In this note, we examine how the sale is being positioned, the potential valuation, the failed 2013 Hikvision acquisition of Pelco, who would make the most sense to buy Pelco now and what is the future for Pelco.
UPDATE March 2019: Pelco is now in the final stages of being sold, says Pelco.
UPDATE May 2019: The deal is done and some employees have been laid off, according to various sources. And Schneider has announced / confirmed the deal is done.
Maybe some people were joking when they voted in the poll for $100m, but I think most were serious and it should be taken seriously. Pelco seems (though I have made no forensic analysis like you guys have) to have "downward momentum" that negates a lot of value that may appear looking at a shot in time balance sheet.
I so rarely hear them talked about or specified. Would it be fair to say a lot of what may keep them propped up is old RFP contracts and government specifications?
Who knows, maybe a company will buy both Arecont and Pelco and we'll have "Areco" or "Pelont".
The part of this I don't understand is that Schneider doesn't appear to be unable to grow and modernize other parts of their business (energy, automation, etc). They were a ~20 billion revenue company the year they bought Pelco, and have continued to grow to the ~30 billion number in 2017. I don't know how that compares to the growth of those industries overall, maybe that is really slow and poor growth?
Was Pelco really targeted by Schneider internally to be stripped of all of its value, overlooked by management, or what other reason would they have to intentionally kill a brand like Pelco (as many people in the industry seem to imply they did)?
If Schneider was hurting financially on all levels, I could wrap my head around this much easier, but to me it simply doesn't appear that is the case.
what other reason would they have to intentionally kill a brand like Pelco (as many people in the industry seem to imply they did)?
Lol, I don't think many people think they did it intentionally, as if it was some piece of corporate performance art.
The best explanation I have heard from people close to Schneider is that Pelco fit poorly with the other things that Schneider did and therefore Schneider had difficulty fitting the proverbial round peg in the square hole. Can any ex-Schneider or Pelco people provide any insights here?
I'm not a Schneider or Pelco employee, but I've been through an "aqui-hire" before being bought by a much larger company that had nothing to do with security. It didn't work out. They were used to being their own manufacturer in an industrial sector and owning their own distribution and sales divisions. Other division leaders saw us as the redheaded stepchild with no history with the parent company but were being asked to trust us and share their clientele for cross selling, but it never came to fruition. A square peg in a sea of round holes was a pretty good analogy. If Pelco was only 1% of Schneider's overall portfolio, then yes this should not be surprising. I knew Schneider was big, I just never knew Pelco was that comparatively small to it.
Pelco probably never had a strong enough product champion in the Schneider ecosystem with enough clout to keep it relevant. But that is just a guess on my part.
I knew Schneider was big, I just never knew Pelco was that comparatively small to it.
When Schneider bought Pelco, Pelco was just under 4% of Schneider's revenue (i.e., Pelco - ~$500 million, Schneider ~$13.5 billion USD). Even, from the start, Pelco was a small part of Pelco but that magnified over the years.
As someone who worked at Schneider Electric on the security side, I can tell you it was very frustrating trying to understand the Pelco business model, as well as the overall position that Schneider tries to maintain in the security business, i.e. sometimes Schneider is a manufacturer and sometimes Schneider is a integrator/contractor.
The revenue growth comes from the big name brands with heavily established market penetration, like Square D (everyone knows Square D, right?) and APC, as well as the industrial automation business.
It was frustrating at Schneider because in order to grow and penetrate the security market, you have to think and function like the better established players whose only business function is security. Yes, there were contract wins of good size at A-level accounts, but mostly at lower margins than a standalone security business would have been able to sustain. As anyone who has ever sold large projects at a Johnson Controls, Siemens, Schneider, etc., it is fun and a bit heady to be able to throw around someone else's money, often in the 7 figure level, and know the "thrill of victory and the agony of defeat" .. lol
Being that security is such a very small percentage of SE's total sales, as well as the fact that they go to market through company branches as well as integrator "partners" (basically a dealer network), often in the same geographical area, you have a less than optimal recipe for success.
It had gotten to the point with Pelco, when we would be doing the estimates for a large bid, that their reps would come in an just say "just tell us where you need to be and we'll get you a special quote". This was after we'd already taken off the job using Avigilon, AMAG, Genetec, or some other manufacturer that was in the spec.
