Avigilon Acquires VideoIQ

Sadly, its been almost two weeks since the 'acquisition' and still BK's all-time number refuses to budge from its lofty yet vulnerable perch of 358...

More than once I have been drawn to a flurry of comment activity as ravenous posters skillfully dissect the 'fatted' manufacturer, integrator, distributor or sacred cow du jour, expecing to see K artfully executing the coup de grace, but when the dust settles seeing nothing but knives and blood... and shadows...

Where for art thou, Karas?

They might consider buying or producing their own alarm panel. That would cover all 3 major aspects of security (video, access and alarm) and maybe finally bring the alarm panel world out of the prehistoric era.

Interesting observation. I do think there is still a lot of diversity within the overall surveillance market (dozens of significant players, hundreds of non trivial suppliers, etc.). That said, I agree with your sentiment that the 'open' providers are going to need to get serious about how to counteract the growing strength of the Avigilon offering. To date, they have let Avigilon eat their lunch.

Alain, good point.

It's certainly possible for an end to end solution to simultaneously offer the best products in each category. The challenge is that it is really hard to do and I cannot think of any surveillance manufacturer who has been able to pull it off.

Staying at the leading edge of development for cameras, VMS, analytics and access control is a daunting proposition for anyone. It also tends to be undermined by end to end company's efforts to push their own offerings to their somewhat 'captured' channel.

Avilgion has grown at an unprecedented rate for its size in this industry so it is certainly possible they break ground here, but it is still going heavily against the odds.

I think there is a real chance that Avigilon leverages its hot streak to sell themselves in the next year, which would be quite the culmination of this run, especially compared to the increasing difficulty of managing such a large and complex organization already valued at such a premium.

Well to be fair to Avigilon, that it is not entirely correct. Avigilon has a line of H.264 Cameras that are ONVIF compliant and they can be used with other third party platforms...

Well, we both seem agree that the biggest problem is to get various products to work together seemlessly.

The other part of the equation, at least from a client perspective, is wether the cost/quality trade off, both in the short and long term, is worthwhile or not and that's usually very subjective, considering that integration costs are typically much more difficult to assess properly - and usually much more volatile - relative to hardware and software costs.

James, some context for others. That scenario is based on real time monitoring, immediate response, talk down and the hope that it scares off crimes in progress. Otherwise, one is still left to call responders (police, security guards) to intercept / apprehend.

I bet they will sell a ton of Rialto IP units to complement existing Avigilon cameras. That's the low hanging fruit.

That would imply Schneider, GE or someone else would be interested in taking them out at this point.

I've been thinking about the possibility of a that happening with Avigilon and am not convinced it will happen in the very near term. Their revenue and bottom line are growing at a very rapid pace, but based on their current run rate, sales only represent 1-1.5% of the global video surveillance market's estimated value for 2013, according to this article from July 2012, if those figures still hold true, and they seem to be based on what's been touted about lately. And the market is expected to continue to grow at close to a 20% annual clip for at least the next few years.

As John pointed out in previous posts, the current market valuation for Avigilon, although probably warranted given their track record up to now, is quite rich and that leaves only a select few candidates with the resources to afford a buy out of this size.

I'm thinking it's likely potential acquirers might wait out a little longer to see how they fare with the Redcloud and VideoIQ integrations. They've obviously executed very well up to now, but they haven't really provided any results that would include those acquisitions yet and that probably won't come until at least Q1 14, at which point the success of those products additions could become somewhat clearer. Any real interest in acquiring them might not come until the second half of 2014, if something was to materialize on that front this year.

Then again, if others expect they will continue to deliver as well as they have in the future, that would mean a much richer offer would need to be made down the road.

Highly, highly doubt it in my opinion. Too competive a field (network switches), they don't have experiance in it, and only reason I could think of is if they tried to do something special like Dedicated Micros' ClosedIP solution where the switches were part of an automatic connection and encryption solution, but DM never got anywhere with that that I know of.