Avigilon Strong Growth Continues Q2 2013

Author: John Honovich, Published on Aug 08, 2013

Continuing to buck the trends of the broader surveillance market, Avigilon's revenue was up 61% year over year for Q2 2013. Here is the full financial report. [Bonus - at the end, we break down the revenue of Avigilon's recent acquisition of RedCloud.]

Here are a few details gleaned from Avigilon's Q2 call:

  • *** ************* **** ** *.*%, ***** ** * *********** *********** over **** **** *** *********** *** ***** ** ****** ************ companies (**** ** **** *** *******), ********** **** ******** ** not **** '******' ****** *****.
  • ****** ** *** ** *** *** ****** ** *** ********** regions ** **** **%. ** ****** **** ** ********'* ***** revenue ($** ******* *** *** *******), **** ***** ** ** indicator ** ********** ********* ** ********* ** * ****** ********* market. ** *** ***** ****, ******** **** ~**% ******* ** the **, ***** ***** ******** ** **** ******* *********** ******.
  • ***** ******* ********* * ****** **** **% ** **%, ***** puts **** ** **** **** **** ************ ********** *** ****** surveillance ********** (**** ** ****).
  • ***** *** ********* ******** **** ** **%, ***** **** ***** overall ****** ****, ***** ******************* ** *********.
  • ***** *&* ************ **** ** **** **%, * **** **** compared ** ********** ******** ** ************** ** *&*.
  • ****** *****: ******** ***** **** *** *** *** *** ****** statistics. ******** ***** * **% **** *** ** ****** ***** from *** ****** *** ***** ****** **** **** **** *** projects * **** **** ****. *******, **** **** ***** ** not *********.
  • ****** *** ** *** ~$*** *******, ** *** **** ****, more **** ***% ****** **** * **** ******.
  • ** ******** **** **** ***** ********-****“*** ****** ******” ******* ********* $*** **** **** ** **** **** *** ******* ** end **** ***** **** ******. ******* **** *** ****-**** ** not ********* ** ** ********** **** ****** ** ** ** * *** ******* *******. That ****, ***** *** * *** ** ******** ***** ** ***** **** *********.
  • ******** **** **** ** *** *** ************* *** *** ***** ************** **** *** *********** *** *** ***** ******* *** ********* or *** ******* - ******* ** *** * ********** ***** company - *** ***** ******* ** ******* **********.
  • *** ******* ******* ****** ****** ** *** ******* *** ******* European ******* ** ** ******* ***** **********.

********

****** ** *** *** ** ********'* ********** ** * ********** of ********'* ******* *** ******. *** *** ***** **** ** 2013, ********'* ******* *** **** ***** $* *******, ******* **** on * $* ******* ****** ****. ***** *** $** ******* price ****, ****'* ** ********* **** *+ ***** *******.

**** ****, ********'* *** ******* ** ************. ******** ** ******* ****** them *** ********* '*********' ** ********* *** ** *** ******** systems, ********** **** ****** ********* **** ****** ***** ****.

**** *** **********, *** ***** ******, ** **** ******** *** losing * ****** *********** ****** ** *****. ******** **** ******* double ******* ******* ** * ******** **% *** ****. ******* being * ***** ***, ******** *** ****** ************* ****** ** acquisition ** *** ******* *****. ***** ***** ********, ******** *** very **** **** **** ****.

****'* *** ******* **** *** ********* ****** ******** ********:

****: ***** *** ****** *** **** ** ******, *** **** to ****** ******** ** ***** ****** ********** *** *** ****.

Comments (13)

Avigilon deserves such growth...

Most economical yet evident end to end surveillance solution in security industry in recent years.

How is Avigilon more cost effective then Arecont + Axis/Panasonic cameras managed with Milestone/Exacq/Aimetis/Luxriot?

The cost of just about any of the above combinations will be more economical then Avigilon.

I don't get what the fuss is about with Avigilon?

I think they just have very good marketing people, as reflected in the quality of their website.

Please correct me if I have been naive and wrong.

Do I need to write a post "Why Avigilon is So Wonderful"? :)

We've talked about this before but it's a number of things, in no particular order:

  • Having the 11MP / 16MP / 29MP cameras is a nice differentiator and starting point.
  • Having a restricted dealer channel is a big plus for many integrators, because even if their cost is the same, they probably can make more on Avigilon vs Axis (or Arecont or Pelco or anyone else that can be bought on the Internet).
  • Being an end to end solution is a plus. While there are a lot of other ones, most are from lower quality players (indeed all the companies you mentioned are primarily one side or the other).
  • Their analog / migration pricing is attractive with the encoders and the licensing deal (see encoders vs hybrid DVRs).
  • Their IR cameras are quite strong.

Super & Correct Answer John.

Totally Agree.

