Developing the Security Business through Acquisition and Alliance---Part I

Three years ago, manufacturers focused on one aspect of the business. In the case of video surveillance, the business was made up of layers including IP video software platforms, video hardware and video management systems. Most of the leaders in these fields sold to other hardware suppliers that offered systems, and distributors or system integrators. As the demand for total solutions grew, alliances rapidly developed between manufacturers in the different layers so that best-of-breed products could communicate and work together. This has developed with time into much stronger partnerships sharing development and promotional costs. These partnerships progressed further by companies joining together through merger or acquisition, to produce vertical-integrated companies that can deliver a full surveillance system.

We have identified alliance arrangements between manufacturers and system integrators, working together to provide a solution for a particular vertical market and sharing the development and promotion costs.

IT network design and install companies are crossing the boundary between IT and physical security to offer a complete solution. In many cases, they doing this through collaboration and alliance with physical security suppliers. A noticeable trend has been the identity validation suppliers move to integrate with access control. Their preference appears to be to go the whole way and acquire an access control manufacturer.

Alliance will almost certainly play a more important role in the future. It would be surprising if the more successful partnerships do not ultimately lead to merger or acquisition. 2010 has shown that merger, acquisition and alliance have become a vital part of security companies' business strategy.