Lee Odess: Why Physical Security Is Becoming an Enterprise Software Business

Hosts Stephen Olmon and Collin Trimble sit down with Lee Odess for a wide-ranging, no-nonsense conversation about the forces reshaping the security and life-safety industry—and why operators who keep treating cloud, mobile, and AI like “features” are already falling behind.

Lee, one of the most connected voices in access control and physical security, makes the case that our industry is no longer evolving like a traditional hardware channel. Enterprise software norms are taking over: value is pooling in data, software, and architecture—not panels and readers. And that shift is happening now, not five years from now.

They dig into what this actually means for operators on the ground. Why alarms will become the minority of security spend. Why access control and video are converging into platforms. Why vertical-specific solutions are replacing generic systems. And why the real risk isn’t disruption—it’s clinging to “old truths” that used to protect the industry but now actively hold it back.

Lee also lays out the early warning signs operators should be watching for: losing deals to software-led solutions, manufacturers showing up with their own demand gen, revenue trapped in hardware margins, and brand-collector integrators who can’t operationalize what they sell. Throughout the conversation, one theme stays constant: this is an and moment, not an or moment. You can stay in the $10–12B high-security market—or reposition to compete in the $70B+ mainstream market—but you can’t pretend the choice doesn’t exist.

The episode closes with a clear, tactical starting point for owners of legacy security businesses: erase the old mental model, define a 30-year vision, and rebuild your product mix, partners, and talent around where value is actually going—not where it used to live.

✨ What You’ll Learn

• Why physical security is being reshaped by enterprise software—not incremental tech upgrades
• The difference between treating cloud, mobile, and AI as features vs. architecture
• Why alarms are becoming a minority of total security investment
• Early warning signs your business model is quietly falling behind
• How value is shifting from hardware margins to software, data, and systems integration

🔗 Connect

 Lee Odess

Stephen Olmon

Collin Trimble

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Chapters

• 0:00 Meet the Hosts and Guest
• 2:22 Lee Odess' Journey in the Security Industry
• 6:22 Trends and Future of Security Industry
• 26:57 Emerging Market Trends and Business Development
• 30:27 Future-Proofing Your Security Business

Transcript

 There's no better time to be in our industry than now. We as an industry are moving more to like an enterprise software industry. It's fundamentally because enterprise software 

norms are impacting our industry. And I think a lot of these, uh, operators are struggling to figure out like, how do I adapt to that?

Let's not kid 

ourselves. Some of the world's largest. Institutions and companies entering into our space are going to dynamically change 

the business model. Alarms are going to represent the minority of the security investment, and it's going to be consolidated into video and or access control. 

If anybody in our industry comes to you and brings mobile or AI and they don't treat it like it's architecture, throw them out of your office.

Welcome to Entry and Exit. My name is Steven Ulman. This is my business partner and co-host Colin Trimble. We run Alarm Masters in Houston, Texas by day and by night. We run Entry and Exit a podcast where we try to give practical, tactical advice on the security and life safety industry. 

I'm really excited.

Today's guest is someone. Most folks in the access control world already know Lee Odes Lee leads a handful of well-known brands in our space, including the Access Control collective, the Access Control Executive brief, and a CS events where he's focused on thought leadership, community, and bringing people together.

He also serves on the SIA Board and has spent more than two decades working with companies like Bvo, latch, uniki, and Allegion. Long story short, Lee knows his way around the security industry and I'm excited to have him on the show. Lee, thanks for being here, man. 

Of course, happy to do this. Uh, I've seen what you've done before, so it's uh, nice to actually be on it, so thank you.

Yeah, absolutely. We're pumped that you're here. Lee. What you should know is you are our very first guest on Entry and Exit. We are very excited that you're here. 

Thank you for that, uh, the honor. I'll do my best to, uh, to not screw it up and for everyone else that comes on after it's all uphill. So you're good.

Yeah. You're setting a high bar for us. Um, we're excited to jump in. Lee, the first thing we wanna do is just, uh, give the listeners a little bit about your path. You've obviously been in the industry for a long time. You have a ton of experience, a lot obviously, in the access control world. Um, but you have done everything from the integration side to the manufacturer side, and now.

On the media side, so we'd love to hear about your experience, how you got there, and kind of what you're focused on right now. 

Sure. 

No, I appreciate 

that. So yeah, started off on the integration side more. I was on the audio video end of it and worked closely with the security integrator locally in the marketplace here.

Uh, once I went through that and was ready for something different, uh, spoke to the security guy that I worked with. He knew the CEO of Bvo, um, and said, Hey, you should go talk, talk to him. I was brought on, did a marketing. We had this labs division there. It's really early in the cloud access control side, so I learned a lot.

It really was the beginning of I, if I look back to, uh, a lot of what I talk about today and what we do, it's sort of started there and germinated from there. Uh, went to uni, uh, which after I saw him on Shark Tank, uh, was like, Hey, you know, also he went to my alma mater. So I was like somebody in the industry on a show I watched, like, I want, I want in on this.

So, uh, went there for a couple years. Uh, then from there. Went to Allegion, actually moved back to the DC area here where my wife and family wanted to be, and, uh, remotely worked for Allegion, worked there, uh, primarily around the idea of taking the locks and integrating 'em into other ecosystems. So between the cloud base.

Uni being around first really around Bluetooth, but then also global expansion. Then moving into, uh, Allegion, which was giving me some experience around, uh, big company, frankly, public company stuff. And then also taking our locks, putting 'em into different ecosystems, working across a lot of things. Um, from there I went out on my own, actually started something called Group 3, 3 7, which was the idea frankly was.

