The 25-year trend of electrical contractors buying “smarts and parts” from fire alarm ESDs (Engineered Systems Distributors) may be going away. That is, at least, how I’ve been seeing it recently—and I’ve been in the industry for almost four decades.
A Brief Look Back
If you’re not familiar with these ESD “smarts and parts” dealers, let me give you a quick primer. Let’s say there’s a large building project that involves a new fire alarm system and the prime electrical contractor isn’t knowledgeable about fire alarms, or doesn’t want to be in the firealarm service business. The contractor can turn to an ESD that takes a look at the engineer’s design, applies its fire alarm parts, and provides a complete set of system wiring drawings and programming. Finally, the ESD sells the package to the contractor. This process effectively sells their expertise (smarts) and their product (parts). The prime electrical contractor responsible for the entire installation has used this strategy for many decades.
How the Industry is Progressing
Because of trends in the industry and technology, electricians are now dealing with an abundance of low-voltage systems, such as fire alarm, access control, cameras, voice and data, sound systems, telephone networking and Wi-Fi. As a result, for a $12 million electrical project, about $2 million of it could possibly be low-voltage specialty systems. Since there’s so much low-voltage work—and usually the prime/large electrical contractor understands the significant challenges of completing it—many contractors no longer want to assume responsibility for the installation. This has caused a new market segment to develop for low-voltage integrators to partner up with large electrical contractors and take over that portion of the installation.
Therefore, the smarts and parts dealer who only sells equipment and does not employ installation staff may be in a less competitive position. However, the low-voltage integrator who can complete the entire installation can partner with electrical contractors who specialize in areas other than fire alarms (security, voice, data networking and public address). That organizational restructure would be stronger and more profitable for the future. I look at these low-voltage integrators as specialists—similar to those you find in the medical field, such as ear, nose and throat doctors.
Adding Value to the Job Site
What’s more, as one of these low-voltage integrators, working with these big electrical contractors has been extremely beneficial as it allows us to bring all the low-voltage sub-specialties under one roof; we are a “one-stop shop” after all. Telling the electrical contractor that you’re going to take ownership and coordination of all the low-voltage systems is key. If you only specialize in one area, then the contractor has to find someone to fill in the gaps.
Also, we’ve been able to consistently show that the project will be completed on time. For example, let’s say there’s a $20 million building and the construction interest could be as high as $100,000 per month; it’s critical that the job stays on track. The owner doesn’t want to find out on the brink of moving in that the fire alarm is not designed correctly. Then, there’s a sudden scramble to add devices that were not included in the original scope. We avoid this because we are continually monitoring the project and even review the plans and drawings at the very beginning to make sure nothing is missing. Additionally, we keep track of all the building modifications that occur during the course of the construction to avoid an 11th hour nightmare. People who work with us value rigorous scheduling in advance of their move-in date.
With an increasing number of low-voltage systems today, the smarts and parts dealers may be at a disadvantage. Instead, electricians are seeking to partner with low-voltage integrators to shift their own priorities to high-voltage systems.
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About the Author
Jonathan Phillips is the founder and owner of System One Alarm Services in Franklin Lakes, New Jersey. He graduated from Lehigh University with a degree in electrical engineering. Jonathan is NICET Level IV certified in fire alarm design, and has been in the industry for 35 years.