ADT Business History - Business Chronicler

Table of Contents

The Establishment of ADT
ADT's Growth Story
ADT Videos
- THE HISTORY OF ADT AND ADT ALARM SYSTEMS
- 10 questions with Tim Rader
Where is ADT Today?
Philanthropy and Social Responsibility
- ADT Helps Fight the Pandemic
Controversies
Frequently Asked Questions about ADT Business History

ADT Inc. is a prestigious American security company established over a century ago. It provides homeowners and businesses with smart alarm systems to protect them against burglars, fires, and other hazards.

As of this writing, ADT is valued at $6.64Bn and is the largest security provider in the United States.

Like brands such as Alibaba and Caterpillar, it serves millions of people in different parts of the world. I can’t say it has penetrated the global market as well as these companies since many of its customers are based in the US.

All the same, I believe it’s played a major role in keeping countless individuals safe for many decades. And that, alone, convinced me it’s worth looking into.

So, if you want to discover more about the ADT business history, read this piece I wrote to let you in on its various aspects, including its foundation, growth, controversies, and leadership.

The Establishment of ADT

Like GE, ADT has been around for over a century. This electronic and fire security company was established in 1874. And intriguingly, initially, it wasn’t meant to protect people’s homes and businesses.

So the story of ADT began with Edward A. Calahan, who started The Gold and Stock Telegraph Company after inventing the stock ticker in 1863 with his friend, Elisha Andrews. The firm cashed in on the stock exchange’s need to communicate and created a system to send messages to and from the department.

Then, one day, the founder of The Gold and Stock Telegraph Company woke up to discover an unanticipated nighttime break-in at his home. Devastated, he was inspired to develop a telegraph-based alert system to signal for help in the event of another burglary.

Calahan realized that his neighbors were in the best position to show up if intruders broke into his house. So, he connected his new security system to fifty other nearby homes, making it a residential network to keep all of them safe.

Then, 57 district telegraph delivery firms unified in 1874, leading to the birth of the American District Telegraph (ADT).

ADT’s Growth Story

As the 19th century ended, people began using the telephone. Soon enough, they didn’t require ADT’s services as much as before because they already had a reliable way to get in touch with their family, friends, and business associates.

Determined to adapt to the changes that came with new technological inventions, ADT began to branch into offering other services without necessarily closing their telegraph business.

Signaling was the first venture the company integrated into its growing brand.

Incorporation into Western Union

In 1901, ADT was consolidated into the Western Union company. It split up its two lines of business to create the messenger and signaling enterprises.

Eight years later, AT&T Corporation (initially known as American Telephone and Telegraph Company) obtained control over the Western Union and ADT. This was conveniently beneficial to the latter because it enabled it to explore other areas of business, including security and fire alarms.

I think it’s safe to say that ADT flourished after that.

By 1920, the company had begun utilizing the “Roundsmen”, its first proactive monitoring system that involved inspecting customers’ homes at night to help keep robbers at bay before they attacked.

Between the 1920s and 1940s, ADT made the most out of modern technology to expand. It spearheaded the world’s first automated burglar system and introduced a self-operating fire alarm system, allowing immediate responses to fires.

Then, in the 1960s, it became a publicly held company.

ADT Becomes a Monopoly

In 1964, ADT was declared a monopoly. After all, it had an 80% market share, solely providing alarm and security services to a tremendous portion of the United States.

At the time, no other security companies were serving several cities, including Memphis, New York City, and Tennessee.

And, seemingly, this was a part of ADT’s game plan.

The company strategically ensured its services were priced way below those provided by its competitors, pushing them out of business. It would later increase its service fees after eliminating the competition.

As soon as other companies and customers figured out what ADT was doing to ‘flourish,’ they turned to anti-trust regulators and took the organization to court; by then, it was an independent brand. Eventually, it was found guilty and compelled to develop a standardized, publicly published pricing model to allow for fair competition.

More Expansion

In 1974, ADT disposed of its telephone network-based call boxes and replaced them with microcomputer-based security systems, which were ideally more dependable.

In the 1960s, ADT continued to transform its protection services and even launched Safewatch residential systems and Unimode fire systems. Today, they have helped the company cement its authority as one of the best security companies.

Hawley Goodall

Hawley Goodall acquired ADT in 1987. Then, Lord Ashcroft, now among the UK’s wealthiest entrepreneurs, owned the firm. And he’d just bought Crime Control Inc., the fourth-largest security firm in the US at the time.

