Mergers and Shakers
Over time, the larger security companies snapped up a great number of those original wireless pioneers. Now, the advent of 802.11 wireless networking technologies has spurred a whole new group of companies, leading the way in wireless applications.
Today, just about every major player in the security industry has a wireless component, and the choices have never been better — or cheaper! These cases definitely illustrate the benefits of consolidation.
Product development cycles, innovation and product choices have all seen great acceleration due in large part to the merging of technology companies. I, for one, do not believe we would be as far along as we are if it weren’t for some of these companies combining talent pools.
Selling Out Can Be a Smart Move
The merging concept is not unique to manufacturers, however. Recent years have also seen a rise in the number of integration companies, dealers and distributors that have combined forces in a number of different ways.
In industry, as in nature, the governing rule is, “Only the strong survive.” This is one reason for the willingness of some small, independent alarm and security installation companies to sell out to larger entities. The owners of the smaller firms have seen the coming rough seas, both financially and technologically, and have decided they want to latch on to a larger, more stable vessel. Or perhaps they have simply reached the point of retirement.
In my opinion, this is a noble and correct move. Sure, there will always be complaints that service will never be the same, or response times have gone up, or it’s not the same person I was used to dealing with; the griping can at times seem endless.
Seeing how the economy has changed in recent months, I think being part of a larger, more stable corporation can offer a degree of security beyond what a small mom-and-pop organization can even dream. Of course, I know there are no guarantees anywhere and the larger companies can cut personnel just as quick as small ones. But even then, there could be additional opportunities in other parts of the parent corporation or in other parts of the country that could not even be fathomed at the local level.
Most of the small business owners I have had the pleasure of knowing are broken-hearted when they have to sell. But they also know that in doing so, they are (hopefully) doing what’s best for their employees and customers, even though we don’t always see it that way.
Sometimes Customers Can Suffer
The last type of merger is the one that generally elicits the most scorn (that “great wailing and gnashing of teeth” discussed earlier). This is where a large, multinational conglomerate buys up smaller companies in a particular industry in an attempt to capitalize on the strengths of the smaller fish and hopefully extend their reach into new markets.
The biggest problem that occurs in these types of mergers is the company focus changes. For small, privately held firms, the customer is king. Decisions are made based on what is best for the people buying the product, because without them the company is nothing.
When the large, publicly held company comes along that focus typically changes from the customer to the shareholder. Bean counters get involved, cuts get made, and quality and service suffer … we’ve all seen it many times. It is unfortunate that those at the very top can’t see the damage that is done, as more and more infrastructure is cut in the name of (and with the sole purpose of) maximum profits. This is where innovation stops and where the industry as a whole gets damaged.
The best we can hope
for is that some sense of balance is achieved. In at least one recent acquisition I am familiar with this seems to be the case, although everyone is watching carefully. If the multinational companies can regain that original focus, and customer service and product quality is maintained, or even improved, the benefits will far outweigh the costs over the long term.
And the people will live happily ever after.
MCSE- and CCNA-certified Steve Payne has 15 years of industry experience, presently serving as a network/security system sales engineer and trainer for Warren Associates. He can be reached at [email protected].
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