It's pretty simple. I wanted to take everyone that I've met all over the globe that was doing some pretty cool stuff. I wanted to bring them onto platforms that I was using, like LinkedIn and YouTube and tell their story. Then I had this great idea of going to IC West and I was gonna film there, bring all of that, and like do a trade show online on LinkedIn.

Um, but that was January of 2020. By March of 2020, there was no trade show, no one could travel. But the good news is. I had 70 videos and while everyone was scrambling to get cameras and mics, I had that already. So I just started putting that stuff out. Mm-hmm. I started writing about. Frankly, frustrations in the market that I saw.

Mm-hmm. Yeah. Were things that didn't me, people join. So then I was like, oh, wow. We turned kind of into a media slash analyst company. Uh, latch was a customer. They saw it, they acquired us after they went public. Then I was there for a short period of time, uh, went back and with my business partner, Hillary, who's been with me for like 15 years, said, Hey, let's do this again now that the world's opened up.

Yeah. But let's go do omnichannel. Like go out, look at trends, build community. Uh, I wrote this book called The Six Phase Changes Shaping Access Control, which was really around applying digital transformation to, to it, and that's what we wanted to go out and talk about. Um, but everything we've done, fra, frankly, has been focused on communities of people and communication, uh, observations, insights, so touch a lot.

Sort of brought it all together to, to really what, what we currently have today with the access control collective. 

Yeah. Well, I will say this, it was successful because everybody knows who you are. I can't go to an industry event and they don't know who Lee is. It's like. It's like the, the, what is it, like 10 degrees of Kevin Bacon or three degrees or whatever.

It's, it's the three degrees of Leo Des. Yeah. 

Hey, it's a niche, small market. Uh, I talk a lot. We actually are doing our la my brief, uh, which I read, uh, for the last one. And was going through the year in review of like how many posts we've done all this stuff. And it's, you know, on LinkedIn alone we're 1200 posts, I think it is.

That's great. Wow. I've read since, uh, since January. So it's a lot of talking, a lot of writing, uh, a lot of going out in person, but 

I enjoy it. Yeah. That's great. That's, that's really fun. We, um, we're really excited that you're here because what we really focus on is giving folks kind of practical and tactical advice about how to improve their business and things that they need to look at to increase the value of their business.

And one of the reasons we're really excited to have you on the pod. Um, we really want to get a perspective. You've obviously been on the integration side, been on the manufacturer side. Now on the media side, you're super well connected. What we'd love to kind of start with is two to three trends or themes or any shifts that you're seeing in the industry that you think is sort of a blind spot for operators.

Um, I want to make sure that. You know, we're not just covering the basic stuff where it's like, oh yeah, if you're not doing cloud applications, you should be doing that. It's like all of our peers have heard that until they're blue in the face. Yeah. So now it's like, Hey, what do we need to know about, like from your perspective, if you could put a billboard up in front of these operators, what would you tell 'em?

What, what are two to three things that you think we need to know about? 

Yeah. Alright, so this, first off, I'm a firm believer that, and, and frankly I'll, I'll do it from an operator standpoint of like understanding and appreciating the friction that's created around this idea of, uh, having to deliver for today.

Yeah. And, and especially since a lot of the operators, you know. Small operations, a lot of the large ones thought to get a lot of the, the, the airtime and, and frankly, a lot of the programs are built for them and then shoved down through the channel. Yeah. That doesn't necessarily align with what a, what I'll call a local operator is, but, so I understanding some of the pressures that exist there.

So some things that I would think about that is, uh, a couple things. There's no better time to be in our industry than now. That's the first thing I would start with. And I say that because we hear a lot of negativity with the changes that are happening, whether it's ai, uh, whether it's cloud and the changes, what it has with like manufacturers now talking to, to end users, like all of those things.

It's a mindset change, in my opinion, more than it is a technical change that's happening. Yeah. And the reason being is, is that. For the past 30 years, if you think of it as an, as a math problem, the numerator hasn't changed. Same type of systems, frankly, it's been iterations. The business models are the same.

The the value creation, the delivery of the promise to the market of like keeping bad people out, locking and unlocking. Again, I'm, I'm, I'm simplifying it, but in general terms, like it was kind of known. The, the competitors were known, the products were known, like all that stuff was known. Yeah. Now the numerator and denominator have changed, and because of that, we also have to change the people with the mindset where either they're fighting it and resisting it, because in a lot of ways it, it challenges.

The, like our self identity as an industry in a lot of cases, right? Doubt a lot of these changes that happen. So it, but if you change the mindset in some ways, and I, I'm not trying to be woo woo with you on this, but I find it hap like everyone I go out and talk to, it's usually the first I could tell. By the, almost the first breath, it's either an excitement breath that they have, or it's like a sh 

Yeah.

Like, you know, I I, I was gonna retire soon. Yeah. Like, now I gotta worry about this. Like, 

yeah. 

So it's, it's a mind shift change in, in my opinion, and I would look at it from a positive standpoint. All right. So, enough, with that said, the me the change though, the business too, is, is that. We, we as an industry are moving more to like an enterprise software industry.

And if we look across the aisle, yeah, we hear a lot about it convergence. The rest of it that's, that's sort of downstream a little bit more upstream of what's happening is enterprise software fundamentals are coming into our industry and we have historically been able to say, this is about risk and you don't want it.

So people are like, all right, I'm not gonna get involved. Well now. All of these people are getting involved and they're happy to take on the risk because frankly, the, the, the physical side is not just the only thing. It's cyber, it's, it's, there's a, there's a belief that if I adopt technology, uh, that it actually can increase not only levels of safety, but also of convenience.

That's right. And it's challenging this traditional norms that we've had as an industry. I call 'em old truths. 

