ADT President: Recession easing for security industry

As the security industry gets ready to descend upon Anaheim, Calif., next week for the 2009 ASIS International Seminar and Exhibition, SIW had a chance to catch up with ADT President John Koch for his take on the current state of the industry and what he expects going forward.

According to Koch, as some industries have begun to experience somewhat of an economic recovery, so to has security and ADT.

“We’ve seen a little bit of stabilization in the order rates,” he said. “Actually, this particular fiscal quarter… some of our vertical markets have seen some growth.”

Koch explained that petrochemical industry, along with the government and banking markets have really begun to pick up recently for the company. Even the residential market, which has been one of the hardest hit industries during the recession, remains a viable vertical market for ADT.

“(ADT) has weathered the bubble bursting in the residential market for the last two years. A good portion of our distribution was not necessarily tied to new construction,” he said. “And remarkably enough… as we end our fiscal year 2009, our residential business will be on the plan that we developed over a year ago.”

Some of the company’s biggest verticals, such as retail and enterprise/commercial industrial clients, have lagged behind other markets as they’ve had to adjust their budgets to make it through these lean times. But even in these areas, Koch says that he is seeing signs of improvements.

“We have seen some of our larger retail customers with some good investments continuing, not necessarily at some of their historical levels, but we are seeing a bounce back with some of our largest retail customers,” the ADT president explained.

Though the company’s commercial video business, particularly IP solutions, has taken a hit during the recession, Koch said that he believed that IP video and other security systems are the “wave of the future” and that ADT will continue to invest in the development of the technology. If anything, Koch said that downturn has only affected the pace with which IP convergence is taking place.

To help the company during these times, Koch said that ADT has continued to focus on some key fundamentals that has made the company successful in the past, which includes such things as service delivery capability and customer service.

“During this downturn, we’ve been playing both strong defense, as well as offense. On the defensive side, we’ve made sure we’ve driven productivity improvements in our operations and have really focused on our cost side of the equation. Also, we’ve made sure we’ve had a very good balance on playing a strong offense and that is making sure we continue to invest in the overall business.”

Koch explained that in 2009, ADT will have introduced twice as many products and services as it did in 2008 and that they believe they are better positioned heading out of the recession than they were a year or two prior. The ADT president also believes that emerging technologies, such as high-definition surveillance products, improved video analytic capabilities and cloud computing bode well for the industry moving forward.

“Security has always been and we believe it will continue to be a very attractive industry. In good times and bad, security is vital to our customers,” he said. “We’ve been in business now for over 130 years; we’ve weathered multiple recessions and economic corrections. Each time, ADT and the security industry has bounced back and returned to attractive growth rates. We’re still very bullish on the security industry and we’re very excited about our position and the actions that we’ve taken over the last two years to allow us to compete even better in this industry.”