Avigilon Changes Strategy

Author: John Honovich, Published on Feb 06, 2015

Avigilon is changing their strategy, shifting away from their classical HD positioning to their new found video analytic focus.

In this note, we break down 8 specific shifts that are key to understand how Avigilon is refedining itself and how that will impact the company and the market.

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Comments (15)

Nice analysis!

Along the same lines looks like they also added a "side-car" to justify their sizable patent acquisition investment. The cost of which is nearly double both RedCloud and VideoIQ put together. Also gave them a chance to boast about who's in charge of who by name, Sony, Bosch, Panasonic, et. al.

Thanks John.

Great work. I read the presentation myself but never thought of comparing it to last year.

As stated before in other articals Aviglon is betting that selling regular HD cameras is a losing battle against the cheap cameras that come from China. They need to give an added value and analytics might be it.

One interesting element is that throughout 2014 Avigilon's CEO denied seeing any margin pressure or impact from Chinese vendors. Whether or not that was accurate then, evidently it appears they are seeing / forecasting it to be an issue going forward for simple HD camera sales.

Avigilon most definitely has the financial resources to monitor the analytic alarms through a central station they start, but will integrators with their own central station want to get in bed with a company that has a past as ruthless as theirs? Who would ever trust that set up? I think they will try to develop a SaaS solution of self monitoring and hope that takes off.

I suspect that a very small percent of Avigilon integrators operate their own central stations. There's definitely that risk though.

Btw, my thought was that they buy an existing central station. They still have ~$60 million in cash. They don't need to buy anything, just a solid niche video centric one that they can quickly adapt / integrate.

I could have one up and operating in under 30 days for about $300K! Who do I contact at Avigilon to start the sale negotiations?!?

Do that, package it with some patents, done and done :)

Great analysis.

One question: On Jan 14, Avigilon announced the appointment of Dennis Fong as VP of investor relations. Any thoughts about how much these changes have to do with Mr Fong putting his own mark on the investor relations package?

I'm sure a rejigging of strategy would have been part of his own positioning to get the job.

Typically, investor relations people deliver the pitch, not define or create it. It's generally more akin to White House Communications Director. They say it but the position is / should be the President's.

Also, from everything we have seen, power is pretty tightly concentrated amongst Fernandes and Schmode, so my guess such a significant shift is coming from them.

"Now, after the video analytics market collapsed, Avigilon is switching gears, focusing on analytics. No one has been able to make it work yet"

John,

We install a lot of analytics, I am curious to know where the difficulties are? Integration problems with the Central Station, Wrong solution for the problem, reliability of analytics, equipment, maintenance issues, ...

Perhaps a survey?

When I say 'no one', I mean manufacturers in that context. There's no video analytic manufacturer that have become large (say $25m +) and financially strong.

We've done surveys in the past, like Market Guide and Favorite Video Analytics 2014 that covered this.

The net/net is too few reliable product options available, too much cost, too much risk.

Ok, so if I am not a Avigilon dealer and I don't want to use a video analitic they own patents on. Who are the alternate high quality video analytic companies that I should be looking to?

"I don't want to use a video analitic they own patents on."

I am not sure that's possible, minimally it's debatable what third party analytics are covered.

Here is a list of other video analytics that integrators are using / reporting favorable results. One other to add because they just re-released after years without anything new, ioimage / DVTel.

Nice article. This is a major strategy pivot for the big camera manufacturers, as they now seek to employ software as their competitive advantage over low cost Asian cameras. It makes perfect sense, the hardware is being rapidly comoditized.

It would be an interesting IPVM analysis to compare a few of these knock-offs to BIG camera company versions, in features and price. How big is this perceived threat? One thing for sure, Chinese camera build quality and features are only going to improve. Examples of low cost camera emails I continuously get are from wodsee.cn , xenon.cn and apexis.com.cn

C, we have been doing this for a while specifically for the big two Chinese vendors, Hikvision and Dahua and they've done well.

We have also tested a wodsee camera though that did not do as well plus has no real support.

The threat, even from the perspective of the major manufacturers, is Hikvision (#1 by far because of their sales and marketing effort) and then a distant second Dahua (because they are less well organized on sales and marketing). All the spam email Chinese companies are just noise to the major manufacturers.

That said, we are doing a low cost Chinese shootout this month. Expect the results to be published in early March.

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