I Am Leaving The Industry... Here's Why

[Note: This was sent to IPVM this week. This is not from IPVM.]

As you know, things are changing in the industry, Hikvision and Dahua are trashing the market around the world, and as such there are no margins left for anyone.

It's been interesting here to listen to the integrators, who all thought that cheap cameras from China was going to be a good thing, now they are realising that everyone gets that price therefore there is no margin. So, then it becomes a price war on install, and now that has got so low that it's not worth doing, currently here we have people offering a deal on 4 x 3mp hikvision cameras, NVR, installed for $1995, not even sure how they are making money.

I also believe that nobody is really looking at the chinese cameras, there are too many "backdoors" being discovered, Hikvision here actually told, and convinced, a consultant, that all they needed to do was ensure that the password was changed to stop these issues. I had to explain to him the reason it was called a backdoor.

I have been trying to work on solutions, using cameras in security for marketing purposes, lets face it, they have all the money. So we have been showing how they can be used to show ROI on a marketing campaign in a retail environment, or, in the case of a bank, have it recognise age and gender, approximately, to change the adverts on the screens in front of the customers as they walk in, but still, people want cheap.

Anyways, if you have got this far into reading my rant, then thanks, the real reason I am writing to you is because I am leaving this industry as of the end of this month, as its just become too depressing.


This was emailed to me this week. Posting it anonymized because I think it is worth debating.

Vote here:

When $99.00 alarms first hit the alarm industry and we were averaging about $3,000.00 per residence and $30.00 per month I thought it was over too.

Then I was drawn by accident into the very high end custom home security market. That year we sold over $800,000.00 in installation business ..... across 6 homes.

the real reason I am writing to you is because I am leaving this industry as of the end of this month, as its just become too depressing.

Depressing? Only if you let it be! :)

First, mass produced technology products always carry the risk of commoditization, so that isn't anything new nor exclusive to security.

Next, at a macro level, geopolitical relationships change, so the dynamics of trade (ie: China as manufacturer to the world) one year can change the next. Government policy changes, popular sentiment changes, natural disasters happen, so on. The point is speculation works both ways, and it's never as gloomy or rosy as one thinks, and market change is always going to happen.

If you leave the industry because the money is too thin, that's understandable. But I'd encourage the letter writer to take the long view. Just like Pelco didn't stay on top forever, the biggest threats today yield to different ones, requiring a different response, tomorrow.

If video has you down, there are lots of allied segments of the industry to spread in to. Access control is very close to video, yet different enough that the Chinese threat isn't pronounced... yet.

See: Smart Integrators Should Lead With Access Control for more.

Brian, man....what are you doing recommending access control as a bright spot? It's our little club!

I voted that it was a bad idea, with the understanding that I think it was a poor choice for him.

However, I encourage as many quitters as possible. This will thin the field and prices will stabilize. The market will hold what it can. Too many integrators for the market is a bad thing, but I believe that will self correct due to attrition, as the OP can attest to.

There will always be the ability to make more than the slammers at the bottom, due to using best practices, showing a portfolio of good work, and being a good partner with your clients. Not every client wants to work with slammers, but those that do aren't likely a good suitor anyways.

At least that's what I've found. If price is their sole concern, I can't or don't want to help. You have to have balance as an end user as well. Cost can be a factor, but it can't be the only one.

Until it is completely a DIY industry, there will be work to do. With product prices falling, it just means more potential clients, as the lower entry cost will undoubtedly lead to it.

With product prices falling, it just means more potential clients, as the lower entry cost will undoubtedly lead to it.

But does those people pay the same, more or less for services involved?

In my experience, customers who spend more per product tend to spend more for services.

I tend to think that as the cost of hardware comes down, it allows for more of the overall budget to be allotted to labor. I am not sure if it is a net gain, losing out on margin vs gaining in labor dollars. But, it allows more clients the ability to afford a system in general. You can easily offset the lost margin per item with the additional volume, even without raising labor rates, due to the additional hours of billable time.

John : My experience is that price never justifies the services. If it is not my money i am managing and someone else is responsible for it then i will spend until it is gone or i get the most for what i spent.

Then there is expectation level. What value for what service .

Managers tend to just accomplish what will make them look successful to their managers .

Profit margins for bonus's , sorry to say its about the bottom line.

what I see is a lower quality all around the board.

Installers, Products, Professionalism

I am in that niche which will pay what ever it takes and the only thing that does matter is reliability, quality, and professionalism.

This is always different with Gov., Agencys, Vs Comm, Residential, customers

Different Mentality on what is good value, or best value.

If cost does not matter then I want best and i choose with in the limits of my position

If i am on a fixed budget i choose the cheepest for what i can get.

Most of the customer expectation levels dont change with price, they just accept less

The Trick is to be in that marketplace where the value supports your expertise and value .

I voted that this was a bad move, but there should have been a choice for, it depends. If your market / business is the low end / high volume, then I can see how it might be a good time to move on, but for those of us that recognize change, embrace it, and adjust will see what we've always seen -- new opportunity. It's an opportunity for us to redefine now just our businesses, but the whole industry.

So it really comes down to that...if you're able to help create and embrace change, stay in. If not, then yeah, you're probably better to see the writing on the wall and get out, and I say that with all due respect.

Change mocks those that whine about it's inevitability.

By refusing to change?

We could all do without the often- repeated platitude of "embracing change". One adapts to change. or not. Market disruptions kill off the most vulnerable first. Then that leaves the stronger companies with a choice to adapt to the new reality, or exit, based on whether it is worthwhile adapting to the change. Adapting to Disruptions of long-standing profitable business models are costly and painful. Nobody "embraces" them.

