Technology is changing the role of locksmiths. Change is underway in the form of increasingly intelligent “things” at ever lower cost capable of detecting and responding to almost anything you can imagine. There are issues, to be sure, about how to secure these things and around how they will all communicate. The Internet of Things (IoT) and more recently, the Web of Things (WoT), are all about these issues. But what does any of this have to do with locksmiths? To answer this, we first need to look at what specifically the IoT and WoT are, and what impact they bring.
What is IoT?
A May 31, 2018, Forbes article citing an Industry Insights Survey of 1,445 professionals around the world said “This shift toward more internet-enabled products has been dubbed IoT for short. This technology has gained steam in recent years as the cost of sensors declined and processing power increased thus making it possible to connect more things, people and devices. In a futurist world, everything in the surrounding environment could communicate without human intervention.”
In his book, The Fourth Industrial Revolution, Professor Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, explains why he is convinced that we are seeing the end of the third industrial revolution, the “Information Age” and entering a new era. He sees us at the beginning of a revolution that is fundamentally changing the way we live, work and relate to one another. “I believe that today we are at the beginning of a fourth industrial revolution.” He observes that “we are witnessing profound shifts across all industries, marked by the emergence of new business models and the disruption of incumbents.”
An OnSolve blog post states that IoT is a game changer, and concludes that IoT is good for business. However, it also refers to IoT security as a “clear and present danger” and warns “despite the clear benefits that IoT provides, security issues loom large. That’s because every Internet-connected sensor is a potential attack point for a hacker.”
Is IoT Ready for the Security Industry?
What about actual IoT applications in the security industry? Our team has been working on just such a project over the last year to leverage IoT to manage intelligent locksets and other sensors and devices. Until this last year, IoT looked to us like another overhyped three letter acronym filling our inboxes.
We learned how far along the ecosystems needed to make IoT secure and practical had come. First to address the questions about how all these “things” are supposed to be secure and communicate with each other, we learned that by 2016 the basic direction had been found. The state of the IoT was essentially where the Internet was prior to the development of the Web in the early 1990s. Web standards enabled interconnectivity, discoverability, and security for the Internet. They continue to evolve to keep up with security needs and new feature demands.
The World Wide Web Consortium, or W3C, the major standards body for the Web, refers to the use of Web standards for IoT as the “Web of Things”, or WoT. On their WoT page at w3.org/WoT, they explain “The Internet of Things (IoT) is widely recognized to have lots of potential, but its commercial potential is being held back by fragmentation. The Web of Things seeks to counter the fragmentation of the IoT, making it much easier to create applications without the need to master the disparate variety of IoT technologies and standards.” Wikipedia’s Web of Things article states that “Rather than re-inventing completely new standards, the Web of Things reuses existing and well-known Web standards.”
We also found that Artificial Intelligence (AI) and Machine Learning (ML) had moved out of the experimental phase into practical tools for product developers. One example of this is found in detectors for vaping. These smoke detector-like devices can be used where normal surveillance cannot, such as K-12 bathrooms. One model claims to be able to detect not only vaping, but whether THC is present. The same device claims to detect smoking, whippets (Nitrous Oxide), ammonia, light, raised voices and aggressive behavior.
The list of devices with surprising capabilities at ever lower price points is growing daily. A key game changer is happening with integration among both devices and applications. This area has evolved to the point that integration can now be done by non-programmers using visual editors. This is termed “no code” development and has a sibling, “low code” development. It means capabilities normally only in the hands of OEMs are suddenly available to everyone. Other technologies like 5G, the next generation for mobile device communication, are highly optimized for IoT and will only accelerate its growth.
Opportunity for Locksmiths
How will all this impact the security industry? These changes have enabled a new generation of Do-It-Yourself for consumers in their homes. However, not everyone wants DIY, especially in the commercial sector. Our impression is that the key to future success will be bringing value to the end user by understanding their specific needs and leveraging these new abilities to serve those needs. Instead of a siloed market based on vendor and product relationships, solutions may become massively end user oriented with components coming from a broad variety of sources, not just security industry vendors. Those closest to the customer, such as locksmiths, may be in the best position to leverage these new abilities.
Tony Hokanson, President of Bloomington Security Solutions in Bloomington, Minnesota, said in an interview for this article, the idea of locksmiths as the front line of IoT in the security industry is an interesting one. His view is that there are likely only a few locksmiths in each market progressive enough to adopt the approach today. However, he sees the opportunity for them to do so as very real.
“Every locksmith has access to the decision makers.”, Hokanson said. “Our solutions are becoming more and more automated. It’s definitely a gateway to discuss IoT.” Multifamily is one of the markets they serve. He added, “We’re seeing what people are actively looking for is really in the IoT space. This has expanded to include light switches, thermostats, etc. I see the features of access control expanding with the use of things like smart keys and data on card.”
Chad Lingafelt, Managing Partner at Loc-Doc Security in Charlotte, North Carolina, regarding locksmiths as the front line of IoT in the security industry said “I don’t think locksmiths are embracing it as a majority. There are separate cloud systems, electronics and web services. But a small portion of locksmiths are using and applying them. I do believe there are huge opportunities in this space for those that want to pursue it.”
