GE gets down on it's knees and begs me to throw it into the Dog House

A remarkable thing happened this week in the security industry. GE gave us an indication of how it fumbled the ball and destroyed it's once- bright opprtunity as a security solutions provider. Actually that was not the remarkable thing.

The surprise came from a chutzpahdich ad in the Wall Street Journal this Monday. The full page ad was taken out by a company which for years has been one of the dominant physical security companies in the Southern Hemisphere, Gallagher Group. The ad announced Gallagher's entry into the US market and indicated it's interest in Recruiting channel partners (integrators, dealers, etc), especially those partners about to be impacted by GE's intention to sell it's security business.

GE Security Americas President Mark Barry's response to the Gallagher ad in Security Systems News (see below) was amazing. He basically told the world that he is clueless about his global competition, and possibly unaware of the nature of converged security solutions. For example, he said he had never heard of a competitor with over 4000 installed systems around the world; he referred to the New Zealand based maker of Cardax access control solutions as Australian (a veiled insult - like referring to a Canadian as American); and he referred to his own business arena as "electric security."

Now, I've been in the security industry for a few decades and I honestly don't know what electric security is. Perhaps he meant electronic security which is a passé expression still used by the older set. Nevertheless, Barry was clearly flustered in his response. Barry, who apparently has little hold on concepts such as marketing, declared the ad to have "backfired" on Gallagher. I guess he doesn't realize that his own public statements in the press and elsewhere, and the continual "no comment" statements he and his staff gave to me and several of his partners only serve to fuel Gallagher's marketing momentum.

From my point of view, Gallagher made a gutsy marketing move in response to GE's widely discussed decision to get out of the security business, while GE just looked lost and foolish.

Poor GE. Welcome to the SecurityDreamer Dog House. Make yourself comfortable. I expect you'll be here for awhile.

For more complete coverage, and to read the best articles on the subject, see Security Systems News, especially this article: Gallagher woos GE Security dealers GE Security says: Who's Gallagher? By L. Samuel Pfeifle and Martha Entwistle

Comments

[Sam Pfeifle]

Hey Steve, where did those remarks from Barry appear? Did anyone actually interview him and post his response on like a web site or something?

[Steve Hunt]

Sorry, Sam.

[Sam Pfeifle]

No worries, Steve, thanks for the kind words and edit. And I think the electric thing was probably a typo on our end.

Also, the who's gallagher stuff was a little tongue in cheek. 4000 systems? GE probably has more than 4 million.

I don't have a horse in the race, but what you call ballsy I call tacky, to be truthful.

Regardless, it's an indication that the business climate is more cut throat than it's been in a while.

[Michael A. Silva]

Hey, I still use the term "electronic security systems" in my reports - I guess this makes me part of the older set. What term would you young whippersnappers have me use instead? :-)

Actually, the term "electric protection" (not electric security) was commonly used prior to the 1970's. ADT had a legendary black and red decal that said "ADT Electric Protection" and these were ubiquitous on commercial buildings for at least fifty years.

There is an interesting video from 1958 that shows what security systems were like in that era. It is presented as a "science" program, but is actually an infomercial for ADT. At the time, they had nearly monopolistic control of the commercial security market.
http://www.archive.org/details/ADTWhenE1958

[Jack Turley]

Our ad, inviting GE Security dealers and end-users to consider doing business with our North American team, noted the wide variety of high-profile clients we serve, including embassies and other highly secure government offices, US military bases, NATO sites, banks, critical infrastructure, and large mines. Considering our long list of customers, we were surprised that GE Security was unaware of our presence in the security systems market.

Gallagher is a New Zealand company with our own research and development group and manufacturing plant; we have over 4,000 installations around the globe on every continent. We hold a dominant position on the world security stage, and it is rare to hear a competitor confess that we snuck up on them.

More surprising was the claim by a GE Security spokesman that the money we spent on our ad benefited them, not us. The response we received at the ASIS show and in days since far exceeded our anticipated return on the advertising dollars invested. As an example, GE Security has many times the dealers we have at present and therefore should have had noticeably greater booth traffic. Judging by walk-bys throughout the show, that was certainly not the case. And the reception I received from ASIS show attendees was enthusiastic to the point my hand was getting sore from friendly shakes and high fives.

More importantly, we had the opportunity to talk with a lot of people about Cardax FT, our platform for integration and the core access control and intruder alarm functionality it delivers. We were able to demonstrate to attendees how it integrates with a wide range of other systems to deliver comprehensive security solutions, including our PowerFence system, an electric perimeter security system that uses the same software as Cardax FT.

While the ad achieved much more than we had hoped, perhaps the more important development is the number of relationships we are establishing throughout the North American business world in a wide range of industries. That is the most exciting part of the Gallagher story, and we look forward to sharing more of that in the near future.

[Rob Delsman]

Certainly Gallagher is entitled to exploit any opportunity that is left vacant in the market by GE.

Being a veteran of a GE divestiture I can tell you that it doesn’t’ happen smoothly. Typically, GE puts out feelers in the marketplace looking for a suitor and typically keeps the troops in the dark until some announcement is precipitated.

As to the comments made by GE Security management regarding this entire affair and the WSJ article, don’t forget the Streisand effect, the more that GE complains, the more press that the entire affair receives.

Good for Gallagher, business is business and some of us in today’s marketplace are extremely tired of GE crying foul, when their competitors are better innovators. Research their recent settlement with SonoSite, this is a prime example. Stop complaining GE and just go sell something.

[Jerry Burhans]

So when UTC buys GE Security does UTC go in the Doghouse or do the get a reprieve?