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Motorola Solutions has bought Pelco. Why the deal may be good for both

Motorola Solutions has bought Pelco. Why the deal may be good for both
Motorola Solutions announced it has acquired video surveillance heavyweight Pelco for a total of US$110 million, marking the communications giant’s third major video surveillance purchase in two years and making it a growingly influential player in the video surveillance business.

Motorola Solutions announced on August 3 that it has completed the $110 million acquisition of Pelco, which Transom Capital purchased in 2019. Before the Transom ownership, Pelco was owned by Schneider Electric from 2007 to 2019.

The $110 million was small money for Motorola Solutions, considering its $7.9 billion revenue for 2019. For that money, however, Motorola Solutions has gotten itself a third major video surveillance company after its 2018 acquisition of Avigilon for approximately $1 billion and its acquisition of IndigoVision earlier this year for $37 million.

With three video surveillance brands under its roof, Motorola Solutions becomes a major video surveillance player with a solid lineup of products and expanding geographic presence. In the case of the purchase of the U.K.-based IndigoVision, for example, John Kedzierski, Senior VP of Video Security and Analytics at Motorola Solutions, said in an earlier interview with that it “helps us extend our reach globally. For Motorola Solutions, the U.S. is the strongest region, and we are always interested in extending our geographical reach. This acquisition brings the channel, the sales organization, and a brand that would help us expand internationally.”

Good fit for Pelco

The deal may also be good for Pelco, which had been a leading player in the video surveillance business but has been on the decline due to fierce competition, which has diminished Pelco’s sales from the channel side and forced it to look for special, advanced projects for which highly customized video surveillance solutions are needed. Yet that objective was not well served by the ownership from Schneider Electric, whose core focus is on building automation for which video is not a good fit.

Motorola Solutions, on the other hand, is a better match for Pelco, whose solutions can benefit critical infrastructure, government and law enforcement sectors that Motorola Solutions also targets and has lots of integration projects in. In this sense, the Motorola Solutions-Pelco combination makes more sense and is expected to create more synergy for both.

Greg Brown, chairman and CEO of Motorola Solutions, himself said in a statement that “Video continues to play a more powerful role in enabling safer cities and securing businesses around the world. Pelco’s track record of innovation, internationally recognized brand, global channel and customer installed base enable us to further expand our global footprint with enterprise and public safety customers.”

The challenge for Motorola Solutions now is how well it can manage three video surveillance brands whose offerings are more or less similar.

Further, Honeywell, Johnson Controls and Bosch Building Technologies, all of whom used to have strong security businesses, have now become a bit weaker due to their acquisition or restructure to have a stronger focus in building automation. Will Motorola try to maintain Avigilon, IndigoVision and Pelco’s current glory in the security industry or follow in the footsteps of the aforementioned companies? Or will Motorola become the biggest security company who is able to compete with Hikvision? All of these are important for us to predict the future development of security.

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