Avigilon CEO: Axis Model is Win - Lose
Author: John Honovich, Published on Feb 12, 2014Are manufacturers winning at the expense of their integrators?
That is the claim Avigilon's CEO makes, calling the channel model most, and most notably Axis, use a 'win lose situation'.
Here is what he said:
"The vast majority of our competitors sell through distribution and on the Internet and basically it is a free for all where everybody can access the products and the end result is their products are essentially commoditized, end users can bypass integrators and get dealer pricing and so it's very difficult for them to maintain a margin and that creates a win lose situation."
Watch the video segment itself:
However, there are multiple tiers of dealer pricing for the vast majority of manufacturers and rarely do end users get the largest discounts reserved for preferred / top dealers but....
The Upsides
No doubt, most products are available for sale online and almost always notably below MSRP. One can use Google products to get pricing and purchase products from the clear majority of surveillance manufacturers. To that end, not only can end users go around integrators, they can and do use the existence of such avenues to push down integrator pricing.
Certainly, many integrators disdain this availability and bemoan being 'price shopped' and 'haggled' with.
A model like Avigilon's, which is a distinct minority in this industry, makes it hard for end users to buy Avigilon outside of local authorized dealers and even difficult to find pricing (though not impossible as Avigilon price lists are found here, here and here, e.g.). The outcome is that margins are much better protected, maximizing the chances of dealers profiting as much as possible.
This approach is certainly a key component of Avigilon building a legion of fanatical dealers.
The Risks
On the other hand, integrators become more allied and dependent on promoting that manufacturer's products. Selling a rival's product in key deals, criticizing the company or not selling enough of their products are all reasons to terminate a dealership, which can lead to major issues with existing customers who they have already sold those products.
Also, end users face integrators who are driven to sell those restricted products, even if those are not the best choice for their needs. End users also have restricted options for buying and support as well as greater difficulty for ensuring the best price is obtained.
The Balance
Many, if not most, integrators would likely prefer a restricted channel model, where as few competitors as possible, and no users, have access to purchasing products. The opposite is likely true for most end users.
What Do You Think?
Industry Divided
Our poll results show an industry divided on selling products online to the public:
- 70% of integrators and 60% of manufacturers think this is a bad thing
- But 90% of end users and 75% of consultants think this is a good thing
The Future
Will the future see more manufacturers with tightly restricted sales? Should the industry go in this direction? Discuss.
2 reports cite this report:
Comments (72)
Since I'm not an integrator/installer, my view may be too simplistic, but I think it's okay for mfgrs to sell to the public. In commercial applications of multiple cameras, an integrator/installer will probably get the job anyway. As for the DIY-ers, they will try it themselves then call a company to correct their mistakes, so the installer stills gets involved and makes money in most jobs.
"As for the DIY-ers, they will try it themselves then call a company to correct their mistakes, so the installer stills gets involved and makes money in most jobs."
Cynthia - That ties in to what I was just saying. The end result is that this customer probably ends up paying even more than if he had gone straight to the integrator and had chosen the right system and had it installed properly in the first place.
Paying less for something, when you're a consumer, is usually considered to be a good thing but, generally speaking, the only ones who really immediately benefit when selling a product online at a deep discount are the ones who are willing to do that.
I would say that for end users, it can create unrealistic expectations as to how much they should be paying for what will actually meet their needs.
When a user is shopping for, or trying to price, a security system online to get an idea of what he should expect to pay, that user may or may not have the required technical knowledge to evaluate what would actually work for his particular situation. When he comes accross a low-end PTZ that promises the moon for for about $100, that user will jump when a proposal comes in quoting what he perceives to be a similar product for $200-$300 or more, although that product might perform much better than the cheapo version he saw online. Right off the bat, it starts the relationship with the integrator on a bad footing and that user will most likely try to second guess everything the integrator tells him.
That in itself might not be a bad thing because it gives the integrator a great opportunity to educate the customer and potentially build a more lasting relationship, but it probably adds an extra level of complexity to what might have otherwise been a much more simple transaction.
The problem is that, like any transaction where technology is involved, buying the right IP Video system or component isn't as simple as buying a book online from Amazon VS getting exactly that same book from the brick-and-mortar shop at your local mall.