I have been in multiple industries that have experienced commoditization, and in each instance my team was able to strategize ways to create value and add margin and revenue. Most of the time it was driven through services. This is what often "frustrates" the veterans in an industry. They grew up doing everything for "free" and struggle adapting their business model to start to charge for these services. The real truth is these services were never free, they were built into the higher costs and margins when the product was sold.

Today you have to execute at a high level, with high value and integrity and a highly trained and managed sales force to execute a margin generating business plan, especially one driven by services. Truth is, clients WILL pay for these things if that value is created and communicated. Best Buy did over $3B in services last year...... an average Apple store does over $20M a year in revenue, over 55% of that comes from the Genius Bar. Those are two radical examples, but the truth still stands that with commoditization comes the need to adapt your business model and introduce new profit opportunities, engage your teams, ensure they have the tools and guidance required to execute and hold them highly accountable. That needs to start at the top.

So in short (too late), if this seems difficult or frustrating to do, then quit.......I know I am sticking around.

I understand your overall theme of your post Undisclosed 5, however you used two examples outside of this industry in Apple and Best Buy. Best Buy is kind of a weak example too in that they are struggling to compete with Amazon and closing stores currently. They haven't really shown a great ability to adapt (Same Day Delivery: Best Buy's plan to take on Amazon?)

What are some examples of services security manufacturers should start offering that can ameliorate the effects of commoditization?

Obviously whomever wrote this does not have any sales skills. Our business is up over 200% this quarter over last year Q1 and we are not selling cheap solutions. Matter of fact our average margin is over 33% during that time. Selling is NOT about price, it is about perceived value and solving pains.

Now don't give up, just re-look at to whom you are selling. If the retail vertical (which we don't sell to due to low margins and little loyalty) isn't working for you, go find another. Just remember sales are made on trust and relationships, not prices.

Best of luck

U7, do you mind listing what areas you sell to and what products/services you offer? That is very impressive growth in this economy/market.

Here is my take,

Leaving the industry is just a lame excuse for whatever this person is choosing to do next. Any industry has ups and downs and changes, it is up to the integrator to follow the market and the products that will fit into a profitable business model. No business model is static, you just can not do the same thing over and over for years and expect nothing to change. 10 years ago we were primarily selling analog products at much higher cost and margins. In comes IP, it was a struggle to move clients to IP when offering VGA level imaging, other than specialized projects that were able to leverage the network rather than creating a new cable infrastructure. FF to today, IP is the stock and standard for the last 6-7 years I have offered nothing but IP and have had overwhelming positive feedback from clients. I did not fully understand the OEM market but eventually came to find out that my premium cameras were in fact just OEM from Hikvision. I kinda felt silly for all the smack talk I had given on "the cheap chinese alternative". Over the last few years I have used a Hikvision OEM knowingly, their pricing worked with my VMS choice, and I could not be happier with the results. I have been able to build brand recognition, and a reputation for high quality,budget friendly surveillance.

My product offering is constantly changing, and it is up to each integrator to recognize what his/her market will support and fit offerings accordingly. I watched HD-TVI,HD-CVI and other HD over coaxial technologies come out, and once again I found my IP purist soul smack talking the "cheap alternative". This year I came to realize that I had missed out on some niche markets for upgrading legacy analog systems, and also for entry level systems that I could make great margins using HD-TVI products that were substantially more end user cost effective, and my sales went vertical.

I could have made the choice to leave the industry when things changed and got tough, but honestly at this point I do not know how to do anything else. This entire thread is about a person who is blaming their own poor choices on a vibrant and profitable sector of the security industry. All I will say is "So Long, Close the door, and don't look back" your choice to leave opens some market share for another integrator.

I could have made the choice to leave the industry when things changed and got tough...

Is there a better time to leave?

No there would not be a better time, but my point was I took the time to understand my market , and adjust to it, and am better for it, anyone that can not do that, honestly needs to check out...

What I am saying is that if the stakes change, that may be reason enough for some up to get up from the table, and try their luck somewhere else, without being "lame".

If the sum total of well-paying work available per integrator is decreasing, then even though some, like yourself, will, thru determination will find a way, there's just not enough to go around for everyone.

And you might find the cumulative effects of your 'adjustments' to the changing market over time have led you to a place that is pretty different anyway from where you started, e.g. Analog cameras -> IT Networking.

So, if you see a better path, why not take it?

Sorry, but exactly what "premium" cameras were Hikvision: Sony, Canon, Axis, Panasonic and Samsung make their own cameras, well, apart from the very low entry ones from Panasonic, which funnily enough are Dahua. so I am intrigued to hear whos premium brand camera you were using

Can you point to a spec sheet or web link for the Panasonic/Dahua models? I feel like it's been mentioned before but I've never seen them.

I'm not sure they are still doing them now, however you can still find them online, here is a place in NZ offering them.

http://www.itron.co.nz/ip-cctv/panasonic/panasonic-camera/

BTW, I voted was a good idea for you to leave...

survive and adapt

Voice of experience right there, especially considering where you came from :)

Seems to be a good deal of judgment that the writer is mistaken. However, from his perspective I'd guess he's making the right choice. I am not in his shoes (none of us are at the granular level), so it is tough to call his decision a poor one.

By way of analogy, less than 8 years ago, I worked with a guy who had the 80's mentality of all things low voltage. His mind was made up that IP was an unnecessary waste of time and he wasn't going to learn any of it. For him, leaving the industry would have made perfect sense--given his perspective.