Lastly, instead of using their internal ample and capable resources to update/upgrade/modernize their access control offering, I thought they went the easy and relatively non-committed route of private branding the Feenics cloud ACS. Se's skin in the game was embedding the EP4502 f/w into their own head end controller, which when needed for security-to-building automation integration was a pretty good idea since it allows SE's ACS to talk to SE's BAS via BACNet, and also allows their ACS to theoretically talk to other BACNet-based building management systems via standard protocol.
The fact that Schneider couldn't make a run of it with Pelco further illustrates that SE is not really in the security business IMO... they are a systems integrator at the factory branch level without the depth and product mix required to sustain growth on the merits of their security solutions alone. Their conflicting partner/dealer network also butts heads with the factory branches and is a strange inflammation point in certain geographical markets that sometimes causes the branches to NOT use SE products in projects.
Their deep pockets certainly play well with large end users, and they are a good company to work for from a benefits and lifestyle standpoint. But, if SE were only a security company, they'd be out of business.
Schneider's move to the Feenics-based access system makes sense, but it has left an installed base of Andover Continuum confused and neglected.
These forums commonly have Continuum dealers or users asking "Is Continuum End-Of-Lifed?" because even within SE no one knows for sure what's going on. They aren't ready to call it dead, but they do not appear committed to ongoing development or support either.
I disagree about their move to Feenics. That was the final slap in the face to people who had worked hard to get and keep Continuum in large enterprise sites. The replacement for Continuum is a joke. It can't do anything and I think it's only purpose is so SE can say they didn't abandon their customers, but make no mistake: they abandoned their customers and left them with a dumpster fire to deal with. I would never recommend anyone use anything from SE in security because there track record is one of destruction and abandonment.
The really sad thing here is if they had understood what they had, they could have turned both Pelco and Continuum into dominate brands. Continuum has very unique abilities that go back to Infinity days and I still don't think any system out there can match the flexibility of that platform, especially at the panel level. It lost because they stopped developing it 10 years ago when they should have been putting more effort in.
Pelco had the technology and more important the people and the commitment to the channel partners and the customers. When you called the 800 number, you got a person. When they transferred you to who you were looking for that person knew what they were talking about. The first time I ever toured the Colvis plant I was blown away by the commitment of everyone there to the company and the product. That tour was part of a training class that was 100% free for integrators. They paid for the hotel, the food, the transportation. The only thing an integrator needed to pay for was transportation there. The cost of that was more than made up for with the good will and loyalty it fostered. Unfortunately that doesn't show up on the balance sheet so SE just didn't get it and pissed it all away. They lost all their good people and for the last several years it seems like everyone there is going though the motions and cashing their paychecks.
This is a general reply to all the access control discussion.
I totally agree what you guys are saying, as an employee at SE since 2016 this is the reality and history i have come to witness.
Just here in Sweden SE have bought 2-3 companies that were in the access control market where one system actually is quite close in design to some of the new systems from other manufakturers.
SE does not know the security market, at all, doesn't understand it and doesn't seem to want to understand it, leaving customer by customer stranded with access control systems that are non-upgradable and spare-parts non-existent, but fear not, cause SE has a new access control system, Security Expert, for the trained eye you will see that its actually a rebranded ICT.co system.
The question that remains is how long they will be friends with ICT before they get angry and stops selling that and moves on, leaving the customers behind once again.
And i do wonder how deep the pockets go before they have bought so many companies, whether the branch its from, when they start to realizes wtf they actually are doing with all the companies they hare buying.
IPVM, could you make a comparison on growth in the other bigger markets SE is in compared to their competition?
Are they racing? leading? or are they falling behind is the question!
Not discrediting the argument that Schnieder played a big part in ruining pelco but I believe that they were a victim of circumstance too. If you look at the comparisons to axis and avigilon, those businesses started off as purely ip cctv companies with a singular focus/ approach. At the same time pelco were still managing a massive portfolio of hugely successful analogue products while trying to transition into ip at the same time. Endura and digital sentry were dreadful products who only had success off the back of pelcos brand and integration to the cm9760 matrixes. By the time they realised they needed a new software platform it was way too late to the ballgame.