Competition is good for everyone. Consumers get better prices. Integrators get better products, because, unable to compete on price, manufacturers struggle to differentiate themselves on quality and features, driving substandard product out of the market (or, for those willing to accept substandard product, making the junk really, really cheap). Manufacturers benefit because increased availability of product causes the market to expand, moving surveillance from luxury to necessity. And, of course, the proliferation of good, cheap security cameras causes everyone to be more secure.
It does suck for those companies whose business model is based on high margins, though.
Of course, I'm horribly biased on the subject of whether selling surveillance direct to anybody with a credit card and an internet connection is a good idea, so, you know. Grain of salt.
Life is the book of changes.
I have been a DIYer for 3 years or so and have learned how to get them up and running but I have also learned the serious installs will always need a pro. Prices and product have improved dramatically over the past few years which is a good thing for everybody.
I think having the products available to all will weed out the integrator pool and the best will survive and do very well, even if their margins are cut.
We will always need the good professionals in every service field but the gravy trains are ending.
I'm not sure I agree with the idea that sticking to one line or group of products impedes an integrator's ability to offer quality consulting and design services.
If anything, wouldn't working with the same products day in and day out, wether they are from one source or multiple sources, allow for building better expertise about those products and allow more time for quality consulting and building better designs?
A day in the life of an Avigilon integrator:
- Meet with a utility company - Solution: use Avigilon
- Meet with a bank - Solution: use Avigilon
- Lunch at the neighborhood pizzeria - Solution: use Avigilon
- Meet with an international airport - Solution: use Avigilon
- Meet with a school with 100 new Pelco DVRs - Solution: switch to Avigilon
Hopefully, the prospect will be smart enough to request quotes from multiple vendors.
That's the whole idea of having competition. Avigilon, Axis, and all of the other manufacturers don't operate in a vacuum.
The idea of an integrator, to many, is a company / individual / professional who recommends the best solution, whatever the product manufacturer might be, not the one that makes them the most money. The saying, "Putting the customer first"
The reality is that if businesses don't make, or don't make enough, money, they tend not to stay in business.
On that same line of thought, companies who don't provide decent pay and working conditions to their employees see them leave to go work for someone else at some point.
I'm also not sure I understand the relationship you're implying between offering the best solution, making money and putting customers first. It seems counterintuitive.
There are a lot of successful companies out there who make quite a bit of money, have been in business for a long time, and also manage to treat their partners, employees, and customers very well, regardless of the number of product lines they offer.
There are also a lot of not so successful businesses who don't know how to say no to their customers and get into a lot of trouble because of that.
When in doubt, I always refer back to Maslow's hierharchy of needs.
Does Avigilon have a rack mounted encoder? Do the support Coaxatron? This is one tiny reason to go beyond the manufacture and look for a solution that matches the need. Does Avigilon sell anything besides Cisco and Dell in their solution offerings? Not that any of these solutions are bad but blindly supporting a single model and install without stepping above it all and acting as an independent voice for your clients is doing the entire industry a disservice.
No one manufacture makes everything you need and learning the advanced functions of IT will serve your client base more effectively than learning an Aviglion Install in and out – which is not complicated – if you work on the same products day in and day out and are not exposing yourself or teams to new products or independent IP education than you will slowly become irrelevant. How useful is someone who has installed Pelco for 20 years? I would argue not very. How useful who is someone who been certified and installed multiple solutions and has industry recognized IT certifications ? Very useful.
I definitely agree that if you don't look outside your little box often enough, the world will run you over like a steamroller.
I also don't see too many of the key players in the industry doing that and I'm sure they expect their partners who do consulting, integration and installations to keep up.
"Does Avigilon have a rack mounted encoder?"
From their product documentation on p. 3, their encoders are rack-mountable.
"Do the support Coaxatron?"
I can't answer that specifically, but one smart cookie figured out how to make Coaxitron work with an Avigilon system if you scroll down to his post from 12-12-2008 @ 12:57 PM. Mind you, this was 5 years ago so things might have changed.
