Inside the UTC/GE Acquisition

An exclusive Q&A

If there is one aspect of the security industry that has been a constant over the last two decades, it has been its propensity to embrace misguided mergers and acquisitions.

Our industry is littered with the Fool's Gold of good intentions. So, I was intrigued when the news of the United Technology Corporation's (UTC) Fire & Security group's acquisition of GE Security became public knowledge a couple of months ago.

In an industry defined as much by its fragmentation as its innovation, this marriage of technology giants instantly created a market leader - by percentage points, at least. Now the real test begins, as executives on both sides look to mesh technologies and keep their channels secure.

The combined executive teams from GE Security and UTC/Lenel have adopted a mantra that figures to drive the new business units - "optimize for differentiation."

What does it mean?

In the new order of things at UTC, it comes down to the need to accentuate the differences between product lines as the technology advances move forward.

UTC will continue to provide a strong presence with its enterprise-wide software solutions led by OnGuard, Facility Commander and Picture Perfect. But there will also be a strong refocusing on its distribution channel for technologies serving the mid-level commercial market with the rebranding of the Interlogix brand, which features intrusion, video and fire products. Joining the UTC Fire & Security Products family will also be the Onity locking hardware products and Supra.

I recently spoke to three of the main players charged with ensuring that the new UTC Fire & Security business units survive the transition and embrace the technology roadmap created by this union. I posed some pointed questions to Peter Boriskin, UTC's Director of Product Management; Michael Regelski, UTC's CTO for Global Security Products; and Ken Francis, UTC's VP of Sales and Marketing.

What are the unique value propositions both Lenel and GE Security bring to the table as you attempt to merge the two?

Boriskin: This was a good opportunity to leverage the technologies and delivery mechanisms across the traditional UTC and Lenel organization, as well as the GE offerings. It not only gives us the number one space in market share (according to figures provided by IMS Research), but additionally brings sees each organization bring its own unique strengths to the table. Lenel had been very focused on the technology side of the world, while GE had focused on its development of a strong channel and delivery strategy. When you add the two strengths together it provides a very compelling combination."

Francis: Very few companies have been able to look at the global aspect of business and recognize that one product platform with the right model or design could serve all its regions. We have had a unique opportunity over the last several months to get under the hood and analyze the UTC value proposition. I think we are in a good position to do this [consolidate technologies and expand platform offerings], because the former GE Security group had been dealing with an array of 10 to 15 products for the last three or four years. So we come from a culture of consolidation prior to the acquisition. Our management team was accustomed to taking on the challenge of conflicting platforms.

Regelski: We want to provide a different set of experiences for our customers and it really is two-fold. When a customer looks at buying our products, we want to make sure they work and integrate together better than anything out in the market. So does it matter if the platform is initiated from an intrusion panel or a visitor management software or even a video surveillance system? Our goal is to enable our customer to start at any point they want so they can build and extend their solutions and systems as their needs dictate - and hopefully do it with our solutions. At the same time, we want to make sure we are providing best-of-breed components that will work with everybody else's systems. So adhering to that open architecture approach is a key to the success of our customers.

The initial feeling in the industry was there was technology duplication between the two companies that made a merger questionable at best. Was that a concern?

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