I would say that was only a defense insomuch as that seems to be a very common problem in large, well established business. Taking business classes, one of the things taught today is one of the biggest dangers a business faces is getting in a rut, or traveling on it's own momentum where it is difficult to change. It's a cultural thing that seems to develop from the basic human behavior and need for conformity and stability. The kind of things that almost did in IBM.
Look at Sears, a hundred year old retailer that logically speaking, you would think the history and experience would equate to knowing how to stay on top of the market, but instead turned out to mean it was so embedded in business as usual that other retailers came up, passed them by, and now they are a dying company. Those are just a few examples.
Now Pelco was far from an "old dog" company in terms of very long, established companies in the world, but in terms of technology it where things move and age so much faster, you could think of them like that. And kind of like you said, their competitors had an advantage starting with a culture of IP based technologies. But I don't think having a large portfolio of analog equipment is by itself what kept them back, it was their slowness and resistance to change in a way to keep them relevant and appealing.
I agree. This is why i think businesses should always have a healthy fear of "survive and adapt". With the money they had they could have easily made a dept dedicated to R&D into new and emerging technologies.
Your description of companies that had huge analog install bases being forced to try to retain old methodologies and products in the IP revolution holds true for me. Panasonic and Bosch are examples of this as well and both seem to be in the same predicament as Pelco. None of them have what I would consider a competitive VMS (Panasonic VI being the sole exception) and do not seem to push it as heavily as “boxes”. It seems like these 3 are set on the Hooli model from HBO’s Silicon Valley.
Coming in 2019: the all-new Pelco/Bosch/Panasonic Box 3.0!
The one thing that I believe is missing in most all of these cases of large company acquisitions is the fact that none will ever be able to duplicate the passion and drive that a private owner has and instills in their staff. It seems that most "appoint" internal corporate management that have worked through several divisions and have proven to be a good steward to the company profits and bottom line. It is really sad seeing Pelco today as I have fond memories of visiting them back in my days with an integrator. No matter how large they were if you came there as a visitor you were greeted by the CEO and upper management and they expressed how important you were to their business.
I'd like to see a merger by Pelco and ArecontVision. I can't even imagine how that is possible given the financial troubles both companies have. I think the key to future success for both companies is the troubles that the Chinese manufacturers are having. An investment firm with deep pockets could turn these two companies into huge success and an American Made success story.
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I remember a job interview regarding the role of a national sales rep for Pelco about nearly 2 years ago:
1. A first call with the continental sales director. A very experienced guy with deep knowledge of the industry. He admitted that Pelco / Schneider made some signifcant mistakes through the last years, but was aware of that. They wanted to get up again and step forward with a clear focus...
It was a really open and very detailled exchange of experiences and ideas.
2. 4 weeks later the next step for me was a video conference call with some NEW continental sales director, who switched from some other department of Schneider.
Some other (new) guy from HR was involved, too. He was hardly able to manage a proper video conference call. Technical situation was ridiculous.
With every word he said it got more clear, that sales director was absolutly new to the security industry and had no idea of the market, the customers, the competitiors and the ecosphere in common.
There was no sense in speaking about important details. The only thing he wanted, was to hit the big projects.
As far as I realized, they didn´t find someone till now...
As a small integrator who was a direct Pelco dealer I saw their prices way out of walk to the market and was forced to move on. The Pelco rep went into one of my clients and tried pushing in some product, then he decides to call me. Fast forward 18 months and he calls and asks what happening with that 3 camera deal. I was shocked he has the time to follow up on this big order. Anyway, received a nice letter saying you are no longer direct. Okay with me. Support has gone way down, my inside salesperson had no time to even call back. It was a great brand the Schneider ruined it. Sorry for the folks. RIP Pelco
Why don't we rather focus on their new product launches?
Dear Pelco employee, as a point of fact, I reached out to Pelco management prior to doing this post asking them to brief me on positives for the company, so I could incorporate their perspective into the post. They did not respond.
That said, Pelco being shopped by a banker is more newsworthy than (1) an IR PTZ, (2) OEMing Oncam and (3) a VMS dot release.
To be clear, we are certainly open to testing Pelco's VX VMS and we might test Pelco's IR PTZ but that does not trump this news.
