Motorola Solutions Analyst Day: Putting Solutions First
Spent last Thursday with a cadre of industry analysts at Motorola Solution’s annual industry analyst day. This was the first ‘post-separation’ analyst event for Motorola Solutions and the team spared no time focusing on the strengths of the ‘more focused’ organization. One sense that we got was that the organization was clearly emphasizing the ‘Solutions’ aspect of its business. With significant investments in hardware, software and services the company avoided a ‘speeds and feeds’ discussion while drawing attention to a variety of innovative applications across target markets in public safety, retail, manufacturing, transportation and other industry segments (Note: Many of the new product announcements were under NDA and therefore cannot be mentioned specifically).
A couple of our specific impressions and considerations following the event are summarized below:
- Growth goals and sources. Motorola Solutions has a leadership position in virtually every market it participates in – from radios to rugged handheld computers and bar code scanners. While Motorola has been successful at growing in excess of market rates in several of these sectors, thus expanding market share, much of its opportunity will be tied to its ability to expand its served available market. One source will likely be professional services (beyond traditional break/fix), which Motorola Solutions has been investing in of late. The organization was, however, less clear about its growth strategy regarding new markets and applications. Moreover, while much of the growth will come from the enterprise portfolio, many of the initiatives are more closely aligned with government technologies and applications.
- Highly government centric. The government sector clearly accounts for the lion’s share of Motorola Solutions annual revenues and therefore it was not surprising for the executive team to devote a considerable amount of attention towards government markets and applications. However, the results was also that the organizations did not really do justice to the depths at which it operates across many commercial markets including retail, transportation, manufacturing and healthcare, to name a few. Consequently emphasis around mobile computing and data capture innovation by the executive team was kept to a minimum. This very well may have been an unintentional oversight. However, an alternate point of view may be that the traditional Schaumburg and Holtsville businesses still have some work ahead to better integrate these operations.
- Professional services opportunity/conundrum. Motorola Solutions derives almost 25% of its revenues from professional services. Much of this is weighted towards both the government sector and towards break-fix and maintenance services. As many organizations in the markets Motorola participates in look for alternative approaches to acquiring, deploying and supporting solutions (driven in part to shift from a cap-ex heavy to an op-ex model), Motorola is evaluating opportunities for the organization to either deliver directly – or through partnerships – a broader suite of more sophisticated professional services. There is a huge opportunity for Motorola Solutions – with its vast installed base – to become a more central figure in professional services. However, the questions that loom are (1) how it executes this strategy without alienating its already nervous partner/channel community and (2) how it executes this strategy without significantly scaling its manpower.