EMC Dumps Axis VSaaS
Just two years ago, mega storage manufacturer EMC partnered with Axis to make video surveillance in the cloud go mainstream. Now, it is dead already.
In this note, we review what went wrong what and what is next, along with statements from both Axis and EMC.
Background
The concept was that EMC would provide the hardware infrastructure in the cloud to compliment Axis' AVHS software and cameras. EMC could leverage its Atmos cloud storage platform, and its own storage devices to provide a secure, enterprise class, foundation. EMC would then sell this to large integrators and/or service providers would could re-sell / re-brand it to their customer base. This would free the integrators and service providers from having to build out / maintain their own data centers / hosting.
EMC Divesting This Business
However, EMC cloud video is no more, as they confirmed to us:
"EMC is divesting our Video Surveillance as a Service (VSaaS) business in order to concentrate maximum resources and energy on core strategic initiatives. This approach allows partners to deliver these cloud-based video surveillance offerings, which are enabled by EMC, rather than EMC doing so directly. EMC is working with our partners to make sure there is no customer impact."
What Caused the Failure?
In general, VSaaS remains far more hype than reality and Axis AVHS business model (specifically, high pricing and multi-tier reselling scheme) has problems.
However, we suspect that EMC's failure was compounded by their own ambitions. As a massive company doing $20 billion annually, the company wants and needs big numbers and very fast growth. Indeed, at the initial launch, EMC made it clear that they wanted only large partners and had no interest in 'mom and pops'.
Unfortunately, neither the surveillance business as a whole, nor certainly the immature cloud surveillance space supported the type of revenue or expansion that would motivate EMC to continue. Indeed, looking at the landscape of the VSaaS market, most are small companies.
Axis Response
However, Axis remains undeterred and is continuing to go forward with other partners. They responded to our inquiry with this statement:
"The EMC and Axis hosted video relationship, while officially over, was still a fruitful one and we thank them for the collaboration and knowledge shared. During the time that we worked together to evangelize cloud technology and educate the market on the value of hosted video solutions, we learned how to best reach the market and identify the right partners to deliver hosted solutions. This led to the decision to terminate the partnership and we appreciate the journey.
At Axis, we have refined our strategy and believe it is more powerful than ever for existing and future cloud solutions. By concentrating AVHS partnerships on physical security-focused companies like I-View Now and others we believe this will have more of an impact because they know the industry, have a pedigree in central station monitoring and hold meaningful relationships that garner respect, etc. We’ve already seen this type of relationship success with the Secure-I / ASG partnership.
Regarding I-View Now, they have a very technically-capable development team and can spend time and effort to develop the AVHS platform into a world-class offering for our joint partners. And of course they have the sales, support and training resources to drive the business for the channel. Combine this with their existing central station monitoring platform being closely integrated into AVHS and you have a recipe for success. They have deep integrations with all major CS automation software providers and can now take hosted video into a true VSaaS environment, including services from basic video verification to complex video based monitoring services.
These efforts over the years are bearing fruit, especially with many of our largest National Systems Integrator partners. As you know, we have worked with cloud solutions for many years and have been pushing the industry to see hosted video as a viable option for certain installations (sweet spot today = small camera counts, multiple dispersed locations). While many of the wins have yet to be made public, more and more operators have seen the potential and are positioning themselves to include this business model."