Was Creating ONVIF A Wise Decision For Axis?

Formed in 2008 by Axis, Sony and Bosch ONVIF has been, by most estimates, a successful standards initiative, achieving mostly what it set out to do.

But has it been successful for Axis itself?

  • Do you think they regret it?
  • Did it cut short its golden age of high margins and market clout?
  • How do they feel now about its 'success'?
  • What would have happened had they opposed all standards?

Given the structure of IP video systems some sort of standardization of the basic protocols was inevitable. For Axis, it was probably best to be an active part of that process than to ignore it or try to block it.

They key point that needs to be remembered is that PSIA came first.

Axis didn't wake up one day and say "Hey standards are great, let's do this."

PSIA started the standards effort. ONVIF was clearly a response / counter to PSIA. Indeed, in 2008, PSIA clearly had a big head start, see: Will ONVIF or PSIA win the IP Camera Standards Battle? but by 2010, it became clear that ONVIF had overcome that and won.

So they might regret standards ever happened but it was probably better that they controlled it rather than allowing a rival group to dictate standards.

Better than allowing a rival group to dictate standards.

True. They certainly got out there ahead of the curve.

I feel that if they had done the typical evil corporate thing and joined PSIA as subterfuge (heel-digging), that they could have derailed or at least delayed adoption by several years. And in that time had some of the most profitable years ever. And still largely getting their way with regards to the ultimate standard.

Don't get me wrong, everyone else is certainly better off because of it, but it was quite a gamble, as you opined back in the day. Now, in retrospect, I wonder if they think it was a gamble that paid off.

"if they had done the typical evil corporate thing"

Axis is not evil. There are other companies in the industry that one could argue that for, but not Axis.

Short of trying to blow up PSIA (risky, unclear that it would work), controlling ONVIF was the best thing to do. And listen, the conspiracists would argue that all the flaws in ONVIF (using SOAP, VMD support problems, PTZ control issues, etc.) are ways Axis benefits from a widely used but imperfect ONVIF implementation.

Let me take 'evil' off the table before it gets out of hand; it was not meant in a some absolute moral sense. I was only saying that there were other strategies they might have employed, like promoting/strengthening VAPIX and slowing the adoption PSIA, instead of full speed ahead for open standards. Like if they had actually been hesitant, unwilling and cautious, the way you yourself had feared initially back in 2008 when the decisions were apparently being made:

Because of their market share and their vast partner program, Axis has the ability to drive the standards setting process. What I question is their willingness to take steps that could undermine their advantage in being the de facto IP camera standard. If they delay or work slower than PSIA, this provides a clear opening for PSIA to build support around their specificaiton. To date, ONVIF has clearly proceeded slower and with less openness than PSIA. My speculation (and it is only speculation) is that Axis is being cautious about standards development and the potential negative business impact. I also think it's possible that given Axis' continued slowing growth that Axis could hesitate promoting a standard that might hasten that growth decline.

I understand you feel that driving ONVIF was the best move, but they certainly had others.

If I had to tighten my statement a bit, I would say had Axis not driven ONVIF and instead promoted licensing of VAPIX from the start, that their balance sheet would look better today than it does.

What sales/opportunities did ONVIF drive to Axis' bottom line?

It certainly cost them a lot on the expense side, but it drove enormous sales for their competitors.

I think it's not clear from a purely financial standpoint they are better off.

"I understand you feel that driving ONVIF was the best move, but they certainly had others."

I am not declaring anything 'best'.

It was certainly a reasonable move at the time. I am not sure how incrementally ONVIF hurt Axis anyway. Most of the price damage has been driven by a few manufacturers anyway (who have been empowered by the Chinese domestic market) and those price points would have been hit with or without ONVIF. Also, there's HD analog, which also would have came regardless.

I am not declaring anything 'best'.

Ok, but it sounded like you had:

Short of trying to blow up PSIA (risky, unclear that it would work), controlling ONVIF was the best thing to do.

That statement taken literally means second best. I'll rank it for you:

1. Blow up PSIA


They had to do something about PSIA. The worst option would have been to do nothing and hope PSIA failed on their own.

Again, though, the rise of the Chinese and the development of HD analog would have happened with or without any IP camera standard.

Regardless of your ranking, you said something was best. Then you said you are not declaring anything was best. Maybe you didn't realize I was echoing you... Whatever the case it doesn't matter to me so let's just agree to drop the semantics, ok? :)

Can you assist with these questions, or explain why they are not relevant to the OP?

