How Will "Granite Guard" Tilt the POTs Consolidation Advantage to Granite?

Posted 9/16/10 By Dan Baldwin, TA Executive Director, 951-251-5155 email

Granite Telecom is Telecom Association's first accredited vendor so I know them pretty well. In interviewing dozens of TA's members about Granite several months ago, one fact become unmistakably clear - Granite is the 800-pound gorilla in the POTs consolidation vendor category. Few big POTs consolidation deals seem to get done where Granite is not at the table.

Granite does not seem to be taking their category dominance for granted though as they continue to roll out additional complimentary multi-location client solutions to add just one more point of "stickiness". Their ability to field 8,000 structured wiring techs anywhere in the US is advantage they've promoted for some time. Now they're rolling out another, "Granite Guard", a multi-faceted set of "loss prevention solutions" aimed squarely at their multi-location clients (an no doubt at their multi-location POTs consolidation competitor's clients).

To learn just exactly what Granite Guard is and isn't and how it might tilt the competitive advantage in the POT consolidation market to Granite, I interviewed Charlie Pagliazzo, Granite's Director of Alternate Channels.

Click here to download the MP3 of the interview. Click the audio player below to listen to the interview now.

Podcast Transcript 

What's Granite Guard? How did it come about, and how does it fit in the Granite's multi-location solutions palette of POTS consolidation, nationwide dial tone, data and structured cabling? 

Granite Guard is Granite's wholly-owned subsidiary providing loss prevention solutions to commercial enterprises throughout the entire United States. Granite Guard provides installation and service of fire alarm systems, security systems, closed-circuit TV, access control, and other fire protection and security systems to commercial customers. 

Now, so when people say, "What category does this generally fit into?", you said "loss prevention solutions". Is that the major category people would search to find other competitors in the space?

"Loss prevention" and "facilities management" are the two that come up the most.

How do these multi-location business customers buy these solutions now?  What is your agent advisory board telling you about their ability or desire to get into this space?

Initially, clients are coming on board for facility monitoring services. And that extends out to maintenance, regular service inspections for fire alarms, sprinklers, and even new installations for these services as well as CCTV ("closed circuit television") and other access control services.

Now certainly, Granite didn't invent this solution. Where are mutli-location customers, are they getting them from all different vendors and they wanna just get one vendor out?

The reality is, just like in telecom, there's a lot of players out there. Some names you've heard of, some names you haven't from nationwide providers to regional boutique-type providers. It's an established industry. It came about from Granite's working with our current clients.

We grew Granite Telecommunications through our clients' requesting additional services. You may recall Granite started out as a POTs line consolidator in the Northeast, a group that provides services nationwide through the request of our clients, adding more services like long distance or data structured cabling. All because our clients asked us for them. Granite Guard came from the same thing.

Our clients told us that they were working with a number of different providers for their locations, receiving multiple invoices, had multiple points of contacts, all very similar to the same experience that our clients had in the telecom space. So we investigated how could we find the support process that would benefit our clients, and that's Granite Guard. 

Now I guess the 800-pound gorilla in the space is ADT, right?

That could be one of the names, absolutely, and a few others, but Granite focuses on commercial businesses only. Just the same as in the telecom space, we built our platform and trained our people to support business requirements and that's the same as Granite Guard.

Can a telecom agent lead with this loss prevention solution? If a multi-location customer wants to start with just loss prevention and then add their POTs business later, is that all right?

Absolutely. We feel that Granite Guard is a tremendous club for our partners to have in their bag. It can be the lead, it can be an additional service, wherever it takes to gain the client's attention or to be able to provide them with just more efficiency, cost savings and be more a part of their overall solution suite.

And who is selling this now? I know that Cisco VAR is out there selling routers and hubs and stuff like that and plenty of solution providers and network service distributors are partnering with. If they were looking for the sort of people that are selling this sort of loss prevention or monitoring solutions, are there independent agents out there doing that or is it all like competing as ADT's inside sales force?

It's similar to the telecom structure. There are both direct sales people as well as agent groups, VARs, et cetera, who work within the alarm industry. We feel that this is a terrific crossover for us to be able to provide the service to our telecom agents, providing them with something perhaps a little different than they have in the suite of solutions today and we're also working with traditional alarm monitoring service vendors as well.

So whereas we've had, you know, one of the vendors like Merchant Services vendors come and have success with TA member. What you're saying is even though this is a one-off solution, there's no reason that they can't be successful, right?

For a telecom agent perhaps, it would be a one-off solution. But as far as success goes, this is a product that, I don't want to say sales itself, it takes a professional presentation. But it's a significant industry. It's a $45 million industry and we feel that we've put a program together that, like Granite Telecommunication, allows multi-location business to easily understand the value of the proposition we're putting in front of them and I think our current telecom partners will be able to convey that message as well as they've been able to successfully convey our message in the telecom space. 

Since Granite has actually rolled this out as subsidiary, I think what I'm hearing is this is not just one more point of stickiness, but this is an actual lucrative segment to be in, right?

