February 2007
Carlow’s Big Brother Now Has Global Reach [Dick O'Brien Business Plus Magazine]
Heard about the security firm operating in Carlow that’s protecting Arizona water treatment plants from Islamic terrorists? Dick O’Brien hears from founder David Walsh how the internet platform is helping expand worldwide.
Anyone who has ever doubted that broadband can change the way we do business should take a look at Netwatch, which is selling security systems to American clients and monitoring them from a base in Carlow. “When we pitched there first, we were concerned whether they would be comfortable with the fact that they were being monitored from Ireland,” says managing director David Walsh. “The Americans’ reaction was that they didn’t mind as long as they got a good service at the right price.”
The idea for Netwatch started in 2002, when Walsh and co-founder Niall Kelly were told by a friend that he had been attacked when responding to a burglar alarm. With a background in electronics, Kelly realised that there might be a way of verifying through video transmission whether there was someone on site before the keyholder arrived. Within a few months the pair had quit their jobs and had gone to Australia to conduct some market research. Walsh recalls: “We met with a company that specialised in video transmission technology for military installations. What was possible became obvious to us over there. Not only could you visually verify that there was someone on site before you went out, but now you could set up a situation where the site could ring you with the footage as soon as someone entered a restricted area.”
‘Sometimes the security man can be the weakest link’
Back in Ireland, Walsh and Kelly developed their system and began looking for clients. Says Walsh: “It was tough at the start. My background was in agriculture and I didn’t know too many farmers who’d spend the money. We really had to start from scratch and sell the product, but once we got the first few clients things got easier and we benefited from the word of mouth effect.” Three years later and the company is monitoring 580 sites in Ireland, the UK, Spain and the US and employs 60 staff. Although it has a broad range of clients, the most common type of customer is a business which has a large amount of valuable assets stored outdoors, such as motor dealers, builders providers and stud farms. It has also moved into protecting the properties of high worth individuals.
One of the key selling points of the Netwatch system is cost savings since it eliminates the need for on-site security. “One construction we are working with is saving €750,000 a year on their security bill. In addition to this, one of the big advantages of our system is that the monitoring personnel are removed from the sites, so there’s no intimidation and no corruption. Sometimes the security man can be the weakest link, whether it’s deliberate or accidental,” says Walsh.
There are four elements of hardware needed for the Netwatch system. Motion detectors are installed at the perimeter of the site to detect any unauthorised entry. CCTV cameras then capture images of the intrusion. A digital video recording and transmission unit can then save the footage and relay it back to the Netwatch command centre. The final piece of the jigsaw is a PA system, which allows for audio warnings to be issued to an intruder.
The command centre is equipped with 30 workstations, each equipped with a dual screen display. When an intrusion is detected at a Netwatch protected site, an audio alarm sounds at the command centre and the twin display comes to life. One screen will show a detailed interactive site map of the property, allowing the operator to click on various cameras to move around the site. The second screen shows snapshots of the moment the intruder came in, two seconds before and two seconds afterwards, allowing the controller to access where they came from and in what direction they are moving. Also on the second display is the live video feed from the site.
The next step for Netwatch is to implement a protocol agreed with a client. That usually involves issuing a live audio warning to the intruder, followed up with a phone call to the gardai. According to Walsh, the verbal warning is surprisingly effective as it is not pre-recorded and it is addressed directly to the intruder.
Installations fees average at about €20,000 for a greenfield site, nut tend to be less for existing sites since most would have some elements of the system, such as CCTV, installed already. Monitoring fees range from €12 to €24 per day depending on what’s required. Some firms opt to have their sites checked on a regular basis aside from when an alert is issued. This can help identify things such as suspicious vehicles parked nearby or people watching the site.
Following a reported intrusion, the customer is e-mailed a report before eight in the morning. They can then click through the video and audio footage of the event. Walsh says the reporting system adds a layer of accountability. Staff at the command centre know that everything can be checked by the client, and any failure in protocol or misreporting can be easily discovered.
Over the past year, Netwatch has been making a big push to go international. Through its Irish customer base, it has secured deals with UK subsidiaries of Irish firms and is also protecting holiday homes of Irish people in Spain. However, it is the company’s push into the US that Walsh is most excited about. Netwatch opened it’s first oversees office in Tempe, Arizona last March. The company ended up in Arizona because Tempe is twinned with Carlow. While such partnerships are often seen as excuses for junkets, Netwatch made the most of the networking opportunities provided and managed to make a lot of contacts.
According to Walsh: “The introductions we got were fantastic. When we first went to Tempe, we met the city manager and he really runs the city. They have a serious issue in the US with the war on terror in relation to water treatment plants and fears that they will be sabotaged. We’re already monitoring ten water treatment plants for the city of Tempe. We have our own installation crews and our own sales team over there, replicating the model we have in Ireland. We have 40 US clients at the moment and we’re hoping to add another 150 this year. Once we get up to that level we’ll have to make a decision about establishing a command centre over there too.
Rapid expansion has been kind to the company’s balance sheet. Abridged accounts show Netwatch made a net profit of €192,000 during 2005. Walsh says that turnover in 2006 was €5.5m and the company continues to be profitable. All of it’s billing is done by direct debit, which means that cashflow is never a problem and the company can accurately forecast revenues. Ever ambitious, Walsh anticipates turning over €7.5m to €8m through 2007. Walsh and partner Niall Kelly have managed to grow the business without having to raise the capital and each hold 44% of the company. The remaining 12% is held be security consultant Kieran Morris, who worked with the company during its initial phase.
Looking forward, Walsh says that Netwatch will continue to focus on growing in the US and expanding its product range in Ireland. After that, he can see no reason why the model can’t be implemented in other markets. “ Broadband makes the world a very small place,” he said.