These two acquisitions made Hawley the leading security provider serving the US market.

Ashcroft merged ADT with Crime Control Inc, renamed them ADT Security Systems, Inc., and decided to concentrate on offering security services.

As 1987 drew to a close, Denmark-based ISS A/S bought ADT’s North American-based facility services.

ADT expanded quickly under its new leadership. As a result, 1994 was a great year for the company as it gained 180,000 new clients, enabling it to hit the 1M customer mark.

Tyco

In 1997, a reverse takeover saw Tyco International Ltd. become the new owner of ADT.

Lord Ashcroft sold a vast majority of his company stock and became a part of Tyco’s board of directors.

ADT Under Tyco: Tyco International obtained Broadview Security in early 2010 and merged the company with its ADT division.

A year later, it announced it was splitting into three organizations – ADT was one of them.

In 2012, Tyco introduced ADT as an independent public company again. And in 2014, it bought Reliance Protectron Security Services from the Canadian residential and commercial services company Reliance Home Comfort.

Apollo Global Management

In 2016, Apollo Global Management spent almost $7Bn to acquire ADT and merged it with Protection 1, another full-service security firm.

Three years later, the Canadian conglomerate Telus Corporation bought ADT’s assets in its home country and renamed them Telus SmartHome Security in 2020.

Nevertheless, ADT has made all efforts to grow its brand. In November 2021, it shared it had attained Sunpro Solar, which now goes by “ADT Solar” as its subsidiary.

ADT Videos

THE HISTORY OF ADT AND ADT ALARM SYSTEMS

ADT may have started as a telegraph messenger service, but it’s now known for its stellar alarm systems, as this video explains. Years ago, the company leveraged call boxes that enabled guards or watchmen for other firms to signal for fire department help, the police, and even let the ADT monitoring office know everything was alright.

If a district office failed to receive a scheduled signal, the company’s rules required it to assume something was wrong and send help immediately. If you ask me, this shows that it has always had its clients’ best interests at heart. Today, ADT’s culture hasn’t changed since its top priority is still to keep its customers safe using innovative technology.

10 questions with Tim Rader

If you’ve been keeping tabs on ADT like myself, you may already be aware of Canopy, which this video is about. It’s a $100M-worth venture it started working on in early 2022 in collaboration with American automobile manufacturer Ford to utilize AI and sensors to minimize car theft cases.

The Canopy security product is set to be on the market in 2023.

Where is ADT Today?

ADT has over 18,000 professionals and at least nine monitoring centers as of this writing. In addition, its customer base is considerably large as it serves more than 6M customers across the United States.

Over the years, the controversial organization has dealt with its fair share of complications and legal disputes. Nonetheless, I admire how it has managed to remain at the top, earning its spot on the short list of the best home security firms in the US.

ADT capitalizes on cutting-edge technology to enable its clients to automate their homes and stay safe at all times, guaranteeing their satisfaction. It has also partnered with various companies, including Uber (co-founded by Travis Kalanick) and Google, to deliver more efficient protection services.

Notably, the company has a mobile app that allows them to remotely access their lights, scenes, and other connected smart devices.

ADT’s current president and CEO is James D. DeVries.

ADT participates in corporate social responsibility (CSR) through the Always Cares program, designed to help its workers give back to their communities.

The ADT Always Cares program previously supported community helpers, including paramedics, the police, and firefighters. It also helped to offer meals via local food banks, guide at-risk children and build homes in collaboration with Habitat for Humanity.

In addition, members of the initiative collaborated with The Arc of Palm Beach County to offer social services and educational facilities to individuals living with disabilities. Besides, they partnered with Volunteer Florida to provide emergency management and volunteer services.

ADT Helps Fight the Pandemic

Like companies such as Apple, co-founded by Steve Jobs, and Amazon, established by Jeff Bezos, ADT helped the world fight the Covid-19 pandemic, which hit the globe in 2020. Through the Always Cares program, it donated $1M to support 100+ non-profit organizations in the US and Puerto Rico, hoping to assist those affected by the pandemic.

Notably, the money was given out in $5,000 and $10,000 increments to non-profit companies in areas where ADT employees reside and work. The workers were tasked with identifying the organizations that needed the financial support more than others,

Gleaners Food Bank, which has been operating since the 1980s, was among the first recipients of ADT’s $10,000. Shortly after, it disclosed that it was grateful for the financial help and would use it to provide food for those struggling to feed themselves and their families during the pandemic.

