Siemens CEO Peter Hawksworth Q&A

Peter Hawksworth, one of our most influential people in security and CEO of Siemens Security Products – which was acquired by Vanderbilt Industries in October – shared his thoughts with IFSEC Global.

In a wide-ranging interview he explains why design is as important to the company as function and how the German giant engages with customers with the intimacy of a small business.

Also contributing to the discussion is Alistair Enser, the company’s global sales director, and Andrew Morgan, head of marketing for security products.

IFSEC Global: What products have you launched recently?

Peter Hawksworth: We focus on access control, intrusion and CCTV, but the two major lines that give us distinctive competencies are access and intrusion. Siemens products in these areas go back many years, with many brands.

Over the last five years we’ve been transforming the portfolio. We’ve put more than £10m a year into R&D.

Siemens Aliro access control

All our products were historically analogue. We have a very large customer base, but we wanted to get into the IP world.

Over the last two years in intrusion we’ve launched a product called SPC, a leading edge panel for the intrusion market, and a dual-check detector called Magic. Uniquely they are flush mounted, high end products.

In the access control market we had a lot of different brands serving the enterprise as well as the mid-range area, but we wanted to get something to occupy the entry-level segment.

We wanted a platform dexterous enough to customise to customers’ expectations and be scalable from one door to five thousand doors. That product is called Lira, which has a good price point, is IP based, and is scalable and backwards-compatible with existing solutions – and that is key in retaining historic customers who have been very loyal to us over the last few years, as well as opening up a new area in the market.

We also have a CCTV portfolio with recorders, IP cameras.  This gives us migration from our old brands and positions us at the right price point to compete against people like Paxton and to get into the enterprise area.

IG: How quickly are you rolling these products out?

Alistair Enser: If we take SPC as Peter mentioned, we had a dual-strategy. We had existing customers who we wanted to migrate from our legacy portfolio and a new markets channel segment which addressed what the old portfolio didn’t.

So in the first instance we rolled that out into our core markets such as France and Spain, central Europe, where we already had a very strong footprint, and we saw significant growth over the last couple of years of more than 30% a year.

Then we rolled out into our other regions that may have been historically stronger on access control or CCTV, such as the Nordics. So we’ve gone from effectively zero a few years ago to one of the top three players in the marketplace.

And we’re doing that country by country. With our access control platform Aliro, we are following a similar strategy, although we will launch simultaneously in all markets. We have core competencies in some, where we expect a vast take-up, and then in new markets we can attract new customers.

Vectis iX NVR and NVS

IG: To what extent do decision-makers vary in their approach to buying technology from region to region?

PH: The paradigm keeps changing: are you a solutions provider or are you a product seller? We not only wanted to develop our product but also understand the routes to market.

So in the solutions business they target end users to get their software into the control rooms.  What we were trying to do was cut cost by taking out management layers – reducing more than 600 people to 250 – while maintaining and increasing our investment in R&D – something like a third of those people were devoted to R&D.

So we targeted distributors, wherever they existed, to be our interface with customers in terms of delivery so we could focus more on product.

But it has varied, because some countries don’t have strong distribution like Germany, so we have had to maintain the VAPs in those countries.

Historically our products were at the professional end, where you need a fair bit of technical intervention to make them integrate.  The internal name of our product was Apple because we wanted to get that innovation, the iterative-ness – put it on a wall, press a button, it configures.

We do have to adapt it for each country.

We’ve also had real success adapting our products for global enterprise players like banks. You have to fuse your solution with their own systems, as security often fits as part of a wider network, other protocols.

It’s far easier for us to adapt our access control and intruder products as we go along, whereas before, a system’s analogue architecture made it costly and not very time efficient.

AE: Traditionally markets were parochial with a lot of local players.  We see a real greying of those boundaries; it’s no longer just about selling into Italy or selling into the Nordics or into the UK.

Regulations and approvals are among our biggest challenges. I’d say we’re one of the first and fastest to ensure our new portfolios meet those approvals across the whole of Europe.

You even see some of those smaller, local players working cross-border now.  So businesses in Spain, where the economy might not be so strong in some areas, will take their products to other Spanish-speaking countries.

Magic PDM-IXx12/T

PH: It is a major USP for us. The number of bodies throughout Europe you have to satisfy… and it’s not just getting a rubber stamp. You have to make technical changes. It’s a real USP for us.  We’re one of the few companies now that have full approval for all of our products.  With our competitors there’s often a gap.  Approvals management is just as important as a route to market and as the product itself.

