Genetec and low price are not two terms frequently found together. However, in a surprising and perhaps controversial move, Genetec has won a Panama Canal project being, all other bidders with a direc...
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Genetec Wins Panama Canal With Direct Low-Bid
JH
John Honovich
Apr 27, 2018UM
Undisclosed Manufacturer #1
Apr 30, 2018I voted no, but as an integrator that is strictly going by party lines. I'd be interested in the contrarian viewpoints: dealers who might accept a the manufacturer doing a direct deal in certain cases and manufacturers and end users who might feel sticking to the channel is more appropriate.
U
Undisclosed #8
May 01, 2018UI
Undisclosed Integrator #12
May 25, 2018As a large end user not being able to buy direct has done nothing but hurt our working relationship with integrators. We have 5-6 FTEs that are Genetec certified. When a new project is done we have to buy licensing through an integrator who tacks on line items in order to make their money which is fine. However, because of these increases to the cost instead of us configuring and installing the software we simply leave them to do it to our standards. We have clearly defined standards for configuration going through every option we need done, naming, description, stream settings, etc. When done incorrectly we require it to be addressed and brought back to our standards. This is not good for anyone and we could complete work much quicker if we did it on our own.
Final point, to get around this we found a "value added" reseller that gives us their price +2% for all Genetec hardware and licensing still cutting the integrators out of the solution.
Sean Nelson
Apr 30, 2018Ouch, was it determined that any of the competing bids were also quoting Genetec?
UM
Undisclosed Manufacturer #2
Apr 30, 2018The price is due to the fact that this was an upgrade of existing Omnicast licenses.
As far as I know, it was an old DV Tel system. Funny how Genetec still think of DV Tel as an Omnicast OEM
Lynn Harold
Apr 30, 2018Depending on the version of Omnicast, that would be a true statement (v3.5 and earlier, I believe). What's harder to believe is that the security at the Panama Canal was running something that ancient, and that no one was able to convince them to upgrade sooner.
PS
Paul Shah
Apr 30, 2018Is this the first deal Genetec has done directly?
UM
Undisclosed Manufacturer #6
May 01, 2018While I cannot confirm, Genetec reportedly sold direct to a very large mining company for iron ore & nickel in Brazil named Vale do Rio Doce.
UM
Undisclosed Manufacturer #3
May 01, 2018No, and I’m sure it won’t be the last. [IPVM: Redacted]
JH
John Honovich
May 01, 2018I've redacted the reference to the 2 specific customers above since Genetec denied selling direct to them, explicitly, and we have no evidence to the contrary.
Happy to cover / publish on this but need evidence, info@ipvm.com or john@ipvm.com
UI
Undisclosed Integrator #4
May 01, 2018Motorola is watching.
UI
Undisclosed Integrator #5
May 01, 2018My experience with Genetec in Canada is that they are very supportive of the Integrator channel, including the procurement of licenses only.
Perhaps Genetec in other countries have different go to market strategies.?
AB
Alexander Bakke
May 01, 2018Why would anyone say yes, even if you are a manufacturer?
JH
John Honovich
May 01, 2018Alexander, good question.
So far, with 147 total votes, no is winning with a commanding 83 to 17. Among just integrators, 100% of votes are no. Among just manufacturers, it is 73% no.
Why yes? I think the most typical reason is that it's easier to win deals, the manufacturer can control their own fate and not worry about navigating markups/actions of others. Of course, the opposite site is that it damages the loyalty / commitment of their integrators 'partners'.
Attila Szűcs
May 07, 2018There are some other reason why a manufacturer doing this, and why this is good to a manufacturer/distributor/end user. I'm just thinking about writing down the huge amount of reasons... And the price is only the last.
Ross Vander Klok
May 02, 2018AB
Alexander Bakke
May 02, 2018Ross, may I ask what your motivations are?
Do you forsee cheaper pricing from this approach (which in this case it obviously is), more direct contact with the company behind the solution, or anything else?
Ross Vander Klok
May 02, 2018Absolutely cheaper pricing and I have gone into detail about this in other posts. Without getting into too much detail here my reasoning is pretty clear-cut.
Large end users with an experienced internal Security team, an IT team and a facilities team are more than capable of installing, setting up and managing any/all CCTV systems on their own. The question then becomes is it cheaper to have the internal staff do it or to outsource it. In my experience, the answer has been internal roughly 75% of the time.
I am not sure how to go back and find all those posts, we have been over this and argued it multiple times on IPVM over the years. If you want more detail, by all means, take a peek at some of those strings.
UI
Undisclosed Integrator #12
May 25, 2018Alexander,
As a very large end user it just boils down to dealing with integrators. My team manages the day to day operations of Genetec, we design solutions for our customers, and are very capable of configuring the software, we maintain certifications, have regular meetings with Genetec staff including sales and engineering. Buying direct for us is more about avoiding the hassle of integrators than saving a few pennies. We can get the work done faster without involving others. Unfortunately, this does not sit well with integrators so in an effort to protect their partners Genetec will not sell direct to us even if we purchase more than some of their partners in our region. We have since negotiated and worked with a partner that sells to us for 2% above their cost so we are able to save the money and get rapid response, partly due to our fully outlining the quoted items to them upon request including part numbers.