I would say that this is. it is both a lucrative business as well as a point of stickiness. Unlike our POTs line solutions, which require no term or volume commitments, the alarm business does have a contractual term that clients enter into. So there's definitely some stickiness there.

The efficiencies that we've brought to the table was to put both very effective pricing structure in front of our clients and allow our agents to benefit from a long-term residual compensation plan. 

Now for our members that don't know the pros and cons of loss prevention, alarm or remote monitoring, how is Granite Guard competing against likes of ADT and the others? Are you competing on price and competing on. you know, what's the big hook? Why would someone switch from ADT to Granite?

Similar to the telecom space, where Granite's value proposition as a nationwide solution with a single point of contact and a single invoice capability for multi-location businesses. We're bringing that same value points to the table with Granite Guard.

So I feel that our existing sales partners, channel partners, as well as. perhaps people come to us for the first time because of Granite Guard and we're be able to embrace a very straight forward and effective solution.

And is it kind of a natural segue since Granite is one of the few vendors that does nationwide structured cabling plus you're also heavy into the data field and this is where some monitoring systems are connected, the structured cabling and data. This is a natural add-on to that solution, right?

There's no doubt that there is synergy in placed here. We have over 8,000 feet on the street nationwide with our contractors doing structured cabling services. And a significant portion of the Granite Guard solution involves on-site equipment, involves some way for that equipment to connect to central stations to report issues and events. So there definitely is a synergy here and we're gonna take advantage of that.

And one other competitive advantage for Granite, as I confirmed just an hour ago, there's a lot of interconnects, business phone system dealers out there that do cabling locally. They do a lot of CCTV installations but they're not necessarily recommending ADT or remote monitoring services. And so this solution allows network service "feet on the street" to go in and talk to these interconnects and equipment lead partners say, "What are you doing after you install the CCTV? Can I help you make money off of the monitoring solution?"

I have to agree. There is opportunity here that has not really been exploited in the telecom space as far as we know to date and we're looking forward to bring that to the table. One of the things I did want to point out too that obviously, I think it is important because so many of our Channel Partners, they're busy.

They're out there looking for clients presenting solutions. Constantly looking to add new business. The alarm business, once implemented, it's really hands-off from a sales perspective, The service perspective never ends but that's where Granite and our team will really provide our partners with the opportunity to create a long-term revenue stream.

It's kind of like selling an insurance. You sell it just once and since certainly people are going to want to collect if something happens, but it's not like a T1 that goes down everyday. 

Correct. There is always going to be some element of the business that is going to need follow up. From our partners or from our service support people. But there is not doubt about the fact that once implemented, our partners can look forward to a long-term relationship with that client through Granite Guard. 

How do you measure one of these alarm deals? I mean, what's too small a deal or what do you want to be looking at?

We will entertain any opportunity but I think the overhead reduction and the cost savings are going to be more significant the larger the client. So there is an immediate savings just from simply consolidating invoices and for taking advantage of Granite's pricing structure. But the larger the client the greater the dollar savings and probably the greater the administrative overhead reduction.

How do you measure the size of the deal as in, you know, total dollar volume? What are you paying monthly for alarm monitoring service or is it locations. How do you measure this size deal?

Well, you know, honestly, I think you did a good job in running a little bit about it with that question Dan because it's both. We track it through a number of alarm sites within a location. I don't want to say it's the same as half a number of POTs lines within a location but different size structures would have different number of monitoring station within the site. We track it and price it according to the number of stations within a location. 

So it starts out the same from the agent's viewpoint. "Fax or email me a copy of your alarm monitoring bill and then we'll see what we can save you or see how we can improve service?"

Exactly. What we've found is that by reviewing their existing structure, we can make a recommendation and give them both a pricing and a service solution that's going to improve what they have today. 

And other than feeling that maybe they're spending too much on the solution with their current vendor, what are some of the "pain points" that TA members should be listening for? 

I think on the administrative side, billing, responsiveness to billing questions, concerns, consistency of pricing, add-on charges beyond what's initially contracted. You hear things like that, that's certainly something to follow up on. Support as well, availability of support.

Granite Guard has the same structure as Granite Telecom and that we're 24/7, 365 live on-site support structure. Nobody is on a pager in the middle of the night. Nothing is outsourced from the standpoint of responding to our client needs. The call centers that we work with to take the initial event calls are seasoned veterans, proven entities who's been in the business for quite sometime. So when you hear a client talking about they haven't been getting response to their inquiries, their questions, installation issues, new site builts that haven't been going as quickly as they'd like, not being ready for new site openings. Those are all famous that we heard and that we're looking to take advantage of by implementing a Granite Guard solution

Now the "event" that the agents are listening for I would assume is a growing company where they've already got alarm services or monitoring services but for some reason are not totally happy and they're growing. They're gonna be adding more points of monitoring and it sounds like that might be the perfect sort of deal to flip?

