Subscriber Discussion

Do VMS Only Manufacturers Have A Tough Time Ahead?

I worked for a VMS only manufacturer for many years before moving on.

Now they have decided to float on the stock market - maybe to raise revenues.

My thoughts now are - With so much local and global compettion for VMS products, are we seeing the beginning of the end for manufacturers that only have software to offer as a platorm. Do manufacturers need a mix of hardware and software to attract profit margins and revenue growth going forward?

If this is the case are we moving to the days of 'Open Standards' products supplied by single manufacturer suppliers?

I think that this is important for each company to understand as it affects where R&D is directed.

I think the answer is yes and the moves by most of the software 'only' manufacturers to add hardware lines proves that.

I am not convinced how competitive those companies can be, especially since they are not hardware specialists and most are buying in small quantities.

Overall, the VMS market has become very boring and not simply because no one is doing anything major but because there is not much more to be done (save for VSaaS which continues to be a disaster in the professional market).

I do not buy into the OP's premise.

I get 'why' software-only VMS providers would want to offer 'end-to-end' solutions, but how can one company be expected to 'be the best' at everything?

"I am not convinced how competitive those companies can be, especially since they are not hardware specialists and most are buying in small quantities."

I agree with that statement.

And to add to that thought, I think that companies who do try to 'do it all' (i.e. not focusing on what they do 'best') generally end up with a suite of mediocre products. Nobody can be an expert at everything, so why try?

An open-platform, software-only provider can focus on what they do best (and ways to do it better, stonger, faster) - and rely on their technical partners who already do what they do best).

So - rather than trying to engineer kick-ass products across the entire spectrum, the software-only provider can focus on engineering their software to integrate with those 'other things' - which increases the strength of the software-only product (and the scope of what their software can do) - rather than trying to increase that value by offering heterogeneous components.

Ok, undisclosed VMS manufacturer, tell us what great new solutions software only VMSes can deliver by focusing just on software? I think part of the problem is that 90% of the market is already well served by the VMS features already available.

What new features or improvements can a software only provider deliver for the average user with 12, 24, 48 cameras that are not already available and will materially improve their use?

I'm not saying that software-only providers should be looking to develop 'new' solutions to materially improve their use.

I am making the point that focusing on integration with other manufacturers products will materially improve it's use.

Seamless integration with as many hardware providers as possible should increase the value of the software-only product - regardless of the camera count.

By hardware providers, you mean cameras or servers or both? Regardless I am not sure how that provides enough meaningful differentiation. How does the VMS software only provider make it clear that there product is 2x, 3x better than the low cost box alternatives rising up?

If we are going to segment the industry, I would have to agree that applications in the lower camera count segment are the least suited to capitalize on the integration of numerous components.

In this segment, I agree that my comments above would have less merit.

In general, I think 'integration' becomes more important when the camera counts are higher.

I agree. The challenge though is that you then have a flight to the enterprise market (where all the VMSes move up market with higher end features). There's just not enough enterprise customers to support all the mid tier VMSes going in to that narrower market. yes/no?

Can't argue with that.

But mid-tier providers - with their value proposition being eroded by all that you and the OP mention above - don't really have any other direction to go.

Also, all the higher-tier providers are attempting to capture more of the mid-tier space (again, the only direction they can move) at the same time that these new interlopers are trying to capture the mid-tier space from below. It's not a good time for mid-tiers.

imo, differentiation (which, as you point out is getting much tougher) is even more important than when the number of providers was lower. And I think this is a normal 'thing' - something that is not specific to the surveillance industry.

I agree with the OP only in that there will certainly be some contracting (as opposed to expanding) of the industry - simply because there are so many providers basically offering the same stuff (your point, sort of). I think the dynamic is the same whether you are a software-only provider or a camera, or server-only provider.

Will it be easy to differentiate? Hell, no.... it is much harder now, and will not get any easier. Those that can figure out how to will survive - those that don't, won't.

One avenue for growth that is often overlooked by the typically white/male (mAnglos) stakeholders at these firms, is that of the untapped potential of the domestic caretaker market which since often maligned and misunderstood remains mostly unpenetrated.

Though usually dismissed because of their feminine association, nanny-cams and their assorted ilk are beginning a growth spurt that could be capitalized upon thru targeted marketing approaches coupled with interface enhancements aimed at improving the caretaker experience.

Nanny cams, baby cams, kid cams, pet cams and other residential applications are definitely a big big growth market. Dropcam, for instance, is certainly doing well there. There's lots of companies like Lorex (now FLIR) and D-Link who have establish presence, etc.

The problem for the professional VMS firms is that almost all the features and optimizations of a software only product are not relevant to the residential market - where ease of use connecting 1 or 2 key cameras is key, and selling one's own cameras is essential.

"but how can one company be expected to 'be the best' at everything?"

This argument gets thrown out a lot, and I don't agree with it.

First off, I would look at the current crop of VMS-only companies and relative to each other you might be able to label one of them as "best", but overall none of them seem to be categorized as clearly the "best" in terms of just overall product elegance and reliability.

The security market in general may not ever allow for an end-to-end "best" VMS. Do mall security cops have the same needs as monitoring stations? Do schools need the same features as subway stations? It's hard to make a universal "best" system.

Most of the end-users I talk to in the mainstream markets aren't looking for the "best" system, they're looking for the most cost-effective solution to their problem. They value reliability, ease of use, and overall image quality. All things that are not that hard to achieve (not that you would always come to this conclusion looking at some of the mainstream players).

On the topic of reliability and cost-effectiveness, there are significant advantages to what some might deem a "less than the best" manufacturer that provides an end-to-end solution. The components should be tightly integrated, and any major problems can be handled by a single tech support group, no playing round-robin support.

My personal opinion is that the stand-alone VMS companies are going to have a harder and harder time maintaining relevance and market share. That model worked 10 years ago when IP video was less mainstream and you DID have to focus on a narrow product in order to build something successful. These days I think the standard cameras are almost commoditized, there is no reason NOT to offer an integrated camera, since all the major R&D stuff is pretty much worked out. H.264 is the de-facto standard (maybe that will migrate to h.265?) and recorders are fairly well distelled also. So, why NOT become a full-feature company?

Milestone and Axis should just merge and get it over with. Genetec should buy IQInvision, or some other camera company they could get at a discount.