Yeah. 

Right. Things like a feature of our industry used to be, ah, we go slow. We don't adopt it because, 'cause again, we're, we're delivering safety and security. So if we go fast, we adopt new technology that flies in the face of what we've done.

So we've been able to push that off to where now that's a bug. Like you have to be ingesting some, not all. There still needs to be just like not every new truth is a good thing. Yeah. But we gotta kill some old truths. Bring the ones forward that, that are gonna support us for what's next. Bring in some new truths and say not yet for the other ones, and create what we need.

I jokingly say it is that, you know, I believe what we have and what industry is speaking to a lot of the operators, we as operators, I'll put me in that. Yeah. Have been coming to you and saying, Hey, let's use a basketball analogy. I know you're a five foot five guard. And the game early on was like made up of five foot, five guards.

That's right. Fast. We're shooting like it was Then all of a sudden you're like, man, we need some seven foot centers and like we're going to you and saying I need you to be a seven foot center. It's like, dude, that's genetics. They can't, I'm not gonna be a seven foot center. Right. Yeah. This's just not who I am.

Yeah. But we need to go find seven foot centers and Merriam with the five foot five guards that put together the people that we need to go and take the industry to where. It needs to go, doesn't mean that it's bad. This is just different. Mm-hmm. In a lot of ways and, and it's fundamentally because enterprise software norms are impacting our industry.

Yeah. 

Fundamentals. That's what's happened. I'll stop there. No, I can't 

agree more. I, I think I remember, um, a decade ago I was working, um, I was working at bvo and I was, uh, you know, a regional sales manager talking to independent operators and, and they didn't even, they didn't know what an API was. These, these, they were installers that knew how to do inputs and outputs.

They understood low voltage and they, they just, they didn't understand what is an API, what is software? The software is the dis that I get when I buy it from, you know, a DI and put it on my server and, and I load the software up. And that has fundamentally changed in the consumer mindset. But hasn't all the way permeated down into the operators.

And, and I think a lot of folks are struggling with that because not only has, um, that enterprise model permeated the physical security space, the enterprise model is shifting down market. So now we're finding companies that are. Um, mid-market that are, you know, sub $250 million, even sub a hundred million dollars that have full identity platforms.

They're using, uh, a version of active directory or using Azure and that identity connector to an access control platform. Is a qualifier for them, even if they only have five doors of access control. And I think a lot of these, uh, operators are struggling to figure out, like, how do I adapt to that? How do I figure out how to, to approach that new norm?

I think a lot of our listeners, regardless of what stage they're in on their, in their journey of, you know, being an operator or working at a security company, are really trying to figure out how do we do that? How do we change our mindset to be adaptable to some of that? And so, yeah. What do you, what do you think, man?

Like what, what's, I'll give you one, what's advice on how to do that? 

Here. So if anybody in our industry comes to you and brings anything to you, whether it's cloud, mobile, or ai, and they treat it like it's a feature of the existing product that they have. Yeah. And they don't treat it like it's architecture, throw them out of your office.

Yeah. Agreed. Because part of the problem is, is how I, my belief is we are approaching these things as features of an iterative foundation. Yeah. That is not gonna support. Frankly, what is gonna move forward? So it creates confusion. 

Yeah. 

And I think the ones that are fundamentally shifting, the way that they approaches is saying, okay, cloud, mobile ai, these things create value.

And that value is operational efficiencies. Yeah. Revenue generation, highers level of security data, whatever it might be, those are the actual products that come outta this thing. So first off is to. Take a look at who you wanna be, the market you wanna serve, your strategy, your growth, what you want. And then almost like I, I, I use this analogy a lot, but I will take that, uh, men in black stick and like erase your brain Yeah.

Of like what you knew. Yeah. And then approach the market in that manner of like, you have the fundamentals of understanding safety and security. That's your opportunity to win. Yeah. Because I don't care how good the app is that's being brought into the building to order lattes. If I don't feel safe and I'm not safe, I'm not going in that building.

That's right. So we have the right to win and permission. You all have like the right to win. You're the people locally doing that and delivering it to them. 

That's right. 

Use that on your toes versus your heels and say, great, what are the products now that I need in services in order to support the vision and where I want to take my company versus saying.

I need to add cloud to this thing. Yeah. I need to add mobile to this thing. Yeah. Like right now, the whole conversation about mobile wallets is broke, in my opinion. Yeah. Because we're treating it as an iteration of a card in a phone. 

Mm-hmm. 

And yes, I get it. That's part of it, but it's what it can do that transforms the way.

And if you did that. Your skill sets would change of what you have in tenant. Maybe the way you bill would change, the way you communicate, the customer sets that you talk to, who you partner with, how you make money, all that stuff could fundamentally change. Yeah. Like for instance, you may now be move from a security integrator and you may say, you know what?

I'm now gonna be a systems integrator. Great. What does that mean? I'm not talking about HVAC and security. 

Yeah. I'm 

saying like maybe, I don't know. You're gonna go get certified in Salesforce now? Yeah. Because it's about operational automation. 

Yeah. 

And I'm using mobile in my access control system with, yes, it delivers safety and security, but that data now can be utilized to do things like occupancy.

Yeah. Or. Workflows around, badging, around whatever, but like it's a total different mindset. Mm-hmm. I would look for the people who are creating programs and are creating products that fundamentally support the vision that you have of what the marketplace looks like and how you wanna show up and how you 

wanna make money.

Yeah, I could not agree more. I think that it's so funny that in this industry, a lot of these operators, they think of cloud or a security suite like, um, like an LPR camera. Like, oh, I need to be able to add, you know, license analytics into my suite of feature set. I need to check that box as an offering.