What revenue did Axis gain due to ONVIF?

Help me out with this one, B says marketing benefits and goodwill, anything else?

What revenue did Axis lose due to ONVIF?

Reduced margins due to competition from Asia. Yes I know Analog HD is also responsible to a degree, but ONVIF accounts for at least that much pressure. And in the early days there was no Analog HD.

What revenue did the Asian Mfrs gain due to ONVIF?

I would say a lot, since it opened up all the major VMSes to their products without needing direct integration. And back then they were way down the integration list.

Before ONVIF the IP camera market leader was clearly Axis, where were Hikua in 2008? Today it's Hikvision, Dahua and then Axis. And yes I think that the Chinese domestic market is the first part of their story but they didn't affect Axis' margin until the second part of the story, when their ONVIF cameras were able to be used in place of Axis ones.

To summarize, if Axis had continued on its VAPIX path, it would have likely delayed the onset of cheap, western VMS compatible, Asian cameras by some time period in which margins would have been higher. Yes/No

Is Axis current control of ONVIF worth what the increased profits from that time period would have been?

One thing to remember in this conversation is the starting point and AXIS position in 2008...they were only (approx.) 5th or 6th largest camera supplier at the time so the perspective changes just a bit.

They did have something to gain publicitywise in starting the new standards organization. If you ask those that dealt with Axis over the last 7 years you will find that they used the fact that they were one of the founders of ONVIF to market themselves quite often. This was useful to them at times and mentioned in nearly every PPT they gave. So I believe it was very much a marketing ploy/tool for them to be a founder of this new standards organization.

I was at one of the three founding members and was told AXIS did not want to start ONVIF and was pressured into it by the other two founding members.

I wonder what leverage Sony or Bosch would have had over Axis?

Interestingly Axis had a different take other than being forced but maybe they told all employees that it was their idea.

Standards was coming to the industry anyway, because standardization is a hallmark of a maturing technology.

Imagine a world where Axis didn't join ONVIF or some other standard. They'd be increasingly marginalized as integrators began flocking to the stuff that worked with the other stuff. They'd become less and less popular, and start losing up money. One of the big VMS manufacturers would eventually make the decision to stop supporting Axis products, which would be big news for about fifteen minutes, until all the other VMS manufacturers would follow suit (probably after breathing a sigh of relief behind closed doors that they didn't have to be first). The snowball would only get bigger and gain more momentum as time went on. Axis becomes less and less relvant, and by the time they try to put themselves up for sale, no one is interested in buying. Axis closes in 2020, it's customers and talent long having since fled for greener pastures. It doesn't matter how big you are, proprietary is always a non starter, as the ghost of Dedicated Micros could tell you.

VAPIX would have done for Axis what MXPEG did for Mobotix- isolated them until they were irrelevant.

Imagine a world where Axis didn't join ONVIF or some other standard. They'd be increasingly marginalized as integrators began flocking to the stuff that worked with the other stuff.

Lennon would be proud of your optimism, and of your noble integrators disdain for proprietary systems. ;)

In any case, I am not insisting at all that Axis not join the standard. Many fine proprietary companies have joined 3rd party initiatives, and talk the standards game.

But there is a big difference between taking seat on the ONVIF bus and buying the gas... And the bus...

Why buy a ticket when you can buy the bus company, if you've decided that taking the bus is the only viable option? No waiting on lines, no luggage restrictions, no having to look for the closest bus stop if you can tell the driver to pull right up to your front door.

Half measures are for wimps, and they never really work anyway. Go big or go home.

Regardless of what the benefit to Axis was, the industry certainly should be thankful that Axis decided to buy the bus. And you may be right that Axis would have been in worse shape now had they not 'done the right thing'.

Though it would be easier to argue that ONVIF was a fiscal 'slam dunk' if Axis was still #1 today, instead of #3. And the gap looks to be widening: News out of Lund for Q1 2015 is showing only 2% sales growth (local currencies) worldwide, and 0% for the Americas (local currencies).

At the same time, the second ONVIF enabled Asian Invasion, IDIS/Uniview, et al, has landed...

Edit: Ironically, since going to the Axis website I have been hounded by this Ad... coincidence?

When these efforts started Axis had a significant piece of the camera sales pie. I always argued what was in it for them was to increase the size of the entire pie. Standards soften barriers to all camera/vms sales in general. With a bigger pie, Axis continues to compete on price/performance/brand to grow their slice. Being in the driver's seat of the standard is a bonus.

Was the strategy successful? I think yes and no.