The security week that was: 11/13/09

A weekly surveillance of the news shaping your profession


GE finds a suitor

It was the rumor that wouldn’t die: GE Security was for sale (oh yeah, they sold to UTC in case you've been too buried in paperwork to read the news). First we saw the sale of homeland security technology to French firm Safran after a deal with Smiths Detection fell through in previous years. That homeland security technology had been one of GE’s biggest hallmarks –that it wasn’t just another video, access control and alarm company, but that it was at the “big boys” level, developing systems for spotting explosives. Except that the technology never really took off. I remember the times when it seemed like the GE puffer machines were about to explode across the airport environment, but they never really made it much further than the TSA pilot projects.

But with the homeland security division gone (and providing cash flow to the main business), GE was faced with a variety of commercial and residential security products that pitted it against Honeywell. The long-time GE Security dealers who knew the product line seemed happy, but to most dealers who had been accustomed to working with the previous companies (companies like IFS, Casi-Rusco/Interlogix, Edwards), dealing with GE was a challenge. I can’t begin to count how many times I heard that after a GE acquisition, it was like working with (or in) a vacuum.

Now, with financial pressures coming from other areas of its business, GE found it to be the time to sell its fire and security business en masse. The rumor crept around the industry after an unidentified insider said as much not long before the ASIS tradeshow. Competing firm Gallagher Security Management Systems ran a brazen advertisement in the Wall Street Journal designed to cast doubt about GE’s solidity in the minds of its investors, customers and dealers. It popped back up from time-to-time before UTC officially announced it would pay $1.82 billion for the full kit.

So where does this fit into UTC? Here is my purely personal speculation:

  • On the fire side, the Edwards systems from GE are a natural fit because it locates UTC solidly in the U.S. fire alarm detection business area. It plays well off of the Kidde and Chubb brands that UTC Fire & Security already. Earlier this year GE introduced the FireworX fire panel line to hit the small to medium building market, and it’s held strong with the EST and Vigilant brands.
  • On the alarm intrusion side, it gets UTC the Simon family of intrusion alarm systems, which could be a good fit (they don’t really have a full competing product in this space)
  • On the video side, the message can be mixed. Neither GE nor UTC have been especially known for video surveillance solutions, though each has had offerings in the space (Chubb has OEMed cameras, though the division typically resold other companies’ offerings). Neither have been market leaders. It’s difficult to say where this could lead. Without a doubt, video surveillance is one of the faster growing segments in our industry, so it would make sense at some level for UTC to keep this GE segment and try to turn it into something big. We could put the IFS technology into this category, even though it can be for general data transmission.
  • On the access control side, the question is really up in the air. UTC owns Lenel, which is clearly considered one of the leaders in access control security management systems for corporate security. GE, of course, has its own access systems, and the speculation is that this might be the technology that doesn’t quite fit for UTC. The general thought is that it’s not bad technology; it’s just that UTC already has a strong brand in this area that is already integrated into the company. But what the GE buy brings is hardware. Lenel has always been a software company, and while GE’s FacilityCommander may not fit because of Lenel, there is plenty of hardware technology (the company’s “Transition” readers, for example) that could mix in with the Lenel and Onity brands (both UTC brands have an access control angle).
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