Economics Of Third Party Apps Running On IP Cameras Or VMSes

There's a relatively new trend where IP camera manufacturers are offering SW developers easy SDKs to integrate their applications into their HW or VMS (most big IP camera manufacturers acquired a leading VMS provider in the past 2 year).

This should provide a win-win situation where manufacturers provide superior offerings, SW developers get market access and relatively easy product integration and users are able to choose from a wide variety of applications.

I have 2 questions:

1. how do the SW developers earn from all this?

a. Do they need to sell the cameras to users

b. Do they make a profit with each application installment (app store business model)? is so, how will it be priced?

c. Do they get a percentage of the sale made by the camera manufacturer or VMS provider? if so what are the customary percentage?

2. Is it fair to say that over the next 1-2 years we will see a trend of camera manufacturers buying video analytics companies to gain an edge over the competition just as they did with VMS providers over the past 2 years.


It's not that new. Axis has been offering ACAP for nearly 6 years now. In that time, it has not gained that much ground, with Samsung being the most notable recent 'app platform' but with still very few partners.

As for your questions, from what I have seen so far is that the app developers keep 100% of the profits from the app license but they do not get any cut from anything else (i.e., camera or VMS). The app developer typically does not sell the camera or any other hardware because the integrator/user can buy it themselves for less.

As for the future, there might be a few analytic companies bought by I am not sure if it will qualify as a 'trend'. Almost all of the analytic developers are small and could be bought for $10 million or less, so that to end maybe a few camera companies see it as a worthwhile low-cost investment.

That said, there is clearly opportunities for new entrants to come in and build something better off a clean slate.

Thank you John,

How could I access the list of third party apps and prices hosted on AXIS, Samsung and other OEMs?

You mentioned that at the time, this business model has not gained too much ground.

- Do you think things are different nowadays?

- Is there any market analysis on how big this business segment is in terms of number of users and dollars spent (focused on the analytics itself and not the HW and VMS)

- It seems to have the potential for video analytics startups to gain market share and generate sales. Is it a business model which you believe is recommended to pursue for an eraly stage startup or is thr orthodox business model of approaching integrators and VMS providers a better route.

Thank you and I very much appreciate your feedback.

Here is the list of Axis camera application partners - they are by far the biggest. Everyone else seems to have no more than a half dozen partners.

Do you think things are different nowadays?

No.

Is there any market analysis on how big this business segment is in terms of number of users and dollars spent (focused on the analytics itself and not the HW and VMS)

Likely in the single digit millions. There are not many people use these applications.

Is it a business model which you believe is recommended to pursue for an early stage startup or is the orthodox business model of approaching integrators and VMS providers a better route?

If you can get sales people at Axis and Samsung, etc. to actively sell your apps/analytics, then yes but I'd be skeptical about that, as they don't seem to prioritize that overall.

At first, better to target integrators and end users directly, build some traction that way. Also, that would help make the camera manufacturers more motivated to work with you, if you can get yourself into their accounts.