There must be a good reason why Pelco brand is still standing after all these years.
The good reason is that Pelco used to be a huge, top-tier company, and now is only 'standing' as a laggard and left-behind.
To be clear, a strong Pelco is good for the industry as a diverse number of quality competitive offerings is good for users but we need to be realistic about where Pelco is today.
A return to anything near their zenith would be difficult. The talent pool is not there and to replace it would be an uphill climb. I would be curious if a group such as a PSA could muster the funds to take on the project.
In my opinion, Pelco's decline was the lack of innovation. I think almost everyone here will agree that their PTZ was the best out in the market. Competitors even supported the Pelco protocol on their DVR's because they knew it was the best and wanted to compete on the DVR space. Pelco stopped the innovation, resisted the "IP Fad" as they used to call it and then was playing catch up ever since. I am surprised that Schneider didn't want to take the brand, invest R&D and bring Pelco back to the leader table. When the purchased Pelco, they still had a decent reputation but strong name recognition. I see this as a missed opportunity and a sad one. It seems to me, if you want to stay in this industry today, it's all about "what have you done for me lately?". Lack of innovation and new products seems like a death sentence.
Yea, the going wisdom has always been that Pelco didn't innovate and I think that isn't entirely accurate. They were full steam into Endura which was IMHO too cutting edge. The only way you could get it to work well was to have a full time network engineer and a fully separate network. The corporate world (an their IT departments) just weren't ready for it. I also think they pushed it too hard and put it in too many places were it was destined to do poorly. Now to be fair, they totally did miss the boat on IP cameras and should have been deeper into that, but I think Endura was distracting them from that. A mis-step to be sure, but given all the good will they had built up over the years, not fatal. Of course one of the first things SE did was kill Endura and push everyone to Digital Sentry or DX. And they had a ton of problems managing the Digital Sentry line with also died a horrible death that wasn't necessary. But that's a whole other story. ;-)
The name PELCO now means nothing. More and more in big projects we ( the integrators) have to deal with IT department or staff. IT Staff and Physical Security directors/managers/executives do not see anything so Last Century as welcomed or prestigious or something their job, prestige or reputations or creds should depend on. This is a dead brand with not much value. They don't even have any IP ( Intellectual Property) or IP products in short IP :) to rely on.
Schneider made a bad calculation. Had they sold to HIK they would have made a few tens of millions. The acquisition for HIK would have been only one of Human Resources to strengthen their corporate/Big accounts/Big systems understanding and sales.. I don't think it would have made much difference in Hik products line or Intellectual Properties portfolio... PELCO IP (both meanings) are/is at this point in time not worth anything.
I don't think PELCO will fetch $50 million...
RIP PELCO. You were Great. Today utterly irrelevant.
#19, no real update in the 3 days since this was published. Pelco has been publicly silent on the matter. And any deal, if one is to be worked out, will take at least months.
Recall, Avigilon's acquisition took more than a year. The big thing is finding someone willing to pay the price Schneider wants. To use a real estate analogy, Pelco is a fixer upper in a modest neighborhood, so companies are not rushing to throw top dollar at it.
Rashid, if someone bought Pelco that had their own panoramic / fisheye line, I could see it being a problem. But the companies that have that (Axis, Dahua, Hanwha Hikvision, etc.) either would not buy them and/or could not for political reasons.
I briefly worked at a Schneider Electric integration branch but left after a few months once I realized they had no strategy and poor product management not just at Pelco but across all their security brands. At an internal annual global sales meeting I challenged the head of Pelco product management on why we were trailing in innovation (i.e. Arecont's 360 cameras were groundbreaking at the time.) He stated their strategy was to be followers not leaders in product innovation. That blew my mind and cemented my decision to leave.
To reiterate just how "trailing" they are - note that they still do not have any HD Analog cameras.
Other companies were leaders as well it's just a matter of proper timeframe selection. Not Pelco was the all time leader forever.
When HD analog came, all the mature manufacturers were in love with IP, and focused R&D there. If Pelco lead the Analog HD era, they would sink, as margin killer, volume leader chineese companies were cheap as hell from the very first appear of that technology. But for sure, who knows?
