When you think about some of the most iconic brands in the security industry, Pelco is usually at or near the top of most lists with regards to video surveillance technology. For years, the company has been synonymous with high-quality products and top-notch customer service. However, following the company’s acquisition by Schneider Electric in 2007, Pelco has experienced a number of challenges that have taken a bit of the luster off of the brand.
Perhaps one of the biggest criticisms of the company was its inability to keep pace with the industry’s migration away from analog to IP-based systems. Pelco was and continues to be a juggernaut in the analog video market, but the company’s integration into Schneider admittedly took some of their focus off of product innovation and allowed many of their competitors to gain a leg up in the surveillance technology arms race. With the struggles of the Schneider integration in their rear-view mirror, Pelco, under the leadership of new CEO Sharad Shekhar, is looking to experience a return to its former glory.
Shekhar, who became the company’s CEO last October, is a newcomer to the security industry. Prior to joining Pelco, Shekhar spent 15 years at Cummins where he led the company’s $1.7 billion North American Exhaust Aftertreatment business. Shekhar also previously served as general manager for Cummins’ Global Light Commercial Vehicle business based in China where he played a leadership role in the negotiation and establishment of one of Asia’s largest Joint Venture Engine plants in Beijing. SecurityInfoWatch.com (SIW) recently caught up with Shekhar to discuss how Pelco can overcome some of its previous mistakes and his plans for moving the company forward.
SIW: What were some of the largest missteps made by Pelco in the past, and how can you change that perception?
Shekhar: The integration of Pelco into Schneider Electric took a lot longer than anticipated, and while the integration was taking place, Pelco struggled to keep up with the organizational focus and investment on technology development, as well as the migration from analog to IP. This hurt the company’s technology innovation. In the last year-and- a-half, Schneider Electric has had the foresight to recognize the uniqueness of the security industry and Pelco’s brand recognition in this space and has stepped back to allow Pelco to maximize its independent presence in the security marketplace, as well as its business operations. This independence has helped us immensely in terms of our focus and speed for technology innovation and development, building a concentration on key vertical markets and a strategic reorganization of Pelco’s business units to help further the company’s core strategy. Today, Pelco is changing the perception that has been built over the last five years, evolving it to focus on developing innovative solutions that can serve markets outside of security, ensure customer success, and open doors to new business opportunities.
SIW: What do you see as Pelco’s current strengths and weaknesses in the video market?
Shekhar: Pelco’s history in the security industry, along with the depth and breadth that that history brings to our customers, is one of our main strengths. This strength manifests itself in innovative technologies such as our Optera IP camera line and VideoXpert Video Management System, which are deeply integrated with other software and technology on the market today. Going further than that, Pelco delivers an entire suite of technology platforms that help promote a more proactive approach to security and emergency response. Pelco’s intelligent security management and video surveillance technologies are built to address the broad range of security, risk, and business concern users in our targeted vertical markets face. At the same time, we are focused on ensuring our technologies are scalable enough to handle the security requirements of these vast environments today and into the future – all while backed by Pelco’s renowned customer service and support. Pelco’s weakness lies in the fact that we were slow to transition from analog into the IP space, but we have since developed strong IP product offerings and remain a trusted provider of technology to our partners. Additionally, we’ve spent a lot of time trying to be everything to everyone, and we’ve lost sight of the bigger picture. As a result, we’ve reorganized the company at its very core to focus on certain verticals in the market and continue to strengthen the relationships with our core partners to best serve these markets.
SIW: Did the company’s slow acceptance of the analog to IP transition hamper product development, and how has that changed today?
Shekhar: It wasn’t so much the slow adoption of IP that hampered product development. In the first couple years of this decade, Pelco didn’t see a significant speed of investment in product development, which made it challenging to remain competitive in the security space where innovation is paramount to success. Since Pelco has recognized this gap, we have been able to focus on product investment and development, and continue to establish valued technology partners to meet the needs of our customers. Today, Pelco has a complete portfolio of security intelligence and surveillance solutions that address analog and IP requirements, which helps enable integrators to support existing analog customers while driving them towards IP in the future. We want to provide our integrator partners and our customers with a wide variety of options in which they can build a system that fits their specific needs — we are the partner to help them accomplish this task.