So it is (I believe) when one is so exclusively focused on shrinking margins that they cannot see their way forward. Better for them to leave the industry in pursuit of whatever industry/trade it is they will feel positive about. That step of leaving at least removes the mental block that they cannot make it in this industry.

This was a bit downer of a thread since I joined the industry 9 months ago.

I am excited about this industry and we have yet to see technologies that will breed new implementations in this field.

The IP Camera world is just cracking its shell in my humble rookie opinion. As a prior Network Engineer from the Y2K days doing router configs all day - this is much more intriguing. There are more challenges (variables) and each solution will vary and the money is in giving them great results and service after the fact.

You're in a good spot, Todd. The benefit and the key to success hasn't really changed. The market and the industry change all the time, but if you're just getting in (15 years for me now), you will benefit from not having the previous knowledge of how things were. Like most industries, things change, and the biggest challenge is for those that can't / won't adapt. The reality is that there are huge opportunities to think differently and provide value to your customers in the market today. Look at how things ARE and forget how they USED to be, then put together a solid biz plan and execute against it. Don't worry about how anyone else does it...be different and give the market a choice. If you try to do what everyone else does, you'll likely get your share of everyone else doing the same thing, but if you focus on new services, additional value, and differentiation, you'll find yourself successful now and in the future. You see, the biggest value is learning how to adapt and change so that as time goes by, you already know how to identify and make the adjustments needed.

Good luck!

Q1 this year vs last year we see 28% growth in revenue.

Q1 last year =48% GP. Q1 this year = 61.8% GP (by design)

Sales per rep last year Q1 VS this year Q1 is up by 15%

60% surveillance, 25% access, 15% alarm by dollars.

We're not going anywhere, and in my opinion, this person sells based on a part number. Stop selling cameras and start selling aspirin. Stop worrying about your competition and make yourself better. Become a trusted adviser. You will succeed in any industry. Get depressed and give up and you will prove yourself right.

Ive said it before and you can probably figure out who I am by this, but as price comes down, margin MUST go up to thrive in any industry, but especially those that involve a truck. Offer more value, do more for the customer, alleviate their pain. I'm anonymous because I dont want the hassle of people saying it isnt possible and I may have local competitors on here and they dont need to know our secret sauce.

Actually, no, I havent ever sold on a part number, I have sold solutions all my life, just the issue is everyone else is selling part numbers, cheap, and security people dont seem to give a f**k about a solution.

Note: This person is not an integrator, s/he alludes to that in the beginning: "It's been interesting here to listen to the integrators"

I do think that commoditization has hurt the manufacturers and dealers more so far than the integrators / consultants. Agree/disagree?

Many integrators tell me that they are staying (trapped?) in the industry, but no longer look at CCTV systems as profitable, due to the issues discussed herein, ad nauseum. They instead are focusing on access control, IDS, fire, A/V, etc, for their primary margins, and responding to their clients' CCTV RFQ's by carrying very low margins, so as to avoid being looked at by their customers as overpriced. They do push for camera system service contracts now more than ever, however, using VMS updates as a reason to try to convince their customers to sign up. I have not heard many success stories based on warning customers about "back doors" and network vulnerability, in order to justify selling higher end/higher cost cameras.

They mostly consider the camera business "ruined" forever, seeing no end in site to the downward price spiral and the DIY trend.

Emerging Markets Story...

I am Ukrainian guy currently working in Kazakhstan - CIS region, large county with small market but relatively stable economy cause of big deposits of natural resources.

My decision is to stay and fight...

Short introduction to the situation:

Hikvision is moving towards market domination.

Method of market penetration #1. They conduct direct sales and cheat on partners... I have heard several stories about partners who were thrown by Hikvision just before the actual deal... You as a partner conduct all presales activity (presentations, demo, pilot projects), negotiate prices and budgets. Then in some time you discover that Hikvision made direct sale to that customer with lower prices (of course). Intergrators were depressed and a wave of rage scattered on the market. Hikvision understanding that nobody soon will bring them clients has created several "pet" integrators (not directly connected to vendor) to support the illusion of a fair competition.

Method of market penetration #2. Hikvision representatives appear after presales activities done and the deal is focused on any other vendor to break the deal. The strategy is simple... We go to the upper decision maker (like VP or CEO) and tell him that we can offer the same or even better solution (not going deep to details) for the considerably lower price avoiding distributors and resellers. "You will by our outstanding solution, you will make company budget savings and you can get any sum from the rest of the budget in cash after the deal if you want." Everybody knows that CIS markets are highly corrupted but this is insane... No other vendor can't even think about such style of behavior. Surely most of C-management in such situation (knowing nothing about technology) will think that such proposal is a 3 times win... Results: other vendors sales fall and integrators depressed again with plenty of time wasted and opportunity lost.

Method of market penetration #3. While I was working in Ukraine one of my friends was working in a distributor company and they just had signed a contract with Huawei. Huawei just have opened representative office in Ukraine and I was told that Huawei have budgeted $20M just for bribes to penetrate the market (just imagine this... budget for bribes... this is sick...). This is the most wild and sassy strategy I've ever heard. C-management of target customers were offered "a cash forward" scenario... We pay you - you provide lobby... I have no info about Hikvision or other China brands doing the same things here , but I think it is pretty obvious...

At the end... Several small and medium integrators had a meeting discussing forced alliance to confront the emerging threat. We have an informal agreement to "seek and destroy"... during any bidding if Hikvision is present we form the temporal alliance to eradicate the vendor from the deal at all costs and only after continue to compete with each other based on solutions. I think that our "one vision" community will grow...

To sum up... situation is complicated but it can be solved making friendship among cats and dogs and uniting together against common enemy.