Mark Kenniston, General Manager of Beishir Lock & Security, St. Louis, Missouri replied to the question with “It depends on the locksmith. It comes down to the expertise you have as a company. We see IoT as a huge piece for our business - everything from commercial security, access control, and video surveillance to home automation.”
We asked how often the locksmiths are installing intelligent locksets. The consensus was that it was still a lower portion of the secured openings but rapidly becoming a larger portion, especially for larger installations and in multifamily environments. One comment was “We see more traction when we talk about intelligent locksets. People keep asking if they can control it from their phone. It seems like developers usually go with what they are familiar with, but we’re seeing more of them asking us for what is best for the situation. People seem to have had low expectations in the commercial market on what can actually be done, but as these systems become more and more prevalent in residential, they are increasingly looking for it in their commercial environments. They seem pleasantly surprised when they find out we have cloud solutions. It’s important for locksmiths to embrace IoT because it’s a way to add value for their customers.”
We asked for their opinion regarding revenue and margin growth opportunity for both IoT and Recurring Monthly Revenue (RMR). Lingafelt said “RMR is the hot topic. We’re finding multiple ways to provide a higher quality of service to our customers by offering web applications that are constantly updating and adding new features without the need to processes updates. It also empowers our team and our customers to solve problems without rolling a truck. This is just one of the examples of RMR benefits. Service agreements are a whole other topic.”
Hokanson echoed this view, “Absolutely. It seems like most locksmiths are not aware of the value this brings. We’re trying to make our solutions service oriented and holistic.”
But Hokanson’s major point about RMR was less about revenue than being able do more for the customer. He said “It seems like the culture of locksmiths in general is that they really care more about finding the right solutions for their customers. They have an interest in helping the customer, so they’re not out there looking for more ways to build revenue. They go into the profession because it’s interesting and they like it. So as a result, most would care about RMR when they see it as a key part of the solution and enabling more service they can provide, rather than about the revenue. For example, enabling the ability to remotely support the customer.”
Kenniston, regarding revenue and margin growth opportunity, replied “Certainly. Every year that portion of our business is growing. The lock side of the business has stayed very stable, but there’s not a lot of direct growth there. However, the electronic side is growing every year. The locksmith area will always be a valuable piece. People who strictly focus on the mechanical side should be careful because more of these areas are moving to electronic. So, I would expect the revenue for the purely mechanical side to be declining over time. Openings that used to be strictly mechanical are increasingly starting to be replaced with electronic components.”
On RMR, Kenniston commented “We see RMR from a few different standpoints. We’ve seen an increase in our alarm monitoring but now also provide integration with thermostats, door locks, lights, etc. It’s reduced the amount of conversation needed to sell those services. By providing all of this, they’re not just paying for something they hope not to use (alarm monitoring), they now are paying for something they use every day – the light switches, thermostats, etc.”
When asked if they saw IoT as an opportunity to support emerging devices that perhaps would have been the domain of other markets, such as server rack locks in the IT space, we were told “Yes, that’s one thing we’re always trying to do. Being one contact point for many of the devices is a convenience for the customer as well. We’re selling a suite of products. Serving the mechanical side means we’re on site anyway, so we can save the customer time and money by helping with other areas. It provides efficiency both for us as the vendor and for the customer, and again locksmiths are best positioned for this. Locks are used every day, so they fail more frequently and need more visits than other devices. Customers use the lock every day, so at some point it’s going to break. As a result, we have more opportunity.”
Another reply was “Certainly. Even in our industry there’s a bit of a barrier to entry as those kinds of things have been managed by network service companies. But there is an advantage to having a single system in the same user interface you use to control everything else. You don’t want to manage a different system of access for your server locks.”
One of the questions we wanted to explore was whether locksmiths might be uniquely positioned to leverage these changes versus other players in the equation. One of Hokanson’s comments spoke to this. “Customers want simplicity and one-stop-shopping. Customers are looking for the ‘Easy’ button. There are a lot of locksmiths that don’t seem to be embracing technology and I think they are going to struggle. Our customers are asking for connectivity to the locks. They want to be able to control them remotely. Integration is driving the opportunity.”
We also concluded that IoT and WoT standards could knock down barriers created by industry proprietary protocols, increasing competitive threats from outside the industry.
“We’re seeing the companies that provide the thermostats etc. are afraid of the door. They’ve been so focused on technology they may be overlooking the mechanical side of the security equation. We’re so experienced with that side, it’s second nature. We have a complete skill set for both sides. We’re also seeing a demand for intelligent keys. Most locksmiths seem reluctant to embrace this because of their comfort with mechanical. However, we’ve seen our opportunity expand to low voltage and other areas in many cases when we were brought in just for the mechanical because of our service and complete offering.”
Our summary impressions are:
The IoT (and WoT) are not future – they have arrived.
Locksmiths appear to have a competitive advantage.
- They are closer to the customer
- They are almost always necessary
- Their needed mechanical skills are unique to locksmiths
There’s a danger in not adapting to these changes, but a large opportunity to differentiate by doing so. To leverage the opportunity, locksmiths will want to strengthen the technology side of their businesses.