IR Sells Off Bright Blue
Once the hottest new access control product, Bright Blue has sunk into relative obscurity in a market teeming with competitive offerings. Despite falling by the wayside, IR has now sold off Bright Blue and a new ownership group thinks they can turn things around and fulfill BrightBlue's promise. Will they succeed? In this note, we take a look and break down the details.
Ingersoll Rand is a huge conglomerate reporting ~$1.6 billion [link no longer available] revenue annually in security (~11% of IR's total company revenue). In the realm of 'mega security' companies, IR competes with the likes of ASSA ABLOY and Stanley [link no longer available].
One of the more exciting access control announcements from IR in recent years was the introduction of the Schlage branded Bright Blue - a small/medium business oriented networkable electronic access control product. BrightBlue EAC is designed to be a no-frills, easy to use access control product that works with a wide variety of electronic locking hardware. See our previous report on Bright Blue for details.
A new company named Vanderbilt Industries issued a release saying they are "pleased to announce the acquisition of the Ingersoll Rand Software & Controllers business unit, effective August 31, 2012. The product portfolio includes SMS, SEVMS and the “Bright Blue” access control systems."
Aside from BrightBlue, Vanderbilt Industries has taken the larger-scale access line SMS and video management platform SEVMS [link no longer available] from IR. While the exact value of the spinoff deal was not disclosed, together these product lines represent a tiny percentage of IR Security's overall earnings [link no longer available]. BrightBlue is the most promising product in the group, and will garner the primary sales focus of the new company.
One of the underlying catalysts was internal dissatisfaction with staleness and neglected development of BrightBlue. Despite being released over four years ago, the offering is largely unchanged since the day of introduction, and incremental hotfixes or patches were nonexistent. Unlike IR's core hardware product offerings, electronic system suffer if not continuously updated and improved.
While large, IR Security is built on mature product lines mostly composed of mechanical hardware. The company has experienced limited to no revenue growth over the past few years. A systems product with potential to grow like BrightBlue stands a better chance of development and adoption when not treated as a door hardware product.
Due to the simple, yet dramatic, focus change in maintaining and developing the product, BrightBlue stands to regain some of the promise it once held. However, Vanderbilt Industries needs to demonstrate that it can deliver the marketing, distribution, and support of the line may given the unknown funding, newness, and small size of the new company.