This is my point-- why home brew it with Avigilon when Sony supports out of box ? ( if that is what your job requires). You are making my point -- you are looking solely to Aviglilon to fit every hole and it is just not the case.. They fit some nicely others ok and some its a terrible fit.
I don't think they are trying to fit every hole, but what I am saying is that it seems that the answer to both of your questions is Yes.
And it took me two minutes of online searching to find those for you. I guess I must have been pretty good in my tech support days.
You did not find them for me - I know Sony supports coaxatron - because I had a client who needed it and other encoder manufactures did not support it. You found that for you to support that Avigilon does everything I guess?
What would you do in a case that a customer wants SNMP based management of end points and wants to encode all their existing analog cameras?
(actual real world example of large customer who has Avigilon)
I believe your original questions were:
"Does Avigilon have a rack mounted encoder? Do the support Coaxatron?"
Now you're faulting me for finding positive answers to them? Why ask in the first place?
Honestly, I don't even work in the industry and didn't know all that much about it until a few months ago when I subscribed to IPVM. And I have no issues about saying that. I'm just a relatively smart and sometimes lucky dumbass investor, but I did work in IT for a number of years.
To answer your other question, there are a lot of ways you can convert an analog signal so that it can be used on an Ethernet network and the associated device managed using SNMP. Which one are you looking for? I wouldn't want to incur your wrath again.
My wrath ? Not at all. I like the fact that you are willing and able to make strong statements and discussion- its much better than lurking! :)
On SNMP- Avigilon does not support SNMP off of their devices - so you cannot pull bandwidth information off of an Avigilon Encoder l( that I know of- i could be wrong and have been before) like you can off of an Axis encdoer and pull that into an indpendent network monitor like Solar Winds / Naigos.
So to the dealer that has a customer who needs to be able to offer SNMP data but sells Avigilon it does not fit the bill for this client.
Very few physical security devices support SNMP. But, why wouldn't you just get that data off the switch port?
This SNMP angle is way, way off topic. I have started a new discussion just for it. Please take it here: SNMP And Video Surveillance?
And honest question on that encoder- is that blade ( like axis /sony ) or is that just 3 4channel put together to form a 1u ?
Avigilon only offers 4 channel encoders, no blade devices/systems. 3 Avigilon encoders can be mounted side by side in a rack, excerpt from install guide:
That is different than, a rack / blade system like the Axis Q7920, which looks like so:
Now, please don't ask if Avigilon has encoders that are hot swappable or support redundant network connections and power supplies....
The Avigilon Encoder is a four port unit with 4 485 ports, 4 I/O ports, plus a 3v voltage for relay control, mount three on a metal shelf. Voila. Support 768x512 encoding. H264/Mjpg
Many think that direct end-user purchases are primarily to consurmers and small businesses. But there is quite a large percentage of Fortume 1000, govt., and education markets that have their own installation capabilities and they will simply not consider using integrators. Integrators are not losing this business because of product pricing. It simply isn't available to them. So Avigilon's current policy of working only through integrators may be suitable for their current stage of growth. Once they get another $100 million in annual revenue under their belt and growing gets a little tougher I won't be surprised if this policy is reevaluated.
Using distribution and online sales channels is not a bad thing as long as a manufacturer has good channel structure and pricing policies and the ability to enforce them. Distribution provides a logistic and financing capablity that is much more robust than what the manufacturer can provide and allows the manufacturer to focus attention and resources where they should.
"But there is quite a large percentage of Fortume 1000, govt., and education markets that have their own installation capabilities and they will simply not consider using integrators."
You'll have a tough time convincing me about this. For years, government and large corporations have been relentlessly pushing the "stick to our core business" mantra and outsourcing pretty much everything else.
Why would that paradigm suddenly shift when it comes to surveillance/security?
Alain, you can be convinced or unconvinced or disagree, but the practice of large end users buying direct is quite common (e.g., Distributors Dealing Direct to End Users). Not all of them install themselves, but many will purchase the equipment directly from the manufacturer and then pay the installer/integrator to put it in. I have seen other large end users negotiate a set price directly with a manufacturer ("We will pay X per camera or recorder") and then let the integrators regionally fulfill orders but constrained by that blanket purchase agreement.
