UTC has completed the acquisition of S2, launching literally Lenel's2LenelS2 with UTC declaring that "LenelS2 unites two world-class teams with complementary strengths."
'Uniting' competitors, especially at the size of Lenel and S2, is unprecedented within the physical security market and exposes them to significant challenges. Can LenelS2 succeed?
Inside this note, we examine the challenges and share feedback from S2 Founder John Moss who shared his excitement and thoughts to IPVM about the upside of LenelS2.
So the die is cast with the name change. This isn't like Canon/Milestone/Axis with each being kept as distinct units and names. Lenel does, or indicates they want, to unify these lines. But it will have to be clean. People are not going to accept if they do not scale adequately. If one product line is deployed first and the customer later needs to "scale up" to the next product line, they are not going to take well being told they have to use a different platform with a different interface, or be told their hardware does not work with the next level of software they need, so they will have to buy new hardware.
That is the challenge you will have running them as unified lines rather than distinct and separate businesses. I personally think an acquiring company should not half step an acquisition. But it will take a strong and influential product champion at the top to insure this happens and as quickly as feasibly possible. I'd be curious to see what the risk management assessment looked like for this acquisition (I assume one was done.... maybe), but that's a C-level document.
I think uniting S2 and Lenel products will be quite a challenge, however, I believe that putting both S2 and Lenel engineering teams under unified leadership will be a step in the right direction.
I had assumed they would have been kept separate, until everything slowly gets turned into Lenel. I know that's how they handled Summit and Facility Commander, kept sort of supporting and running them until they all just "upgraded" to Lenel. Presumably while Lenel worked out how to best use the hardware from Summit and Facility Commander.
While I have zero experience with S2, Lenel really could benefit from a better graphic interface.
I do not know much about both products, but I believe merge won't work well.
I foresee moral issues at least in product and dev teams.
Good people tend to think they do good product( unless they indeed do bad product) and merging with another one would make a blurry vision, increases tech debt etc.
I would recommend Moss to come up with a very clear vision with external and internal(I guess more difficult one) buyout. And this just steps one.. Ideally, he already should have one, but maybe he just was forced to merge( or used it as an S2 sale pitch ).
My poll would be: do you see a clear vision in the announcement notes? I vote "NO"
My poll would be: do you see a clear vision in the announcement notes? I vote "NO"
UTC is terrible about communicating, they have been for years. I was shocked that Moss talked to us but, presumably, they won't fire him for saying positive things about them...
They definitely need to be clearer about their vision and their plans. Uncertainty is bad for business, compounded by the rightful concerns that industry people have of UTC's track record.
i wonder der if this opens opportunities for integrators from both sides to use these products
I hope not because Lenel would inherit some horrible S2 dealers and vice versa. I could see LenelS2 picking and choosing dealers based on volume as to who to keep and who to drop between the two brands. That I would be ok with.
Lenel was much more stricter on the number of dealers they allowed in a territory when I checked about 3 or 4 years ago. For whatever good it did, as we came across Lenel users who seemed to complain as much about the dealers as the product.
They probably should move very carefully not to alienate current S2 dealers. If they feel too alienated, they could jump ship quickly. And this uncertainty about the merger could be used as an reason for Lenel users to be lured away. But the Lenel dealers might not be happy the channel being opened up to more competitors.
My question is does that mean Lenel will come out with a common interface for OnGuard and S2 to both access from a regular user standpoint and to manage?
As with any merger, we will have to see if the parent company UTC really does pick all the positive aspects of S2 and uses S2's progressive thinking and runs with it.
I have been trained by S2 in both Basic and Advanced and worked with them closely for (7) years and the have the market dialed in. I have survived several mergers and they almost always do not go as well as planned.
We were one of the first Summit customers, begrudgenly went to Facility Commander and am in the process of finding a replacement. S2 was on my list but now that they’ve been assimilated by UTC...and I havn’t been happy with anything UTC since the GE acquisition and have ZERO faith in any product longevity unless it’s true Lenel, 95% sure I’ll pay extra and go elsewhere for a unified platform.
When I first heard the news, I assumed S2 would have been positioned similarly as the Axis and Milestone deals with Canon - autonomous. When I later heard that they are uniting the businesses as 'LenelS2' my eyes opened and my jaw dropped.
We can all sit here and armchair this thing to death about the 99 problems this creates for both brands, but don't overlook the key benefit here for everyone concerned - Moss leading the product team. Maybe this gives Lenel the chance to get over the hump and keep a product leadership position - while extending the potential for S2 technology to make its way to each of their customers around the world. If you had to dream up any acquisition scenario where Lenel comes out better, this would be one of the best options.
Jeff Stanek doesn't get enough credit in the above article for being an 'accounting' person. Bottom line is that he is a good person with a ground-up mentality to do the right thing. While he did move from a finance to a GM role, he isn't a typical corporate climber who kisses up and kicks down. The people of both Lenel and S2 descent will appreciate that during the challenging road ahead.
However, what we don't see this combination solving for anyone, is video. Both Lenel and S2 are access control companies that backed their way into video. So does this mean there is more coming as far as acquisitions go? Maybe Qognify? OnSSI? Some VSaaS start-up no one has ever heard of? A camera company?
But what it all comes down to is the integrator community. Is there room for their partners to double-down and continue their investment in trained technicians to support the massive customer base? Or, will they be marginalized and get further pressure on their business to turn to other providers for more exclusive relationships, ones which can help migrate their customers to future-ready platforms?
Having read a few business case studies this year, seems accounting people can make better leaders in management than what sometimes people give them credit for. Rather than being just "bean counters", I guess because they deal with numbers and numbers don't lie (you can't change 1+1=2 no matter how hard you try), they tend to be more pragmatic and grounded in reality, and better assessors of risk vs. reward.
But in this case, they have to make Lenel + S2 = LenelS2. They have to merge 2 cultures, 2 ideas, 2 philosophies, into 1.
To elaborate on my bean counter comment, I mean UTC as a whole, not any specific individual.
Do I believe UTC Security division management recognize their past problems and want to avoid them? Yes.
But I also believe that UTC corporate management has not changed and when push comes to shove, they will sooner rather than later prioritize quick ways to make money (cut 'redundant' engineering and sales staff, centralize support, etc.). 5 years from now, how many of these security division management people will be left? I bet very few but UTC corporate focus on quarterly numbers will likely remain.
I hope I am proven wrong on this. A damaged LenelS2 is not good for the industry but I am unconvinced UTC corporate is somehow reformed.
Why ultimately ruin one product when you can ruin two at the same time!
Anybody remember Infographics or Casi being merged under Onguard? The access control game is changing and Lenel is as far as I'm concerned a legacy system these days, S2 has allot more promise to be fair as its at least a more modern take on what a security system should be, but dev will most likely slow down significantly now and in 10 years it will be just another one of those systems that used to be good.
I have worked with both lines, and both have their pros and cons, unfortunately in my experience this "merger" will be painful for end users and integrators, they will push one line (S2 makes hardware) over the other one, when they bought CASI they were supposed to have a firmware for Lenel and we ended up swapping boards.
I wonder if S2 micronode's will be changed to LNL hardware?
