Una's blog

Una on Pelco: August 2014

by Mark Rowe

In 2007 the UK stock market went through a period of volatility. Banks begin to stop lending to each other due to market fears over exposure to potential losses on high-risk US mortgages. The credit crunch began in earnest. hat was also the year that Northern Rock sought emergency funding from the Bank of England in its capacity as “lender of last resort” … which in turn prompted the first run on a bank for more than a century. However, it was not all bad news …that was the year that my company was acquired after 23 years in business. It was also the year that PELCO Inc was acquired by Schneider Electric. Anyone involved in the specification of CCTV at that time was aware of Pelco, a leader in the CCTV market. My company Euro had specified Pelco on many occasions on behalf of clients. We had been invited to visit the factory in California and witness the manufacturing of the CCTV products but alas I was always too busy to take up the offer, although a number of our clients managed to make it and came back decidedly impressed. Pelco was very highly thought of as a manufacturer and the acquisition by Schneider Electric was a good fit for Pelco. It also gave the opportunity to enhance Schneider’s building automation division, after acquiring TAC, Andover Controls and Invensys Building Systems. The division included HVAC [heating, ventilation and air-conditioning] control, electronic security and fire safety. Schneider Electric was an ideal partner for Pelco as both companies shared the same commitment to people, innovation and customer service that enabled them to combine and become an even stronger, more competitive player in the world of security. That was then and a lot of water has run under the bridge for everyone since 2007.

Now Pelco by Schneider Electric has become the most sought-after supplier in the video security industry. Founded in 1957 and based in Clovis, California, Pelco continues its never-ending pursuit of 100 per cent customer satisfaction. Pelco designs and makes high-definition and IP fixed cameras; video management and software-only solutions; video matrices; full HD displays and more … as many a specifier and installer will attest. Having been a former customer and highly satisfied with the product I could not wait to catch up with Hervé Fages, Director of Global Marketing, to learn more about the company today and his role within the organisation. Fages has a busy schedule and after a couple of attempts to meet we finally decided to meet up in San Diego in a hotel that was conducive to conversation. Schneider Electric is a French company and so is Fages. Firstly I wanted to know about his background and how he came to be working with Pelco by Schneider Electric.

He said: “From a personal point of view I have been in the security profession for a long time. I was with Sensormatic when I was a lot younger and stayed with them for ten years. I was also with Tyco for three years and then I left Tyco because I didn’t like a huge corporation so I decided to go to a smaller, private company with the hope of more control. So I did that for three years before I went back to a large corporation … Schneider. I have been with Schneider for seven years … so I would say that it has been a good journey. Schneider is a very strong organisation.” We talked about his role before taking on the global position in marketing when he was Director of APAC countries, we spoke about his contributions such as establishing a Singapore office, and championing the establishment of a China-based Warehouse and expanding operations in Singapore and Shanghai. However, here we were in the USA talking about his present role and the development of Pelco. Fages was very pleased to point out that all Pelco products are backed by the most comprehensive customer support in the video security industry. He stressed how much Pelco is committed to delivering support second to none, and how they have established an array of help to their customers. From guaranteed ship dates and local service centres, to the Pelco Global Training Institute. He said that it was important that users felt confident knowing that they are never on their own, but have the support of experts who are available to assist 24 hours a day, seven days a week. Fages pointed out that with all the Pelco experience they had an understanding that integrators, installers, and end users want to keep up with ever-changing technologies. He then went on to talk about the Pelco Global Training Institute (PGTI)that combines IP knowledge and experience in traditional video security to deliver training for IP video. Pelco is also recognised as a product innovator in the specialist market, producing a large number of items, including explosion proof and pressurised camera enclosures, high-security housings and thermal imaging pan-tilt-zoom positioning products. Through instructor-led classes worldwide plus online resources, including a library of e-Learning, podcasts and videos, the training platform is is considered to be very important to the overall service provision of Pelco. Fages pointed out that it has never been easier to get the information you need, when you need it. He also explained that Pelco by Schneider Electric is a good fit all around and the brand is even stronger now thanks in some part to the global marketing that has transpired, courtesy of Fages. We chatted for ages about the industry and changes that we had both seen and agreed that technology is the gift that just keeps on giving.

The exciting technological developments that are being introduced to the marketplace are indeed encouraging and while Fages was very enthusiastic and animated about all the positive aspects of integration I wanted to know the reality of a huge acquisition and the challenges that they had to face. I wanted to know more about the challenges that Pelco faced integrating with a much larger organisation. Fages said: “We are a world leader in the design, development and manufacture of video security systems, including high-definition and IP fixed, dome and integrated positioning camera systems; next-generation video management and software-only solutions; video matrix systems; full HD displays and more. However, there are still challenges for instance there are more market entrants than there were some years ago. The ticket of entry to get into IP is much easier and so you find more competition … which was a challenge for Pelco because they were a strong analogue company. They had to migrate to IP and everybody knows that performing a technology transformation is very difficult … in fact most companies just don’t do it. I believe that Pelco has succeeded in the technology migration area … or should I say exceeded. Today our sales on IP are sixty to 70 per cent so we met the challenge and it has been a journey.” We then discussed the Schneider factor and Fages said: “Schneider has been able to provide Pelco the financial support to conduct the transformation. As you can imagine this is a big change financially, you have to do a change in people, in investment and R&D and you don’t get your money back right away so Schneider has offered that financial stability to afford the migration. A further challenge for Pelco was as we indicated earlier going from a privately owned stock based company where ebit is something that people worry about when you are privately owned … and the last one I would say is keeping the focus on the customer service during the transition. During the last seven years we have replaced say about 90 per cent of our engineers but that was a choice because we had a lot of analogue based technology experts and we needed more IP expertize. It was a choice we made. We lost people in the transition for obvious reasons in such circumstances, for instance perhaps they did not want to be part of a larger organisation and in the end it was about forty five percent personnel change but as everyone knows … if you do not have turnover in a company you do not get new blood and new ideas.” We then went on to discuss the changes in management style over the last years going from platforms like Investors in People which encouraged long term employees to the revolving door style of management where turnover is constant. Fages said: “What I like about Schneider is that they are a large company but they try to get the right balance about keeping the right people, there are a lot of long term employees at Schneider. The comparison is that when I worked at Tyco (the old Tyco not the new one) it is now transformed. The old Tyco was all about the investor and the bottom line … it was not about the employee, which is one of the main reasons why I left. So I would say that Schneider is pretty good at trying to find the right balance … of course it is still a stock based driven company and a global organisation but at the same time the former employees within Pelco that embraced the Schneider ethos have more career opportunities today than they ever had before. Because when you were at Pelco you were at Pelco and that was it … now the entire world is open to them In fact our CEO has moved from France to Asia to be close to our biggest customers. Most of our executives are living and working in different parts of the world … we are a global company and employees who wish to be mobile have huge opportunities within Schneider. As a French based headquarters I would say that we are more global and international focused than most other French companies. As I said Schneider has been very good for Pelco and it is a great fit.” So what of the future, I asked. Fages shrugged his shoulders as he said: “What is the future? I would say who knows … as a large company we understand the specifics of the industry and the time to market and the speed to market so I believe from that perspective it is a good fit all around. I believe the future of Pelco is very strong.” Or as the French would say ‘Pelco est très fort’ and I would concur.

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