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Genetec, Milestone And Exacq Are Still Using The SSA Model - Why Are We Still Putting Up With It?

Genetec, Milestone and Exacq are still using the SSA model, huh? How Quaint. Remind me, does Windows charge you for updates within the same software model? (I.E. if you own Windows 7, you get all the patches and updates for the supported software life)

Why are we still putting up with it for VMS software? 

NOTICE: This comment was moved from an existing discussion: VMS Export Shootout - Avigilon, Dahua, Exacq, Genetec, Hikvision, Milestone

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Chris, thanks for a good first comment / question.

The net/net is that those companies still provide 3 of the best VMS software offerings with ongoing new features. Whether it is worth it or not is debatable and depends on the buyer, of course.

6 years ago, to give some sense of time and perspective, we did these 2 posts:

Today, they are still going. And while I have criticized and still find faults in the model, there are benefits of having software development teams build new features and not just get software thrown in (which can be acceptable for smaller systems but often not for larger, more demanding customers).

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lol.

Do you really want to use Windows 7 of all platforms as the justification for why SSA's are "quaint"? That seems like a rather poor comparison.

We "put up with it" because it allows companies to invest in engineering to continue to develop the product without relying on constantly selling new systems, and to invest in support to actually provide support for the products in a reasonable time.

The list of companies that 1.) don't charge some form of an SSA, and 2.) provide really good, continues product development AND top-tier support is extremely small. I would suggest that's not just a coincidence.

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Disclosure: Prior to joining IPVM I worked at integrators that sold Genetec, OnSSI and Exacq as a sales engineer, selling among many other things, SSA/SMAs. It became more challenging in the last 2-3 years, but we still had hundreds of thousands of dollars in recurring revenue from those SMAs.

The Windows update version comparison is an interesting one to me because a VMS is not an Operating System, its a application installed on a Windows or Linux operating system.

The more appropriate comparison is Microsoft Office Suite, and yes, Microsoft charges you when you want to update from Excel 2013 to 2016. Additionally, I couldn't even find a way to purchase Excel outright today, as it looks like it's only available through... software subscription (Office 365).

None of that is to say that SSA Models in video surveillance aren't out of favor in today's market. However, you named 3 of the most well known, successful VMS manufacturers in the world, so maybe it isn't hurting them as much as you might think? Quaint, adj., attractively unusual.

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If every hardware producer, component supplier, and accessory manufacturer developed their stuff to work on my, ie any vms, software then they would remove a lot of R&D from this side.

 

That's the difference between an OS and a middleware application that is always cresting or updating.

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Actually Microsoft is going to start charging to keep Windows 7 updated at some point. Not sure when but I know I have seen it on their site. The key is for the video manufacturers to keep the cost reasonable and simple(which Milestone doesn't). 

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If a company is a pure software company (or nearly so), they either need exhorbanant up front costs or recurring costs for their business model to succeed unless the market for their software is massive. The VMS market is far from massive.

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As long as the product and service are top notch, I have no issue purchasing and selling SSAs. Currently, we are having some trouble with a new version pumped out by Exacq, but they are refusing to help out. That makes it a tough pill to swallow.

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I could be wrong but exacq allows you to get the updates to a certain point regardless of the built in software updates button if you do it manually.

Also they are running there 2nd promo right now for lifetime ssa with new hardware.

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Some of the other brands do the same thing, but in disguise.  When you add camera licenses, they default to their latest software, and if you want those features, you are required to buy an upgrade for all your existing camera channel licenses and base software.  You do not have to pay for an SSA with the most of the companies mentioned, but if you want the latest features/patches/security improvements, you'll need to pay for the SSA to cover the cost of that development.

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Patrick, thanks for your first comment. 

When you add camera licenses, they default to their latest software, and if you want those features, you are required to buy an upgrade 

Which brands are you thinking of? I believe you but did not know that happened.

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I'd rather not say, as we carry the brand and they are a pretty big player in our local market.  I should have noted that you can request the older version of software to match your existing base software, and then you would not be required to upgrade everything, but eventually you won't be able to add any cameras because the old cameras this software supported are not being made anymore.

 

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SSA is a decent compromise model between the pure software sale and a software subscription. 

Each model motivates the vendor differently. For the software sale approach look at how Microsoft had to stuff features (that you probably never use) in to Office to get you to buy the next version at the cost of introducing bugs. Conversely, a subscription sale model encourages the vendor to mazimize profit by fixing bugs and providing a product that requires as little support as possible, but there's less incentive to produce new features.

The ideal is having your vendor motivated in the way you want them to behave. I'd like operating systems such as Windows to be subscription based, with the development team focused on making Microsoft money by minimizing the support burden. 

 

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Microsoft sells 100’s of millions of copies (billions?) of their OS, their scale is enormous and have the revenue to pay for the engineers and development.  Exacq/milestone/genetic sell a million each?  Not sure what their volume is, but they still need to pay all their bills as well AND try to build new features to not lose market share in a very competitive industry.  Microsoft pretty much has a monopoly, so you are comparing apples to airplanes.