This is not an agreement we could get even with the largest of integrators. Note that the larger they are the more bonkers their pricing seems to be. We can spend weeks going back and forth over quotes because they want to charge at or above MSRP for everything and then still want, real numbers here $17,740 to install 5 cameras. Note that cable is to be ran by our electricians and the cameras are being 3 put up on 20' poles and 2 on buildings. Integrators know that we cannot buy direct from software and hardware manufacturers, they see our name, and then they charge tremendous amounts thinking we will not check the price and not knowing that we have internal team of 10 people, previous integrator installers, integrator sales, security engineers, project managers, etc that work to ensure it will be spec'd appropriately and at a reasonable cost.
Long rant. TLDR Integrators charge more than they should. We know it, they know it, of course we try to cut them out as much as possible.
NOTICE: This comment has been moved to its own discussion: Integrators Charge More Than They Should. We Know It, They Know It, Of Course We Try To Cut Them Out As Much As Possible.
UI
Undisclosed Integrator #13
May 30, 2018Not all integrators, in fact I would say none that are truly worth engaging, sell to the end user above MSRP. In fact, I believe that an integrator is a true partner to the end user, and that it is the job of the integrator to develop the partnership between the end user and the vendor, and to develop an open dialogue of trust. I know that I have that relationship with my end-users, and I am comfortable saying that if that is not the case, then the integrator and end-user are not a fit. I know there are extremes on both sides, and it seems that we always try to highlight those extremes, bad or good. As in any relationship, there are good and bad situations, but the true value of an integrator is seen in how they handle the bad times with end-users and vendors and not how well they do when everything is "fine". If the perception of my end-user is that all I want is the money and bring no value, then I can tell you I will walk away every time, no matter the size of the opportunity.
UM
Undisclosed Manufacturer #1
May 30, 2018I would agree with most, except for the part about MSRP. It depends on the product. For example, if the product is Axis, you're going to have to sell at close or maybe even above MSRP to make any money because of the small reseller discounts.
BH
Brian Havekost
May 02, 2018Thinking of a global provider in a global market. Is there an opportunity where the local integrator pool does not have the means to bid a large project and it is a project that the large, international providers aren't going to bid? Well, in that case, the manufacturer can be seen as supporting the local integrators.
I voted No. But it is hard to say that a manufacturer should never bid direct.
I think that a manufacturer should not bid direct if there is at least one of there integrators that is capable and willing to go after the project.
Christopher Uiterwyk
May 01, 2018Security integration requires an ecosystem of partners where layers of competency come together to delivery a successful project. Snubbing distribution and integrators comes from a position of arrogance and greed.
UM
Undisclosed Manufacturer #7
May 01, 2018This would be a pretty big break from the consistent messaging of using the integration channel exclusively. If it turns out that it is true then that would have a major impact on our long term partnership with them, as it would with any manufacturer or distributor that does sell direct (not the end of a relationship, but a definite change).
JH
John Honovich
May 01, 2018General note: We are interested in covering large deals, especially when they are sold direct. We prefer to have documented evidence, like in the post above, to have proof. Email us at info@ipvm.com or john@ipvm.com
Jon Dillabaugh
May 01, 2018I voted yes because I don't want to be hypocritical. I don't want anyone else telling me who I can and can't sell to, so I won't assume to do the same.
If one of my clients is better served by the manufacturer direct, so be it. Why force my services on anyone? I would rather win on the merits of my work than rules that say who has to buy where.
Anyone who is mad about this should have worked harder to stand out and give a reason why they should have been chosen instead. If you feel like you got burned by your partner (likely so with the low pricing), time to let that bridge burn and move along and find another partner who is willing to keep you in the deal.
NP
Nils Petterson
May 01, 2018The Panama Canal is a very demanding customer so we believe they will loose money on this deal.
per example the other supplier of cctv equipment for the ACP is servicio tactico de seguridad bid on item for the support $ 80,423 and Genetec 22,351
and this company is working closely with the ACP in other cctv project and know exactly why they charge $ 80 k for the yearly support on site 24 x 7 we really don't know how Genetec will comply for $ 18 k from Canada.
also the supplier of the ACP cannot promote the reference of any installation,
U
Undisclosed #8
May 01, 2018JH
John Honovich
May 02, 2018Update: we asked Genetec about their position on selling direct. Their response:
The integrators who make up our channel partner program are central to the Genetec business model, and vital to our continued success. There has been a very small number of direct projects in our history (less than 0.3% of our global end users). And when these have happened they have been with highly complex clients, often global, where we have taken a lead and then subsequently worked with integrators to either make the projects happen or to do extension business (unification with ACS, Mission Control, etc.). We undertake these projects very carefully and rarely.
I asked a follow up this morning about the 0.3%, specifically what percentage of revenue this makes up (i.e., since they are global end users they must represent a disproportionately higher percentage of revenue). If they have any feedback, I will add.