NOTICE: This comment has been moved to its own discussion: Alliance To Seek And Destroy Hikvision Bids

"You will by our outstanding solution, you will make company budget savings and you can get any sum from the rest of the budget in cash after the deal if you want."

If Hik is cutting the integrators out, whose is doing the installs?

...budget for bribes... this is sick...).

Western companies are big bribers as well, Glaxo apparently bribed Chinese doctors to the tune of 400 million.

We have an informal agreement to "seek and destroy"...

What do you do exactly?

Installs are done by "pet" companies managed by Hik representatives...

What do we do... During presales we always point on Hik weaknesses... Chinese government and security issues to build up strong opinion on the market that Hik = problem... We help security people to ensure their leaders to say "no" if Hik arrive... We are preparing and educating customers on risk management ))) providing Hik as an example... We are trying to alert our customers about Hik even using internal financial audit department to be informed... At the end, we are creating marketing nightmare for Hik preparing customers to ask specific questions discovering Hik lies, to make "ah, ok, thank you, bye" effect.

the problem with the tin foil hat thing about Hik (every thread seems to end up here) is that I'd have trouble believing many other cam providers are any different (back doors etc) and feel that your good integrator needs to build in security to accommodate the issue (ie have the knowledge about your routers and firewalls to block the possibility assuming your customer cares enough about it.)

Michael, as for security, of course other vendors are not ideal this is obvious... but I am sure you understand the difference between private company and government controlled monster and the difference of vulnerabilities that are made cause of lack of security code knowledge and in contrast backdoors created on purpose...

I don't know (not sure) if Hik provide the code for analysis, mostly all tests are based on blackbox methodology. And we know what we have found and not what was coded... may be there are some "sleeping" vulnerabilities... And the main problem is Risk, which is considerably higher than in private company, cause Chinese government is not interested in profits first place... And this is why Hik is a bit specific vendor with clear difference from others...

The situation globally scare me sometimes, we are all witnesses of global companies covered by governments fighting for world control in certain spheres:

USA - Microsoft, Cisco etc. with the ability to disconnect any country from the network with just distributing an "urgent security patch" to the target public subnet

Russia - Kaspersky controlled by government and particularly ministry of internal affairs to spy on everybody

China - Hikvision (no comments)

The point here is everybody just ignore human rights for privacy and go towards increasing the number of tools for cyber war... this worries me most

Whilst I understand the sentiment and hear it mirrored from many areas, the real problem underpinning the demise of the industry lies with education.

Education of the clients on the underpinning of the technology and the associated limitations and vulnerabilities. They are going for costs without knowing the issues

Education of Integrators in the problems associated with technology especially in the IP sphere. Installation departments frequently do not upskill, which means that the correct technology starts to become secondary to cost and ease of install. The installer will typically go to a distributor that provides the best service instead of learning about a systems capabilities themself. As such the technical knowledge by these guys is depleted. They won't usually enter into a CPD program unless they are forced. As such distribution which is based on volume pushes What they can get the most return from. That is where the Chinese come in. While the distribution chain isn't getting the margins they used to, they are making it up with volume. The integrator is getting what is pushed.

Education of company owners on how to run a business, how to do effective marketing, how to sell, and the need for constantly reviewing the operation to ensure effectiveness.

If you can't beat them.....diversify

go big, high end.....create your niche and keep planning your next

Wow - this is a thread I never expected to read - and I appreciate the candor presented.

To be clear, I am not an integrator, not a manufacturer - simply a member of a team who is working to make a better business offering to our users.

I have been involved in this for 18 months, and been spending a bit of time assessing the market itself - seeing how the hardware is all getting commoditized and how the software is incredibly bad; almost an afterthought for many players. With all of the recent mergers and issues of shrinking margins, watching how most manufacturers are making it almost impossible to succeed - it can bring anyone down. I understand the original poster's POV.

In my work with Chinese manufacturers, they operate in an almost Darwinist-like capitalism, where any way of getting the penny, pound, yuen or euro is all that matters. So, we have an industry that the lines are getting blurred and the ones who form the alliances are the ones who can succeed (IMHO). Like any fragmented industry with minimal enforceable rules, there needs to be some form of consolidation to be able to act in the interests of the different parties.

Go back to the US - and the creation of unions - or to England and think about the creation of guilds. From what I see, as an industry, we are not working together because we are fighting with each other and the people with the perceived power (the manufacturers) are leveraging their position. We are working for our margins using the cheap (or increasingly cheap) hardware and working hard to maintain our customers while the hardware guys are bringing about their own success.

I wonder - Where is the unification of the security integrators? Where is the one voice to be able to fight for the rights and success that can come to them?

We will not go quietly into the night!

The company I am with is working to bring about a common voice - relying on revenue sharing and partnerships - forging relationships based on principles and values inherent in building a success across the industry.

At ISC, my coworkers heard various gripes and frustrations - which is why I see we are in the right fight. Yes, we are in it to make money. And yes, we know we can make it work since our real goal is to provide security and ease-of-use and find a way to bring about the right change.

Everyone wants to make a buck, every customer wants to get it as cheaply as possible, and everyone wants to be safe and secure. This is the time to find that connection - that opportunity to make things happen.

That's why we are in the industry.

If you are interested in speaking about this proposition, connect to me at partners@owlr.com

I understand the sentiment..... The thought has occurred to me as well.

With 130+ votes, there is a fairly clear trend. Update, with 220+ votes, trend is the same.

Integrators are more optimistic than manufacturers. Here are the votes segmented for those 2 groups:

Recall - bad move in this context means bad move to leave the industry.

