Trotter: GE to network systems, synergies

Company to tie in security and building management, grow with partnerships
Monday, April 1, 2002

PLAINVILLE, Conn.- General Electric's entrance into the security market went off without a hitch, with its purchase of holding company Interlogix and its suite of security manufacturing companies closing in late February.

The deal successfully propels GE into the security arena where it is expected to leverage Interlogix's security products and tie them into GE's existing sales channels and other services.

Lloyd Trotter, president and chief executive officer of GE Industrial Systems, the $6 billion division that Interlogix now falls under, expects GE will look at ways to make its systems, and those located in homes and businesses, to seamlessly work with security products.

Exactly how GE will accomplish that remains under wraps, said Trotter during an interview with Security Systems News, but plans are in the works to take disparate systems and create an integrated one and tap into more than just manufacturing and buying synergies.

One example is when an employee leaves a business at the end of the day. That person does not normally forget to turn on the security system, but may not remember to turn off the lights or air conditioning, said Trotter. Networking the systems together would solve that problem.

Another avenue GE is considering tapping into is the appliance market. "Every place appliances go security systems and fire could go," said Trotter.

Trotter expects once GE puts its ideas to paper, the end result will be an acceleration of innovative technology.

Research and development is GE's strong point, according to security industry analyst Girish Solanki, with Frost and Sullivan. "GE has a lot of expertise in that," said Girish, who expects GE has the resources to tackle nearly any security market, perhaps even biometrics.

But one market Trotter said GE is not interested in is the systems integration and monitoring business.

"They really don't bring any real technology to the party," said Trotter. "They design and build and that tends to be very people intensive and doesn't have the value that I think the product side has."

Instead, he expects GE may partner with the systems integrators and monitoring companies, all the while continuing to grow on the manufacturing side through organic growth and possible acquisitions.

"I see this as a very fragmented market," he said. "You look at the number of players on the product side and sooner or later it is going to consolidate and we want to be one of the individuals that grow."
Industry analysts have long been predicting that GE will not stop with its purchase of Interlogix. "I think its going to be the first of many," said Jack Mallon, a security industry analyst.

Some say GE has built a reputation for itself as a company that once it enters a particular market it goes all the way.

"We like to believe that we want to be best in the class in anything that we do," said Trotter. "Clearly, Interlogix gives us a start in fire and security and we want to grow that."

For GE, Trotter said the timing was right to buy Interlogix. The company was already familiar with the security market through its failed purchase attempt of Honeywell, which operates a security systems division.

Trotter said the integration of Interlogix into GE is still in the early stages, but few differences should be noticeable to installers and integrators. He said Interlogix's headquarters in Austin, Texas will remain and Ken Boyda will continue to head up Interlogix.