What is your outlook for 2012?

Comunale: The exciting thing about our business is the cost-selling opportunities we get from both the technical-based group with Northern Video and then the expertise that they are bringing to the branch locations, and what the branch-based [personnel] bring to the [Northern Video] technical [staff]. Tri-Ed had a core group of customers and now we are able to sell the high-end integrated products that we never had. For us it is about capturing more share of wallet from our existing customer base on the branch-based side. And then from the technical side, now that they have all these other brands within intrusion and access control and fire, we are able to sell the same customer additional product offerings.

We can continue to grow our business both organically by capturing more share of wallet from our existing customer base and of course acquiring new customers. We’ll be looking to make strategic acquisitions or open new locations. Having Brazos Private Equity gives us the wherewithal to continue to grow this space, and so we are projecting double-digit growth for 2012.

How has the emergence of new RMR-based business models such as managed services or software-driven products affected distribution in general and Tri-Ed specifically?

Comunale: When you look at this business it has always been about recurring monthly revenue. The security dealer and the integrator have always worked on the premise they wanted RMR. What we are doing is training thousands of dealers in new technology every year. We have an IP staff. We think we do things a little bit different than some of our competitors. But our focus is how do we take our existing customers and get them into that IP business where they may not have been comfortable before.

We are training at any given time in the branches with our IP roadshows and with our manufacturing partners, and helping our customers transition to that next space. One of the services we provide for our customers is we will preprogram IP cameras and send them out to the jobsite. We have the technical expertise to configure the cameras and put together the switch or router the dealer needs to make the configuration happen.

We are becoming more of a value-add distributor. This is not your father’s Tri-Ed distribution. If you haven’t tried us you really should call the technical salespeople at one of our branches. We are really working to deliver the best possible service and deliver the technical expertise that we believe we do better than anybody.   

How daunting was it organizationally to begin offering a robust slate of IP training?

Comunale: The legacy Northern Video distribution company was doing that. It may have been the best-kept secret in the entire industry. That is why they grew their business right through the early 2000s up until we merged in 2010. They had incredible vendor relationships with all of the higher-end brands, delivering the technical expertise that the high-end integrators relied on. We have leveraged that expertise and really have brought that back to our customer base on the local front. Our branches now rely a lot on the technical expertise at our technical support center.

We thought we knew everything about security distribution when we merged these two companies. But I can tell you that James Rothstein, myself and Steve Roth, we learned a lot by integrating these two businesses, especially about the high-end brands and what Northern Video was doing and providing for their customers. That’s why they were so successful. The other thing we have done is taken that to the next step by delivering that same national technical ability to the local branch level.

If you went into our branches now, you’d see we are partnering with some of our key manufacturers. We are giving them space within our branches to set up these IP support centers so that they have working models of programs and products and how they all work together. We have an IP specialist in every location to really help the dealer make that next step. Going from analog to digital on the branch-based model is a difficult transition to make, especially to the higher-end brands. That’s why we have an entire separate team that just focuses on that.

What direct effort do you undertake to help a traditional-minded dealer keep up with the pace of technological change?

Comunale: Typically what happens is a dealer is going to go out to a jobsite and either he knows what he wants and he comes in and asks us, ‘Do you have the product?’ Or he says, ‘Look, I have this opportunity … what do I need?’ At that point the branch-based staff will say to him, ‘Do you want IP or do you want traditional products?’ We are finding that our guys will recommend both the IP solution and the analog solution, which our dealers are most comfortable with. The application is what’s really driving what the dealer needs. It’s also competition; some of the competitors are out there promoting IP.

If you go back to the 1990s as technology evolved and new products came out, our customer base has always adapted pretty quickly to the latest technology. It’s an adaptable group. I remember when the first control panels came out and downloading was a big feature. We went fr
om programing chips to software-related products. If you talk to most of the larger manufacturers they will tell you somewhere between 15% on the low end and about 25% on the high end of their overall product [sales are now] IP-based.

We are going to continue to migrate as the lifestyle features are enhanced, as the wireless technology improves, as bandwidth continues to increase … all of that continues to drive the sales of IP products.

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