And they've really gotta shift their mindset around offering a security suite to their customers. They also need to figure out like. What is their lane? And that's something that we talk about all the time on this pod, is you can't be everything to everyone. You need to decide who your ideal client profile is, and you need to go attack that with whatever your value proposition is.

Because I, I do think that as much as some people say, oh, well, the, the physical security space is gonna be totally adopted into the IT world, into VAR world. Like that's, that's where it's going. I don't know that it's gonna go quite that direction. I think that a lot of folks. Uh, need to understand and be able to operate, but, but I think that there is value, like you said, in being able to continue to do the security expert.

You are there to. Make that space safer, right? Like that is, I mean, 

it's a, I'll even go far. It's a fundamental right. And a utility, right, that we deliver. And then like all these companies, these tech companies, a lot of them, especially I, I use PropTech uh, applications, they ultimately become access control products.

That's 

it 

in the end. That's it. Because the utility of what they deliver is what's needed. Now it's our position to add. More value on of what we do. And I, I, I do wanna preface it this, a lot of this is a binary type conversation and it's not what I wanna make sure this is an and conversation. 'cause if you think about it, what's happening, I'll take access control.

Um, OA a while ago said there are market sizes like. Somewhere like 10 to 12 billion. I think, again, I've been well documented and written about it. I think it's garbage, but it's numbers that we all collectively agree upon, so we all hallucinate around them. Fine. We'll use that as a baseline. Let's say it is the high security locking and unlocking global market access control, 10 to 12.

That is the high security market as we've known it and has been for the past 30 years of electronic access control. That is the cottage industry, frankly, of our industry. Yeah. Which is fundamentally, and that's not negative. I'm part of that. It's my identity as a person too, of, in this industry. I've been working within the high security.

Now what's happening as we have become more like enterprise software and because of cloud and mobile and all these other things, we're now going to a mainstream market, which is about what else you can deliver on top of that utility. The math we did was a $70 billion market off of that. I say a hundred billion because it's bigger than 70, but Right.

The math that we put together is 70 billion. That's called marketing, right? Yeah. Right. You put together $70 billion, uh, market to show what the TAM is. It includes the 10 billion. Yeah. Yeah, so you, that's why there's no better time You can decide today. Do I want to continue to deliver the high security and do that is the $10 billion market.

Go after it. 12, whatever. Right. Go get it. Good cagr, good growth. Seven, 12% growth. Awesome. A lot of people, great businesses have gotten rich, family owned business, whatever, like you don't, you can choose what you want, your own adventure there. It also means though, I can make a decision to go after that 60 billion and be something different than I am today.

That too is O also, okay? Mm-hmm. It's about the entire thing. We haven't had this in 30 years as an industry. 

I, I completely agree. Lemme ask you a question. Um, yeah. What, what do you think, what do you, what do you think the timeline is for some of these massive shifts to come in? Like what do Yeah. Yeah.

That's 

the, that's the, that's the bajillion dollar, so that's why I call all these things we talk about, and I write about inevitable trends because I'm tired. Of pretending like they're not happening. Yeah. Mm-hmm. They're, they're inevitably happening. 

Yeah. 

Then I'm also tired of talking about the future because these things are today Yeah.

Happening. Yeah. So I call it today forward. Yeah. So like if we ground on the fact that these are inevitable truths 

Yep. 

And it's today forward, what we can always argue about, and I'm happy to do it, is. When it's gonna happen and the impact that it will have, like tho to me, those are the things that go, so, yeah.

Good on you for asking that question. 'cause to me that's the right question to ask. 

Yeah. 

My opinion is, is that it's actually funny to this point, I'm writing this brief and like usually October I write one that's like the trends for the next year. 

Yeah. 

And. I'm like writing it and I'm like, I can't do this.

Like Yeah. 'cause it's not trends. This is like inevitable truths of evolution of what's happening in our industry. Yeah. So I'm actually going to reflect back to talk about how we can use the past to dictate what happens in the future. But anyways, yeah. Um, my opinion is three to five years, inevitably some of these things are going to be true.

Wow. In full swing mobile adoption. I think, I think the minority of our industry, which is the mainstream personally, will outweigh. The cottage industry. What is the majority right now? Right now, small part of our industry has a large part of the voice. 

Yeah. 

Three to five years. The small part of our industry will have a large part of our voice.

So these trends, so that, that to me, and it's like almost like hop out on my end of saying like, 

yeah, 

I believe a lot of these truths that we're talking about, like growth of adoption, of mobile cloud, um, the IT convergence, I think biometric increase. Uh, I think, uh, like I can, like I think every I. So this is one, I think every access control company is a video company, and every video company is an access control company.

A hundred percent. Um, yeah, like those things, like, so all of these truths will be happening at different, but, but they will be fundamentally in flight happening currently now. Now I see my friends out there that are talking about like, AI driven, um, uh, you know, uh. Uh, what do they, what do they call 'em? The, the video?

Uh, like fi I forgot what the term is that they used for, but like some of the, some of the more bleeding edge side of what's happening in our industry. That too is true. Yeah. It's happening. Um, but I think some of the stuff that we've been talking about is like features of the old Yeah. Will be just norms of today and, and some of the stuff that we're doing currently today will become more of the cottage in three to five years.

Yeah. I love that. So we talked timeline. One of the things that I really want to, I want to know is. And this is kind of a, a funny question, but, you know, sometimes when I get sick, the first thing that I know I'm about to get sick is I start to like, get sleepy. And I start to like, my sleep gets bad, I wanna sleep later.