Sure. I mean the really is Greenfield new build are terrific solution. But that doesn't mean that the majority of our business won't be coming from existing entities who already have some sort of monitoring solution in place. We're looking to enhance their experience whether it's their price that are support . that are billing platform. All the things that we become known for nationwide in a telecom space. 

And as far as I say you just, you know, taking over monitoring from an existing vendor that you know you're bidding out. Is there equipment involved? Do you have to swap out equipment or is it just simply taking over monitoring was already there?

Well, there is a . there is often . often time we're going to be putting Granite Guard equipment at the site that say no installation cost situation, but most of the activity out there in this space is open protocol. So often times majority of the existing infrastructure will remain. It's simply just a programming issue with the equipment on site today. 

And are there generally long term contracts that people are stuck in or have you found it's on that bigger deal for them to roll out of whether or right? 

The industry definitely has contracts as part of it. What we're finding is the (??) in auto renewal for additional time frame typically on initial (TU?) deal than renews on a yielding basis. That's what we're finding. So when we're dealing with multi-location client, they don't have any consistency in their current contractual status. Some sites are coming up in 3 weeks. Other sites are coming up in 3 months. So it allows us to establish the relationship. Begin the process of bringing them over and we grow through as it makes sense whether it's expiring contracts, or clients make a decision to make a change regardless of contract status. It all depends on the situation. 

This is Dan Baldwin. We've been speaking with Charlie Pagliazzo channel director for Granite Telecom talking about the new Granite Guard. Charlie anything we have forgot to talk about here?

Well, I think . Dan, thank you for some great questions. I think we covered it. You know, I . the real thing to leave behind for TA members is to understand it simply Granite offers one consolidated solution for all businesses lost prevention needs. And it's a long term revenue creating solution. That definitely gets people attention when it gets brought up in the meeting. 

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For more information about Granite Guard, visit http://www.GraniteGuard.com or contact Charlie Pagliazzo at cpagliazzo@granitenet.com  or CPagliazzo@granitenet.com.

Comments

[Doug Turpin, Venture Group]

I think this is a creative attempt to expand their business model. They may find it is hard to get customers to buy this kind of service from a telecom provider in the larger multi-location space. I have seen some of the smaller LEC's try to tie this together with limited success with larger customers.

It seems like the small to mid size customers are easier to sell to but I wish them well on this endeavor and will be watching it closely and hope this is a big success for them. I think they are wise to look to expand their business and leverage their relationships into new areas.

[Fermin Perez]

Great service! Copper State Communications provides a similiar service for Arizona businesses. Our service includes cabling, camera installation and remote monitoring.

Fermin

[Steve Handelman, Owner, ATEL Communications]

We know of no other company offering to consolidate Alarm Monitoring Services and this would be a big benefit to our multi location customers. We're a NEC dealer in Dan Diego that does quite a few CCTV structured cable jobs.

Any partnership with Granite that would include using ATEL to outsource wiring jobs is obviously a plus for ATEL. I am having my Vice President Andrew Cohen look into the program and see how we can benefit from it.

[Adam Edwards, President, Telarus,]

It's great to see carriers add managed service but we've seen little success with non-telecom services being introduced to the telecom channel.

If they can find agents focused in this area, or create a referral program so agents don't need to be experts in security, I think they'll have a much better chance of success.

[Jeff Leshin, VP Sales & Marketing, Ernest Communications]

Ernest continues to focus on adding data and integrated type services to complement our core offering of local services. Given the fact we sell exclusively thru the channel, had our agents come to us with requirements for a service such as alarm monitoring, we would have investigated and determined the validity and potential success of offering this thru our partners.

However at this time, we have seen no indication that this is a service that our agents specialize in or have a strong desire to become involved in. I am also not sure if companies would purchase these type services via an agent or reseller, rather than utilizing their direct providers.

I would have to ask what is the strategic advantage, the pricing discount, support structure that would motivate companies to actively look at other potential providers?

[Cale Perry, President, CPI Communications]

This could be a good niche offering so long as it brings value to the customer and putts money in the partner's pocket.

CPI though would need to review some case studies prior to jumping on the bandwagon and offering it to our multi-location customers as a master agent.

[Bo Wheeler, President, EnTelegent]

Enterprise customers ask about the alarm and fax capabilities of our Managed VoIP solution regularly. We have the ability to run alarm and fax lines through our Managed VoIP platform without the need for external POTS lines.

Our channel partners target multi-location end users for EnTelegent Managed VoIP, so we are seeing that these customers have the need for alarm monitoring. As our customers continue to look to reduce the number of providers they deal with, based on our experience, I would think that this market segment will benefit from the Granite Guard Monitoring offering.”

Find out more about EnTelegent Managed VoIP:
http://entelegent.com/voice-services/Managed-VoIP

EnTelegent Managed VoIP White Paper and Case Study:
http://entelegent.com/uploads/resources/documents/EnTelegent%20Managed%20VoIP%20Case%20Studies-08202010101535.pdf