When United Technologies Corp. (UTC) announced plans to acquire GE’s languishing security business for $1.82 billion near the end of 2009, it sent shockwaves through the industry. Having entered security just six years prior, UTC had swiftly and boldly positioned its Fire & Security division as a world leader in those technologies, products and services. After spending a year restructuring and completing the massive GE integration, UTC Fire & Security is ready to assert itself in the marketplace.
To carry out that mission, in May of this year, Kelly Romano was appointed president of Global Security Products within UTC Fire & Security. Although a newcomer to security when she joined the division in 2010, Romano brings more than 25 years of rock-solid experience in building systems. She earned her stripes in sales, marketing, general management and executive capacities for Carrier, UTC’s HVAC business, including president of Building Systems and Services from 2006-2009.
Romano now heads up a group that offers a broad range of security and life-safety products, enterprise software solutions, electronic locks, and key management systems through well-known brands like Interlogix, Lenel, Supra and Onity. Of particular significance to dealers and integrators are Interlogix — a prime part of the GE deal — and Lenel. All told, in less than a decade, UTC has integrated more than 60 acquisitions into its Fire & Security operations, which employs approximately 4,500 people worldwide. In 2010, the business accounted for $6.5 billion of its parent’s $54 billion net sales.
Despite its formidable size, resources, brands and leading technologies, several challenges confront Romano and UTC Fire & Security. Longtime installing company customers, many tracing back to the trusted manufacturers that were consolidated into Interlogix even before GE paid $777 million for it in 2002, are wondering if and how new ownership is going to restore the luster.
How much of a priority will fire and security be within the larger UTC universe? What will become of seemingly redundant product lines? Will favorite brand names vanish? Will there be upheaval among sales and technical support people? What about channel conflict with service providers? What will be done to ensure technological innovation?
As if all that were not enough, there’s the matter of America still being enmeshed in a depressed and unstable economy. However, not only does Romano unflinchingly answer these tough questions and many others, she also explains in detail the reasons why UTC and its strategic partners are likely to achieve great success together.
Can you explain some of the differences as well as similarities of security compared to your background in HVAC with Carrier?
Kelly Romano: The more I get into the security industry the more I love it and the opportunity it presents. It’s a very dynamic, technology-driven, rapidly changing industry. I see lots of opportunity for a world-leading company like UTC to make a big difference to customers in this space. Like Carrier, UTC Fire & Security really depends on strong relationships with strategic partners and distributors.
After 25 years with Carrier, a lot of people said, “Oh, Kelly, that’s a big change going from Carrier to UTC Fire & Security.” Frankly, the industry structure is very similar. Who did I work with at Carrier? Dealers, distributors, contractors, more on the mechanical side than the electrical side, consulting engineers and building owners. I come over to UTC Fire & Security and I’m working with the same kind of industry structure — dealers and distributors. We call some of them strategic partners or VARs [value-added resellers]. We certainly have consulting engineers in the fold and building owners. So they are very similar industry structures that I had at Carrier.
The key in my mind is all about the relationship with customers and that channel strategy. Clearly, technology plays a very important role. But we can have the best technology, and if we don’t have strong partnerships and customer relationships we won’t get to where we want to be.
What about the cross-over potential and opportunities between the two?
Romano: Whether we are talking about building owners, commercial-type customers or the residential side of the homeowner or consumer, the end customer needs are very similar. They want reliable product performance, high quality installations, on-time delivery, they need us to be competitive, they need the best industry experts. There is a growing need for connectivity between the HVAC side, the fire side, security, video, even elevator controls, as building owners want to be able to control the system from a single point so that building management systems are simpler and easier for the owners to manage. I see some of these systems coming together over time.
Looking at the residential side, we’re seeing more applications for temperature control within the home, so there could be opportunities to integrate HVAC technologies from Carrier with our residential intrusion systems.
Do you see traditional security installers branching into HVAC or is HVAC branching into security?
Romano: That’s yet to be determined, but it presents an opportunity on both sides. It’s partly driven by the sophistication and forward-thinking of the dealer and the partner side of business. I know we are doing some pilot integrating of Carrier’s ALC Automated Logic control system with the Lenel OnGuard system to drive down energy consumption.
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