And I start to feel something kind of coming on. What are those early onset symptoms that these operators need to be aware of before? Like, I don't wanna wait till it's in full swing, right? Like, we want to know what are these early onset symptoms? What are we gonna start to see? Because some people may lee, I mean, some people may just disagree with you inherently, right?

And so, so the proof is. Hey, if you start to see X, Y, Z, then you should diagnose yourself with these following problems. Like what do you think are some of the early onset symptoms? Like, oh, they're gonna lose a deal to X, Y, Z, or, or whatever. Like, I'd love to, I'd love to get your perspective on that. 

Yeah.

So first off, I would tell you whatever somebody's experienced is their truth of what's happening. Yeah. And it just like they, for everyone they can show me, I can show you one where it is happening. Yeah. So they like, they can argue with me again, let's argue about when and at what impact. Yeah. But I, I, I'm happy to, I don't think we're going back to just metal keys only.

Yeah. And uh, although I do think metal keys will exist. That's a great example. Like, yeah. I'll be dead or retired by the time keys are gone. Right. Like, I don't care. All the people are saying they're gonna be gone. They're not. Yeah. But yes, your question to some of the symptoms, I like that. Um, I think if you're in a marketplace, um, and you start to notice.

Certain verticals of yours are starting to change and look different because the solutions that are being brought in and adopted are making security a feature of a larger value proposition. You may have a problem, so a good example, if you've taken a product, let's say it's a product really that's built for government and has been built for airports and we've just applied it to.

Multifamily residential, right? And, uh, you just use less of the system there. Um, but you notice all of a sudden there's these lock companies coming out with solutions that are getting adopted or, uh, vertical solutions of like property management tools that are doing it. Um, and you notice that you're not getting as many calls for that big system anymore to control.

The exterior because all of a sudden the interior or maybe that fancy box on the outside, that used to be an intercom that our industry really didn't care about very much. But yeah, all of a sudden it's become a digital interface to that in So the vertical shifts that are happening, that is a side effect of software.

Coming to a customer and saying, deliver me more value. I am no longer okay with you telling me that I can't have this thing called tenants, right? They have to be called users. 

Yeah. 

I am no longer gonna wait for the roadmap to come to where I can get access to my data. To so that my maintenance crew can have automation to get access to the units.

Yeah. 

I'm no longer gonna put locks that are not digital on the doors interior because you haven't done an integration to these digital lock companies. Like all of that stuff is, is changing on that. So that. The vertical side. You could even do the, I could have the same use case conversation around stadiums.

Same use case conversations around, uh, enterprise commercial real estate. There's certain verticals to where the verticalization is happening at this point. That if you don't go deep into those areas with solution sets to deliver high amount of value in the language of how that certain vertical goes, you're in trouble.

Yeah, totally agree. Massively in trouble. Another symptom, if you all of a sudden notice that, hey, weird. There's more manufacturers starting to do business development in my area. Mm. And you're no longer the control point of distribution of knowledge in the marketplace because there's also this thing called the internet that people learn and they can actually, you know, talk to each other.

And manufacturers are starting to understand also because capital infusion's coming into the marketplace to where there's an expectation of growth that is no longer gonna be dictated. By the channel alone. That's right. It doesn't mean, and I wanna, I wanna make sure it's understood. I'm not saying selling direct, that is something totally different.

That's 

right. 

Business development generation of opportunity versus selling direct two different things. Yeah. I do think we get to a point where a market motion is going to be where you have manufacturers selling direct business development. Direct through the channel. Channel generated opportunities and teaming.

Yep. Like that is what the enterprise software industry looks like. Yeah. And as we mature. The market continues to grow those, that is gonna be the motion. Doesn't mean that it's the doomsday. I actually think it's net positive for the entire marketplace. It's, it means there will be some winners and losers of course, but in, in mass in general, it'll be more positive for those that that change.

But if you're starting to notice that and you're not being part of those conversations. You may be in trouble, uh, on, on that end. Um, another one is if all of your, uh, revenue is being generated by hardware mm-hmm. Yeah, you're probably in trouble. 

Yeah, we talk about that all the time. 

Yep. And that's not like a high level, like you need more reoccurring, right?

No, it's, it's not, it's not just that, right? It's like that that is, yeah, I would, I would say that, yeah. But I actually think the, uh, where value is, is, is starting to pool. This is about value pooling. You're starting to see a a, a change in shift into software models that are, frankly, as an industry, we've had software that supports hardware.

That's right. Well, now we're gonna have a hardware that supports software. A hundred percent. Yep. So if you noticing that and you look at your product mix, you may have a problem. I say you may, because I do believe. Just like a lot of, like, especially for a long time. There's a, there's a, there's a decent size of our market for a while that's gonna be like, I joke that some access control companies, 'cause they're not making changes enough, should come out and say, you know what?

Screw it. We're the best onsite, non-mobile, non-cloud. Yeah. Like, be honest. Yeah. Like, this is who we're gonna be. Yeah. Because we were, we're gonna grow 5%. That's right. We don't mind. Yeah, you don't mind. It's a good business. Yeah. We got customers, but you know, it's fine. Yeah. We're not gonna be one of these high growth.

It doesn't matter. Fine. Right. There's a market for it and that's okay. And you should for now, just like, you know, I can, I can buy phones that don't have apps. Right. So those are some examples of what, of what you can do. I, I would also say this, the other one that I think is interesting, if a majority, if like if you're in North America and you're only looking at North American products, you're probably in trouble as well.

Yeah. 

Because again, this is a symptom, in my opinion of totally agree, hardware driven only products to where we, yeah, like when it was hardware, the moats of entry for organizations like the salt, those of the world coming into North America. 

Yeah. 

That's hard. 

Yeah. 