Our product I think is the first time in our marketplace that someone has created a real pan-European and even global product that you can take off the shelf and it meets local standards and customary requirements.

I started off with a board of 25 people, thinking I want to get all their ideas all at once. It was a bit unwieldy but everyone realised that they had to give up some things for the benefit of the whole.

Many companies with our budget would never allow for that to happen. I think that’s why that is quite unique.

IG: Why should an end user invest in your Aliro access control solution?

PH: You don’t know what tomorrow’s requirements may be, but you still have a price point to meet today.  At the small end he can have a product for one door that is lower than the competitors’ price, it has the capability to grow and it looks good.

People are very design conscious these days and our readers are very elegant, colourful, the technology is discrete. It’s also a really good brand name.

And finally, we’re a products company. We’re constantly investing in and dealing almost directly with the customer.

The channel between me, the CEO, and our end user is very small, so you have almost an intimate relationship.  You never get that normally with a company of our size.

Also, the technology allows you to interface with lots of other systems.

AE: It’s also about total cost of ownership and our access control products interface with systems that are 20 years old.  We’re here for the long term, so if you invest in us today, then you’re in safe hands.

IG: Interesting that you mention the design element. We get a surprising number of architects at IFSEC International, because when they’re building a beautiful, elegant building they don’t want an ugly access-control system…

PH:  We’ve always focused on design.

Take detectors: traditionally you get a pretty ugly-looking piece of plastic, often visible at an angle. But architects want flush mount.

We’ve developed a flush mount detector and still allows an arc to identify things that improve performance – and I don’t think anyone has done that. And our card readers look like an iPhone almost.

The latest keypad for our intrusion access is superb. You don’t even need to touch it, and it comes on. It works beautifully.

IG: And what might you say to me as an installer about your products?

PH: I can make you more money – one, because it’s easier to understand, two, it’s intuitive, three, the brand, and four, you don’t have to worry about integration.

Andrew Morgan: we try to encourage you if you are an electrical installer, to move from doing your bread and butter electrical installation to perhaps dip your toe in the security market with a system that won’t embarrass you, won’t demand huge amounts of knowledge and will help you build a strong relationship with your customers.

PH: And you have got a technical support team you can ring up and get an instant answer. We have a really good track record in technical support. We’ve tried to design the product not to need it but there is that failsafe.

That is another thing that other companies have drawn back from in recent times; our CCC target is very good.

IG: Does the term ‘safe cities’ mean much to you?

PH: It does.  Not just in security but in a range of areas we are developing smart tech. Cities is our core target market, so we’re looking at electronic support for cities to save on energy costs, to make sure there is integration so there is no systems monopoly.

We’re the largest installer of security systems in that we have also migrated to join up technologies like fire systems, security systems, comfort systems, energy generation like wind farms, energy production- that’s very much the USP of Siemens.

We have an exhibition centre called The Crystal in East London, which is all about cities. You can play a game where you’re the mayor and you have to harmonise how much money you put into energy versus security, terrorism…

IG: To what extent are there growing opportunities for companies to provide end-to-end solutions?

PH: People often say that if you control the control room, you control the system. In the 90s, if you controlled the software then you also wanted all the devices and cameras – that’s what people didn’t like, because they were totally reliant [on a single manufacturer].

The new paradigm – and this is what Siemens does – is open protocol, so they can interface with lots of different technologies. Because unless it’s a brand-new site, people have legacy products and they don’t want to throw them away.

Having that model you can put in commercial KPIs, whether achieving them with a financial consequence or not. The problem is that customers’ decision-making is quite fragmented, they have different departments – so the technology is there, the commercial model is there, but the thought processes aren’t always there.

AE: Even if our nirvana was to have a one-stop shop and complete system, the market today is demanding that flexibility, so we make our systems open and interfacing to a lot of other systems.  We sell on the merits of what we offer.

IG: If a customer does have a brand new building do they often just buy everything from one manufacturer for convenience?

PH: We were the master systems integrator on Heathrow Terminal 5.  There were too many systems; it wasn’t integrated.  The theory was to have all the systems on one network, but it didn’t work totally because you have other commercial drivers requiring different things.

So quite often there’s a loose specification, but then it all gets ripped out and started again. On new buildings it is very difficult.

AE: Ultimately, who’s the decision-maker? Because the client might aspire to have one thing, but the general contractor or electrical contractor have different drivers.

PH: I have a family connection with the biggest developer in Europe, at Earls Court. Trying even to persuade them to have company to do everything is very difficult, because while security is important, it’s still so low down the pecking order of demands that it’s not even on the chief Executive’s radar.

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