Avigilon has acquired video analytics developer VideoIQ, just like we predicted.
At the end of 2013, Avigilon raised $69 million 'for potential strategic acquisitions.' At that time, we observed:
"Analytics is the most sensible target [for acquisition]. They do not have any analytics of their own (specifically intrusion/tripwire) plus analytics are more important to larger enterprise accounts (with more cameras and more critical security concerns) and they are still poised to be a next big growth area (certainly with megapixel decelerating as the market becomes more saturated).
VideoIQ makes the most sense to us. They have a strong track record, works well (not a small achievement for analytics) plus they have extensive experience in edge storage (another important area that Avigilon lacks). VideoIQ seems to be doing reasonably well (for the weak analytics market) but they have been around for a long time, and VCs generally want an exit sooner rather than later."
The most surprising part is how little Avigilon is paying - just $32 million in cash compared to the estimated $11 million in revenue. This would be a modest, sub 3x, premium compared to the 7x valuation that Avigilon paid for access control provider RedCloud, a far less established company.
We think this is a strong move, at a good price, both because it adds a quality product and potentially restricts access / integration to rivals.
Avigilon's Partner FAQ on the acquisition contains some additional details:
- Avigilon says VideoIQ "enables end-users to prevent crime proactively" which is typical Avigilon mis-marketing - it's nearly BRS Labs style. Nonetheless, VideoIQ is strong at detecting crime in real time.
- "VideoIQ’s technology and business structure will eventually be transitioned to an Avigilon product to provide one single, end-to-end solution for our customers and partners." In other words, in the not too near future, you will need to be an Avigilon partner to get VideoIQ products, a very big deal for non Avigilon dealers / customers.
On the other hand, this is not a bullish sign for existing video analytic companies. VideoIQ was arguably the most successful analytics company and yet was only acquired for $32 million, compared to the tens of millions they raised over the past decade.
For more analysis, see: A Postmortem of VideoIQ and the Future of Video Analytics
8 reports cite this report:
Favorite Video Analytics 2016
on Feb 22, 2016
Video analytics are security professional's choice for the next big thing.
Despite that, our Video Analytics Market Guide and Favorites...
Here's What Avigilon Should Do Now
on Aug 24, 2015
An Avigilon partner asked:
"What would be your Goal if you run Avigilon?"
Given Avigilon's 60% stock price drop since last year, the continued...
Avigilon Loads Up With $200 Million More
on Apr 08, 2015
Evidently they are not done yet.
In the past 18 months, Avigilon raised $169 million, then bought nearly $100 million in patents, VideoIQ for $32...
Avigilon Analytic Cameras Tested
on Nov 12, 2014
Analytics remains the 'next big thing'
But supply of high quality, ease to use analytics remain in short supply.
VideoIQ had been the favorite...
Falling Down: The 2014 Mid-Year Guide
on Jun 02, 2014
Falling down - the theme of the 2014 video surveillance industry. This is the toughest stretch for the industry overall, since at least the...
I'm going to miss BRKs posts on IPVM.... :(
Hold on, let me get my popcorn and a beer...
Hey, why no poll on whether or not this is a good thing for VideoIQ? [IPVM Response - Added]
IPVMU Certified | 12/31/13 04:14pm
Let's hope that this is as good a move for the VideoIQ product line as it is for Avigilon...
It's about time. Can't wait to see how tightly the analytics are integrated into the management side. That still leaves 39 million for another (few) acquisition(s).
The industry is truly shaping to be a two camp world, the end to end solution, Avigilon, or the best of breed solution, Milestone, Genetec etc. exacq will leave us soon folding into the Tyco world leaving us with less choice going forward. 3rd party companies will depart from Avigilon faster I think and look for better partners such as Milestone to counteract the Avigilon story.
These are just thoughts of mine.
Great product addition for Avigilon and great move for Video IQ. Video IQ has some great sales people but they will certainly benefit from the outstanding service provided by Avigilons Service Department.
