Another Nail in PSIM's Coffin: ADT Acquires Proximex

By: John Honovich, Published on Apr 03, 2011

The first rule of PSIM: Security integrators are where open platforms go to die. As such, today's announcement that integration behemoth ADT has acquired PSIM provider Proximex is a bad sign for the future of PSIM. Additionally, it is no good news for Proximex customers (albiet the handful that actually exist).

The PSIM dream is for independent companies to produce independent platforms that bring together various systems providing greater intelligence. Independence is critical for PSIM providers because of the inherent need to work and build trust with so many other players in the market.

Acquisition Comparables

This acquisition follows a trend of deals, including NICE - Orsus and Siemens - Vistascape [link no longer available], that show PSIM independence is difficult, if not impossible to achieve. The Siemens / Vistascape deal is likely the best comparison to ADT - Proximex as they follow the same pattern - massive integrator acquires small software developer. What we learned from Siemens / Vistascape is (1) product development essentially grinds to a halt and (2) the product becomes essentially an integrator only solution. Both of these make sense from the perspective of the integrator but they are bad for overall innovation.

Proximex's Products Future

In a statement, ADT claimed [link no longer available] that the industry should look for Proximex to 'retain its branding and continue to maintain its relationship with customers, manufacturers and vendors.' Additionally, in an interview with SSN, ADT said that Proximex would remain 'independent and agnostic' and that 'competitive information will not be passed' between Proximex and ADT. While such statements are necessary and perhaps the hope of ADT, we think this is unlikely. PSIM deals are small in number and generally high profile. They are hard to hide even from competitors in different companies. Plus, we believe that ADT will have to depend on its own sales people to promote Proximex. Do you really think large integrators like Diebold, JCI, Siemens, etc. are going to spec in a product that they can only procure via ADT? Hard to believe. The same goes for any other smart integrator.

We find it impossible to imagine ADT leading the ongoing development of a first rate PSIM software development organization. We anticipate ADT will scale back development to project specific requests and that other integrators will run as fast as they can from recommending Proximex. No integrator really wants to invite an attack from ADT.

ADT's Future

On the other hand, this may be a good move for ADT. Security Dreamer, PSIM fan / insider, suspects ADT likely got Proximex at an attractive price, adding that, "[Proximex] was not growing at the rate its investors assumed or hoped." For ADT, this significantly increases their probability of winning $1+ Million installs which is a sweet spot for large integrators. If Proximex can contribute to a handful of 'mega-deals' every year, a reasonable projection, it likely will pay for itself.

Impact on the Market

Let's conclude with observations on impact across the industry:

  • End Users: Bad - Do you really want to lock yourself into ADT? That's what selecting Proximex will essentially do as it is unlikely that anyone else will or want to support it. Having the company widely known as 'Another Damn Technician', 'Always Done Twice', etc. as your sole source integrator is a risky proposition.
  • Low Cost PSIM: Bad - Proximex tried to deliver a low cost turn-key PSIM appliance that we believed had promise. Now as a part of ADT, we think this will be pushed aside as ADT focuses on more lucrative large scale projects.
  • Future of PSIM: Bad - Proximex did not burn through a lot of money, was reasonably focused on building a solid product and still failed. Who's left? CNL, Vidsys (and Vidsys is running on hype). As we examined just a few months ago, the PSIM market remains terribly small.
  • Video or Access 'Centric' PSIMs: As each of the 'pure' PSIMs fall by the way side, this will certainly help VMS and access providers adding PSIM functionality.

8 reports cite this report:

Tyco PSIM Proximex End of Life on Mar 06, 2017
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$18.7M PSIM Acquisition Examined (IDV / Everbridge) on Feb 06, 2017
This may be the biggest deal for a PSIM developer ever. In a segment that has...
Vidsys Hangs On, Gets $11M New Funding on May 16, 2016
The founder of Vidsys claims to have invented the term "PSIM" in 2005, and...
Why PSIM Will NEVER Be Popular on Jun 15, 2015
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On April 20th, nearly 100 IPVM Pro Members participated in a webinar...
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Now that the dust has settled from the numerous new announcements of the last...
New Surveillance Products Spring 2011 Final on Apr 06, 2011
In this report, we provide a single source listing new video surveillance...
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