Do integrators face challenges in trying to market wireless solutions to a commercial end user?
In the commercial space today, wireless is not well accepted. It is an education process that we as manufacturers in partnership with integrators have to educate our customers on the benefits, the reliability, and that technology is changing. There are new technologies out there so we have to educate customers on that. That is probably the first challenge. As well, the challenge of making sure that we have the right skill sets at the integrator level — and the customer level — that they understand what are the benefits and limitation of wireless in different environments. That is an education process.
In the next couple of years I do believe you are going to see a major transition in the commercial space. You are going to see wireless become more and more accepted as we go forward. Certainly in the North American market. Being a global provider, the North American market is a lot of times leading in some of the technologies. But I think this is a global endeavor. Asia today is embracing wireless faster than probably most of the market. In the next couple of years you are going to see a major shift.
What does it say about the health of the security and fire industries that two of the new Tyco companies will be life-safety focused organizations?
Tyco certainly values the security industry. Tyco sees this as the strategic area for growth and investment. It is a good growth market. They are continuing to invest and see this as a strategic initiative for our business. It is one of the few markets in the world that continues to grow. People continue to deploy security solutions throughout their different installations or territories. From a Tyco perspective, we see this as a real plus.
We are going to have two different areas: A services side of our business that basically is very much like integrators in the different marketplaces handling the end users’ needs and solutions, as well as we’ll have a products business and we’ll have our products solutions on a global basis as well.
To what degree are outside players altering the traditional security industry landscape?
The entre of any new player into a marketplace always has positives and also has areas of concern for people. From an integrator perspective, they themselves have strengths that a lot of the new players don’t have. They certainly have the expertise. They have the channel into the market. They have the infrastructure. Having and forging those new alliances will just strengthen the integrators as they go forward.
The piece now is who are the customers for the integrators? You will see changes in that model as we go forward. If somebody stands stagnant and doesn’t change with the market, then [new entrants are] a bigger threat. Our partners that we deal with are pretty intuitive, innovative. They understand the changes and are adapting to the changes as we speak. Our role as a manufacturer is to help them. They are our path to market. Providing them the right technology and solutions to be successful in the market is our objective.
Many dealers and integrators are threatened by manufacturers building alliances with and selling direct to end users. Can you suggest a rationale why they shouldn’t feel threatened or is it simply a reality of today’s market?
It’s a little of both. While we do in certain instances sell direct, I would say 90+% of our business goes through the integrator or dealer channel. Mainly because we spend a lot of time training and investing in our integrators, building alliances with our integrators, getting their feedback on what is needed, what customers are looking for, what’s the ease of installation. From our side, we don’t see it as a threat. It’s always been there. We don’t see major shifts in how that is changing today from our side. Our tactics to market aren’t really changing as we go forward.
What do you consider the most vital asset that integrators provide to the industry?
They provide a whole host of great opportunities for us to work together. We see them as partners. From the beginning of our process — understanding what the customer requirements are — they are vital to that linkage. Making sure that we get good communication back and forth on customer requirements.
Their security expertise and knowledge is key and paramount. Probably one of the pieces that may be overlooked or discounted is in many instances the different integrators are regional in focus. They have good and solid relationships with their end users, and are viewed as partners with their end users. They have a cascade of different advantages and benefits that they bring to the whole equation.
Has the recession affected the introduction of new technologies into the security market?
We are at an interesting point with technology. It has forced us, and allowed us, to invest in technologies to make sure that we are positioned well for the future. We have been out investing over the past three or four years, we have been investing heavily into our R&D initiatives, to bring the new technologies to market. Other [vendors] are viewing it the same way. It’s about trying to make sure you are prepared for when the market comes back.
The advantage that we bring into this is that we are a more stable company. We have a good bandwidth and investment portfolio. We have done a nice job of being positioned with good technologies — like a Visonic acquisition with a wireless portfolio — as the market starts to turn around.
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