What I think is more debatable is whether Avigilon has to allow this. I think overall it is still in their best interest to hold firm to their restricted model.
"many will purchase the equipment directly from the manufacturer and then pay the installer/integration to put it in."
I can see how that would make sense for large global/multi-site organizations since they can probably negotiate bulk purchasing agreements at lower cost compared to local integrators who don't have the same scope.
That doesn't prevent the manufacturer from promoting the local integrators they know have expertise with their products and probably makes sense for the clients as well, as opposed to trying to build that expertise in-house when it may only be needed from time to time.
"That doesn't prevent the manufacturer from promoting the local integrators they know have expertise with their products and probably makes sense for the clients as well, as opposed to trying to build that expertise in-house when it may only be needed from time to time."
This is not reality.
Reality is where the manufacturer is terrified of losing a sale because they are propping up a 3rd party as an agent, because the customer has no interest/desire in being involved with them. Instead, they just do the deal direct, cut out a few margin points, and preserve the sale.
Meanwhile, the manufacturer simultaneously supports a 'dealer sales channel' because it amplifies their own internal sales efforts. Dealers are company salesman who do not count against overhead... can't beat that.
This happens everyday, worldwide, in thousands of verticals. Paperclips, cars, security, pharma, you name it.
Amen
Brian - I'm not saying the manufacturer will push back and tell the prospect "No, no. We can't do this. Go talk to this guy and that guy and that other gus and they'll put their orders in individually because we can't cut into their margins".
More something like "Here's you confidential price list and agreement. Oh! And here' a list of companies in the different locations where you operate. These guys all charge reasonable rates for their services and are really good and they'll add even more value to what we're already offering you. And you'll save time if you deal with them."
Almost six years ago, we found Avigilon, and after seeing and working with the product, we stopped selling every other product and focused exclusively on Avigilon. Years later, and many hundreds of cameras, we have had ZERO lockups, ZERO catastrophic Failures, the best tech support ever 24x7 on special requests and complex issues, many satisfied clients.
While margin is important, delivering the best possible solution, and selling yourself and your business as a service business, will trump low prices.
Having been in the IT/IP support business since before the Internet, I would consider our expertise unequalled by any traditional CCTV vendor, and the feature/functionality of the Avigilon platform allows of the accurately predict image quality, and comfortably provide an SLA based operations/support agreement.
Many hundreds of cameras over six years? Maybe your test pool is not very large but every system has issues and complexities.
I am not arguing that Avigilon is bad or selling it is bad but blindly recommending it is bad.
“I would consider our expertise unequalled by any traditional CCTV vendor”
What expertise beyond Aviglion install experience over six years does your team have that you would say is beyond the traditional CCTV vendor? What drove you to that expertise? As you gained more expertise in your tech staff did you feel that forced you to raise pay which raises cost of job? Does Avigilion have a road map for this expertise or is this something you developed for your team ?
It may/may not be necessarily true that Axis (or any manufacturer) is actually selling their products online. There are a number of websites hosted by either dealers/integrators where they resell products, wholesale distributors who hide behind an anonymous name to resell products, etc. As a manufacturer, we do not sell directly to end users on the internet, and sell to very few online resellers, yet our products are found on countless websites, from Amazon, to Sears, to dozens of others I have never seen or heard of! I think it's just a downside of the information era that we live in, and manufacturers and integrators have to work together to sell value to the end user, not just price.
Scott, thanks for the feedback. The counter that I have heard is that manufacturers can track down who the online reseller is buying a unit from them, getting the MAC address of the unit shipped and then determining what distributor that unit was originally shipped to. Then they can go the distributor, have them check where that unit went and push them not to sell to this online reseller.
We live in the age of the internet where people don't even have to leave their home to buy anything they want. We also live in an age where even Luddite's have technology in their palm that would have baffled technologists 20 years ago. To assume that only an integrator is smart enough to install and configure an IP camera is narrow thinking. Many times, people buy on brand recognition and the public has likely never heard of Avigilon and they like to keep it a secret from consumer. But consumers are not dumb and an integrator submits a bid a project, I bet the first thing someone does it Google it and not finding much on it to many is a red flag. Googling Axis would return a much larger result and being able to see what the cameras cost gives the customer a good idea what the cameras cost and if he's overpaying. We are talking thin margins anyway, so in the overall scheme of things, an integrator is not really making his money on cmaeras, but the entire job.