UM
Undisclosed Manufacturer #1
May 02, 2018I was thinking that myself. 0.3% of customers may not seem like a lot unless it means 10% of total sales volume or revenue. I'd be surprised if it was that much or more, but I agree the clarification would be nice.
U
Undisclosed
May 02, 2018I learned long ago (in the 70's, with Data General) that there are sometimes "major accounts" that work directly with the manufacturer. Now a wise manufacturer will structure such deals that the normally incumbent channel partners aren't getting zinged. There is too little information here to identify what happened IMO. If I were empowered to know about the structure of the deal I would ask...
-- were they bidding against their channel partners with no warning.
-- did they do something to include the channel partners in the bid (let them resell a boatload of PS time for the install, for example.)
-- do they have a "major accounts" process so that channel partners have rational visibility into when they are or are not going to be able to bid on work for "large" clients.
So IMO yeah they could be jerks about this but I don't know that, they could have been behaving reasonable.
Remember also this is Panama, where "normal behavior" includes bring the cops to throw Donald Trump's emplyees out of they hotel you just bought. After calling in the US Marines for a non-combat operation that one time...) Did you know that soldiers who participated in that were only in combat for too short a time to count for combat experience? "I got asked to go to a meeting but they said bring my combat shotgun" or something like that...
UM
Undisclosed Manufacturer #1
May 03, 2018I don't like the idea of our manufacturer partners dealing direct, either. But we're a US based company that did an install in Panama. It was telling to me that we as a company in another country were one of the few options they had. I cannot go into detail about the job or the client, but I will say the labor was pretty much 3rd party local general low-voltage labor from an fairly large established company in that region, and we pretty much just sold the system, supervised the installation done by the 3rd party labor contractors, and did the config and training on the system.
UI
Undisclosed Integrator #9
May 04, 2018If we were a Genetec dealer, which we are not, we would drop Genetec from any new projects immediately and put our loyalty into a true partnership. Instead of helping a Genetec dealer win the Panama Canal Project, they simply cut the legs out from under their partners and sold it direct, and likely at better than dealer pricing!
Fair Game? How would Genetec like it if the tables were turned and a certified Genetec dealer, who was given a huge project to bid by Genetec, switched it over to Geutebrück, Milestone or OnSSI? They would terminate that dealer partnership so, why should dealers tolerate this behavior?
Whether they make money or lose money on the deal is irrelevant. It is BS when any video manufacturer sells direct, no matter what the circumstances!
No Excuse!
As for "Motorola is watching", direct to the customer is and has always been their core business model so,... stand by!
UM
Undisclosed Manufacturer #10
May 04, 2018I work for a manufacturer and I voted 'no.'
However, there is something else to consider here; I have personally been to the Panama Canal twice over the last 10 years to help them clean up the shoddy work of integrator's. There are a lot of very capable integration companies out there but there are also companies that completely blow it - which in many cases can make the manufacturer look bad. Both times I went down there the integrator was blaming our equipment even though the issues were due to installation/configuration - my job was not just to fix the problem but help repair the relationship with the Canal. This is not the only example either; I have been to airports, nuclear power plants, government buildings in DC and more under similar circumstances.
Even though I voted 'no' I can understand why manufacturers may want to go direct in some cases.
DL
David Lieberman
May 07, 2018If integrators sign on with you because you represented to them that you sell through them, then you have a moral obligation -- whether or not a legal obligation -- to adhere to that business model.
Further, I believe that if the mfr keeps the largest transactions for itself, eventually the threshold for "largest transactions" will drop, leaving just the "crumbs" for integrators.
UI
Undisclosed Integrator #11
May 09, 2018I am not sure this is new news but it does appear that Genetec is taking more risks going direct in recent times as well as making integrations with other providers more difficult. We dropped Avigilon years ago because of this same trend but I can say that we have personally met with many municipalities to discuss projects to find that Genetec has been dealing with them directly on software and LPR deals. In response to one post above, we in all cases have not, however, seen any price savings. The design is often built to maximize go forward support and licensing costs and resulted in that municipality being locked into a very expensive solution with high switching cost - which is understandable for a software provider's interest versus an integrator that is looking to work with them on several competitive projects for years to come. We have had a much better experience with Milestone respecting these lines but curious if there have been any horror stories there from any of you? John - appreciate your posts. I think it is important for all of us integrators to understand if it is a few greedy sales people or a corporate strategy and if it is the former that Genetec will make it right. Personally I am wary at this point of registering projects with them that aren't publicly marketed.
UI
Undisclosed Integrator #12
May 25, 2018I can say that at least in the US the Genetec sales team were not willing to break their selling only to channel partners agreement for us, nor other businesses with similar revenue over $100B, global reach, and spending on security. They did point us toward some channel partners that they know sell for cheaper to users that are low demand high spend but that was they best they would do. Note that our security group is an entirely separate company from our parent company and not even named in a way that would lead you to believe who our parent company is and we were still told no. Trust me we tried hard to get around it with no luck. To my knowledge and that of my peers at other large businesses in the US we have had no luck buying direct.
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