TycoIS President Focuses on Delivering Long-Term Benefits to Businesses
The March issue of SECURITY SALES & INTEGRATION includes my exclusive and in-depth interview with Mark VanDover, president of the newly rebranded Tyco Integrated Security (formerly ADT Commercial Security). In this, the first of two bonus blog posts from my lengthy discussion with VanDover, the long-time Tyco executive who assumed his current post last November, talks about marketing the new TycoIS, personnel and market dynamics, and projections. Learn more about VanDover’s background in a companion post to this one. In addition, check out a third blog in which some of the industry’s leading analysts chime in on VanDover and TycoIS.
Concerning the highly visible (NFL Hall of Fame QB) Steve Young ad campaign, is this more part of the initial rebranding or will TycoIS maintain this scale of marketing?
Mark VanDover: It’s a little of both. In the commercial space the initial launch was to make sure people recognize the significance of new brand and are able to identify with it. We’ve also been very selective in our approach, making sure we’re focused on business media and business venues to really accent that side of the business. I think you’ll see us focus more in that area, as we go forward, where most of our customers deal. And you’ll see similar in the type of magazines like yours. I think you’ll see a lot of effort put into industry-type endeavors, as well.
Approximately how small of a customer does TycoIS scale down to?
VanDover: We actually are focused on our commercial customers, so we’re not necessarily into small individual local stores or whatever. We’re more on a medium commercial base, and larger. It depends on the regional area as well. Some areas we have a bit more focus on smaller, if it’s out in urban areas, where they need those types of services. We’re certainly providing them there.
So is there frequent handoff between the ADT and TycoIS, depending on the type of customer?
VanDover: I would say through the separation we’ve agreed on areas that we’re going to focus on and certainly ADT is focused on the very small businesses, the local businesses and residential. We’re focused on the larger commercial endeavors and up, as we go forward.
Looking at then ADT Commercial Security back to 2011, 2012, how has the growth been in general versus projections and stockholder expectations? How does that translate to what you expect to see for TycoIS this year?
VanDover: I think certainly there have been some areas where we’ve seen weakness in the market. The overall construction market’s been somewhat weak in that area. We’ve had pretty good focus in our business. We’ve certainly met the expectations of the business as we’ve charted our path forward. I think again we’re making a fundamental shift from the point solutions to much more selective approach on long-term focus for our customers. While we may see a little bit of revenue slip on that, certainly bottom line we believe that’s going to be a healthier proposition for us, and better for our shareholders, as we go forward as well.
I’d like to dig into the issue of personnel, which is about 10,000 strong for TycoIS. Do you know approximately how many of that is on the technical side, and then within that the subgroup of IT that seems to be growing?
VanDover: It’s difficult to split the organization quite along those lines. I can tell you we are a very technical organization and when I look through the workforce probably three-quarters of the workforce have technical backgrounds. Whether they’re in a technical role, whether they’re working as a technician or whether they’re doing support or different areas, it really depends on the opportunities and the individual likes and wants. I think the IT side of our business is one where we’ve invested. We probably have north of 500 people in our IT umbrella who are always focused on new systems, productivity enhancements, arming our front line, whether it’s dispatchers or technicians or financial people with better systems, better productivity tools as we go forward.
I would imagine you’re also seeing that the salespeople need to have more technical acumen as well so they can really convey to the prospective customer the nature of the benefits of a particular system or service. How do you contend with that?
VanDover: It starts with the profile of the individual. I think you’re spot-on with the assessment. As you look at the market dynamics, and you go back to our goal of trying to make sure we have longer-term relationships, customers are looking for people who have the ability to look to the future: technology, trends, the individual needs of the customer. Hence, that means we have to make sure we have people that have that type skillset. In the days past you may have trained just technicians on an intrusion panel, or video system, or the needs of that. Now you have to have more training on how do you sell an IT system, or how do you talk to the IT department about cloud-based solutions and things like that. It’s a changing dynamic for the marketplace. We invest in specialized sales training through different venues to try to optimize that.
Looking at the business overall, could you give me approximate percentages on the technology-system side what you’re looking at in terms of video surveillance versus access versus intrusion and so forth?
VanDover: I’m not quite sure on percentages. I can tell you more the migration. We’re certainly seeing more and more need and call for the video-type of backing and solutions. We see that in our retail sector as well in our customer/industrial sectors. Looking at integrated solutions is becoming a big driver. In the past people talked about them. Nowadays it’s becoming more and more reality, especially within the security applications. But if you look to the future, especially with all of the investment at the government level and overall security, we’re seeing much more deployment of totally integrated solutions. We see tie-ins, whether it’s access and video and intrusion, but also other monitoring systems that they may be using and deploying in different areas.
Is there any technology you’ve had your eye on that you think shows promise but isn’t quite there yet? Particularly in security you want to have reliability. How do you balance the innovation, the speed to innovate or the urge to innovate quickly with maintaining the reliability that you need?
VanDover: That’s always a challenge. It’s an interesting environment. In the past, it used to be consumer electronics led the technology shift and I think now security has become much more of a frontrunner in technology shifts. Certainly biometrics plays a role that continues to develop out there. The question is nobody has really come out and become the leading contender for reliability and trustworthiness of the data. We also see a big shift into much more software solutions and the analytics that go behind it. What we’ve found is there’s a lot of interest but the question is how do you convey the value to the customer? In the traditional security environment it’s difficult to convey the value. It’s much more focused around operations. Can you convey those analytics and analytic capabilities into operational benefits for customers? We see that a
s a big emerging trend for us, but it’s not quite there yet. People haven’t really been able to conceptualize what that means for many of the customers. You can always see better and better cameras are out there and the nuances. They do this or they do that. There will always be those types of solutions. We’ve always found making sure you stay with proven solutions is always a much better strategy than if you’re out there on the cutting edge. Normally that’s not the great position to be in, especially as you’re dealing with long-term relationships for customers.
You certainly have to have a lot of patience for some of those markets in terms of how long it can take to have a bid come to fruition and get it done.
VanDover: Yeah absolutely, and certainly each one is very independent with very different dynamics that drive them. If you look in the federal government, it’s a lot to do with the budgets and the climate of politics. If you look into the higher education, it’s the cyclical part of the year and some focus unfortunately on current events. Our strategy is making sure we have the skillset and depth to provide services where and when they’re needed. Also one of our strengths is having the bandwidth of many different areas and a very large business and being part of a very successful overall parent company that gives us greater capability to deal with the market dynamics of each individual vertical.
Are there any verticals that you see making a comeback or emerging in the near future?
VanDover: I think certainly retail has had a pretty good run over the past couple of quarters. We see education, a lot of focus on education probably over the next couple of years. Certainly the oil and gas areas go up and down depending on market dynamics and how we’re doing there. We’re focused in those key areas.
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