ISC West in Las Vegas kicked off with a bang on Wednesday, reflecting a healthy physical security industry with an overall upbeat outlook on the future. Driving the optimism is a pending new wave of product innovation, propelled largely by developments in artificial intelligence (AI) and deep learning. Some of that new wave is evident at ISC West, but much of the talk still centres on what’s to come. Attendees flocked to the first day of the show to check out the newest technologies, and they were rewarded with a wide range of innovations. Tempering the optimism are ongoing concerns about ensuring the cybersecurity of IP-based physical security systems.

Cybersecurity standards for physical security

At least one news announcement is related to cybersecurity at the show: Johnson Controls is the first company to achieve UL (Underwriters Laboratories) certification 2900-2-3 for cybersecurity of life safety and security products and systems for their VideoEdge network video recording platform from American Dynamics. The UL brand ensures that the certification involves a standards-based and scientific approach to evaluating cybersecurity, and that JCI’s certified products meet the requirements.

We were able to be first because we understand issues of cybersecurity, and the UL standard matches very closely to what we have been doing in cybersecurity,” says Will Brown, Senior Engineering Manager, Cyber Protection at Johnson Controls. Tempering the optimism are ongoing concerns about ensuring the cybersecurity of IP-based physical security systems

Neil Lakomiak, Director of Business Development and Innovation at Underwriters Laboratories, says relatively few companies have invested sufficiently in cybersecurity, and much of UL’s work in the physical security market is to help manufacturers develop a roadmap to meet cybersecurity goals. “A lot of companies have not invested, but Johnson Controls has,” said Lakomiak. He speculated that it could be some time before another security company achieves the certification; there certainly won’t be a rush of additional companies to do so in the near term, based on the progress he has seen to date, says Lakomiak.

Cybersecurity is a topic that has hit the Board of Directors level,” says Lakomiak. “They are definitely inquiring about it and trying to understand what their posture should be. The leadership teams of companies will be asking a lot of questions.”

In terms of cyber-consciousness among the integrator community, Brown estimates about 10 percent are “on board” with the issue. Among the manufacturing community, more than half of the companies are pursuing cybersecurity goals, although the levels of those efforts run a full  gamut, says Lakomiak.

Vertical markets that are especially cyber-aware are enterprise, government, and critical infrastructure. Financial and retail companies are also coming on board, as well as companies — even small companies — in regulated industries such as utilities

UL’s work in the physical security market is to help manufacturers develop a roadmap to meet cybersecurity goals
Cybersecurity is a topic that has hit the Board of Directors level

Cybersecurity in the cloud

Another company emphasising cybersecurity at ISC West is access control company Isonas. “What’s really new at the show for us is that we are being very transparent about the levels of cybersecurity we are applying to our cloud software platform and our IP network hardware,” says Rob Lydic, Isonas Global Vice President of Sales.

The levels of complexity we are putting into our cybersecurity, including the fact that we host our software on Amazon web services, ensures a really high level of security. We are taking painstaking efforts to subject ourselves to third-party penetration testing to give us the visibility of what is going on with our cybersecurity — are we actually as cybersecure as we believe?” The answer: “They have come back to us to say we have an amazing strategy for cybersecurity; the surface that is attackable is minuscule, and the complex layers underneath really prevent anybody from hacking the product.”We are being very transparent about the levels of cybersecurity we are applying to our cloud software platform" 

Lydic says he sees higher levels of awareness about cybersecurity at the show, especially among end users. Several other exhibitors agree. Because edge devices have often been targeted in cybersecurity attacks, they are especially an area of concern. “We’re raising that conversation, saying we are a cloud service provider that uses edge devices, and it is core to us to make sure we have a great cybersecurity profile, so the customer can be assured we are doing what we say we are doing and delivering on those promises,” says Lydic.

Awareness is filtering through channel: Isonas is seeing many customers who want to have that cybersecurity conversation at the show. “We have had probably 20 or 30 conversations with end users at the show who want to understand what it means to be in the cloud, to understand how the level of communication is encrypted between devices,” says Lydic. 

Vertical markets that are especially cyber-aware are enterprise, government, and critical infrastructure
Many end users at ISC West want to understand what it means to be in the cloud

Ambitions for growth

Successful companies often increase their ISC West booth size as a reflection of their ambition to grow as a company and their success in sales so far. One such company is Paxton Access Inc., which has increased its booth size from a 20x40-foot booth last year to a 30x50-foot space this year. Beyond the show, another reflection of Paxton’s growth is addition of personnel to cover 11 U.S. sales territories that have been newly restructured. New regional sales managers will work with dealers locally.