I made this conclusion based on what history could gave all of us regarding, margin/volume/time.
The death of a powerful Brand. Very interesting and instructive.
My firm was a committed Pelco partner prior to the SE purchase, but we had already begun to drift away after some painful Endura experiences.
The shame of it (in retrospect) is that a motivated and intelligent team could have created PelcoIP and leveraged the reputation to make a successful run in the IP world.
Instead, we witnessed and experienced a manufacturer that appeared unwilling/unable to parallel process: maintain/service their analog base while developing quality IP products.
They "chose" the highly proprietary path with their VMS and cameras, which made little strategic sense considering the open architecture of the analog world where they had established an industry leading brand and reputation for quality service for dealers and end-users.
Someone with marketing and technical genius could purchase them for a $50M song, only if they were ready to risk a fortune to create their own Pelco Skunkworks and emerge as the "underdog" that is ready to get back in the ring........
VideoXpert Enterprise had some significant hurdles when it first came out, with problems up to about version 2.0. It has minor annoying buggy things now, but from what we can tell, most of them have been worked out.
VideoXpert Professional, which is a newer developing product, appears to still have some bugs. It is actually more similar to the Digital Sentry line of software than VX Enterprise, so I suspect they may have just layered their VX Ops Center Software over the Digital Sentry software code. The software installation process is completely different with the two products. Professional does not require a certification, Enterprise does.
At this point, both appear to be mostly stable. We still do quite a bit of Pelco VMS products, including Endura. It took Pelco awhile to work out the bugs with Endura too, and essentially the same thing happened with VX.
Features-wise, it is a competent product at this point. The ability to support 3rd party cameras is probably a good long term move, since Endura essentially required using Pelco cameras only. We have used Axis cameras with good reliability thus far with VX.
#19, as a rule, we don't run unconfirmed reports unless we have 3 independent senior sources confirming the activity. This applies here.
Again, I am not saying they are simply for sale, I am saying they are working with an investment bank, to quote myself:
Baird, a US financial firm / investment bank, is shopping Pelco to various companies.
Yes, 'everything' may be 'for sale', but in this case, Schneider / Pelco has a bank working on it, which is different and more serious than being open to inbound inquiries. This is also why so many senior industry people are aware of that.
Well I didn't say you are running unconfirmed reports, just what happens if your sources failed? This happens everyday.
Just a personal thought, if Schneider didn't know how to manage Pelco through 11 years, might happen they don't know "how to sell" it. As a matter of fact selling is always harder than buying.
Still just thinking, that what if Schneider made a decision without prior notice to Pelco and a FRESNO newspaper can ask 100 times a day but if they simply do not know what to answer, what should they do? Or what if they have no right to answer?
I feel really sorry when anybody ask them to act. What if hands are tied? Who knows?
Well I didn't say you are running unconfirmed reports, just what happens if your sources failed? This happens everyday.
I've seen the deck from Baird. We are quite conservative about reporting unconfirmed things so when we do run something, we have an abundance of evidence behind it.
IPVM made a very specific factual assertion - not just that Pelco was for sale but that Baird was marketing them for sale. If that specific factual assertion was false, Pelco could have easily said that. However, Pelco knows its true.
Update: I spoke with numerous executives last week who confirmed that Pelco was being shopped over the summer with many evaluating purchasing but none too excited to pay anything significant, citing Pelco's various problems and fall from grace over the past decade.
As an end-user of Schneider Electric's Andover Continuum and Pelco's Video Xpert I have to agree with those that have stated SE appears to have no strategy for the security market. I was at the ASIS GSX2018 show in Las Vegas a few weeks ago and there was neither a Schneider Electric booth nor a SE Pelco booth! This speaks volumes!!
Some initial thoughts / questions on the PE firm, Transom, that is said to be negotiating / buying Pelco.
Transom markets itself as improving operations of companies they acquire:
we have developed a systematic approach to value creation known as the ARMOR℠ Value Creation Process, which is an acronym that stands forAcquisition,Restructuring,Monitoring &Operations, andReturn.
ARMOR is our playbook and is a collection of real-world proven methods for each stage of the investment timeline to create performance driven cultures, create and improve strategy, drive topline growth, decrease waste, improve operations, customer service and product quality, source talent, tighten budgeting and lead companies and their executive teams to new heights.
