Electronic security is a very segmented market with different types of players including MNCs, domestic players and small importers. How does Honeywell carve a niche in this market?
Chadha: As an MNC brand, we operate at the high-end of the market. So our target-customers are those who are not looking for cheap products, but instead are more focussed on the total cost of ownership and how they can acquire it back over a period of time. Having said that, we are spreading our product basket to cater not just to the very high-end customers, but also the mid-segment of the market. In the course of a year, we have introduced many ‘value-for-money’ products and designed for the next tier of customers. That’s our strategy to deal with the issue of segmentation. However, we do not have entry-level or low-end products in our kitty because we have a commitment of basic quality which we cannot compromise on.
So who exactly are your high-end customers? Are you referring to customers who do large projects?
Chadha: It is not the size of the deal that defines whether the customer is high-end; it is actually the type of project. Any customer for whom the cost of downtime is higher than the additional money they are going to spend on buying our products, is a high-end customer for us. There are a number of such customers in verticals like hospitality, gas refinery, power plants among others. These are customers who cannot afford any downtime. They don’t want their products or services to go faulty when they need them and basically look for products that have in-built redundancy. A lot of global banks also use our products as they cannot afford any kind of downtime or non-availability of information. High-end products are our mainstay in
An interesting trend in this industry is the marriage between the IT systems and electronic security systems. for traditional security players, this introduces new competitors like Cisco or D-link. How do you deal with that?
Chadha: This marriage is inevitable and is happening mainly because of the technology shift from analogue video to digital. For digital technology, the back-bone is actually the IT infrastructure.
A lot of IT players have products on the networking side and they provide the backbone for the surveillance system too. So these vendors naturally become a part of the overall solution. But, we see this as an opportunity more than a threat. We don’t compete with them exactly in the same shape and form. In fact we complement each other. While we focus on the front-end of the infrastructure, they focus more on the back-end. We have expertise in areas like camera and video management software, while the IT vendors focus more on areas like storage and networking.
But some of these IT vendors have competing offerings too.
Chadha: Today there is a very thin line separating these two categories and we can see some of these players entering into our space. As of now, our biggest USP is that we are not new in this market. We have a product basket that spans the spectrum. All the new entrants, especially from the IT-side, are trying to focus on a particular space which is adjacent to their core competency. But Honeywell has built strong competencies around focus areas—the front-end hardware and the management software layer. This is where our value-proposition lies. We not only play on the video side, but also focus on applications like access control, intrusion, home automation and many more. Moreover, all our products can talk to each other and can be integrated with each other. We are much stronger than some of our competitors in the IT space, when it comes to the integration.
Security or surveillance is still projected as the single largest value proposition that video systems provide. Is that how customers look at it?
Chadha: Surveillance is definitely not the only driver for video. Many customers deploy it for process management and monitoring. Often in places, aberrations in various industrial processes are identified with the help of cameras and are then passed on to the operator with the help of analytics tools. It also improves productivity as it provides high levels of automation, which in turn helps in save cost. There are strong reasons other than security that drive this market.
In the last year, Honeywell seems to have improved its focus on channels. Could you elaborate on your partner strategy for India?
Chadha: Our partner strategy in
We also work with a lot of small integrators in the country who have entered into this market from the IT, telecom, or office-automation space. We address them through our distribution company, ADI.
While a lot of small IT VARs want to get into surveillance, isn’t it still a whole new ball game for them?
Chadha: They definitely need different skills sets to address this market especially at the solution-designing level. Most of these partners are working on developing these skills internally. Those who do not have the skill-sets to address this market rely on Honeywell to a large extent. Our idea is that a customer should not over-spend or under-spend on a solution.
Honeywell has an SI unit. How do you ensure that there is no conflict between the internal arm and other SIs?
Chadha: We are totally different entities. We work with them as one of our partners and they treat us as one of their suppliers. They also have a mechanism of ‘locking’ a project with us just like any other partner of Honeywell security. If there is a conflict, it will be similar to that between any of the other partners of Honeywell Security Group. We treat them like any other third-party partner and the same policies and support are applicable to them as well.
But does the SI unit of Honeywell compete with your other SIs across the spectrum of deals?
Chadha: They are, in fact, focused more on very large deals. Most of our large integrators for that matter have a specific focus and space they want to operate in. This allows in limiting the conflict among our integrators.
Our biggest USP is that we are not new in this market. We have a product basket that spans the spectrum.