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We lead with Video Insight on many occasions because of their new(er) Unlimited SSA structure. Up front cost is a little more compared to Exacq Pro, but VI includes LDAP which puts it more comparable to Exacq Enterprise. VI has been solid for us, and is easier to sell when theres no annual cost involved. 

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VI is not as appealing as it once was now that they have the silly server license. Which is priced way to high. 

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When you purchase a car and the manufacturer continues to develop the model do you get regular free upgrades of the car you purchased to keep up to date? 

The answer is clearly no, but you do still get to drive the car you purchased after the warranty period runs out, as long as your NVR of choice continues to function in the same way then the option to purchase an SSA to take advantage of any new features is a valid one and in most cases will also lenghten a products useful life expectancy.

What is unacceptable are forced SSA, where the system stops functioning upon SSA expiry!

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What is unacceptable are forced SSA, where the system stops functioning upon SSA expiry!

Who exactly does that?

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Or also, if you do not buy SSA right away, you will be charged for past years when you try to get up to date, is that another definition of forced SSA?

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I would tend to disagree: you would still be getting the value that was delivered over those years. You would still be getting the same software as if you would have bought it when it expired. I would like to turn it around: would it help to make it cheaper if you would renew the SSA agreement before it expires (call it a loyalty discount)?

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Actually buying up new software vs enabling "old" SSA was better for the customer, they had the system for a few years, it all worked ok with the original software version. 

When they wanted to add new cameras the software just did not support them (it was too old), so we asked the VMS manufacturer for help, they said we must enable SSA up to date since original install (9 or so years), and then buy the new licenses, when we worked in numbers it was actually cheaper to buy new licenses fot the whole system instead on enabling SSA and just buying the new ones.

To me that is a forced SSA, they said it was a must!

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We have done the same thing. 

Years ago ONSSI had a nice compromise. They would allow you to download new camera drivers at no cost on an old license. But if you wanted the new features that were developed for the software you would need an SSA to be current.  

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I don't think you would see that in traditional VMS. But absolutely in cloud hosting. Which is different but parallel. 

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Sure, with cloud. "SSA" generally is a compliment to a 'perpetual license', i.e., one has a license to perpetually use the exact software code provided at that specific point in time. The limitation is that it does not include future software updates which given changes in technology and time are often necessary for the software to continue to be valuable to the user.

By contrast, with cloud services, you generally do not get a 'perpetual license' but only a license for that particular period of time.

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When you purchase a car and the manufacturer continues to develop the model do you get regular free upgrades of the car you purchased to keep up to date?

Yes, if you bought a Tesla.

https://www.tesla.com/support/software-updates

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Bringing in a manufacturer's perspective into the discussion: we are spending effort and time to improve these products every release. Customers are free to keep an existing version running as long as they are comfortable with it (there is no enforcement of the annual costs), but as soon as new functionalities or improved system support (for example, running on a newer operating system, which sometimes also can require effort) we think it is fair to charge for this. The question is: what is a fair amount to charge for this (as a % of the initial purchasing price)? Are there any opinions on this?

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I would have a hard time placing a software only (or mostly) VMS into our product portfolio that did not have some type of recurring revenue model.  I believe that a VMS software company must have this type of business model to not only stay current with new operating systems, but continue to R&D features that propel themselves into the upper echelon of their market.  I am of the opinion that this simply can't happen long term if the business' technology advancements are funded solely on new & existing customer purchases of camera or workstation licenses.

Is somebody able to point out a VMS software manufacturer (that does not also sell a significant amount of hardware) that has proven this theory wrong?

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I don't find a 15-20% annual maintenance and support cost a bad thing at all for all the reasons outlined by the others - it's an extremely common practice for the IT industry both for line-of-business applications and hardware systems.  Microsoft is abandoning the "free update" strategy and replacing it with subscriptions. Yes, at some point in the not too distant feature you will pay for Windows and all of it's nightmarish updates. Perpetual licenses, one-time purchase or whatever you want to call them, they are going the way of MS-DOS. Office will be via subscription only and the push to do the same with Windows is on (HINT - It's called Microsoft 365 Business).

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Microsoft has announced that Windows 7 updates are no longer free.

Windows 10 will also be moving to an annual subscription model.

In fact, software in general is moving toward this model. Software as a one-time purchase is quickly becoming a thing of the past.

I hate it. You hate it. Everyone hates it. None of us can change it.

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From what I have read, Microsoft is not moving Windows 10 to a subscription based model.  They are, however, starting "Microsoft Managed Desktop".  It is a subscription service for businesses that included, among other things, Windows 10 but it does not replace Windows 10.

Here is a good article explaining it:

No, Microsoft Isn’t Turning Windows 10 Into a Paid Subscription Service

Now, it's not to say that this doesn't change at some point and they move completely to a subscription based model for all of business and for consumer but there isn't nothing that even hints at that happening right now from what I have read.  It is just speculation.

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