At the show, Paxton is introducing its Net2 Entry Premium monitor, the latest addition to the company’s Net2 Entry line of door entry products. “The show is definitely a great way to promote who we are and what we offer,” says Linda Soriano, Paxton Marketing Communications Coordinator. “It’s great to meet new customers and interact with existing customers, to build new relationships. It’s an opportunity to promote the new things we have going on.”

Paxton measures success at ISC West in terms of how many people they interact with at the show. In addition to welcoming booth visitors, the company is signing up attendance at free training through a show promotion. Anyone who signs up for training at the show is entered into a drawing for a $500 Visa gift card and a $1,000 discount off MSRP of Paxton products.

Tim Shen, Director of Marketing at Dahua Technology USA, one of the larger exhibitors, says the company is emphasising solutions at ISC West, just one element of the successful international business model they are bringing to the United States.With AI and business analytics in transportation and retail markets, we are letting the market know that we can build solutions"

Another topic for Dahua is artificial intelligence. “With AI and business analytics in transportation and retail markets, we are letting the market know that we can build solutions,” he says. Dahua sponsored a keynote address Wednesday on AI, including a presentation from Intel about AI trends.

AI is the future, but what can we use it for now?” asks Shen. “We need to give a very clear strategy of what we think about AI.” Dahua will bring AI cameras and an AI network video recorder to the U.S. market in the second quarter; in effect, they will be testing the water to see how well the AI concept is embraced here. Other new products from Dahua include multi-image and thermal cameras. In the thermal category, Dahua has developed their own chipset to help bring the price down and provide affordable thermal cameras to the U.S. market. Another focus will be e-POE (extended Power over Ethernet), which Dahua sees as a big differentiator.

[Main photo credit: Abbey Masciarotte | Larry Anderson]

Download PDF version

Author profile

Larry Anderson Editor, SecurityInformed.com & SourceSecurity.com

An experienced journalist and long-time presence in the US security industry, Larry is SourceSecurity.com's eyes and ears in the fast-changing security marketplace, attending industry and corporate events, interviewing security leaders and contributing original editorial content to the site. He leads SourceSecurity.com's team of dedicated editorial and content professionals, guiding the "editorial roadmap" to ensure the site provides the most relevant content for security professionals.

In case you missed it

Enhance traditional security systems within your smart home
Enhance traditional security systems within your smart home

