Questions on the Johnson Controls story

Because the comments to the stories can only run 500 words, I've moved a series of comments from John Honovich and I from the comments section of the Johnson Controls story here: John Honovich: Is this organic growth or based on acquisition? Who is the source of this statistic? Sam: The numbers are coming from Johnson Controls internally. I have no way of verifying them, so that's why I used phrases like "the company is reporting" and "saying it's moved from two percent to five percent." They say it is the result of their investments in generating organic growth. John: Organic growth from 2 to 5% market share sounds unlikely - even over a multiyear period. Assuming that the market size roughly stated the same, it implies that Johnson Controls increased revenue in this market 250%. Sam: That is a conclusion you can draw. However, the market may have shrank, allowing JC to grow market share simply by growing while others got smaller. That would contradict their predictions from last year, of course, so allow that it stayed the same: "As part of this initiative, Johnson Controls conducted a survey of security end users and came to the following conclusions: The market is growing at a 10 percent annual rate, with roughly $104 billion in annual spending; of that, $24 billion is being spent on integration alone, and that market is growing at a 17 percent annual rate. Asked from whom he sees JCI taking market share, Joel Lehman, JCI vice president of security & fire, said, "we'll take the 17 percent growth on that 24 billion dollars. That would be fine."" So, by their estimates, using the $24b number, JC's revenues went from 480,000,000 to $1.2b in security. JCI's 10k says total revenues in the efficiency unit as a whole were $9.2b for the nine months ending June 30, 2009. That was down 10 percent from 2008, but if it's true they shifted significant resources from "efficiency" and energy and focused on security, it seems reasonable to me that they could be projecting $1.2 billion in security in 2009. Even if they only mined their own current customers, only seven percent of whom (according to them) used them for security when they started the initiative, they should be able to grow pretty significantly on a global basis. -- I think comments on the blog can be longer, so if anybody else wants in, go ahead in the comments field. If you run into problems, email me directly.