SSN News Poll: uncertainty surrounds ADT sale

YARMOUTH, Maine – Last month, ADT made the decision to sell its commercial business, and Security Systems News (SSN) asked readers to chime in and show how that decision is being received.

From interviews at GSX this week, ADT Commercial has made it clear that its excited about the sale, upcoming name change that has yet to be revealed, and the future potential of the company. The readers' response to the decision by parent company ADT to focus on residential, however, was less positive. When asked, “Was ADT’s decision to sell its commercial business the right one?” 20.45% said that “Yes, a good price at the right time for the company to focus on other objectives, while 45.45% said, “No, it shed a positively performing section to prop up struggling initiatives.” Ultimately the remaining 34.09% adopted a wait-and-see attitude.

Next we asked, “With ADT’s renewed focus on residential, will this bring its partnership with Google into sharper focus?" On this point users could neither agree or disagree, reaching a split of 37.78% down the middle on yes and no. The remaining 24.44% were unsure.

It was the results of the third question that were the most lopsided. SSN asked readers, “Will ADT’s commitment and focus on solar begin to pay off within the next few years?” Only 13.64% said yes, while an overwhelming majority of responses, 77.27% said, “No, high costs will continue to scare away residential business until something changes.” The remaining 9.09% of votes believed it will be replaced by a more promising market than solar.

Readers were also incredibly vocal as they reached out to share their opinions this month when asked for their feedback. This month’s responses are as follows:

Here is a company that is linked to the beginnings of this trade, Alexander Graham Bell and Edwin Holmes. It's a real shame that the once-leading commercial alarm installation company has stooped to the level of the "lick and stick" installation business.

Not too many tradespeople left that remember that ADT was once the exclusive epitome in commercial alarm installation. I’m sure it’s a good financial move for them but it’s sure a long way down the list in stature and reputation from what they used to be. But I guess they think being on the top of the list of “Lick N stick” installation companies is easier than being known for quality commercial installations. Also, they don’t have to compete with real professional alarm installation companies. We’re just witness to the de-evolution and absorption by Google of another once prominent corporation.

The complete focus on residential subscribers by the largest security provider on the planet flies directly in the face of “Big Industry Banks'” sour attitude toward residential.

As the state-of-the-art technology of our industry advances, consumers are demanding more sophisticated integrations and services. This move allows ADT proper to focus on more modern solutions by shedding its commercial legacy installed base which is still mired in 1960s/70s technology, and for which ADT has been unable to tell a compelling upgrade story.

ADT COMMERCIAL will flourish under the new banner!

They are just desperate to keep funding their loss leader residential. Eventually there will be nowhere else to go to cash and will sell off its remains. See examples like Xerox. Kodak, IBM businesses run by people who didn’t know the business.

Appears that ADT sale was a needed debt reduction strategy. Reduced 3.4 debt leverage ratio is still very high. 11X EBITDA sale price was compelling for sell. And they can still leverage the ADT brand promoted by the new owners to market ADT residential services.

It’s corporate America. The sale is in the interest of those whose who will see their personal fortunes rise by the sale. It has nothing whatsoever to do with future vision nor customer or employee interests.

The bigger question is what does ADT know that we don't. Perhaps they have recognized that servicing a commercial client is a heavier burden than residential and labor demands do not allow for timely response.

Commercial was the main profit center for ADT. Residential is going to face more and more competition from Ring and Simply Safe.

ADT/Google have gone all in on the residential market. Understand they see “security” as a small part of the overall value of a residential customer. Time will tell if they are able to capture enough residential revenue to justify this decision. In my opinion, remaking ADT into a pure play residential company means less diversification and exposes the company to the risks of putting all your eggs in one basket.

Growth in the commercial sector was wide open for ADT to excel. Their national accounts and nationwide network had the opportunity to dominate. Solar is a joke.

That’s it for this month’s news poll results. Make your voice heard at www.securitysystemsnews.com where next month’s poll will ask readers to comment on Allied Universal’s World Security Report.