To Integrators: Recurring Revenue Interest?

I know this question have been around for a while.. but still.

Integrators, are you interested in recurring revenue VMS(software only) model today?

1) zero upfront software cost

2) customer pays with credit card(monthly). You get the percentage back ( 20-30-35% ).

If yes, what do you think the reasonable price per camera per month should be(for local recording)?

Thanks!


What is your software running on? Since you mention a straight software play, I imagine it would run on the customers 'available' machine?

I don't think many integrators are going to want to support your software running on 'any old customer machine'... there are too many uncontrolled variables that could easily suck a lot of the margins out of any RMR.

Also, I think most integrator sales orgs are not structured in your favor. Lots of integrator company owners love the idea of the additional RMR with a software only play - but few (being generous; I don't know of any) have ever figured out how to get their sales orgs to sell both styles at the same time.

Which, imo, is the problem that your company - and all the other VSaaS plays before you - has with finding traditional security integrators to sling your stuff.

Finally, there are other barriers like bandwidth limitations/costs, free VMS software like Milestone Go, Blue Iris and others, and even dirt cheap surveillance 'kits; etc that can make monthly, per-camera payments less attractive.

"If yes, what do you think the reasonable price per camera per month should be(for local recording)?"

What do you mean by local recording?

Agree with 2, without a qualified, standard machine to run on, might be tough to support and tough to sell.

If you are thinking to sell a box and rent the software, you might be better off renting the whole NVR, as I don't think people (yet) are exactly enamored with renting software on their own PC.

Adding a widget for people to gaze on while they decide if it's 'worth it', is always helpful.

local meaning not cloud, I'm assuming.

Yes integrators are interested in any RMR model. Without some sort of qualifiers, your question is mute. Too many manufacturers give it away for 0 dollars. What are you offering that the customer would want to pay for?? With all due respect, what we think is almost not relevant. The customer is the one who is paying.

What are you offering that the customer would want to pay for??

I'd second that.

For sure, integrators have interest in recurring revenue. The challenge is justifying / getting customers to pay for that given so many options in video surveillance where there is no recurring charge.

How about this guys?

https://www.ivideon.com/pricing-for-business/
http://ipvm.com/reports/russian-startup-aims-to-conquer-vsaas

What makes them so special? (is it just geography?)
My understanding is that they sell to run on "any" machine(sell just a software).

Not in the least. My clients want to buy software once, up front, no recurring costs. This pricing model has lead to us landing many clients. Had there been recurring costs involved, these particular clients would not have bought from us.

After reading your link, I would change my perspective, but only a little. My market is commercial. I always evaluate everything from a commercial perspective. What you describe would generate very little interest as it is today in the commercial market.

The residential market is different. They might be inclined, but, everything I know about RMR in the US residential market says customers are doing their best to get rid of it, not increase it.

There are also a lot of residential offerings already there that you would be competing against.

I would wish you well really, but you are swimming upstream in a very crowded river.

Mark,

I completely agree with your segmentation argument - commercial is different than residential for sure.

But don't forget the huge numbers of mom-and-pop commercial joints that do not have the CAPEX that the traditional surveillance integrators business models are built upon. These 'small' commercial - along with residential - can maybe handle the OPEX (no/low down; monthly billing) if they can see the value in it. (which, as John points out can be tough to sell)

I disagree, however, with your 'residential is moving away from the RMR model' thesis.... the sheer number of individual payments that people make each month is astonishing (compared to say, the 80s):

Cable

Internet

Phone

Netflix

X-Box Live

Magazine Subscriptions

Hair Club for Men

Gym Membership

Dating Sites

IPVM

Steam (PC Gaming)

Security Marketing Guru

YMCA Membership

Hulu

NY Times Online

etc,

Without researching the names of those posting here and just assuming that most of these comments are coming from an integrator perspective, I'm going to throw a giant wrench into the general tone of this discussion. Obviously this is strictly my perspective based on what I personally am seeing in the market as an integrator.

  • I'm a bit shocked at the number of "no recurring revenue" statements from integrators here. This is the polar opposite of what I am seeing in the market, at least in the sense that many organizations are at least considering a lease/OPEX model and exploring it as an option. Obviously nobody likes SSA's so that is a different story, but as a payment model, the appetite is out there.
  • I have discussions ongoing with two clients right now regarding Genetec's subscription model and placing it on their servers. Obviously it depends on the client and the level of IT infrastructure they have, but I think it's a totally feasible solution to put subscription software onto customer-provided box, provided that box meets specifications. From an integrator perspective, I actually prefer that customers provide and manage their own boxes. This takes the onus off of our team to manage updates to the box itself.
  • I will agree that I don't see it becoming THE mainstream option anytime soon, but the vast majority of my non-government major clients are at least considering some type of OPEX-based purchasing, whether it's subscriptions or leases in place of a traditional upfront purchase.

Just my perspective.

I have discussions ongoing with two clients right now regarding Genetec's subscription model and placing it on their servers.

But VMS licensing represents something like (roughly) ~10% of a video surveillance system.

Related, more integrator perspective: An Honest Integrator On The Truth About RMR

Sure, which if you're talking about a new system probably isn't a major consideration. But if you're looking at a 500+ camera conversion, that ~10% becomes a pretty big nut to crack on its own. :)

I just know that I work with multiple enterprise-level clients, all who are at least casually interested in any OPEX-focused options we have. Sometimes it's a fit and sometimes it isn't.