You need a lot of capital to go do that on a hardware standpoint, on software moats reduce a bit and there's a whole world out there of products that are coming in that you probably wouldn't think about or use.

You know, five years ago that all of a sudden now make a lot of sense because they can work with your American made hardware. Yeah. But they may bring a level of, I don't know, workplace optimization. And you like just the sort of the cut that that works and it uses, so you use that. Yeah. It doesn't mean there's not North American software companies, but I would broaden your view of, of solution sets in the marketplace.

Oh, I, I'll give you one too. That is like a, a, uh, channel one that I love. If you collect brands, just because you're probably in trouble. Oh. 

Yep. Yeah. And put them all over your website. Yeah. Uh, I, I, I, this is, this is the key theme of like, gone are the days where it's impressive at how many different brands you carry.

It's like 

the, the 

stamp of approval, the, like the litmus test for the quality of your business. Now it's like, are you, how. Few brands are you an expert on like, the fact that I, I hate having to tell my, you know, my peers like Yeah, I've got, you know, we do a lot of acquisition and unfortunately I have to support three different access control platforms 'cause I've acquired these businesses.

We're act actively trying to convert those customers so fast that we're actually giving away product for free, just to convert them for the operational efficiency. Of getting everybody on the same platform. Smart. Yeah. I think it's smart. You know, and it's funny, you, you brought up the emerging emerging market thing.

How funny is this? 10 years ago we'd go to ISC West and there's like this little corner of a back room of the like symposium or the expo where it's emerging markets and like they put all the international people over there, they shove them into the corner to say, Hey, you're not important, but we're gonna give you a space here.

And then every single year. That part of the, of the expo has gotten bigger and bigger and bigger, and they're getting bigger boosts and doing more headline shows because I think people are starting to realize that software is driving this and that they're gonna have to wake up. And, and, and here's another thing I wanna, I want to pick your brain on this.

And this is kind of, this is kind of a outside the industry thing. 15 years, not even 15, 20 years ago, people would buy in offices, these big printer scanners. You know, you go and you do the scanner and you'd buy it outright and you'd buy their maintenance plan. That day is gone. Everybody, when they get a printer, they're doing it as a hardware model, right?

It's not even a lease it, it is just a hardware as a service model. That is an example of how an industry has shifted their entire billing model as a result of hardware and software changes. What do you think is gonna be the impact to the financial side or the billing side? Do you think we're gonna see more of a shift back to this kind of hardware as a service?

Like how, how do you view that? 

Again, I think it's an and conversation. 'cause I, I just like, I I I do think there will be plenty of p opex first CapEx is basically what you're asking, right? Um, I think we've been primarily a CapEx industry for a lot of reasons. Um. And I believe there'll be a a, a fine size level of CapEx.

But again, we've, we've been like at the triangle of opportunity, most of our existence as an industry is at the high end, not as we go more down market, right? The market's gonna go like this, frankly, in a lot of ways. Like we right, we believe it, it will just do this. But no, it's actually, this is what's happening in the market, so, yeah.

But this part in the bottom when I did that, is actually gonna expand to be greater than the top 10% or whatever it is. That right now makes up a hundred percent. I wrote a post recently, I was like a, A coke can. That said like 90% of our conversation and what we do and decisions that are made in our industry is for 10% of the market.

Yeah, right. I think it switches to where your question actually has more to do, in my opinion, is the larger part of our market will be in a opex manner. That makes more sense. Yeah. Than CapEx. It's just the CapEx part is smaller. 

Yeah, 

because even, let's be real, like as organizations get bigger and bigger, at some point, some of the economics break for them where it makes more sense to be CapEx than opex, even at the high end topic, right?

Mm-hmm. Um, or some people have just a model, like if I'm a real estate developer, I own some of those buildings. I also build, make some to sell like so. I opex would maybe make more sense. Or even maybe CapEx depends on how I Yeah. The finances work for, right? Sure. So I just think it has more to do with market.

This idea though, where people are like, it's never gonna happen. It's like, man, I, I, I'm happy to place that bet. Yeah. Anybody like, let's, let's do that. Yeah. Because. I think these historical, the, the next 30 years has little, did nothing to do with the past. 

Mm-hmm. 

But we utilize the past to dictate what's happening.

I, I just don't, I don't, I don't agree. I'm not gonna die in the hill that says it's not gonna happen. I, I laugh all day long at that. 

Yeah, I a hundred percent. And I think it's funny to see how a lot of these manufacturers now, when we, when I go to a lot of the industry events where they're shifting their narrative away from, I'm an intrusion company to, I'm a security suite business, you're seeing that with ada, with bvo, with DMP, you know, and they're moving away from, Hey, this is, this is the only thing I do.

And honestly, I like, you know, we're an alarm business. That's the roots of our business, but we're, we are not, um, ignoring the fact that. In 10 years, 15 years, alarms are going to represent the minority of the security investment and it's going to be consolidated into video and or access control. Uh, that is what most people, well's happening 

all over the world, right?

Like here in North America it happens to be where ALARM and the rest of like the, it's separated. But I actually think what you're seeing there too is this desire to be the platform. Yeah. And some of the, in certain markets there, you know, who's gonna be the user interface that brings together, that's why if you do like Venn diagrams, it's interesting to watch, uh, like even GS os are competitors of access control products and video products where it's sort of like who controls the interface?

Yeah. Is those is the person who thinks they're gonna win. But I think how it works out, um, I do think just like the enterprise, if I take a sales force. Salesforce competes with everybody, unlike everything. Yeah. But their core part of their business is CRM. Right. And like they don't give that up, frankly, right.

To go get the other stuff. So they'll team and partner with their competition at some point. They got APIs, they've got app exchanges and all those things. 