This could be good for Pelco depending on how their 'value creation process' creates long-lasting value, not just improved short term financials.
One worrying sign is that the firm does not typically invest into operations:
In most cases we invest in businesses with over $5M in cash flow; however, in special situations, where segment growth is significant and our experience plays a highly complimentary role, we will invest in companies with negative to modest cash flow.
Pelco has been run down and if it is going to be a real player (and not just patched up to flip), the acquirer is going to have to put in more money to fundamentally fix Pelco's products and channel.
Hopefully, the first thing they will spend on is changing the company name. Too much negative association to the word "Pelco" at this point, and a ton of marketing money spent on trying to restore the Pelco name to some higher level of glory than presently held would be much better spent reinventing the company, to include a new name.
It has taken Allegion a good while to finally get everyone used to the fact that Schlage and a host of other known door hardware brands are now called "Allegion". Schenider was never adept at getting the naming thing straight with Pelco, since they insisted on the seemingly stylistic convention of adding the "by Schneider ELectric" to the end of the official company names of all the various companies they own, i.e "APC by Schneider Electric", "Pelco by Schenider Electric", etc.
This "by Schneider Electric" not only made the company names longer than necessary, it almost made it sound like these companies were sort of like Schneider Electric, but not really.
Reinvention and renaming of the Pelco entity by the new owners would make a lot of sense, IMHO.
I understand your comment .. I was thinking as an integrator, as in "what would be the compelling reason to buy and promote Pelco products to my customer base without some drastic differentiator at this point?"
Now, think as an end user, I may not be as tuned into the negative market sentiment amongst integrators and be inclined to trust my trusty integrator who brings me a video solution that meets or exceeds my expectations. If this solution includes Pelco products, so be it. If I end up liking the solution and feel it was worth the investment, I will attach a positive sentiment to not only my integrator, but to the brands they brought as part of the solution.
But now, I am back to thinking like an integrator and asking the question: What are the compelling reasons to attach my company to a product solution that has been losing market share for years and has been in a downward path, but now has new owners?
If I have a considerable customer base of Pelco customers that I still need to support and grow, that is one thing, but the reality is that in order to make this investment worthwhile, there has got to be a plan to not only maintain market share, but to find a strategy to grow market share.
If I have a considerable customer base of Pelco customers that I still need to support and grow,
The pool of Pelco legacy sites out there is really dwindling and more so with each year. There are some integrators that still push Pelco and still think Pelco is as relevant today as it was in 2008. Almost invariably the remaining Pelco integrators are actually the low voltage arm of electrical contractors in my area. None of them subscribe to IPVM or are even listed on the integrator finder. The customers are far more educated than they were in 2008 and are frequently are the ones pushing to shift from Pelco.
Word on the street is that the new owners will require an additional headcount cut of about 20-25%. Not too sure what is possibly left to cut at this point after all the Schneider driven lay-offs the past 5+ years. As you clearly stated above, to make it really work, investments need to be made, not more cuts. If I were Transom, I'd also be looking to acquire a few other companies with complimentary offerings in order to stabilize the business, expand the portfolio and truly turn it around. The question remains whether or not the thin customer base will hang on through additional instability.
Or they could shed Pelco's camera business, which has been growing in quantity, but losing in top line revenue and profitability for the last several years. Or at least reduce their camera investment way down to soak up that 20-25%, and do everything pure OEM with minimal Pelco overhead engineering.
Pivot as a VMS company (only part of their business that's actually growing these days) and re-invest in that strategy to grow VideoXpert to the vision Pelco's current leadership claimed it would grow into over the last 3-4 years.
Looking at the portfolio (past and present) of Transom, there's a lot of different companies; a common thread seems to be audio (speakers, mics etc), skateboards, helmets, but also pencils ("writing instruments") and now an aging CCTV peddler has been added to the mix.
According to Crunchbase they have raised close to half a billion dollars ($300 mio in the last round). SE paid $1.2 billion for pelco, so I'm wondering what kind of haircut they took on that deal.
I simply do not understand the rationale behind these deals.