This is consistent with many other signs we are seeing - in general, life is much worse right now for manufacturers (as well as dealers and distributors) than it is for integrators.

I'm going to stop traveling the world because I can see it all on Google.

this is what that sounded like to me. And I always encourage those folks to just stick to surfing the internet instead of crowding nature.. I like it pristine personally.. So the more the merrier.

The security industry is vast and diverse and as long as there is crime, violence and global conflicts, there is business and innovation to look forward to. Global rise in terrorism will ensure that for a long time-like it or not!

Real integrators don't sell products. They identify a problem and sell a solution.

Cameras don't keep bad people out. See fences, doors, gates, access control, lock hardware. Hire a locksmith and start a whole new segment to your business..

those of us who have been around this industry for a long time love innovation and the lower cost of hardware only means that we have a larger target market. The lower levels of that pyramid are becoming accessible.

...as long as there is crime, violence and global conflicts, there is business and innovation to look forward to...

Who said crime doesn't pay? ;)

This is the "locust theory"....they strip everything in sight of the margin and

destroy an industry....it would seem that publicizing the backdoors so that the

integrators can demonstrate the risk would be one of the few avenues to combat

the predators. One thing to talk about them, another to provide the steps a),b),c) so that

integrators can plant the seeds in the mind of the end user. In essence provide a limited

configuration to the customer and let them see the exposure they're facing.

A lot of people still seems to be selling high quality solutions to customers that are willing to pay extra to insure support, longevity, safety, security and quality:

Axis AB: Interim report January-March 2016:

* Net sales increased during the first quarter by 16 percent to SEK 1,567 M (1,354). Net sales increased by 13 percent in local currencies.
* Operating profit increased to SEK 153 M (145), which corresponds to an operating margin of 9.8 percent (10.7).
* Profit after tax amounted to SEK 114 M (104).
* Earnings per share amounted to SEK 1.64 (1.50).

...I guess if you sell low quality solutions on price only you end-up getting undercut - there will always be someone out there more hungry than you. If you sell value and quality you are more likely to get paid well. Apple is a quality manufacturer, there are plenty of imitations and lower priced options but so many of us are still willing to pay the extra to have an iPhone. BMW, Porsche, Mercedes and Lexus still sell plenty of cars even though there are many cheaper alternatives. If you do not like low margins then sell high value and up sell on quality. If you can't make money on the camera then try making money on the quality of the recording solution, add-ons such as integration or the after sales maintenance and support contract.

But if you have found somewhere else it is easier to make lots of money tell us about it - we'll be right behind you...and then start to undercut you.

18, regarding Axis Q1 financial results, they are decidedly mixed. On the plus side, Axis is doing well where terrorism concerns are high (Europe and the Middle East) but they are doing quite weakly in the rest of the world (i.e., Asia and the Americas).

See: Axis Q1 2016 Financial Results - Asia Down / Terrorism Up

Believe me, I am sympathetic, having watched my company get gutted by price wars. At any given time there are people out there who need "real" security which is all about the knowledge you bring to the table (not product brands). My role in the business is slowly transitioning from a manufacturer's agent to a source of security and networking "best practices" information. The means of turning that into a revenue stream are not yet clear but there is still a need for good security and for people who know what that is.

As a techy rather than sales minded individual in this market, I see this as the most exciting and innovative time in the history of security. How on earth could you even consider leaving now??

As a techy rather than sales minded individual in this market, I see this as the most exciting and innovative time in the history of security.

Damon, interesting point. I agree that there is a fair amount of innovation on the camera side - resolution increases, WDR improvements, far better low light, much more integrated IR and longer range IR, plus dropping bandwidth consumption (smart codecs).

I think the problem is that, on the sales side, usually when products get better much quicker, pricing either stays the same or goes up (reflecting the much greater value of the offering).

What is so weird here is that while quality overall is going way up, pricing is falling down, an atypical combination.

As the person who wrote the email to John, I would like to state that I worked in manufacturing and distribution. I'm choosing to stay anonymous due to current projects that I'm still working on before I finish up this month.

I've been a top salesperson in my industry for many years, and have helped design some of the cameras that have come to market. The issue I see now is that everyone is an "also have" in that they never do differentiators, all they have is the same as everyone else. "Yes, we also have a 2mp camera called (insert name here, brand, OEM etc)"

Why I mentioned the Chinese brands wasn't just because of security issues, they have driven pricing down, but this then, in my opinion, has stopped true innovation. It is still good to see some manufacturers trying, but ultimately this is going the same way as the IT market did in the 80's, to a low margin volume based strategy.

I can tell you know that manufacturers are discussing internally how they just sell direct to the end user, is this something you all want? This is now the only way they will make margin, again, remember IT, who buys from that local IT guy anymore, you all buy online from the manufacturer or go to a very large store offering everything.

Ive sold solutions all my life, in IT and security, I've sold technically, never was a salesperson but was always top of sales due to knowledge, understanding the customer's problems creating a solution around that, normally including other manufacturers as partners, as no one manufacturer has a true solution in the majority of cases.

When I mentioned "depressing" don't take that the wrong way, I'm not depressed, I'm stating it is depressing to see this happening to an industry that could have been so much more, however, manufacturers decided to manufacture in China, and this was the start of their downfall.

In the 80s, it was software that made the use of computers that much more compelling.

Yes, you could buy computers in the 80s via a phone call (remember Gateway!), a stop at the local shop/mall/Radio Shack or via a magazine. But the low margin was always driven by software, not the build of hardware. It was not until IBM was the standard - with DOS/Windows and then Apple became the premium product, starting first from a rallying cry for desktop publishing and the Mac Addicts.