Yeah. 

And if you as the customer, what I think is wonderful is as a customer now, I'm gonna be able to have best in class choice if I want to. That's right.

I also can say, you know what? I actually don't mind having a siloed system because it fits my business of what I want. Yeah. The, the consumer in my opinion, here is gonna win. 'cause you have choice, especially as more of these people open up APIs, more middleware companies come into play now to go, uh, to, to tie systems that have never historically been built to go do it.

Like again, I think we make, we're asking some systems to be seven foot centers also. Yeah. And they're just never gonna be. Yeah. So it's like, fine. Let me bring in, you know, the, the middleware that helps tie that together and let's not kid ourselves. You have some of the world's largest institutions and companies entering into our space that are going to dynamically change.

Yes. The business models and how we show up. And on top of that, what's always been weird to me as an industry, and I talked about it today, I, I've written recently about this idea that we need some more, we need anthropologists and people in our industry Yeah. As a, as a, as an industry. We find an immense amount of value on protecting people.

Caring for people. Yeah. But we don't really care to know who they are. That's right. Like, yeah, we don't, but all of a sudden Don't say that too loud. Yeah, no, it's true though. Yeah, no, I agree. All of a sudden this. 

Yeah. '

cause they were a card or a fob and if the card or fob 

Yeah. 

Worked, they got, they were allowed in, right?

Mm-hmm. Majority this in biometrics. I now know who that person is and I have to have a different relationship with them. That's right. To where there's an expectation change that's gonna happen. They have a vote. So do these big tech companies. Yeah. So things are changing. 

Yeah. I've got another question for you.

This is a little off topic, but I just, I, I'm curious, this is purely out of curiosity for myself, is I, I think 10 years ago we saw a lot of industry highlights that said, gone are the days of proprietary hardware, hard. Proprietary hardware is gone. It's all gonna be non-proprietary. That's where the industry is going.

But man, we see companies like ADA right now that are proprietary, that are growing at a massive pace, and they've got primarily, uh, you know, uh, proprietary hardware. Where, where do you think that fits? I, I know you like the both and thing, and I'm good with that, but what, what's your perspective on the proprietary hardware in the industry and kind of that as a business model?

Yeah. So I, I think couple things. I think even ADA itself is an evolution of what they're doing. Like they're, you know, they support on Viff now they never did before. Yeah. Right. Yeah. They're like, so you can even see how they're changing and doing. Yeah. I also believe if you watch the cadence of how they develop product and what they do, there's typically a build first and then partner later.

Yeah. Mentality that they have in, in a lot of areas. So I think they're an early company that. I, I also think we, we, we treat everybody with the same time horizon, where if you look at what they're, they're, you know, they're, they're like two years out, a year out from a an IPO. Yeah. Like, yeah. What they're motivated with is very different, different from some other companies.

So decisions they make today, maybe for that versus some other organizations where I'm a, you know, privately held company that's not worried about that. So like, you know, I can make the same argument in the opposite way of like a DMP or a Genetech. 

Right. 

Right. Where it's like, you know, so I don't know, pick which end of the end of the, the, the poison pill you want.

Yeah. But it's, they're, they're, they're just different beasts that we try to put a lens on it. Yeah. So that said, how I think this shapes out. I think a customer demand is gonna drive a lot of this and what the customer wants, they're gonna be able to go select. So I do think certain areas you're seeing the importance of value of that piece of hardware decreasing to where, uh, a open standards or APIs Yeah.

Integration capabilities, uh, are going to shift in certain areas. Like for instance, I think the controller, a reader, somewhat commoditized type products. You're also seeing, uh, demand for them to be different where I want pieces of hardware to not only do one thing, but do many things. Yeah. So if I treat a controller like an iot device Yeah.

'cause it's a data sensor. It's also a, uh, uh, a door device like I want it to be. So, so the demands are gonna shift it to where it makes more sense to go do that. I also think you're starting to see, you know, a lot of these hardware companies who before didn't even have the capabilities of accepting. Cash that's done in a reoccurring software model.

Yeah, that's right. Or, uh, the only way they made money was on that. But they, how a lot of the public companies work, they start to get permission from their investor base to allow them to be able to change their business models. Yeah. And they do it over time. So I do think as time goes on, the value pulling pulls them to a point where they're like, you know what?

How I made dollar of yesterday doesn't matter to me as much as it's going. So I will shift my mindset to how I make money, which will open it up. 

Yeah, 

so a combination of a lot of those things I think will drive. Listen there, some people will argue like the way that. Salesforce locks you in into what goes on too.

Yeah. I mean that's like, so it's not, it's not any different. It's the flexibility, the choice. 

Yeah. 

The customer's ability to go do it. That's gonna drive a lot of that. And I think we will trail behind that. 

Yeah. 

Where historically cottage industry didn't need to do that. 

Yeah. 

Now, mainstream market, again, will that cottage still exist and that stuff?

Yes, but the, the broader, what we'll be talking about will be more of what. The mainstream market looks like, and the mainstream market adopts standards, it adopts open products, things like that. 

Yeah, yeah. Totally agree. I think, uh, one thing that I think is interesting and is a takeaway that I'm, I'm beginning to think a lot about and try to educate my sales team on all the time, and I talk to owners about this all the time, is, um, you're gonna have to, as these industries shape up, especially as we move closer to an enterprise technology, you're gonna have to deliver.

When you're selling more value than just security, uh, solutions, like you're gonna have to deliver some business value and create a business case to the customer for your solution. And we, we talk about that a lot. Like we have a lot of retail clients that, um, this is my sales guy got hit with this yet we have a multi-site location with, it's a furniture store, and they were proposing a video surveillance solution.