I take a different approach in the business and do consulting rather than intalls. I help the customer scope out a project and get meaningful bids at arms length from bidders. I would never recomend Avigilon to a large commercial customer because it limits their choice of integrator in as much as I would not recomend say Foscam or Dahua for the same reason. I warn them that getting a bid for say $100K from two integrators with different solutions, if you don't know the value or quality of the equipment they are bidding, how do you know which bid is better? I've seen bids for about the same amount of money and one integrator is bidding Axis, the other Speco, another analog.
Let's See, Avigilon provides their software on OEM Dell Equipment. Argueably the worlds largest computer company. And provides 24 x 7 4 hour onsite repair world wide.
Somebody please tell me what vendor providing an integrated OS appliance "Linux, DOS, Windows" or otherwise has the equivalent Support?
If integrators choose to provide their own hardware, the Avigilon Platform is available as BYOD for your servers.
Our IP expertise has come from 28 years as a traditional IT support company, and VoIP, and IP Security grew out of our clients asking for solutions. We sold other platforms such as Video Insight years ago, and did some open source work with ZoneMinder in it's early days... Circa 15 years ago.
We try to educate our prospective clients about Video, at whatever detail level they would like to know, including every aspect of compresssion, lens optics, etc... But more importantly, we're happy to help a client write a SOW that defines the outcome or expectation. Example, XZY, is has the need to install a suitable Camera system on or near the entrance to our facility that has the ability to optically resolve all characters of a license plate out to a distance of 150' regardless of the speed of the vehicle and the time of the day, with the exception of a heavy FOG, or other natural obstruction that may occur.
I've over simplified that, but lets add now assume this might be a "Civic Surveillance" solution and you want to optically resolve license plates in any of four directions at a given street corner, and agency would like the video sent via a wireless link 2.5 miles from the intersection back to the Agency.
We've invested a considerable sum of dollars and time to develop the tools to help us accurately predict pixels on target values across the entire camera line of Avigilon, and these same tools support the specs of most cameras.
Please don't think I am being condensending to any other sales / support model, as they all can work. We've simply chosen to focus on one product line, be the best we can be, and hold ourselves to a very high standard. We use the International "IEC 62676-4" CCTV video image testing methodology to evaluate image quality delivery. We either meet the agreed upon requirements, or we don't get paid, and we're happy to compete against any competitor and any product when the coverage area and a measurable objective result is accurately defined, supported by a subjective client review.
Out MSP IT clients have been measuring our results for 27+ years... We're just trying to do the same for our extended clients in the VoIP and IP based surveillance clients.
So you are a Managed Service Provider that sells Avigilon ? What IT products do you support? Do you manage systems ? What is your VoIP solution ? Do you host or resell ? Did you start in IT and move to Video ? I am genuinely curious because you do not come across IT/IP Centric dealers that have a strong surveillance arm.
You focus more on image quality and pixels per foot over transport and network knowledge? Are your customers mostly traditional security managers or IT directors CTO ? What is your average size deployment?
I would argue that most traditional CCTV vendors can accurately predict Pixels Per Foot and design a low light solution-- do you feel that this knowledge sets you apart ?
You have setup a traffic video with a wireless link- how do you sell this knowledge as validated to the next client ? Do you just say we know wireless? Or we can install a traffic camera in 4 directions?
Back to my original question what expertise makes you unequal to any traditional cctv vendor? None of what you said is beyond what I have seen any CCTV vendor can do including many national ones.
What tools do you use to accurately use to predict pixels on target that are specific to Avigilon that are not available to rest of industry and not covered on IPVM?
