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
9 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...
Canon Buy Axis, Owns Axis and Milestone
on Feb 10, 2015
This is the biggest deal in video surveillance ever.
Just 8 months after buying Milestone, Canon is set to buy Axis.
Canon has offered $2.8...
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 | 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
Dell EMC Surveillance Division Profile
on Apr 20, 2017
With revenue growth from traditional IT customers slowing, Dell has set a focus on the security industry as a market where the company can offer...
ObjectVideo Acquired by Alarm.com
on Mar 14, 2017
Once potentially the most recognized name in video analytics, ObjectVideo has effectively been sold for pieces.
Alarm.com has now acquired what...
Exacq 3 Co-Founders Exit
on Jan 10, 2017
Exacq co-founders David Underwood and Daniel Rittman have exited the company.
UPDATE: And a 3rd co-founder is now also leaving.
In this note,...
5th Acquisition for ACRE, Adds ComNet
on Dec 14, 2016
Mercury, Siemens Security, Vanderbilt, ACT and now ComNet.
While other companies are trying to get out of security, emerging conglomerate ACRE...
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...
Most Recent Industry Reports
Uniview Low-Cost Bullet PTZ Tested
on Jun 21, 2017
Uniview is offering a HD zoom bullet camera, the IPC742SR9-PZ30-32G, with an integrated pan / tilt positioner, for the price of a low-cost...
QSR Video Surveillance Best Practices
on Jun 21, 2017
Fast food restaurants or QSRs (quick service restaurants), are frequent victims of crime and fraud. Because they are open late, deal with cash, and...
No Hack, Still Liable, Court Finds ADT
on Jun 20, 2017
Recently, ADT has been in the news for a $16 million settlement for a cyber security vulnerability class action suit.
One of the most important...
Axis P3225 Mk II Tested Vs. Original
on Jun 20, 2017
Axis has released a number of 'Mk II' versions of their cameras, which are the same fundamental camera but with specific improvements.
Dahua Demotes USA CEO
on Jun 19, 2017
Dahua has demoted their USA CEO Tim Wang.
Inside this note, we examine the move, Dahua's challenges and what lies ahead for the...
VMS UI - Light vs Dark Preferences
on Jun 16, 2017
Several VMS manufacturers have the ability to choose a user interface with either a light or dark color theme. 150+ integrators told us which they...