Pelco exits access control, tightens video focus

Immediate Intelli-M sale or spin-off likely
Sunday, March 1, 2009

CLOVIS, Calif.--Pelco management announced to its employees in late January that “in consideration of the current economic situation,” the company has decided to close its Indianapolis facility, which it gained when it was purchased by Schneider Electric, to focus on Pelco’s core video security business. Further, Pelco will no longer be in the access control business, which was headquartered there.

Pelco will now look to spin-off the access control line, sold under the brand Intelli-M.

“Everyone is seeing a slowdown,” said Dean Meyer, Pelco president and CEO. “And I see no reason why that’s going to change in the first or second quarter of this year. It’s not just our industry, and that’s not earth shattering news.

“In light of that situation,” he continued, “the short version of it is that [the access control business] represents a very, very small amount of our revenue, but we spend a lot of engineering resources on it, and so as times become more challenging, we say,‘Hey, we need to be more focused on what we know best, and that which contributes to the majority of our business: the cameras, and recording, and all the things that you know that we do. This is more about getting the whole team focused. And in all candor, [access control] was not something that just rolls off our tongue, and not something that everyone thought was easy to understand or embrace and really drive the sales. It’s a very small piece of our business, one on which we were spending more in R&D than we were getting in sales.”

Further, Meyer said, it jumbled Pelco’s message to its partners, many of whom make high-end access control software and integrate with Pelco’s cameras. “We’re very open with them,” Meyer said, “and we look for pull-through business with them, and [Intelli-M] was a bit confusing to them once it became part of Pelco. They wondered, ‘Are you going to start competing with us?’ So we kept it as a low-end entry-level product, which didn’t move well through our channel anyway.”

According to Pelco director of marketing and communications Joe Olmstead, there are roughly 50 employees in Indianapolis. Some of them are being offered severance packages, others are being offered jobs at the Clovis and Colorado facilities. Some sales people who work in that office will be asked to work from home.

Meyer said it was his company’s commitment to its employees that led to this announcement, prior to a sale or spin-off. He said Pelco is in a financial position where it wasn’t incumbent that the company find a buyer for the access control line, and “we made a decision that we were going to exit the access control business and we pride ourselves on being open with our folks, and we owed it to them to let them know first.”

He said now that the announcement has been made, “I’ve been surprised with how many people said, ‘Hey, I might be interested.’” He declined to mention possible buyers.

“I’m confident that we’re going to find a way to spin it off,” Meyer continued, “so that our customers will have a positive go-forward experience to have their installations sustained. We’ve had quite a few people come to us about it, and that will be good for customers. It’s not going to take a long time, either. I think we’ll move fairly quickly.”