Why Do Some VMSes Succeed And Others Struggle?
Why do some companies grow and thrive, while others seem to just exist and never 'grow'?
Is it all distribution?
I'm curious what readers think on this subject.
It's a good question and I believe there are a number of factors, so it's not easy to single one.
A few that stand out:
Over the last 15 years, there are at least 3 core areas of focus:
- Software Only
- VMS + Analytics
Regardless of how good one executes, going after the VMS + analytics market has been very hard simply because analytics acceptance has been weak (e.g., 3VR and Aimetis, even Cerinum, who did a recorder first and VideoIQ who tried to be a recorder). If you are pinning your VMS on analytics, you are going to struggle.
Amongst the rest, a key strategic differentiator was whether a VMS company choose to focus on software only or appliances. For example, Exacq succeeded against more established players like Genetec, Milestone and OnSSI by having a fully developed line of appliances, something that these companies are still trying to match today.
Software Only Competition
Lots of VMSes focused on software only. The key to success here is controlling the high end of the market where advanced software features really count and the motivation to use low end appliances is minimal. This is why Genetec and Milestone have been so 'successful' because they have a ton of features that makes a difference to bigger buyers.
To me, that's the big challenge for the 'others' in the space - the Texans (Video Insight, Salient, Lensec), ipConfigure, Luxriot, etc. It's hard for them to beat the big 2.5 (Genetec/Milestone/OnSSI) because of their feature advantages.
Starting Early / Experience
Another key factor is time / experience. Both Milestone and Genetec started in the 1990s which is a big advantage both for developing features and learning the market. Exacq's core team learned from doing Integral and selling that to Pelco.
For example, people at 3VR were incredibly smart but none of us had the depth of market understanding / expertise in the mid 2000s that I am sure Exacq / Milestone / Genetec already had.
I am not saying experience / early starts determine success (see JDS and what happened to them) but it certainly helps a great deal.
Look, there has only been one pure play new entrant to the Western VMS market in years (Network Optix). I think that reflects how mature the products are and how challenging it is to develop the breadth of features to compete.
Beyond cost, how sensitive would you say the low end is to ease of use? I was assuming that Avigilon's appliance play was supported in part by this bias: many haven't time or inclination to learn a ton of features, but want collection and management to be as easy as walking in the park.
Trouble is, first time users have less basis to judge (speaking from experience). We thought going with a major national name would assure competence. It's our second and third systems that focused on the pain points of the first.
I also think that part of the challenge lies in where the manufacturers sales people spend their time. I see 2 x seperate approaches. High end where end user and consultant involvement brings rewards for a smaller number of very large projects. These tend to be the verticals with large camera counts such as Transportation or Education. A lot of effort, time and resources are needed here where VMS features and senior relationships play a big part of the decision process. This is where the bigger companies such as Milestone, Genetec, Avigilon and even Cisco are succesful. Its very hard for new entrants to break into this space.
On the other hand the countless number of smaller projects which are led by local installers and distribution look for less complex products from companies with a good support team. Distribution want an easy life with good margins and no headaches. The big buys handling the major projects tend to have an arrogant approach at this level, dismissive of the lack of networking knowledge from smaller resellers and making out that it is a privelage for the reseller to even be speaking to the major VMS partner. This is where the smaller and new players can make a start to grow their business.
We need the next phase to arrive, such as a true intelligent building approach where a VMS integrates simply and seamlesssly with access control, telephone systems, public address and ighting. The larger players may be caught out when this starts to happen because the downside of being so large is that they are slower to react to change.
Ability to deliver as promised.
When an organization places an RFP on the street, VMS companies leap out of the woodwork and make promises, bids are placed and people from the procurement department make a selection based on the promises made in the RFP responses. Now the VMS Company needs to deliver. They promised these could communicate with all popular camera manufacturer; they didn't mention you will give up all the functionality built into the camera (the reason the camera was selected). They fail to mention they cannot handle Mega Pixel camera traffic well. They fail to mention that when the cameras are brought into their VMS it will change so of the setting in the camera to make their system appear to be work efficiently. Basically they promised to meet all your expectations in reality they deliver 50%, the organization cannot afford to kick them to the street so they tolerate patch after patch.
While living through the pain organizations talk with one another a seminars and meeting, they share their frustrations and lessons learned. Within 5 years the VMS Company will be gone or purchased if they have a few good features.
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