Rivals Sound Off On Avigilon 2013

Over 50 manufacturers answered IPVM's survey today, following Avigilon's revenue doubling announcement. Inside this note, we break down the key claims and color commentary offered about Avigilon, including quite a number of insights into why they think Avigilon is growing so quickly.

Sales Approach

One common theme was about Avigilon's "Take no prisoners approach to sales" with many rivals acknowledging strengths in their sales style. "Their key Sales/Marketing person is a great grand master in Chess/Sales and it shows. A no hold barred fighting match. Winner take all." Another manufacturer noted, "Brian Schmode is killing it!!"

A few manufacturers commented on specific tactics:

• "They are layering sales people in some middle markets which may appear like overkill but they are focusing on vertical market 'specialists' which in North America can be a major benefit"
• Hired sales people with experience / relationships with big end users. "These were sales people that were hunters not account managers call on distribution."
• "Their sales guys are very aggressive and switched a number of my accounts over with high project % support discounts, and strong end user qualified leads passed on to key integrators"

However, some manufacturers allege that Avigilon sales push is unsustainable with one noting, "They have a boiler room mentality on numbers with their sales people and seem to have high turn over in some markets," and another commenting that "Managed with massive pressure that creates a turnover prone environment."

Finally, a few highlighted their "Massive sales investment" and "Market saturation with hiring ongoing everywhere with geographic overlap." Undoubtedly, Avigilon is aggressively expanding their sales team, regularly splitting up existing territories and bringing new RSMs in.

End User Marketing Approach

A number talked about the benefits Avigilon has gained from marketing directly to end users:

• "Avigilon does a very good job of marketing the Avigilon brand resulting in very good name recognition. The general perception of the capabilities of the Avigilon brand is favorable which results in users paying more attention to Avigilon and comparing other product to Avigilon... That means many of the competitors are often in the position of comparing their product to Avigilon which elevates Avigilon in the users eyes."
• "Most importantly... A radically new marketing approach for the security industry that has paid off in spades for end user awareness. Once they have that end users attention, No.'s 2 & 1 above kick in and hence one of the highest close rates in the industry from first touch to final install."
• "Whether you agree with the veracity of it, their marketing campaign is awesome. They even put full page ads in the Economist."

Evidently, manufacturer sales people on the front line are seeing the impact of Avigilon's non traditional / non security outreach.

Integrator Relationships

Surprisingly, few respondents emphasized Avigilon's relationships with integrators. Evidently, most manufacturers do not see this as a powerful force in Avigilon's growth / effectiveness. We disagree.

However, one respondent had an interesting insight / comment: "Avigilon has identified key installers/integrators that control specific geography and vertical markets. They have made them super competitive with pricing etc."

Manufacturers, generally are failing to recognize a huge differentiator for Avigilon - integrator loyalty. Avigilon's integrators are by far the most loyal, which is highly uncommon in video surveillance. We could allege that "Milestone Clubs Baby Unicorns" and Milestone dealers would shrug but, god forbid, you say anything less than praiseworthy about Avigilon and their integrators will protest.

We believe this loyalty is an outcome of Avigilon's limited product availability and no online sales allowed. We cannot think of any other quality, lower cost, end to end solution that offers so much protection for integrators. As two manufacturers did note, "Direct Only .... so there is a assumption of geographic account control" and "My understanding is they also protect their territory, although I've also heard otherwise." This directly addresses the most common integrator complaint of Avigilon's biggest competitor, Axis, that anyone can get the latter's product.

Encoders

A few mentioned how Avigilon markets/packages their encoders.

• "They give encoders away to win the rest of the solution"
• "The architecture and pricing structure with the encoders facilitates a sound migration path for analog systems."

Avigilon has very low cost encoders ($300 or less for 4 channels) and only charges a single VMS license for all 4 channels (see our cost comparison here). This combination is very inexpensive and since they are one of only a few who sells encoders and VMS licenses together, it is hard for rivals to match.

Good Pricing for End to End Offering

Many manufacturers called out that Avigilon had attractive pricing plus offered an end to end solution. As IPVM has reviewed in many tests, this is certainly true, though it is the combination with the other factors above that drive such high growth.

Manufacturer Skeptics

Unsurprisingly, a minority of manufacturers were skeptical overall:

• "Massive growth based on front end spending is not sustainable. Period. 'It stinks. Stinks bad, I tell ya...'" This is pretty clear false though, as Avigilon has been increasing its profitability at the same time (and is solidly profitably).
• "Made their mark when naïve people didn't understand compression. JPEG2000, are you serious?!" Well, they've recently given up the JPEG2000 religion.
• "Massive, seemingly uncapped marketing/advertising spend coupled with acceptably mediocre product offerings."
• "They are counting future orders to be delivered in their sales numbers. Just like Diebold and ADT." They are a publicly traded company so it is highly unlikely they are doing anything against the rules. That said, for any company with re-seller partners they can take steps to push out orders end of quarter to maximize numbers. The question is - why would they need to do this given how well they are doing? This leads to a persistent manufacturer rumor that Avigilon is pumping themselves up to get acquired by a massive company at a massive premium. That would be quite the finale!