Market dynamics are changing the U.S. residential security market, creating new business models that better appeal to the approximately 70% of households without a security system. Smart home adjacencies have helped revitalise the traditional security industry, and alternative approaches to systems and monitoring for the security industry are emerging, including a new batch of DIY systems. Growth in the residential security market and its position as the channel for smart home solutions have attracted numerous new entrants. Telecoms, cable operators, and CE (consumer electronics) manufacturers are joining traditional security players as they compete to fulfill consumer demand for safety and security. Connected products also provide a layer of competition as consumers must decide whether having category devices such as doorbell video cameras, networked cameras, and other products suffice for their security. Increasingly competitive landscape Smart home services can provide additional revenue streams for the security industry For instance, IP cameras are a highly popular smart home device rooted in security, and Parks Associates estimates 7.7 million standalone and all-in-one networked/IP cameras will be sold in the U.S. in 2018, with $889M in revenues. Product owners may feel their security needs are fulfilled with this single purchase, as such dealers and service providers are under increasing pressure to communicate their value proposition to consumers. Categorically, each type of player is facing competition uniquely—national, regional, and local dealers all have a different strategy for overcoming the increasingly competitive landscape. Smart home services can provide additional revenue streams for the security industry. In Parks Associates’ 2017 survey of U.S. security dealers, 58% report that smart home service capabilities enable extra monthly revenue. Almost half of dealers also note they have to offer smart home devices and services in order to keep up with their competition. While white-label devices are acceptable in some instances, dealers need to integrate with hero products whenever possible when those exist for a category. For dealers who have added smart home devices and services are all potential benefits and good for business Improved customer engagement That 2017 survey also revealed 36% of security dealers that offer interactive services report security system sales with a networked camera and 16% report sales with a smart thermostat. For dealers who have added smart home devices and services, enhanced system utility, increased daily value, and improved customer engagement with the system are all potential benefits and good for business. Security has served as the most productive channel for smart home solutions, mainly because the products create natural extensions of a security system’s functions and benefits, but as smart home devices, subsystems, and controllers expand their functionality, availability, and DIY capabilities, many standalone devices constitute competition to classical security. Particularly viable substitute devices include IP cameras, smart door locks, smart garage doors, or a combination of these devices. Products that are self-installed offer both convenience and cost savings, and these drivers are significant among DIY consumers—among the 6% of broadband households that installed a security system themselves, 39% did it to save money. Enhance traditional security Self-installable smart home devices may resonate with a segment of the market who want security While many security dealers believe substitute offerings are a threat, some dealers do not find such devices an existential threat but instead view them as another path to consumer awareness. They argue that the difference between smart product substitutes and traditional security is that of a solution that provides knowledge versus a system that gives one the ability to act on that knowledge. A common theme among professional monitoring providers is that a homeowner who is aware of events happening in the home does not necessarily have a secure and protected household. For example, a Nest camera, a DIY product, notifies a consumer via smartphone about events in the home when it detects motion, but only when the notification is opened and identified will a consumer be able to act on the related event. Self-installable smart home devices may resonate with a segment of the market who want security but are unwilling to adopt professional monitoring; however, providers can leverage these devices to enhance traditional security features and communicate the value of professional monitoring. Smart home devices and features, while posing a threat to some security companies, are a potential way forward to increased market growth Increased market growth A key counterstrategy for security dealers and companies is to leverage their current, powerful role as the prime channel for smart home devices. Many security dealers now include smart home devices with their security systems to complement their offerings and increase system engagement. For example, as of Q4 2017, nearly 70% of U.S. broadband households that were very likely to purchase a security system in the next 12 months reported that they want a camera to be included as part of their security system purchase. In response, many security system providers now offer IP cameras as optional enhancements for their systems. Smart home devices and features, while posing a threat to some security companies, are a potential way forward to increased market growth. Security dealers have an opportunity to become more than a security provider but a smart home solutions provider rooted in safety. Provide status updates Comcast has entered both the professionally monitored security market and the market for smart home services The alternative is to position as a provider of basic security with low price as the key differentiator. Comcast has entered both the professionally monitored security market and the market for smart home services independent of security. It has discovered that monetising smart home value propositions through recurring revenue becomes increasingly challenging as the value extends further away from life safety. Since the security industry remains the main channel for smart home services, security dealers are in a unique position to leverage that strength. Value propositions must shift from the traditional arming and disarming of a system to peace-of-mind experiences that builds off the benefits of smart devices in the home to provide status updates (e.g., if the kids arrived home safely) and monitoring at will (e.g., checking home status at any time to see a pet or monitor a package delivery). These types of clear value propositions and compelling use cases, which resonate with consumer and motivate them to expand beyond standalone products, will help expand the home security market.

What is the value of "free" video management systems?
What is the value of "free" video management systems?

They say that every choice has a cost. It's a basic principle that, economically speaking, nothing is free. If it doesn't cost actual money, it may be expensive in terms of time, attention and/or effort. These are interesting observations to keep in mind as one peruses the various "free" video management system (VMS) offerings available on the market. Some are provided by camera companies to unify their products into a "system", even if it's a small one. Other free VMS offerings are entry-level versions offered by software companies with the intent of the customer upgrading later to a paid version. For more insights, we asked this week's Expert Panel Roundtable: What is the value of “free” video management systems (VMSs) and how can a customer decide whether “free” is the right price for them?

The ongoing challenge of IT and data risk management
The ongoing challenge of IT and data risk management