SIW: Explain Pelco’s vertical-focused business strategy going forward – what verticals will be in focus, how has the business itself changed to align with this strategy, and what is the timeline?
Shekhar: Today, our focus is on a large variety of vertical markets, such as oil and gas, airports and seaports, casinos and gaming, and Safe Cities. In the future, we will focus on a smaller portfolio of strategic verticals, which will consume a majority of our investments, and a larger collection of non-strategic verticals that receive a smaller portion of our investments and management capital. Focusing on this strategy will enable us to help our channel partners serve a variety of customers while we gradually shift the balance of our portfolio towards our strategic verticals over time. In the last eight months, we’ve refocused the core of our organization to align with our focus on key verticals, which enriches our product offerings and provides direct investment in future developments to meet the needs of customers within these market segments. We will continue to optimize and grow our organization in line with this strategy. We are engaging our customers in these segments through outreach efforts focused on providing solutions geared toward their specific environment. You will see this focus on these verticals is a journey that will take a few years to complete implementation, but we want to be a partner with our channel and our customers on this journey.
SIW: How will you get the channel’s buy-in for this change in focus, and can we expect any changes in Pelco’s channel program?
Shekhar: It was through extensive research and collaboration with our channel partners that helped us identify our targeted vertical markets, and therefore, we expect the channel to respond in a positive way. It’s important to note we aren’t abandoning other vertical markets, but bolstering our efforts in these four spaces so that we know the needs of these customers inside and out. Doing so allows us to really examine the challenges end users face, and allows us to choose the best possible solution alongside our channel partners. Additionally, Pelco has changed its structure to match this new focus, forming cross-functional teams that are true subject matter experts in specific vertical markets. Everyone from customer engineers, technical support staff, product managers to sales people will have extensive knowledge within a specific market to help enable us to deliver consulting and professional services value to our customers across the globe. This, combined with our rich history and deep understanding of the security industry, allows us to continually enrich and refine the relationships we have with our customer and channel partner base.
SIW: With so many systems/cameras still out there and in operation, what is Pelco’s strategy for helping the channel maintain and upgrade these systems?
Shekhar: We’re focused on making sure our channel partners are well supported when it comes to product deployment, performance and customer service. In addition, we will work with our integrators on product obsolesce plans well in advance and provide better collaboration with our marketing and supply chain teams to ensure smooth transitions. With our organizational changes, we are strengthening and intensifying our training and support programs to achieve this goal. We pride ourselves in that regard and want to address issues at the channel partner level before they become bigger issues at the end user level. In doing so, we want to engage in regular communication with our partners about their needs, the technology they’re seeing and want, and where there is room for growth. This initiative is about enhancing trust and re-engineering the notion of Pelco as a strong partner moving forward; we are more than the products we produce.
SIW: How do you plan to make the Pelco brand stand out as it once did in this industry with so much emerging and established competition?
Shekhar: With the move to IP, we’ve seen many manufacturers that have been able to make a move into the security space, taking full advantage of the adoption of open standard protocols. Conversely, we see an opportunity to expand our reach into other non-security – yet related – markets through innovations such as video analytics and panoramic surveillance technologies. There is a tremendous amount of data that is collected and stored within our video management systems and recorders, and this data can be used for analyzing traffic patterns to better serve occupational and health safety purposes, or used for people counting and demographics to better serve marketing entities and maximize investments. However, before we can tackle these other markets, we must focus on product and technology innovation, continuing to build and nourish relationships with current and future partners, and listen to the needs of end users on the kinds of development they wish to see in the future from Pelco. Additionally, we are focused on technology development and building partnerships and alliances across the industry to increase and widen our portfolio and product offerings within our key verticals. We aim to differentiate ourselves by strategic technology development, customer support and a broad partnership portfolio that delivers a very wide variety of partial and end-to-end solutions based on a keen understanding of our core market segments.