Where is the software that is going to cause standardization? Where will the premium services come from? Is it truly possible that the inherent knowledge of lighting, placement, physical wiring and integration is actually going to be automated?

What stops people from making the "Android of Cameras"? Isn't that what the guys behind Android were trying to make back in 2004?

https://en.wikipedia.org/wiki/Android_(operating_system)#History

http://www.theverge.com/2013/4/16/4230468/android-originally-designed-for-cameras-before-smartphones

Granted they were looking to solve it for digital cameras - but what about for IP Cameras?

...what stops people from making the "Android of Cameras".

Nothing stopped Martin Gren.

Android is based on Linux. Almost all, if not all IP cameras run Linux.

They already are, majority of cameras are Linux based, some already have the ability to add software modules to them. But, these can be added direct by the end user by buying direct from the manufacturer, so, where is the value add for the integrator.

Ok, setting up on some items like analytics, which need setting up properly, might be something where an integrator can add value, however, having seen some of the analytical installs it's an area these integrators need to know.

Even on here we hear that Dahua is selling direct, IP cameras are not hard to setup, most cameras have auto focus, so press a button on the software, or on the camera, well, IT depts can do that, they know cabling already, so what is left in this pot.

i think the smart ones will survive, but change is a must, HDSDI, CVI and all the other iterations of it, really only exist, in my opinion, due to analogue installers refusing to change. Yes, there are some benefits, but realistically no new greenfield site should consider it, IP should be their only real option, and IT companies can deliver that now.

Our biggest client has an IT dept of 7 people. They don't have the skills or the time to deal with the surveillance system, which is why we were hired by the security dept to take over that portion for them. It was much quicker and easier for the security director to define a budget, define goals, and then hand it off to someone capable.

Analog HD still has its place and time. Clients with existing coax might not want to tear it out. Clients that have zero tolerance for latency. Or super cost conscience, low camera count, new installs.

IT can and will own this area, if your customer has a team of 7 IT people, but they cant add an IP address to a camera, or setup a network, then in my opinion its not much of an IT dept.

IP cameras are simple, and once the IT dept realizes its only an IP address and there is software to help configure and setup, they will end up setting them up, they like to own the infrastructure.

As for the Analog HD, yes, as I mentioned, it has it benefits, mostly on existing sites with legacy cabling. But with the new sites, low camera count, it makes more sense to go IP, pricing has become that low and the benefit is a better quality image.

IT owned (and failed) the surveillance system for the past 10+ years. When a new security director was hired, she demanded more than throwing an old used Axis cam bought on eBay up on a wall crooked, upside down, off angle, wrong lens for the application, etc. He was buying VGA cameras with wide lenses up until last year. They were using Axis Camera Station, which isn't the easiest VMS to use, if you're not computer savvy, which security isn't.

We have come in and in a little over a year and have fixed most of her ailments. There are more things to fix, but her budget doesn't allow us to rip out everything in one budget year. We are on our second budget year and I can imagine we will be there for a few budget years to come.

Also, with this particular client, the security dept owns the camera system budget. It's not up to the IT dept.

As a consultant to tier-1 retailers, big vendors, and research institutions, this is an exciting time to be part of the video community. Yes, the market is fast moving. The premium technology of today (i.e. 3D sensors) will probably not be around in 5 years (yes, yes, I know this is a contrarian view...)

More importantly, the benefits from video are going way beyond identifying autos in the parking lot. While facial recognition gets much hype, the real ROI comes from quantifying people behaviors and finding the context for loss prevention, in-store marketing, and store operations.

Chance is scary, and fast change is terrifying. Our challenge, as an industry, is to be better in training and education. This is IPVM is a good place to start.

I agree, the trouble is it's all coming out so cheap now that there is nothing left for manufacturers or integrators. It's been a while since I left and I've seen some great products coming out, I've also watched some Chinese companies have big issues being selected in government opportunities (about time) but it's still a race to the bottom.

i loved this industry and still follow and recommend every now again, in lots of ways with the new technology out it would be a great time, well, that is if the Chinese hadn't just copied everything and chucked it out for no cost.

Does anyone feel that manufacturers will be able to continue selling through a channel, or do feel, like I do, that you will start seeing more direct sales happening. Take for instance someone like Canon, who now own both Axis and Milestone, and have a massive end user base of copier customers, do you think it will be long before someone in management looks at this and just cuts out the middle man.

I know it's not that easy, site visits, installs, but heck, they could just outsource those pieces, think of the margin they could make without you, the integrators.

just my thoughts

Sorry, is Wayne a known installer in Canada ;-)

If IPVM continues growing the Camera and Access Control class enrollment to end users, all of you integrators will be out of business.

That is simply not true for all end users. There are plenty of end users who don't have the time or the practical abilities to install for themselves. They are pros at their business, which likely isn't security.

Can an end user become much more aware of products, trends, and techniques used in the industry? Sure they can. But that is just the start of it. Asking them to bend conduit, drill through 20 inch thick masonry or five inch thick hardwood floors, or what type of anchors to use, etc is not something that most end users could or want to handle.

There is so much more to installing cameras than what anyone could possibly imagine, unless you are the guy hanging them, are the guy troubleshooting the network, managed the VMS/server/NVR/DVR, or have dealt with network security issues, then you only know the tip of the iceberg. Terminating an 8P8C connection does not make you a network pro.

UD21, you have a very simple view of surveillance, at least it would seem to be.

There is so much more to installing cameras than what anyone could possibly imagine...

It's certainly no harder than learning how to do your own root canal, yes/no?