Old companies often drag around a lot of technical debt and a lot of legacy dogmas that make no sense anymore. The existing customer base pays the bills, so they often dictate the direction and what gets prioritized with no long term strategic direction (sure, there's a lot of talk and BS being posted, but real investments and time spent is nill). The revenue is too small to support development of the next-gen (barely, if even paying for the going concern), so you're left with an increasingly unwieldy system. It's hard to retain good people when your system is 20 years old, and basically represents a technological dead-end for the devs. Even in cases where the company does plan for next-gen, there's the problem of the "second system syndrome" (just ask Milestone about "Galacticus").
So, if the products are outdated junk, and you've decimated the R&D department, then what's left? What is Transom paying for?
I guess it's the brand and established sales channels and reference customers. E.g. Pelco is installed at Buckingham Palace; a lot of end users are going to just assume that Pelco must be rock-solid, based on that information alone. No-one is going to call them up and ask how many times the system was offline last month. They're not going to visit IPVM either.
On the other hand a lot of these systems are sold via installers and integrators, and they may associate pelco with old tech, analog, outdated etc. and the reality is that most end users are going to take the advice of people who DO know the state of tech, and who DO know that pelco at Buckingham Palace means exactly nothing.
Can Transom utilize some of their experience in skateboards and microphones to turn pelco around?
I can remeber the days when Pelco was the go to company. Had their own manufacturing and training facilities. Great quality control and customer service. I think one of their downfalls were the large amount of analogue video customers that they had. I'm thinking Casinos here and their needs that early IP video could not deliver. Being such a small part of Schneider did not help. Sad to see this company go.
Very simple. Pelco was a market-leader in analog video. They effectively missed the market transition to IP video. They were falling behind this market shift before Schneider came along. From Pelco ownership perspective, they sold to Schneider at the perfect time. Brand and numbers were still strong and the general market wasn't aware that they were on the wrong side of a major market shift.
It sounds like Schneider didn't help but they shouldn't get all of the credit for Pelco's downfall.
They effectively missed the market transition to IP video... It sounds like Schneider didn't help but they shouldn't get all of the credit for Pelco's downfall.
agreed, John deserves some “credit” as well.
IPVM’s tireless and incessant promotion of IP Video and subsequent edification of the integrator caste, as well as Pelco’s state of denial and foot dragging, surely probed their weakness, and the adoption of IP technology by their competitors, encouraged and enabled by IPVM, may well have hastened their demise.
could Pelco have made the jump to IP successfully if it had a couple more years? who knows but industry historians have duly noted the curious fact that this very website was founded just months after the Schneider sale; and their fortunes have crossed since then, as shown by this handy chart:
I do so love armchair quarterbacking from the cheap seats <HEAVY SARCASTIC EMPHASIS>... and oversimplification of a very complex set of challenges. Guessing you're in Sales, because if you're in any management capacity, your company needs a talent upgrade.
Some day (maybe) I'll right a book about why Pelco could have succeeded, and didn't.
There is sometimes a very fine line between speculation, and exercising theories and postulations that are important to keep imagination and abstract thinking fresh. Sometimes it's in the mind of the beholder.
Schneider / Pelco issuing a press release on a deal that is not done is highly atypical. If the deal does not go through, Pelco will be in even worse shape as everyone knows a sale failed. If the deal is basically done, it is unclear why they would announce now rather than waiting the days or few weeks needed to officially announce it, to avoid confusion in the meantime.
In fairness, this is the same people who spectacularly ran Pelco into the ground, so such a strange move is consistent.
Schneider Electric finalizes the sale of Pelco Rueil-Malmaison (France), 27 May 2019: Schneider Electric announces today that it has finalized the sale of its Pelco business unit to Transom Capital Group, a U.S.-based private equity firm in line with the terms previously announced on March 25th . Following consultation with the relevant works councils, the transaction closed on 24th May 2019.
That is the entire press release. We spoke with Pelco over the weekend and will post on that tomorrow.
The Employees at Pelco (if any originals are left) where the nicest, most competently trained people in the industry. Many competent rep firms with 20+ years representing Pelco witnessed first hand the dismantling of an awesome company to a completely mismanaged confused business unit of a much larger company with a newly installed management team that couldn't run an IHOP! The Schneider purchase of Pelco should go down in history of what not to do with a billion $$$$$.