Hey, when I say good things about Avigilon, I am super and correct. It's only when I say negative things that I am biased and stupid!

Unless you're looking from a camera only perspective it's hard to compare Avigilon to Axis, Arecont, etc. I think Avigilon compares more to Exacq, both have awesome growth and a solid product. If exacq sold cameras as well that were good quality would they be in same boat as Avigilon?

Avigilon enable the integrator to deliver an end to end solution in a shorter time period, with less uncertainty, and with functionality promised and expected by the end user. By using a combination of technologies there always longer set up periods, unexpected integration "work arounds" etc. Avigilon leads to more certain installation and shorter time on site = lower total cost of installation. Added to this less uncertainty around installation is more stable margins.

For example switching 150 analogue cameras over to Avigilon in a week and starting the client on IP migration.

All the above makes this business owner an Avigilon "fan boy"

Undisclosed Integrator: what you wrote actually makes a lot of sense.

Avigilon really does have a broader end-to-end solution than others I know of.

It definitely is a great business model.

Question: is there no other company that does this - the Avigilon concept is great but I don't see why Axis can't do the same - they have there own VMS and encoders and I am sure they can knockup a multi sensor camera and a 29MP camera here and there.

What I found intriguing is the 29MP + LPR camera + multi sensor panoramic strategy - because it really does seem like these three product categories are positioning Avigilon as THE end-to-end providor.

--> Is it the "reassuring that these exotic options are available" or the "we want to deploy these next gen technologies" factor that makes this USP attractive to dealers and end-users?

Finally the protected channel - surely a SINGLE integrator cannot possibly service ALL the clients in an area? Won't they run out of time and manpower? It seems this part of the Avigilon USP is not a very sustainable aspect in the medium to long term? From the client point of view though I would say this is actually a positive - as the end-user does not have to waste any time (i.e. money) quote shopping.

I would imagine it takes a lot of work. You need to find programmers, project amangers, etc. Not just any people but the right people to ensure you produce a quality product. It's a pretty daunting proposition, if you put all that money into doing that and it fails you face possible bankruptcy. Plus Axis and others have a model of working with other VMS manufacturers and if they all of the sudden put together their own VMS and hardware they would damage those relationships. Avigilon is great but VMS with third party cameras is very strong and that model isn't going away anytime soon.

Bohan, interesting questions, thanks.

  • Why can't Axis do the same? On the VMS side, it's clearly a fear of upsetting partners. Why doesn't ACS support ONVIF? Why do they sell AVHS through a crazy multi-tier dealer structure? Why doesn't Camera Companion support Axis one click? Axis certainly has the skill to rectify these problems, but they are clearly done not to upset existing partners.
  • Regarding Axis and others (Sony, Panasonic) not doing a 29MP camera. I think they clearly made a mistake here. They typically justify that decision by pointing out technical limitations (poor low light sensitivity, super low frame rate, super inefficient bandwidth consumption, etc.). While those things are largely true, not having their own makes them appear to be technological laggards, especially to those you simply equate more megapixels with higher quality. And it's not as if Avigilon's 29MP cameras are some form of exotic technology that cannot be replicated. But Avigilon grasped the marketing benefits of such positioning while their rivals did not.
  • How can Avigilon scale with a protected channel? It's not a single integrator per territory. I don't what the max number is, and I suppose it varies with the density of the market (i.e., New York has more dealers than New Mexico). That said, I agree with you that a protected channel hits scalability limits. If Avigilon chooses to add more dealers in a region, than it increases competition, likely drives down prices and demotivates dealers. However, if they do not add dealers, they will certainly miss opportunities that are driven or won by non Avigilon integrators. I am not sure how it will all play out but it's a fascinating element.

"Avigilon enable the integrator to deliver an end to end solution in a shorter time period, with less uncertainty, and with functionality promised and expected by the end user.

Shorter time period, less uncertainty = cookie cutter solution + lower integration w/3rd party. There simply is no other way to achieve this 'goal'.

"..functionality promised and expected by the end user."

You mean like that convenience store, 1 camera-covers-all, 'not an actual image' ad they stopped using after being crushed to dust right here on IPVM?

"By using a combination of technologies there always longer set up periods, unexpected integration "work arounds" etc."

This is generally because end-user customers sometimes have other systems that they wish to integrate with their security apparatus.

These end-user customers are able to justify the margins they pay their chosen integrators because the integrator is the well-trained party with the experience, skills, and knowledge to provide robust solutions that sometimes require troubleshooting interoperability with the customers disparate systems.

Lacking that, just show the customer some fancy uber-MP cameras that have limited practical use and hope they don't notice they could've done everything the installer did, all by themselves (if they were allowed to buy the stuff themselves - which they are not)...

Value is the key word - and there are different levels of perceived value.

'End to end' is a better fit for certain solutions, and not for others.

