The Downsides of Manufacturer Consolidation

Leaders in the security industry discuss how mergers and acquisitions among security manufacturers have impacted their businesses.

It’s become a melodramatic cliché when a couple is splitting up or something is tearing people apart for an observer to exclaim: “What about the children?! Think of the children!”

But the sentiment is one most of us can get behind, and that is protecting innocent bystanders and those unable to speak up for themselves from harm and minimizing collateral damage.

It’s a scenario that for me conjures the bumps and bruises integrators sustain as their suppliers consolidate, lose key personnel, cut general staff, reduce support, drop programs or value-adds, slash R&D, sell direct to end users/consumers or raise prices.

To the manufacturers, I say: Think of the integrators!

While they certainly are not as marginalized as children in this analogy (especially some of the loquacious ones I know!), the vast majority of security integrators are associated with small businesses that generally have no means for their voices to be heard en masse.

So like the Lorax standing up for the trees in that famous Dr. Seuss book and movie, I am speaking up for the integrators.

The twist is I am doing so in their own words, sharing discussion that took place during a recent roundtable when I asked how mergers and acquisitions among security manufacturers were impacting their businesses.

Joe Lynch, Minuteman Security Technologies: What I’ve seen from manufacturer consolidations, I haven’t seen one that worked out well. I can’t think of one where we can sit around the table and say, “Wow, they really rolled out all these products into something special.”

Bob Kristensen, Tutela: When you get into the consolidations, the paired companies tend to work in silos. With some of the bigger manufacturers that bought up smaller companies, when you try to do business with them you realize the access control guy is a different sales guy than the video guy.

They don’t talk together, so you’re working on a project and it’s still like you’re working with two different companies. They spend six months trying to sort things out, and in the meantime I don’t know who to call or get ahold of.

They’re going in different directions and maybe I lose my salesperson. As an integrator, when these companies go together you also lose leverage, especially with smaller companies where you said we’re going to sell this product and then they get bought up by a larger company.

You don’t get that special touch anymore. Now you’re one of how many integrators? Whereas before we could bring opportunities to them and they brought them to us as a partnership, now it turns out to be a large conglomerate and you’re just a number.

It’s especially concerning when there’s a product you have a lot of invested in. You’re out there with your client telling them about the five-year roadmap for the product you provided them and they based their future planning on, and then a manufacturer’s new ownership decides to get rid of, say, a control panel because it is similar to one they already produce.

I haven’t seen a positive in our company for any kind of manufacturer coming together.

Jim Patterson, Robblee’s Total Security: We’ve had companies we’ve been working with for years that all of a sudden get acquired. You’re used to that level of tech support from your crew, and all of a sudden they get acquired by a large company. The support isn’t so good anymore.

Tim Ferrian, Pro-Tec Design: We’re stuck in a situation where we have thousands of card readers deployed that I can’t imagine are going to be supported due to consolidation. It puts us in a difficult situation because we don’t know what to do with this base.

It could be a year before they figure out the plan, and then there’s going to be a 10-year plan on top of that and how that’s going to migrate.

It’s also challenging because I can’t tell you how many times you see a new manufacturer rep come in and it takes us a year to build a project, get it funded and things, and by the time you’re ready to close it that rep is gone. You’re on to the new guy who doesn’t know anything about it.

The one thing I will say with all these consolidations is we’ve stressed to our clients the importance of “us.” We highlight the fact we’re still here. We were here five years ago for you. We’re the stable environment for you. That’s helped put more emphasis on our partnership

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About the Author


Scott Goldfine is Editor-in-Chief and Associate Publisher of Security Sales & Integration. Well-versed in the technical and business aspects of electronic security (video surveillance, access control, systems integration, intrusion detection, fire/life safety), Goldfine is nationally recognized as an industry expert and speaker. Goldfine is involved in several security events and organizations, including the Electronic Security Association (ESA), Security Industry Association (SIA), Security Industry Alarm Coalition (SIAC), False Alarm Reduction Association (FARA), ASIS Int'l and more. Goldfine also serves on several boards, including the SIA Marketing Committee, CSAA Marketing and Communications Committee, PSA Cybersecurity Advisory Council and Robolliance. He is a certified alarm technician, former cable-TV tech, audio company entrepreneur, and lifelong electronics and computers enthusiast. Goldfine joined Security Sales & Integration in 1998.

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