While I've done all of my children's dental work myself, including many root canals, I've yet to do my own, successfully anyways. The drugs kick in and I'm out like a light. Who knew chloroform worked so quickly?

Absolutely agree. The average "IT dept engineer" screams "eek" at the very sight of a screwdriver. No way is he going to get up on ladders, hang conduit, pull and terminate cable, drill holes or have any clue as to how to do any of it in accordance with building codes. The only threat to security integrators in the implementation realm is by integrators themselves doing dumb things like catering to the lowest end of the spectrum and winding up commoditized. If a company is so cheap that they are OK with their IT dept taping cables to walls and doing makeshift DIY installations of cameras purchased on line, who the hell wants to compete for that business? Let it go.

No, end users get smarter and seek out quality products and integrators.

Brian, I wish there was a "Love It" button, but since there isn't, I will settle for "Agree".

That makes no sense

I think there is nothing wrong with educating end users... I personally educate my customers in every project no matter if surveillance or other systems. The main reason is to provide them information and arguments why I have chosen precisely parts of the solution that they needed and not me and why I have decided to install exact solution in their circumstances. Then customer begins to see value and not template installation. Such behaviour builds trust! My customer understands that my priority goal is to provide solution to complete task and not just make as much money as I can... Additional bonus is position of a guy who stands out of a crowd providing some kind of quality baseline to customers, and thus customers are tending to build long term relationship. And this baselining provide protection from other integrators, because customers start to ask right questions when they understand that some integrators treat them as fools. So the main point here is end users education provide trust and their ability to select quality.

As we all know the decisions made not by companies but by people and we are selling solutions to the companies and for individual people we sell what they all want the most: confidence, calmness and peace. Each manager wants to be confident in his or her choice of supplier and confident when he or she reports to C-management, and wants to be calm because he/she knows exactly what work should be done, why is has to be done and how it has to be done.

As for IT and Security to control surveillance I choose Security... IT and security have absolutely different thinking model, IT is focused on simplicity, manageability while for security this is secondary. In addition, best practices suggest to separate managing and control functions to different departments without common middle level management. Surveillance can be admined by IT as for hardware, but content should be dedicated to Security. Security should also correlate surveillance with access control and other perimeter and safety systems which are not typical for IT. IT just is not able to create a general vision of security including all systems and managing just one system would not give the whole picture. That's why security department should design a general plan of assets protection and treat surveillance as a part of it like a puzzle piece.

Surveillance is used to control IT too, a layer of defence against insiders to support information security. And here comes "separations of duties" and "need to know" global security rules.

Educating the end users aids collaboration on future project design with the customer. Bi-directional communication also helps scope feedback from past projects. The more informed an end user becomes they are able assist in so many ways particularly to your companies success and growth.

They will still have to sign the cyber security waivers from Genetec!

Just Sayin.

I think there is nothing wrong with educating end users... I personally educate my customers in every project no matter if surveillance or other systems. The main reason is to provide them information and arguments why I have chosen precisely parts of the solution that they needed and not me and why I have decided to install exact solution in their circumstances. Then customer begins to see value and not template installation. Such behavior builds trust! My customer understands that my priority goal is to provide solution to complete task and not just make as much money as I can... Additional bonus is position of a guy who stands out of a crowd providing some kind of quality baseline to customers, and thus customers are tending to build long term relationship. And this baselining provide protection from other integrators, cause customers start to ask right questions when they understand that some integrators treat them as fools. So the main point here is end users education provide trust and their ability to select quality.

As we all know the decisions made not by companies but by people and we are selling solutions to the companies and for individual people we sell what they all want the most: confidence, calmness and peace. Each manager wants to be confident in his or her choice of supplier and confident when he or she reports to C-management, and wants to be calm because he/she knows exactly what work should be done, why is has to be done and how it has to be done.

As for IT and Security to control surveillance I choose Security... IT and security have absolutely different thinking model, IT is focused on simplicity, manageability while for security this is secondary. In addition best practices suggest to separate managing and control functions to different departments without common middle level management. Surveillance can be admined by IT as for hardware, but content should be dedicated to Security. Security should also correlate surveillance with access control and other perimeter and safety systems which are not typical for IT. IT just is not able to create a general vision of security including all systems and managing just one system would not give the whole picture. That's why security department should design a general plan of assets protection and treat surveillance as a part of it like a puzzle piece.

Surveillance is used to control IT too, a layer of defense against insiders to support information security. And here comes "separations of duties" and "need to know" global security rules.

Instead of complaining, running away, calling it quits.

Get on the change of venue bandwagon and make a difference . Set standards for the industry.

Nothing in life worth having is too hard to work for.But You must have a reason, purpose, passion for doing it.

We as a society for too long have just sat back and gave in.

The working poor are getting poorer and the cost/overhead does not go away.

If I did as this person says and Quit every time the battle of life got to overwhelming, then I would not be here today to say to the rest of you .

Get Tough, Chin up, Look to the future for ways you can change this industry.

Educate, Achieve, Strive for Excellence, do what is best for your life ( not for the industry)

When there is a no Quit option , you must go forward and you cannot quit

Don't quit, Get Real , Make changes that will make the industry worth working for.

If you have employees, give just and due rewards for achievements, Livable wages

If you have overhead, Cost of doing business, restructure and get the overhead down.

If you have to compete with the cosco, walmart, cheeeeeeeep mentality , figure out a new niche to get things up.

If your not cut out for the contractors, business, dog eat dog environment which this industry creates , then Plan, Purpose, set site s for better times, greener pastures.

what ever you choose do it as your passion or because you like what you do, not just a job!

I applied this to my business plan about 10 years ago, restructured, got rid of all the overhead , started doing business on a different design .

