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Stanley Buys HSM

From today’s Wall Street Journal:
Stanley Works agreed to buy electronic-security company HSM Electronic Protection Services Inc. for $545 million.  this should help Stanely extend monitoring services.

Categories: TechNews
  1. December 18, 2006 at 10:24 am

    Quick Question: What am I missing on the Stanley acquisition of HSM?
    Granted, I understand the recurring revenue model. Jeff Kessler at Lehman Brothers drove home that point durung the Securing New Ground conference last month.
    However, the other interesting point at that event was a comment by Tim Whall, President & C.O.O. of HSM when
    he said in effect ” I don’t see the whole security convergence thing”. I was surprised initially because most of the event was very positive about convergence. In fairness, he wasn’t negative about it, it just was not an issue in running his business. Tim is obviously an experienced and successful executive . He is also a good
    negotiator based on the Stanley paying 545M for HSM.
    My question is does Stanley get convergence? They want to” Focus on providing a one stop security & IT
    solution.” yet it appears to me most of their integration purchases are of traditional physical securiy solution providers. Not to say some don’t have
    storage & networking experience, but it does’nt appear to be the number one priority. I asked a former VP Sales there about convergence and he replied, “I’ll believe it when I see it”. How’s that for business foresight? Granted, he has since left Stanley after selling his physical security integration firm to them. I find it interesting that Stanley announced two new busihness units in the HSA cover story in SDM magazine, (1) The Convergent Security Solutions Business Unit and (2) “Mechanical”
    Access Solutions. I think the fact they named it “Mechanical” Access says a lot about their understanding of convergence. They must have missed
    the Cisco / Assa Abloy announcement. I have my doubts they really understand what Cisco has in store for
    them in the commercial security monitoring market. John Chambers has targeted that space as one they will
    fundamentally change with an IP video strategy.
    My personal feeling is that if Stanley is serious about the future they should spend some money on IT technical
    skills. Hopefully they have more cash to do that. The future business model will demand it. If not, they will have spent a ton of money on a declining business
    model that changes rapidly over the next three years. Maybe the exit strategy is to sell to an IT firm like HP or IBM, but I don’t see the value proposition?
    Maybe the mechanical access market will save them? I doubt it. Does Stanley have any executives with IT Sales and channel experience driving their convergence strategy? Not someone who sold an nvr to a restaurant, but Fortune 1000 end user experience. This is where the business is going and where the big battles will be fought. This is why Cisco is in the business in the first place.
    Happy Holidays to the guys at HSM, timing is everything! Great move.
    Dan Dunkel
    New Era Associates, LLC

  2. December 18, 2006 at 11:14 am

    Thanks for the comment. As far as I can tell, Stanely execs absolutely do not get convergence, and don’t care to learn. They only seem to want to milk the “business as usual” cash cow until they, just a handful of key execs themselves, retire. The fact that they are not building a company “for the future” does not seem to cost them any sleep.

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