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2014 Digital Yearbook of Homeland Security Awards

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such as HVAC, access control, utilities, and communications,<br />

and being monitored and driven by an enterprise’s<br />

network. As such, these systems provide an easier route<br />

to hack into the network, because they <strong>of</strong>ten sit in front<br />

<strong>of</strong> the firewall and don’t contain the same level <strong>of</strong> security<br />

as network systems do. The theft <strong>of</strong> over one hundred<br />

million customer accounts during the Target Stores breach<br />

was enabled by the theft <strong>of</strong> a password from an HVAC<br />

technician that was subsequently used to breach the Target<br />

network.<br />

What are the drivers <strong>of</strong> demand for Unified <strong>Security</strong><br />

Solutions?<br />

Improved Technology & ROI:<br />

• Technology and ROI: analog to digital video surveil<br />

lance; new capabilities in simulation, ROIP, etc –<br />

better security and ROI?<br />

• New capabilities to combine physical and digital<br />

access control and identity management<br />

• “S<strong>of</strong>tware trumps hardware”<br />

• Requirements for security technology to keep up with<br />

“smart buildings”<br />

• M2M/Internet <strong>of</strong> Things/smart sensors<br />

• Securing the “last mile”<br />

• <strong>Security</strong> integration with external partners (from<br />

warning to video sharing, a la Boston)<br />

• Critical Infrastructure Regulations like FERC, PPD-21<br />

• Federal specific regs (eg, FIPS 201-2) and new security<br />

requirements for products sold to the U.S. Government<br />

How does the investment community perceive<br />

the opportunities in the security market?<br />

SG: Investment returns in the security sector were strong<br />

in <strong>2014</strong>, mirroring the healthy growth in the industry. Secure<br />

Strategy Group publishes the SSG Small Cap <strong>Homeland</strong><br />

<strong>Security</strong> Report and Index, which tracks the top small<br />

and mid-sized public companies in the security industry,<br />

categorized across 11 different technology sectors.<br />

As you can see in the table below, our SSG Small<br />

Cap <strong>Security</strong> Industry Index returned 22.5% for <strong>2014</strong>,<br />

handily beating the Dow Jones Industrial Average (up<br />

10.0%), the S&P 500 (up 13.7%), the Nasdaq Composite<br />

(up 14.7%) and the Russell 2000 (up 4.9%). Moreover, 7 <strong>of</strong><br />

our 11 sectors showed positive returns.<br />

Regulations:<br />

• SEC cyber reporting guidance; Sarbanes Oxley<br />

requirements<br />

• Federal regulations such as FICAM and HSPD-12 that<br />

mandate improved security for federal buildings by<br />

implementing “cyber pro<strong>of</strong> ” access control systems<br />

43

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