The Avigilon scheme works, simply because there are numerous dealers who value simplicity and marketing hype over multi-system, robust solutions.

Hello Mr. Purvis, thank you for good analysis.

By the way, I don't understand how to calculate net profitability.

Could you make me clear how the 8.6% comes from?

Undisclosed, the formula for Profit Margin is Net Income divided by Sales Revenue. In this case it was $6,189,000 over $71,244,000 (see pg. 2 of Avigilon's financial report).

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

ISS VMS / Video Analytics Company Profile on Aug 16, 2018
Who is ISS? In the past few months, they had one of the craziest ISC West promo items in years. Then, they hired industry veteran and ex-Dahua...
Dahua NA Consolidates Rep Firms Led By Ex-FLIR Team on Aug 01, 2018
When Dahua acquired Lorex / FLIR SMB, Dahua NA had 11 manufacturer rep firms and FLIR had another 6. Now, Dahua NA, led by the ex-FLIR team, has...
Wave Retorts: SDS 'Desperate' And 'Defeated' on Aug 01, 2018
Distributor SDS has sued Nortek and distributor Wave Electronics alleging bribery, conspiracy, antitrust violations and violations of state laws...
Security Sales Course January 2019 on Jul 31, 2018
The next IPVM Security Sales Course will be held in January 2019. Register now and save $50. This sales course is customized for the needs and...
Milestone / Canon Spinout Arcules Cloud Launch on Jul 30, 2018
Canon and Milestone's VSaaS Startup spinoff Arcules launched their platform at Google Cloud Next. IPVM spoke with CEO Andreas Pettersson about the...
Dahua Overseas Head Is Out on Jul 27, 2018
The long-time head of Dahua's overseas (i.e., International) business, VP and GM Michael Chen, has been quietly removed, amidst struggling...
Hikvision Strong Domestically, International Business Struggles on Jul 25, 2018
Hikvision's H1 2018 results are out. Overall revenue growth has sharply dropped, with the company acknowledging their "facing geopolitical...
Uniview Super Low Cost 4MP Tested on Jul 25, 2018
Even lower cost than Dahua and Hikvision, China's self-proclaimed 3rd place company, Uniview / UNV, is offering aggressive pricing including for...
Bribes Alleged, Nortek Sued For Antritrust Violation on Jul 23, 2018
A case of an unhappy distributor rival or did a manufacturer accept bribes?  Nortek Security and Control has been sued by distributor Security...
Arecont Acquisition By Costar on Jul 11, 2018
Arecont Vision acquisition by Costar Technologies has been approved by the court, concluding the bankruptcy process triggered by Arecont's...

Most Recent Industry Reports

2Gig Gun Lock / Motion Detector Tested on Aug 17, 2018
Safer guns for families and an opportunity for security dealers to sell more services? That is the aim of Nortek's 2GIG 'Gun Motion Detector'...
Video Analytics Integration Guide on Aug 16, 2018
Video analytics is hot again (at least conceptually) but integrating video analytics with VMSes can be challenging. This is especially significant...
Hikvision IP Camera Critical Vulnerability 2018 Disclosed on Aug 16, 2018
The same day that the US government passed a prohibition on Hikvision cameras, Hikvision disclosed a critical vulnerability for its IP...
ISS VMS / Video Analytics Company Profile on Aug 16, 2018
Who is ISS? In the past few months, they had one of the craziest ISC West promo items in years. Then, they hired industry veteran and ex-Dahua...
Chinese OEM Avycon Gets ADI Push on Aug 15, 2018
Who is Avycon? An American company? A Korean company? A couple of guys relabelling Chinese products? The latter is the best explanation. While...
Backboxes for Video Surveillance Tutorial on Aug 15, 2018
Backboxes are a necessity in surveillance, whether for managing cable whips, recessing cameras, adding wireless radios. But it can be confusing to...
Genetec Stratocast / Comcast 'Motion Insights' Examined on Aug 15, 2018
Comcast recently announced "SmartOffice Motion Insights", an extension to their Genetec OEMed cloud video service (covered by IPVM here). This...
SimpliSafe Violating California, Florida, and Texas Licensing Laws on Aug 14, 2018
IPVM has verified that DIY security system provider SimpliSafe, founded in 2006 and acquired in June of 2018 at a billion dollar valuation, is...
Ban of Dahua and Hikvision Is Now US Gov Law on Aug 13, 2018
The US President has signed the 2019 NDAA into law, banning the use of Dahua and Hikvision (and their OEMs) for the US government, for US...
Cut Milestone Licensing Costs 80% By Using Hikvision and Dahua NVRs (Tested) on Aug 13, 2018
Enterprise VMS licensing can be quite expensive, with $200 or more per channel common, meaning a 100 camera system can cost $20,000 in VMS...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact