itself better – regulating installations, regulating products, education to end users and key stake holders. I don’t think it’s something that needs to be completely rigorous but there needs to be an awareness.
The UK mindset is very different from the mindset of continental Europe. We’re being driven on a price-led culture whereas in northern and central Europe you’ll see a quality-led purchase.
It’s been going down that route since before the downturn.
It’s the industry’s responsibility to set the standards to make CCTV more useable to the authorities.
I think there will be more consolidation of manufacturers within the CCTV sector.
I think we’ll see a proliferation of products at the low end because it will be easier for small outfits based in the back of a shed to manufacture standard technology that’s bought in a package.
I see the various areas of the security market coming together. A lot of it is currently based within software but you might start seeing that appear in hardware.