Amazingly nobody picked VideoIQ in the IPVM "Who's going to be Acquired Next" $500 pool.
Would it be fair to say that best of breed shouldn't necessarily exclude end-to-end, judging by the acquisitions Avigilon has made recently?
No product is perfect and the true test will probably be how well they manage to integrate the various components, as this is usually the biggest challenge, wether you look at if from the provider's or the client's side - true of anything IT related which video surveillance seems to be leaning more and more towards - while continuing to perform the way they have in recent years.
Best of breed should be about getting the best products and putting them together so they work seemlessly. in addition it should be about choice and if one piece fails to measure up or ceases to be best of breed then it can be replaced with something else and the whole system continues forward. I agree that this is not always true in our business, but in the avigilon world they do not want this at all. they want you to lock into their solution and nothing else, you cannot take their software out for example and continue forward with their cameras as you can with Milestone talking to Axis for example. Take Milestone out and replace with Genetec, or Exacq etc and everything goes forward without issue.
IPVMU Certified | 12/31/13 05:11pm
I don't think the "prevent crime" quote is entirely off. I've seen it prevent theft (but only after tresspassing was already in progress). Obviously their statement over simplifies reality, but it does not rise to the level of some of their previous claims.
Avigilon is no different than Tyco or Verint - they want to sell the end to end solution which is just another way to say the customer is locked into their proprietary products.
IPVMU Certified / IPVM Admin | 12/31/13 06:40pm
I wonder what (if any) hardware redesign will happen as a result? Will the product builds change at all?
Merging Avigilon's offerings and devices like Rialto Analytic Bridges into the same portfolio has an odd twang.
The next step for avigilon would be a strategic move which means folding to Schneider or GE as these companies are pretty much the best choice to take over this dinosaur!
Does anyone see them making a play at the actual network switching infrustructure through an aquisition, using their remaining funding to have an even more complete closed end-to-end offering?
Related Reports on Acquisition
Milestone Favorability Results
on Dec 06, 2016
In our second installment of manufacturer favorability results (first was Pelco), we turn to Milestone.
100+ integrators rated and explained what...
FLIR Buys Point Grey For $253M
on Oct 04, 2016
FLIR's acquisition streak continues, announcing an acquisition of Point Grey Research for $253M in cash.
Other notable FLIR deals include:
VMS Developer Lensec Acquired
on Aug 10, 2016
Independent VMS companies have been popular acquisition targets in the security industry the past few years (with Tyco acquiring Exacq, Canon...
FLIR Buys Camera Manufacturer ISD from DW
on Jun 07, 2016
FLIR has made yet another acquisition, following up on last year's DVTel deal, FLIR has acquired ISD from Digital Watchdog.
In this report, based...
Axis Acquires Retail Analytics Developer
on Jun 03, 2016
Two acquisitions in a week and the third in three months for Axis. At this point, it is pretty clear - Axis is on a buying spree.
On the other...
Axis Acquires Intercom Manufacturer 2N
on May 30, 2016
Axis has now made its second acquisition in the past 3 months. And it is another company most industry people know little about.
In this note, we...
Most Recent Industry Reports
The Russian SMP Security Robot
on Dec 08, 2016
A Russian manufacturer, SMP, has a commercially available outdoor security robot, at a lower price and with much less marketing than their main...
How Hikvision Beats Its OEMs
on Dec 08, 2016
Hikvision GM declared that they are not aggressive with their competitors.
But some of their own OEM partners disagree.
Inside, we reveal a key...
IP Networking Course January 2017
on Dec 08, 2016
This is the only networking course designed specifically for video surveillance professionals plus it includes live training, personal help and...
Hikvision vs Dahua Mobile Apps Tested
on Dec 07, 2016
With smartphone use and low-cost video recorders surging, many user's main interface to their surveillance system is their phone. With mobile video...
Sony IP Camera Backdoor Uncovered
on Dec 06, 2016
A backdoor has been uncovered in ~80 Sony IP camera models, attackers can remotely enable telnet on the camera, and then potentially login as root,...