I don't advertise, I don't take on everyone's liabilities, and nightmares they create

Work Hard, charge for what your worth, Do a professionals Job, don't Gauge or take advantage of others lack of knowledge or understanding of the products or education in this field.

I make a decent living, customers appreciate me, I don't compromise for the low price, I don't Consult to agency's, personnel for free so they can get others to do the project with my expertise.

and I don't lower these standards NMWTCost .

And I dont waste time on walmart bids which have no value

just my thoughts on this subject

Use the resources to your benefit.

I have been for more than 35 years in the security industry and had to adapt continuously to market demands, to technology evolution,... If one is unable to adapt then "yes" I can understand. In actual situation with open markets, internet business,... margins must be taken on values not any longer on a third manufacturing product! Values are intelligence, capacity of installation, service,.... "these are values a company owns and merit margin".

If a customer asks for a China product where you are not sure of, well ask mister customer to buy it by himself and install it on his responsibility but with your installation margin and your support margin.

As one door closes another one opens with security opportunity. The speedbump for most integrators for building RMR through SecurityaaS service offerings has been amoritization of hardware costs and cash flow. Lower hardware costs actually enable this business model to grow your business and reduce risks. Your initial offerings must address cashflow however over 18-24 months it will become nearly "self-funding" within reasonable scale. In 5 years you have a company that is remarkably more valuable with much stronger cash flow. The glass has always been half full sometimes the perception...not so much.

NOTICE: This comment has been moved to its own discussion: Lower Hardware Costs Enable ‘Remarkably More Valuable’ RMR Based Business

This is True with all industry's, not just security

When any people Try To Excel in getting all and not sharing the marketplace . All loose.

The Bottom line does not change as greed excels

The Rush is not Stability, longivity, success over time , But instant gratification.

Now instead of paying a livable wage, and company's charging a livable price. Its a rush to see how much, how soon the return, and who can get us there. Greed

ADT set the market stage for this and the chinese and all others are following .

The Get it Now with long lasting lifetime payments and get it free, and pay later over time will eventually collapse and we will all pay.

No Stability in Debt

Agreed Time goes on, and Those professionals in the field will adapt and overcome and succeed as they get smarter and more creative to find ways to make it work.

only the passive, take it as it is type s will fail.

The Bottom Line is, If your not in it for a career and, you don't have a vision on where you are going.

Then, this industry is not for you .

So if your expecting a hand out and entitlement for what you do and where your at in life then this industry is not for the average. or you whoever you are.

A Lot Of Work, A Lot of Education, Sometimes little Pay, A lot of time OT, Odd Shifts, Out of town Commutes.

You take the good with the bad, you change direction constantly, you take no for the answer constantly, you get no recognition for what you do. and others take the reward for your work.

So ask yourself this?

Why do you work in this industry?

What is it that gives you satisfaction in where you go ? what you do? who you see everyday?

It is a matter of where you want to go, See, have in life.

Money is not the satisfaction or end all to being successful. Self Respect , Respect for others , Gratefulness.

And there is always a price for success or failure

Yeah, I tried to give my landlord a big bag of self respect and gratefulness but he keeps insisting on cash.

I feel your pain, fortunately, there are customers out there that care about quality and the people they purchase from, otherwise I would have left the industry a long time ago. The ultimate goal of a great sales professional is to become your client's trusted adviser, regardless of product, your mission is to recommend what is best for your customer. If you find yourself fighting against low end competition & products, it's time to change your strategy. There is more than enough ammunition on this site alone to aid you in selling against these products. The old adage "People buy from People" is still alive and well. Don't quit!

All kind of industries are the same, if you would like to have a job and work, you will need to suck it up, so i'll say as Apu in The Simpsons:

Thank you, come again.

Unfortunately, there are simply too many players in the market segment, all producing identical products, and the inevitable descent into competing on price has delivered the commoditization. Eventually, market forces will eliminate a number of these players and alleviate some of the saturation.

As an integrator, the way to avoid commoditization is to lead with YOU, not a manufacturer's product. When you lead with a product, you turn yourself into a mere "installer" of the product, thus opening your own labor to be commoditized as well. Bad idea. Provide customers first and foremost with expertise, competent support and trusted advice, and resist "peddling widgets" and you'll be OK.

Zig Ziglar has no clothes! How does one propose to dispose of all the worries and woes. Take it in, breath deep and dive try to wonder how your security company is still alive!

ScAmazon will conquer all!

That's a fine rap there!

If you don't mind I've broken it into iambic pentameter (roughly):

Zig Ziglar has no clothes!

How does one propose

to dispose

of all the worries and woes?

Take it in, breath deep and dive;

try to wonder how your security company is still alive!

You can run but you can't hide...what industry isn't feeling price pressures?

Service, service, service will always win out in the long run....Lord willing.

This is where Value Added comes in. One example of many is the ability to offer custom software that allows your customers to view and control their IP Cameras from any Internet browser capable device from computers to tablets and phones and TV's. Using any browser.

All Without the need of any plug-in's or downloads. While supporting the ability to throttle FPS ("Frame Per Second") rates to help limit bandwidth usage on customer metered Internet devices like some phone plans.

From my perspective, I see little to no ("Unique") value-added software and/or services offered. Which amazes me since many other industries have realized that unique value-added software and/or services can make or break a sale.

Access to IP Cameras from any Internet browser capable device using any browser was and is one of the largest common customer issues yet it is rarely dealt with and used as a marketing edge. Why is that?

One can leave a industry out of frustration or get creative to help increase sales instead. Walking away is the easy choice which you still can do after trying to get creative first.

Don