GE Security's Problems are Good for the Industry

Author: John Honovich, Published on Aug 26, 2009

GE Security's sale is a recognition of its failure as a business. That's actually a good and necessary force for the industry.

The best case scenario for GE Security is a turn-around starting in 2012. Expect a few months to sell the division and then, at least, 1 to 2 years for the buyer to re-organize. 

However, that's unlikely. In video surveillance, GE has very little advantages in IP video. A below average hybrid DVR, limited selection of IP cameras, the failed Covi HD product offering, and VisioWave's IP software (once promising but now stunted).

Indeed, the lack of strong product development certainly contributed to their problems. And now, it will cripple efforts to re-build the division for the purchaser.

The more likely case is that GE Security's video business continues to lose market share and revenue. The best an acquirer may be able to do is maximize cash flow out of the declining legacy analog video.

Good for Others

If you are a GE Security partner or end-user, this should be a serious wake-up call to leave (if you can). 

For everyone else, this is a promising opportunity to take GE Security's estimated $200 M USD to $300 M USD market share in video surveillance.

A big barrier to IP video companies is the continued strength of many analog providers like Pelco, Panasonic and Bosch. It's hard for new entrants to grow if the incumbents can match on the new technology. While the value of Pelco, Panasonic and Bosch's products can be debated, they clearly have credible IP product offerings.

GE Security is the first of the old guard titans to surrender. This will be good for new entrants bringing innovation.

[GE Security was sold to UTC and still struggles as Interlogic to remain relevant.]

1 report cite this report:

GE Security Sale -- UTC to Buy GE Security on Nov 09, 2009
UTC has agreed to buy GE Security - confirmed directly by UTC. Nonetheless, GE Security suffers from significant competitive problems that are...
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