Josh,
Yes,
We are an IT MSP, and began providing FLAT rate IT support in 1995, after the margins ran out on hardware and software during our early years from 86 - 94. From the early years of Novell NE1 cards, Arcnet, and every protocol since. Avigilon was once sold via the REP method and they found us, they've since gone direct removing the REP, and they may someday go via Distribution. That would not change my pricing model, as every proposal is a single bottom line number, designed to meet the documented requirements. Not a BID SPEC list of stuff. and if the client isn't interested in support plan, then we are not a good fit....
Seems to me, we need to find a way to move to the IT business model (e.g. little/no margin on equipment but make it up on skilled labor - $150 - $200/hr - in line with professional engineering services). Instead, we integrators are stuck in the model that says make some on equipment because you're just another construction contractor and should only charge rates similiar to an electrican or plumber. I don't know too many IT guys who pull cable and are on the project from rough thru trim and final. Just sayin..
Michael, that's a good point. Question is - how do they get there? It's challenging when all/most of one's competitors are charging much less. See our Security Integrator Hourly Rates results, e.g.
Michael,
Don't undersell either. You can't rob peter to pay paul in this our any other service oriented business. You need to know the client expectations and budget well in advance of doing any work or providing any products. Move as quickly as possible to solution selling or grow accustomed to price shopping. Pre Installation Education, and Post installation support are the two things you can't buy online.
Andrew,
We do all you say where possible. But the mindset is different on the construction side. While we do charge more for Programming/IT services, it is still not at the rates IT guys get. My point is we need to change the expectation/mindset as an industry-integrator - particularly if the customer want commodity pricing on product. See to me that the IT guys (who usually don't do any of the dirty work like cabling or install) have managed to set a higher expectation.
In general, I think it's a good thing for the public. It may not be a good thing for some in the industry but most will find a way to add value to the products and survive.
We are in the same stage as when the Model T was popular. According to Henry Ford's autobiography, other manufacturers and dealers of higher priced cars sued Ford in an effort to reduce the number of cars being sold so they could make money. But he won, and that was good for the public as now know.
If you look at the short history of personal computers, it follows a similar path. The wider the distribution the more people bought. I remember the big manufacturers limiting their sales to the big stores but there were so many more little stores selling white box computers at cheaper prices that the big stores eventually faded away, and the company responsible for "standardizing and popularizing" the pc left the business long time ago. The consumer dictated the market.
And I'm sure radios and tv sets followed the same path in their heydays.
Which brings out a thought ... Aviglon may well become the Apple of the video surveillance industry.
Apple of Video Industry ? Based on what ?Maybe based on their fanatical following and users unwillingness to concede that there may be a better solution besides what they offer. Than yes Apple of video industry.
Apple, That ain't all bad
If they were smart, integrators should adopt the mobile phone market model of subsidized cameras. Imagine, you go to a customer and say that Axis dome is $99 and you make it up in installation, consulting, maintenance subscription. Then they can't possibly go online and find it cheaper elsewehre.
Think of the alarm model, free system but make it up on subscription. Everyone likes free, just have to figure out how to charge for it.
Josh,
Having an SNMP layer on a device is a security risk and provided little in the way of health. You can make pretty traffic graphs, but little else. You can pull speed information from the supporting switch.
We use an unnamed product, that does statistical and moving average analysis on the ARP and UDP connections to the cameras and switches and provide alerting on the statiscal changes in the response times. This is a much more reliable method to manage, monitor, and alert on pending and real failures.
How is SNMP a security risk inside an enterprise network ? You can pull off of switch but try doing this on a large customer and match ICMP testing with bandwidth / netflow- it sucks- a lot of times the security managment team has little to no access to managment side of the switches they are using. It is much easer of device supports SNMP and can deliver bandwidth, status, power etc in one secure package to network manger regardless of location.
Why do you need to look ARP connections? what does that give you ? UDP connections can be verified via ICMP and netflow /sflow as needed. I am curious as to why you think UDP / ARP monitoring is more effective than SNMP- i have not heard this argument. I would like to understand what end result you are driving to with the data you are collecting.
This thread regarding Avigilon has devolved to a technical discussion and my final thoughts.
SNMP has been exploited since day one, and remains an exploited unsecure protocol. one quick search for SNMP RISKs will net you years of evidence. The occurance of L1 physical RUNTS, COLLISIONS, SHORT PACKETS, etc on the Switch Port is a much better indicator of potential health issues. Keep the traffic graphs for historical use.