Managing IT and data risk is a challenging job. When we outsource our IT, applications and data processing to third-parties more and more every day, managing that risk becomes almost impossible. No longer are our data and systems contained within an infrastructure that we have full control over. We now give vendors our data, and allow them to conduct operations on our behalf.  The problem is, we don’t control their infrastructure, and we can never fully look under the hood to understand and vet their ability to protect our data and operations. We have to fully understand how important this issue is, and ensure we have the right governance, processes and teams to identify and mitigate any risks found in our vendors. No longer are our data and systems contained within an infrastructure that we have full control over Today, everything is connected. Our own networks have Internet of Things (IoT) devices.  We have VPN connections coming in, and we aren’t always sure who is on the other end of that connection. It is a full-time job just to get a handle on our own risk. How much harder, and how much larger should our teams and budgets be, to truly know and trust that our vendors can secure those devices and external connections?  For every device and application we have internally, it is very difficult to even keep an accurate inventory. Do all of our vendors have some special sauce that allows them to overcome the traditional challenges of securing internal and vendor-connected networks? They are doing the same thing we are – doing our best with the limited human and financial resources allocated by our organisation. Risk stratification and control objectives  The benefits of outsourcing operations or using a vendor web application are clear. So how can we properly vet those vendors from an IT risk perspective?  The very first thing we need to put in place is Risk Stratification. Risk Stratification presents a few targeted questions in the purchasing process. These questions include – what type of data will be shared? How much of this data? Will the data be hosted by a vendor? Will this hosting be in the US or offshored? Has the vendor ever had a data breach? These questions allow you to quickly discern if a risk assessment is needed and if so, what depth and breadth.  Risk stratification allows you to make decisions that not only improve your team’s efficiency, but also ensure that you are not being a roadblock to the business Risk stratification allows you to make decisions that not only improve your team’s efficiency, but also ensure that you are not being a roadblock to the business. With risk stratification, you can justify the extra time needed to properly assess a vendor’s security.  And in the assessment of a vendor’s security, we have to consider what control objectives we will use. Control objectives are access controls, policies, encryption, etc. In healthcare, we often use the HITRUST set of control objectives. In assessing against those control objectives, we usually use a spreadsheet.  Today, there are many vendors who will sell us more automated ways to get that risk assessment completed, without passing spreadsheets back and forth. These solutions are great if you can get the additional budget approved.  Multi-factor authentication  Even if we are using old-fashioned spreadsheets, we can ensure that the questions asked of the vendor include a data flow and network/security architecture document.  We want to see the SOC2 report if they are hosting their solution in Amazon, etc. If they are hosting it within their own datacentre, we absolutely want to see a SOC2 Type II report. If they haven’t done that due diligence, should that be a risk for you?  Today, we really need to be requiring our vendors to have multi-factor authentication on both their Internet-facing access, as well as their privileged internal access to our sensitive data. I rate those vendors who do not have this control in place as a high risk. We’ve recently seen breaches that were able to happen because the company did not require administrators or DBAs to use a 2-factor authentication into sensitive customer data sources.  In the assessment of a vendor’s security, one has to consider what control objectives to use This situation brings up the issue of risk acceptance. Who in your organisation can accept a high risk? Are you simply doing qualitative risk assessment – high, medium and low risks? Or are you doing true quantitative risk analysis? The latter involves actually quantifying those risks in terms of likelihood and impact of a risk manifesting, and the dollar amount that could impact your organisation.   So is it a million dollars of risk? Who can accept that level of risk? Just the CEO? These are questions we need to entertain in our risk management programs, and socialised within your organisation.  This issue is so important – once we institute risk acceptance, our organisation suddenly starts caring about the vendors and applications we’re looking to engage.  If they are asked to accept a risk without some sort of mitigation, they suddenly care and think about that when they are vetting future outsourced solutions. Quantitative risk analysis involves quantifying risks in terms of likelihood and impact of a risk manifesting Risk management process  In this discussion, it is important to understand how we think of, and present, the gaps we identify in our risk management processes. A gap is not a risk. If I leave my front door unlocked, is that a control gap or a risk? It is a gap – an unlocked door. What is the risk?  The risk is the loss of property due to a burglary or the loss of life due to a violent criminal who got in because the door was unlocked. When we present risks, we can’t say the vendor doesn’t encrypt data. The risk of the lack of encryption is fines, loss of reputation, etc. due to the breach of data. A gap is not a risk.  Once we’ve conducted our risk analysis, we must then ensure that our contracts protect our organisation? If we’re in healthcare, we must determine if the vendor is, in fact, a true HIPAA Business Associate, and if so we get a Business Associate Agreement (BAA) in place. I also require my organisation to attach an IT Security Amendment to these contracts. The IT Security Amendment spells out those control objectives, and requires each vendor to sign off on those critical controls. We are responsible for protecting our organisation’s IT and data infrastructure – today that often means assessing a 3rd-party’s security controls One final note on risk assessments – we need to tier our vendors. We tier them in different ways – in healthcare a Tier 1 vendor is a vendor who will have our patient information on the Internet. Tiering allows us to subject our vendors to re-assessment. A tier 1 vendor should be re-assessed annually, and may require an actual onsite assessment vs. a desk audit. A tier 2 vendor is re-assessed every 2 years, etc. We are responsible for protecting our organisation’s IT and data infrastructure – today that often means assessing a 3rd-party’s security controls. We must be able to fully assess our vendors while not getting in the way of the business, which needs to ensure proper operations, financial productivity and customer satisfaction. If we truly understand our challenge of vendor risk management, we can tailor our operations to assess at the level needed, identify and report on risks, and follow-up on any risks that needed mitigated.