ADT goes after small business

BOCA RATON, Fla.—ADT is going after small business with targeted offerings for specific vertical markets, the first of which it launched on April 10.

The opportunity for ADT in this market is “significant,” Luis Orbegoso, president, ADT small business, told Security Systems News. According to a recent survey ADT had done, many small retailers are feeling insecure.

He said that ADT has “14 to 15 percent market share” right now. However, “there are 7 million small business entities that fall within our definition of small business [less than 7,500 square feet], and these are not home-based businesses; these are actual brick and mortar businesses. And, only 50 percent [of those 7 million businesses] have monitored security,” Orbegoso said.  

Another 20 percent “use a door chime or a dog, for security,” Orbegoso said.

The April 10 launch is ADT's Retail Solutions Bundle, the first of five security and automation “bundles” designed for specific vertical markets.

Over the next several months, ADT will launch bundled solutions for four more verticals: food and beverage, clinical, professional offices, and mechanical.

In the past, ADT has offered small businesses products that were essentially extensions of its home security service. “There is a significant difference in what a homeowner needs in security and what a small business owner needs,” Orbegoso said. And among small business owners “there is a huge difference [in the security needs depending upon] the type of small business. … We put together configurations of products that make sense on a vertical by vertical basis,” he explained.

For example, a doctor's office may have controlled substances that only certain people should have access to and which may need to be kept at a certain temperature. A gas station, on the other hand, which would fall into ADT's mechanical vertical, is concerned with safety around potentially dangerous equipment on site.

The Retail Solutions Bundle combines ADT Pulse Interactive Business Solutions, intrusion detection and video surveillance. These bundled solutions will be of interest to national accounts customers, Orbegoso predicted, who are looking for consistency in equipment and processes across all offices. ADT's solutions can help “drive processes automatically,” he said.

In addition, ADT has developed a playbook on the Retail Solutions Bundle and trained its 1,200 dedicated small business sales people on the offering and how to sell it. “We made sure they understand the challenges [of retail customers], the product offering and the best practices [for the end user],” Orbegoso said.

ADT will announce a number of partnerships as it rolls out its different bundled offerings along the way, Orbegoso said.

One partnership with Internet security provider McAfee, which ADT announced in January, will be integral in the “professional offices” bundled offering. How?

Integrated with McAfee, Pulse will be able to help “drive efficiencies with the business,” he said, providing services such as monitoring bandwidth usage of devices connected to a company's network.

What about ADT's move into commercial businesses larger than 7,500 square feet?

Historically, ADT has supported medium-sized and enterprise businesses as well as small business. However, because of a noncompete agreement with Tyco, its former parent company, ADT has been banned from securing commercial businesses larger than 7,500 square feet. “[It's an] an arbitrary number,” Orbegoso said. The noncompete expires in September.

During a Dec. 6 conference call, according to seekingalpha.com, Orbegoso said, “once this noncompete expires, we will have the ability to take a look at possible adjacencies, such as commercial fire solutions and larger commercial and enterprise security offerings that we can integrate and leverage with our existing infrastructure and customers. These adjacencies could potentially quadruple our addressable markets. And again, today we are extremely encouraged by the momentum that we have in this space and our ability to execute.”

According to Imperial Capital's Jeff Kessler, the security market in businesses smaller than 7,500 square feet is $2 billion to $3 billion, but the market segment that includes businesses that are 7,500 to 25,000 square feet is an $18 billion to $20 billion market segment.