Hot Seat: Schneider Electric Strategies and Market Maneuverings

SSI caught up with a pair of Schneider Electric executives at ISC West to discuss the firm’s technology offerings, including the Pelco video brand, as well as its topmost objectives in the electronic security marketplace. Joining the conversation is Sam Belbina, who serves as vice president, Security & Video; and Kevin McCaughey, vice president, Security Solutions.

What is the status of analog? Is it still growing incrementally or is it tapering off quite a bit?

Belbina: We’re seeing it as a tapering, but for us the long-term strategy is really to become an IP company. That’s what we’ve been doing for the last few years. I’m pleased to say that this year we’re probably going to see Pelco shifting more toward IP than analog in terms of percentage. The analog is tapering overall in the marketplace. For us it’s flat. It’s not declining, which is good news for us, but it’s also not growing because that’s part of our strategy. As far as the growth for IP, it’s been pretty phenomenal for us.

How are Schneider Electric’s many business units brought together to the advantage of security integrators?

McCaughey: In terms of our system integrator partners in the marketplace, all of those other products that come from the other business units of Schneider Electric are available to those channels today. A couple of years ago Schneider Electric embarked on an aggressive program to throw one roof over the whole house, rather than have a lot of separate business units, and try to establish an identity in our channels as well as in the end-user market. Along with that came sales efforts — sales teams and the different [business units] working together to go out to the marketplace to increase the accessibility to system integrators and to end users to the full breadth of Schneider products.

Belbina: From a systems integrator standpoint or the general contractor, they’re really shifting the way they go to market. You hear about these terms, IPDs, integrated product deliveries, and so forth. Schneider is at the forefront of making sure we get these total integrated solutions that we’re offering to the marketplace to the integrators.

If you talk about building performance, for example, people are now looking at security beyond just access control, beyond the card readers. ‘Can I use the motion sensors for something else? Can I use my card reader for controlling the heat and ventilation?’ We’ve seen this especially from end users who are really focused on energy management; they want to link security and energy together. That’s the role Schneider is playing. We are going to systems integrators and offering them what we call end-to-end solutions. They don’t necessarily come to us and buy everything from us, but they also have the flexibility to do these integrations with other third-party systems.

Is the company looking to expand its portfolio even further through acquisition? Or is the strategy more organic?

McCaughey: At a high level companywide there are efforts, both organic and acquisition, underway. The acquisition of Telvent [a provider of IT software and services] in Q4 really brings into the portfolio for Schneider Electric new capabilities around the area of energy management and information management, as well as information aggregation from lots of different systems, and brings that up into a platform that helps users run their environment more efficiently. We have a lot of solutions in the area of public safety as well. It helps Schneider Electric tack, if you will, to the smart cities environment marketplace. Telvent added onto a lot of the solutions that already existed in Schneider Electric. Those are some of the types of things that we’re doing.

Belbina: Schneider’s vision is really clear. We want to be at the forefront of the technology. We want to be the global leaders in energy management and security. So first and foremost is, like Kevin says, we’re looking at both but we need to make sure we leverage what we have today. So organic growth for us is definitely the highest priority because we have a lot of resources. We have a lot of competencies and many offerings. How do we leverage all these resources that we have in place to meet our end goals? If we see other technology that can complement what we do today, then our CEO is not afraid to go after that.

What is the philosophy in terms of going to market, particularly in the security space? Along with distribution, you have other interests that probably lean a little more to the end user.

McCaughey: We’ve always had what we call a direct channel and a partner channel through the buildings business to the market. We’ve always had an excellent relationship managing those two channels well so that it’s clear — both to the channels and to the market — where the opportunities fit. I think the opportunities that our direct channel is looking at are going to be larger opportunities that require the kind of bonding capacity and financial capacity that a company like Schneider Electric can bring to those opportunities. Those create good opportunities in the marketplace for Schneider direct, and out of those opportunities and that kind of business activity in the marketplace really come name recognition and market acceptance. That plays well for our partner channels because they’re promoting the Schneider line. They’re promoting the Schneider products, so it really helps those guys too when we’re pursuing those types of activities to create awareness and acceptability of solutions and products in the marketplace, so that their path to market is a bit easier as well.

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