And the c he went in front of the c ffo and the CFO said, Hey, this is great. Like, I, I believe it's gonna keep me more secure, but like. What else can it do for me to help me generate more money or save me money? And, and, and I said, man, you, you, that's a great question. And the, and the question is he's asking is, Hey, how can I use this as a business tool to drive more revenue or more profit cut costs for me and, and my business?

And for him, the use case ended up being hotspot analysis around where they were hanging out, around display. Yes, and And I think that we're seeing that more utility plus 

utility plus, yeah, a hundred percent. Yeah. Yeah. That's why you're a systems 

integrator as far as I'm concerned. 

Yeah, you're not a 

security integrator.

That's right. Completely agree. And, and it's funny too, like we're working another company, we're working with enterprise company that. They, they are so dead set on the data. They are, they're making a massive push in ai. And so we've been hearing forever that, hey, access control data, video data, that is so important to the end user.

But we haven't seen a whole lot of practical examples of that, or at least I haven't until recently. We had a, a several enterprise clients who are actually paying. Tens of thousands of dollars to get the data out of their access control platform. So they can ingest it into their, into their data layer, their data warehouse that they can use to query all sorts of different stuff for employee behavior.

And this is the first time I've seen them say, Hey, we're not even integrated. It's this AI tool, the data warehouse that they have built. They're saying, we're gonna pay, we just want the API documentation. We're gonna pay tens of thousands of dollars. This isn't a Fortune 500 business. This is a sub half, a half a billion dollar business.

That's paying to get this data from all their locations so that they can understand their employee behavior better, which I think is a shift in this market. 

A hundred percent. And it's I that is example of are we a data industry that's applied to security? 

Maybe right. Maybe I, I wanna close out with what, with one last question, which is, can you give our listeners one very tactical piece of advice on, hey, if you are trying to adopt this change, if you're trying, and it could be just, Hey, adjust your mindset, but if you, if you were gonna start today, you're gonna walk in as the owner of a 40-year-old security business and you want them to.

Shift over time, not immediately from a system, a security integrator to a systems integrator mindset, which is ultimately what we're talking about. What would you tell them? Step one is where, where would you have 'em start? 

Well, I mean, create a vision of what, what you want your company to be for the next 30 years.

Yeah. Like just start there. Like what? What do you think? The core parts, and it can be that you're just gonna focus on security. That's fine. 

Yeah. 

But there's also a lot of other opportunities that exist beyond that too. So I would, I would set your strategy in growth for the next 30 years, not as an iteration.

Again, pretend this is the men in black thing. Yeah. Erase your brain. Yeah. Great. I fundamentally understand security. Now though, I wanna understand what my strategy is, how we're gonna apply it into the marketplace that we believe will be viable for the next 30 years. Yeah. Um, and then, and then after that, I would take a look at my skill sets of what I have on board to support it.

Yeah. 

I'd understand who are the customers that I'm targeting, how am I messaging, how am I going after them? Who and what are my expectations I have of the partners and the products that we work with? Yeah. In order to go do that. All of those things. Yeah. And I would set the company up to go support that.

A lot easier said than done. No doubt. But I, I believe though it depends on your time horizon as a new, so we go to these events and I meet with integrators and it'll be like their dad and the son. Yeah. The dad will be like, oh, there's a lot. And the son's like, what about ai? What about this? What about that?

Yeah. Right. And you could see right there the friction that is like the dad has a time horizon of five years. That's right. Son. Has or daughter has the time horizon of 25. Yeah. And their strategy is friction. Now, some of the most successful ones that I've seen, even on Locksmithing, there's a handful of them.

They, um, this guy Killian, uh, I love him. He is in, in Ireland. He's a locksmith. His dad handles the old school locksmithing side of their business. Great business. He handles the electronics. Mm-hmm. And it's totally separate. Now they overlap. Mm-hmm. But instead of the, you know, his electronics side outsourcing into a locks with the handle doors he brings in his own company.

Right, right. So, and it's a lead source across. Yeah. But that's how they're bridging. The inevitable where they know that his business is probably gonna be much greater 

Yeah. 

Than the locksmithing that's been there. And both of 

them are happy. 

Yeah, yeah. 

No doubt. No, I love that. Uh, Leah, we could, we could talk for hours.

Man, this has been super interesting. Yeah. It's not one of my problems. No man. I love it. I think this is great. I think this is gonna be incredible. Incredibly valuable for our listeners 'cause it is for us. Right. Like, this is something that we are thinking about a lot, which is, and it's something we talk about all the time, which is think about the end in mind.

What is your plan? You can't adjust where you are today if you don't know where you want to be tomorrow. And this is something that we're constantly trying to figure out. And so that, that's a big reason why we wanted to have you come on and talk about this, is to help our listeners understand what does tomorrow potentially look like so they can make informed decisions and plans today.

Uh, and ultimately we can be a, a, a more proactive, as a, as an industry well. Lee, we appreciate it man. You have been awesome. Thank you so much for your time. Uh, Lee, where can people find you If they've got questions they wanna learn more? 

No problem. You can. Uh, LinkedIn is a great place. Leo Des, uh, you can hit me there orLee@leodes.com is my email.

And actually for any of your listeners or any of your partners in that, if they'd like, if they'd like this type of conversation with us, like happy to give them access to. Um, our Slack channel that we have that's growing the community we have online. So all I need is their email and I'll add 'em to it and we can continue these types of conversations.

So, um, that's also a good place to reach with. 

That's great, Lee. We appreciate having you on board. Of course. If you like this content, like and subscribe for us. We so appreciate it. Thanks so much. 

Thank you.