Avigilon Acquired By Motorola Solutions

Hmm.. nice... let's see now...

Well, now...

Motorola is finally back in the video business. We sold a ton of it. They use to make the best cameras back in the day (late 60's early 70s). They had their own integrated FSK control, with audio channel as well. What goes around, comes around. It will be pure nostalgia to see that logo on a camera once more.

The big question is commitment. They use to own the 2-way biz, had all first responders. Would seem a natural to get heavy into city surveillance. Time will tell.

As an integrator, it concerns me greatly that Motorola is ready to go direct to the end user. If there is no 'protection', the big clients can circumvent the integrator. 

Could this be a winner?

Since the name merger will start as soon as the Undisclosed person who is great at Photoshop jumps in:

Motolon?

Avigirola?

Areola?

This is all about computer vision driven smart cities.  You don't make a billion dollar acquisition taking a public company private to worry about double digit percentage fluctuations in monthly P&L's.  This is long term, large scale.  Entire mega cities will be driven by public sector cameras, fixed mounted all over public infrastructure, and fully connected with (for Motorola's big interest) mobile cameras on every public sector vehicle and employee.  All unified with Motorola communications and network infrastructure and it's a long range match made in heaven.

In short term I believe that makes it good for current Avigilon dealers, main body employees, and overall maintenance to their existing channel, which they'll likely only want to see grow on top of their megaproject combinations.  And now they can custom tune all the products to their exact integrated computer vision needs.

Update: Here is the 101-page acquisition agreement between Motorola and Avigilon. Analysis to follow later.

Out of interest any western companies still in this business

japan

china 

korea

genetec Canada 🇨🇦 

qvis uk 🇬🇧 

the worlds national security being handed over to Asia 

Interesting, but they are not known for their innovative spirit.

Didnt read the whole string, someone might have already mentioned,  but as someone who worked in Schneider Electric's Buildings Business on the Security Side, during the entire Pelco buyout and re-organization, Im here to tell ya, Avigilon and its dealers and customers will suffer from this.  A company that does only one thing, being acquired by a conglomerate that does many things, usually ends up in an organizational s***show.

Who here thinks Pelco got BETTER after the SE acquisition?  The same will hold true for Avigilon, mark my words.  And if Motorola finds it to be not as profitable as their shareholders (or CEO) likes, it will get re-shopped and re-sold, etc etc.

Avigilon will now be nothing more than a pawn piece to be moved around at the will of the player/s.  Gook luck on the R&D and innovating side, Avigilon. Hard to get funding for that when there are 2 dozen other divisions that have nothing to do with CCTV who are fighting you for the same limited funds.

The Avigilon board on StockHouse has some entertaining comments from people thinking this will be the start of a bidding war for Avigilon:

I think Avigilon share holders, and several integrators, are in denial right now, hoping there is a better end to the AVO story than this.

Yes, it was my distinct recollection that Schneider Electric also had a PR division which invested 18-20 minutes producing an announcement-day statement of similar content and with equally dubious results.  Pelco also had many patents.  Even though Avigilon was publicly traded, it was tightly-controlled and operated in a singularly-focused way much like a privately held one.    Like I said before, publicly-traded companies with many divisions function in a fundamentally different way than people realize.  With this merger, Avigilon dealers and, especially employees, are going to absolutely find that it most certainly will NOT BE business as usual.

I'm going take the contrarian route and say that this will be a good deal for Avigilon, it's resellers and Motorola (at least for the next 3-4 years.)

I believe Motorola's direct end user sales concerns are seriously overblown.  Most of these 'direct' sales are long term, negotiated, infrastructure (proprietary wireless) sales to municipalities/public safety entities with extensive service contracts.  There's no shortage of Motorola 'radio/device' dealers out there and they are almost universally uninterested, unwilling or unable to pull off enterprise projects for IP video surveillance systems. 

For Motorola to execute an end around Avigilon dealers to sell/install/support city wide surveillance systems they would require a massive, bottom line punishing investment in manpower and skill sets.  As a public company, I don't think Motorola would be willing to make such an investment in fixed costs.  I see it much more likely that the Motorola infrastructure sales teams work with preferred Avigilon dealers to get equipment specified and roll up projects as part of negotiated, long-term agreements with which they are so successful. 

On the commercial/enterprise side, I see virtually no conflict with Motorola's existing products/services/channels and Avigilon's.

On the downside, we can expect the usual consolidation in back office, manufacturing operations and possibly R&D.  This will likely result in slowing the pace of innovation in Avigilon video hardware products and some customer service hiccups but nothing like Pelco experienced.  While I agree with UI14 that the vast majority of acquisitions by mega conglomerates have been soul destroying 'sh**shows' (been there for three of them), there have been exceptions. 

For all the Schneider, Honeywell, GE, Tyco, etc acquisitions that have had the life blood squeezed out of them, there's a Canon that gives us hope.  In addition, Avigilon immediately becomes the networked video center of excellence for Motorola Solutions.  Many of the previously mentioned acquirers bought innovative, fast growing video companies to make up for their lack of internal development and/or loss of market share.  However, since they were mere rounding errors in the quarterly income statement, they soon became bureaucratic road kill, squeezed for profits and not viewed as a growth engine for the mother ship.  Even our beloved old Pelco made up less than 3% of Schneider's global sales at it's height.  Avigilon is closer to 8% of Motorola's global sales and has a faster rate of growth then the parent company which gives me hope for how Motorola handles Avigilon.  

Conversely, it's not hard to envision additional investments on the software development side as tighter integration with Motorola's infrastructure solutions as well as body cam and in-car video systems becomes a competitive differentiator.  And if Motorola's ultimate goal in acquiring Avigilon is to be the 'Safe City' company they will have to make regular investments in software development as well as acquiring key technologies in sensors, analytics and machine learning.  If so, these should benefit Avigilon and Avigilon resellers.

My biases include a long time admiration from afar of Avigilon, several of its key personnel that I've worked with at different companies and their successful, methodical global expansion.  Specifically, I admire how they executed with a high-end/high performance/high cost model when the market aggressively commoditized.  I admire how they protected their resellers/brand while the integrity of industry distribution channels became questionable (to be kind).  Finally, I'm still amazed that they succeeded with end-to-end, relatively closed systems when the industry screamed for 'open'.  True, the founder's deep pockets played a big part in helping them establish a beachhead where so many others withered and died but it also took some serious mettle and discipline to believe and keep at it until they became profitable.  I have not worked for nor competed directly with Avigilon.