SNMP, like netflow have their place, but the information is STATIC, and to use it or analysis requires a sophiscated backend to do the analysis work. Simply setting thresholds isn't enough.
You can do that same analysis on UDP/ARP traffic with the right tools and develop predictive failure alerts, leaving SNMP to make the pretty graphs. measuring endpoint response times allows you to analyze the response times that include the Bridge effects of switches too.
I'll share one of the tools we use that you might want to consider by watching their Webinar.
www.intravue.com
Tell Mark or Jim I sent you their way. Tell them the IT guy in Indianapolis sent you.
Cheers -
Andrew, leaving aside SNMP pros and cons, I think we would agree that a non trivial number of enterprises use / require SNMP as part of their network monitoring solution. To that end, this is a feature set that differentiates one surveillance manufacturer from another, just like a customer who demands 20MP+ cameras, even if others think they are a bad decision and should be avoided.
We all agree on so many things, but I learned years ago in sales, You don't have to like something, but you shouldn't act like you don't like something.
Disecting this industry, regardless of brand, you will find technical differences that ultimately have ZERO to do with the reasons someone will spend money on a CCTV system from Avigilon to Swann and everything in between. And to focus on these as a true selling point as opposed to verifiable, predictable image quality is like selling Bread, Milk, Eggs, salt, as opposed to Selling Cake. We sell Cake.
Let's face it, everything we buy is a result of compromizes, else we would all have Cray Computers and Ferrari's. Right?
This discussion reminds me of the Compaq vs. Dell days. (the more things change...) Compaq sold only through VARS/Dealers, Dell sold to anyone and everyone. On the Dell side you didn't have someone local to help you, on the Compaq side if your local VAR was terrible, you were out of luck. Both models were successful and I think can have their place, but I believe the Dell model serves the customer better in the long run.
Applying this to our industry, a dedicated model like Avigilon's helps build expertise and ensure a better typcial customer experience, but can cause a lot of friction with customers who can't go elsewhere if they have a bad experience and between the manufacturer and integrator when their expectations start to diverge signficantly (sell more or we fire you/how dare you all more integrators)
The open model can lead to frustrated customers working with an integrator who doesn't know the product very well.
Ultimately, the right answer progably depends on the sophistication of the customer/integrator and the complexity of the project. For manufacturers, the onus should be on making products that are simple to use and be successful with.
They are a niche player, does anyone else do this? When you have a niche so small nobody else wants to fit in, it makes you the king of the niche and their niche is for insecure integrators that want to lock in their customers so they can't go elsewhere.
Are you saying Avigilon is a niche player? They are many things, but niche is not really one of them.
To expand on this, Avigilon did nearly $200 million in revenue last year (2012). They might have been a niche player a few years ago but not anymore.
Yes, niche player regarless of size. The company I work for is a niche player that runs about 200m a week in revenue.
Does the company you work for sell 200 million in surveillance products per week??? Cause that is roughly the size of the entire global surveillance market :)
Presumably, your company is in a different (far bigger) market. In surveillance, a relatively small market (compared, e.g., to computers or mobile phones), $200 million annual revenue puts a manufacturer in the top 20 companies or so (out of 1000).
Still, not a revenue or company size that to me makes a niche. To me, Apple, #1 largest market cap company in the U.S. to me is a niche player and yes, I have several Apple products, but is not the mainstream product for servers, desktops or even laptops, yet I get lots of people asking where can I get NVR software that runs on Macs, but the CCTV industry considers Apple too small, a niche player, not worthy of their time.
By keeping their dealer network small, controlled, and afraid of the man, they are by my definition a niche. I can't just call a distributor and buy it and I can't even just call them and buy it, not without filling out forms and signing an agreement that may not be in my best interest. This makes their everyday products irrelavent to me because there's plenty of other products in the marketplace to choose from that I can source from multiple supliers, one is out, I call another. The niche then becomes their very high end where I would be forced to make nice with them to buy purely for their niche which as of today, had not had a need for a 29MP 2 fps camera, but someday :).
