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?


Product features?

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:

Product Focus

Over the last 15 years, there are at least 3 core areas of focus:

  • Software Only
  • Appliances
  • 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.

By pure play, do you mean VMS only? Or do you mean a company which makes a VMS product its primary focus?

If it's the former, my personal opinion is that there is a growing trend towards full-solution providers (Avigilon, DvTel, March, Tyco) vs. "best of breed" hand-picked systems. I think this trend would be more obvious if there were more truly viable players, more companies seen as offering an elegant solution vs. a collection of ill-fitting components.

Even the pure-play VMS's like Milestone keep dancing around with hardware, and Axis is slowly creeping from a pure-play camera company to a camera/software company.

We see many of the same trends in security as IT, just a few years behind. I remember when "Cisco" was synonymous with "router" before being regarded as an overall "network" company. Other companies like Dell went from PCs to PCs + Servers + Monitors + Network equipment + etc.

With rare exception, I have not frequently seen solutions providers that *prefer* to deal with lots of vendors be as successful as those who deal with 1 or 2 vendors and build deep knowledge of those products within their application domain. Which is more reason for big names to consolidate products across cameras/VMS/access control/.

My feeling is that we're seeing this arc of companies that can only specialize in one thing (camera, access control, software, etc) each with more or less unique feature sets, moving to companies that build a product portfolio of the mainstream components that all interoperate well, and then once things become so feature complete and commoditized that "1080p IP Camera" is as sufficiently generic as "10/100 8 Port Switch" we'll see the primary components break back out into low-cost quasi-disposable items. On the low-end of cameras you're already seeing hints of that, the better-quality no-brand Chinese cameras with basic ONVIF support are getting pretty damn good. Give those guys a couple more years, and pretty soon $50 1080p bullet cams are going to be equivalent to 8-port workgroup switches: any standard unit will be good enough for 95% of the standard applications.

Access control has, IMO, always been a little bit of the weird outlier here. When you see an all-in-one IP door reader for $150 that "just works" with 5 or more software platforms, it'll be the start of the next phase.

Great feedback - thanks!

2 questions:

Do you envision a smaller group of 'security manufacturers' on the horizon (no more camera, VMS, or access-only companies) that dealers use almost exclusively? <---The Avigilon model

What do you think the benefits/detractions might be for an integrator using this 'closed' model vs integrators using more than one 'solution'?

"there is a growing trend towards full-solution providers (Avigilon, DvTel, March, Tyco)"

Not growing. Those companies have been doing that for years. Pelco is another full solution provider. And Honeywell. And Interlogix. Just to name a few big brands.

In terms of my answer, I was addressing companies that just sell VMS / recorders.

"I think that reflects how mature the products are and how challenging it is to develop the breadth of features to compete"

I've two questions based on above.

  1. Are the people responsible for large projects (Govt, City Corporations, Airports, Metros, Ports etc) are particulary not "early adapters" & thus discouraging new entrants? They're not risk taking enough & go with the tried & tested?
  2. Or the incumbent sales team is working behind the scenes to spec these high end features to keep away the new comers?

My guess is both are true. While there will be a case study to prove 1 & 2 wrong, by & large having early market share does seem to work except the case with JDS

Both are true but I don't believe that is the most important factor.

The main driver is that large end users have very sophisticated needs that only a handful of VMSes can meet.

Here's an example: PTZ control prioritization - allowing assignment of different user levels whereby a higher level user can take control of a PTZ from a lower level one, blocking the lower level ones when the higher ones attempt to control the PTZ.

There's lots of niche / advanced functionalities like that which are very important for large scale customers and can be deal breakers. And in the greater scheme of things, the monetary difference between the most advanced VMSes (like Genetec) and general purpose ones (like Luxriot) is not so much that they (large end users) will typically give us functions that are key to their security / business operations.

PTZ control prioritization is a requirement for casinos. In fact, NIGC MICS (National Indian Gaming Commission Minimum Internal Control Standards) requires that Surveillance Control Room personnel even have the ability to override Surveillance management's office systems.

Of interest: I don't believe Avigilon has that capability, yet they are gaining popularity in casinos due to their relatively low cost. Casinos looking to purchase a new system should be aware of that requirement and specify for that capability.

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.