Controversies

It’s not rare for companies to stir up controversies; I’ve seen it with GE, Beyond Meat, Alibaba, Caterpillar, and others. Here are some ADT-related occurrences that have aroused public interest and invited much criticism.

Former ADT Worker Hacks into Surveillance Systems to Spy on Women

In 2021, Telesforo Aviles, a former employee of ADT, confessed to hacking into the cameras of over 200 customers, primarily hot women, to watch them undress and have sex with their partners. Worse, he didn’t commit this heinous crime once; he accessed the surveillance feeds more than 9,600 times over four years.

Notably, Aviles’ victims weren’t random. He took time to identify the homes of the attractive women he spied on for his own sexual gratification. Sometimes, he alleged that he had to add himself to their respective accounts to check if their security systems were functioning correctly.

In other instances, he didn’t tell the ADT clients that he was adding his email to their accounts, avoiding unwanted suspicion.

Lawsuits

Florida-based ADT faced three federal lawsuits last year related to the data breach. As per the legal proceedings, the company got in touch with the affected customers in 2020, telling them that one of their workers had violated their privacy for years.

According to the lawsuits, ADT didn’t uncover the data breach. Instead, it all happened by luck, after a customer called to report a technical issue that led to the shocking discovery. Some affected individuals blamed the security company for failing to monitor their accounts as well as it should have.

One victim claimed that Aviles didn’t just access her home cameras. He also hacked into her parents’ house over 70 times to view her bedroom, where she slept as a teen.

The 200+ customers whose cameras were hacked into and most members of the public were disgusted by Aviles’ betrayal of trust, and I think they had every right to feel that way. Accessing the surveillance feeds of those who bank on you to keep them safe is wron,g especially if you intend to watch them naked or enjoy intimate moments with their lovers.

One of the female victims told the judge that she was sickened by the thought of Aviles watching her and her young son naked.

Aviles was sentenced to over four years in prison after pleading guilty in 2021.

Did ADT Try to Pay Off Victims?

I should tell you that before the lawsuits, ADT tried to pay off Telesforo Aviles’ victims in exchange for their silence. One customer revealed that it initially presented her with $2,500, and when she said “no,” the organization upped the offer to a whopping $50,000.

From my perspective, this is unethical corporate behavior, but it’s not surprising at all. If a company’s reputation is at stake, it’ll do anything, including bribing people, to prevent the public from discovering the truth.

ADT Sues Ring

In 2021, ADT was involved in a trademark dispute with Ring, the Amazon-owned home security company founded by Jamie Siminoff in 2012.

ADT alleged that Ring’s use of a “strikingly similar” blue octagon design made it hard for their customers to distinguish between the two companies. And some were even convinced that they were affiliated.

Additionally, ADT accused Ring of trying to sow the benefits of its goodwill, and its excellent reputation solidified after decades of being in the security industry.

After checking out the two symbols, I was inclined to agree with ADT because Ring’s outdoor sign looked like a copy of the Florida-based company’s design.

In its lawsuit, ADT wanted the federal judge to order Ring to pay cash compensation and stop using a similar symbol for its products.

The Settlement

ADT settled its legal dispute with Ring in 2021, with the latter promising to release a new different design.

Both companies shared that they were happy to have reached an agreement but didn’t discuss the monetary amount involved.

It’s notable that this wasn’t the first time Ring and ADT bumped heads. In 2017, ADT sued Ring again, alleging it had gained from its trade secrets after attaining a firm ADT had invested in. The two organizations settled the lawsuit in 2018 for $25M.

Frequently Asked Questions about ADT Business History

Question: When did ADT launch its mobile security network?

Answer: ADT introduced its mobile security system in 1999.

Question: Did ADT build homes in Colorado?

Answer: Yes, in 2022, ADT helped establish homes for two families in Colorado and installed its smart security and rooftop solar system.

Question: Which are some of ADT’s top competitors?

Answer: As of this writing, ADT is competing against various companies, including Frontpoint Security, Vivint, Hikvision, and Alarm.com.

Question: Did State Farm invest in ADT?

Answer: Yes. In 2022, State Farm announced it invested $1.2Bn in the home security company, acquiring a 15% ownership stake.

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Jodie Chiffey

As a fellow business owner and business strategist, Jodie shares valuable insight into the strategies and tactics business owners can use to increase their growth.