NVR software or client software that runs on MAC? Several companies have MAC/ Apple clients and all of the big ones have Apps. No one makes an Apple NVR because Apple market is not servers ( NVR) and unless you realy small you should not install the head end engine directly on to a desktop-- if a customer wants that its pretty easy-- tell them to run a dual boot ( windows) or vm and run whatever NVR you want that is what anyone who has a MAC /Apple product in business does because so many apps need windows to run.
No one makes an Apple NVR because Apple market is not servers...
Pretty sure the Mac Pro can function as a pretty decent server.
You probably didn't get the memo because it's just a niche play but Apple has a server operating system called OS X Server. They did drop their rack mount XServe, guess that niche play did not work out but as said above, the Mac Pro with Xeon processors and hefty $4K price range certainly puts in the server catagory.
I'm not saying I would ever want to run NVR software on a Mac even though I own a Mac, but people do. I would imagine that surveillance at Apple facilities do not run on Windows ;)
I see the online selling model an inevitable path to trade products, being an ex-camera manufacturer myself, I agree with Avigilon CEO that manufacturers will win the game at the end of day. End Users may buy directly online or take the online pricing as a means to negotiate with integrators/ dealers on better pricing.
While this will be a painful process for integrators, it maybe become a positive catalyst for integrators to serious consider how to upgrade their value offerings to their target end users by means of more customer centric solution consulting, better professional and technical support capabilities or even create more differentiation by promoting vertical solution offerings.
Think about this: when IP penetration exceeds 60% market share, 2M IP cameras priced at less than USD150 online, End Users will be demanding for additional BENEFITS from IP investments!
I personally have been hearing constant comments from end users : "Nowadays, there is little differentiation amongst ip camera selections -- To See & To Get good quality video is easy, BUT To Use/ Apply or Manage Video is still a puzzle...."
But who can deliver those sorts of benefits? Is this an area that is likely to be of much benefit to the integrator?
Horace, VMS providers with capabilities to integrate POS, access control, EAS systems, and provide exceptional reportings taking video as evidence (to the extent that it will be seen as critical biz intelligence for Enterprise End Users.)
integrators will be beneficial since they are the one who can promote such kind of integrated video solutions to the Enterprise End Users, and in the process, gain more domain knowledge on the specific vertical.
I believe everyone should have the opportunity to purchase products online if they choose. Most companys will go through an integrator anyway. I look at it like my car...I would never go through a dealer as they have to jack up the prices to cover they're overhead. In this case, better to buy private.
IF we're talking a small installation, there are a number of NVR software packages out there you can run virtualized, so you can be using your MAC (or PC) all day long and have a windows VM running your NVR software on the same machine. (with all the usual disclaimers that someone's PC is not the place to run a security solution).
So you can have your apple and eat it too.
It IS the way nearly all business seems to be accomlished these days.
Plus, someone is going to make a buck or two installing whatever equipment the customer buys.
Besides, the customer will probably end up spending more money to "fix" their initial purchases....
it is a good thing for buying camera boxes online - but for solutions , no, it is not .
the integrators work force that provides these solutions has to be protected as integrators have invested in developing the skills of their team to deliver a better working solution .
So for solution based vendors - MSRP should not be published .
but for box moving cameras - not big of a deal.
i think the market has already shapped itself around my note.
If you form a mutually beneficial relationship with your Suppliers (Vendors) then you don’t have to worry about any of the above. I have found that when you build a rock solid business relationship with a valued and ethical company they will always have your best interest at heart.
We write rigid standards in our SOW’s with the help of our partners and manufactures. Additionally we also demand that our Suppliers possess industry certifications from the manufactures that they represent at the highest level. All of our Suppliers must also have separate service and installation departments as we have found the two to be very different in how they function. These standards help keep out the companies that don’t invest in the training and allow us to receive a better product.
We have a decent size Enterprise system of approximately 3,000 cameras. I would never purchase equipment from the internet – especially cameras and NVR’s. Software patches, recalls and other issues make this a bad decision. We have competitively bid our components and labor rates in advance with reputable companies that invest in their personal so we know we are getting value for our dollar.
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