Axis Hosted Video Decade of Failure

Author: Brian Karas, Published on Aug 29, 2016

Do you want to 'head up' Axis hosted video offerings?

Axis almost never publicly promotes senior positions, but for such an unattractive job they made an exception with the following seen on LinkedIn:

For more than a decade, Axis hosted video offerings (previously STS, now AVHS) has struggled and is still going nowhere.

In this report, based on inside accounts, we examine what went wrong, how Axis failed while Dropcam built a half billion dollar business they sold to Google and why Axis now competes against itself in hosted video.

** *** **** ** '**** **' **** ****** ***** *********?

**** ****** ***** ******** ******** ****** *********, *** *** **** an ************ *** **** **** ** ********* **** *** ********* seen ** ********:

*** **** **** * ******, **** ****** ***** ********* (********** STS, *** ****) *** ********* *** ** ***** ***** *******.

** **** ******, ***** ** ****** ********, ** ******* **** went *****, *** **** ****** ***** ******* ***** * **** billion ****** ******** **** **** ** ****** *** *** **** now ******** ******* ****** ** ****** *****.

[***************]

AVHS ******* ** ********

**** *** ** *** "*****" ********* *****, ******* *** *****. Their ******* ******** *** ****** "** ********",* *** ** *** **************** ********* ***/*** ****** *** ******* ******* ******** *** ******* interface. ** *** **** ** ******** ******** ** **** ** cameras **** ***** **** *** *********, ****** **** * *** fit *** *** ******/*****-******** *** ***** **** ******** *** ** Services.

*** ******** *** ********* ** **** ** ****. **** *** costly (******* ** *** **** *** ~$**-$**/******/*****). * ****** *** is **** ************* ** **** ********* ** ** * "******** grade ******* ** ****" *** "**** *********** ****** * *******". Here ******'* **** **** **** **** ****, ********** **** **** **********.

** **** **** **** **** **** ********** ********* **** **** had ******** ** *** ***** **** ** **** **** ********* with *** ******** ** ***** ***** ** *** *****. ********** ******** ************* ** **** *********** **** ***** ***** **** *******.

Competing **** **** *********

**** *** ************ ******** ********** ***** ************ *** * ******* set **** ******* *** ****** ***** **** ***** *** *** their **** ****** *****. ** *** **** *** *****, **** added **** **** ************* ** *** **** ********* ***, ****** the *** ******** *********** ** **** ******* ** * **** market *** ****. ** ******** ** **** *********** ***** **** ********* ******* *** **** ***** ****** ************* as ****, ******* *** ******* ****.

*** **** ** ********* * *** *** **** ******** ** sell * *******-***** ******* ** *** ************* **** **** ******** for **** **** *********. *******, *** **** ******** *** *** free, ********* *** ******* ** *** **** * ******* ***-****** fee.

Current ***** ** ****

*** ****** ****** **** ** *** ****** ** ***** ****** and ****** *********** ****, *** **** *** **** ******** ** make *** ***** *********** ** ****. **** **** * ****** installed **** **** **** ********* ** *******, *** **** ****** the ******* ** "**** *****", ******* *** ***** ************.

Complicated ***** ******* ** ******* ****** *****

**** ** * ********-***** *******, **** ** **********-***** ***** *******. Customers ****** ****** *** ** **** ****** *** ********* ** the ******* **** * *** ****** **** *** **** *** with *******, ** * ****** ** ***** ************. **** ** they *****, **** ***** **** *** ***** ***** ****** ** much ****** **** *******.

**** ****** **** ***** ** **** ******** *** **** *** time ** ******** ********* ** ** ********* **** ****, *** with **** ***** ***** ******** ****** **** *** ****, ** a *-**** ******* ***, *** **** ******* **** *** **** to ******* ** ******* **** **** ****** ****** ** *****.

Axis ****** ***** **** *******

**** *** *** ** ***** ** ****** **** **** * solid ********, *** *** ****** ** ** **. **** **** been ******** ** ******* *** ******* ***** ********-******** ******** ** the **** ** ******-***** ********* ** ******* **** ** ***** and ************ ****, *** ** *** ************* ******** **** ****** mobile ****/****** ****** ** *** ********** ****. ** ********, ***** NVRs **** ********* *** ***** ******* ***** ******* *** **** remote **** **** *** **** ********* *** *** *** ****** that ***** ********* ** *** ******.

** ** ******** **** **** **** ******* ****, *** ***** are ** ********** ** **** **** ********** ******** *** **** Axis ** **** ** ***** ** *** *** *********** *****.

Comments (13)

Two issues for Axis, the AVHS platform is designed to be OEM'd and is incomplete out of the box. Secondly, the don't sell it direct which limits their ability to influence the final product.

IPVM has suggested numerous times that AVHS is a failure of a product. I curious how you define that?

The $2.8B acquisition by Cannon last year represented a %50 premium over Axis’ stock price. That happened despite several poor financial reports from Axis where AVHS (although small by percentage of overall revenue) was one of the only shinning areas of growth. AVHS may not have given Axis the surge in growth like the VSaaS offering from Alarm.com or the insane purchase premium boasted by Dropcam, but it did help Axis secure a monster buyout.

IPVM has also suggested that VSaaS growth is weak in general for an emerging technology (26% CAGR) but by comparison to the growth of the rest of the industry, it is more than double. Everything is relative right? I would agree with the argument that AVHS is feature limited or niche in application, but an outright failure? That seems like a surprisingly hash assessment coming from IPVM(wink).

Nick,

You love some cloud video, don't you ;)

That happened despite several poor financial reports from Axis where AVHS (although small by percentage of overall revenue) was one of the only shinning areas of growth.

I am not sure where you are getting this. Axis does not break down product segments in their financials.

That said, we can get a fairly good sense of what is doing well for Axis based on what they release and they promote. AVHS has very little on either front for a number of years now, which is a very bearish signal.

Let's find some common ground here. The issue is not that cloud video is impossible to make it as a business. The issue is how Axis went about it. We are bullish about Axis Companion, it is an excellent cloud video access implementation at an attractive price (free to sell more cameras). But AVHS suffered from too many errors. Cloud is the future? Yes. AVHS model of multi-level OEMing / Reselling? No.

Nick,

"I would agree with the argument that AVHS is feature limited or niche in application, but an outright failure? That seems like a surprisingly hash assessment coming from IPVM(wink)."

I'm not sure how you can associate the relative success or failure of AVHS to Axis getting bought by Canon at what most would agree was a ridiculously high price. What is the revenue generated by AVHS vs Axis revenue as a whole? I can not imagine it is anywhere close to being significant in the grand scheme of the value of buying Axis.

What I find the most confusing is:

How can Axis offer two competing platforms (AVHS vs Companion) with two wildly different pricing structures? Anyone who is paying AVHS monthly fees who happens to stumble across Companion would certainly feel that they are being hosed by paying AVHS rates for the same feature sets that Companion offers for free, no?

How can Axis offer two competing platforms (AVHS vs Companion) with two wildly different pricing structures?

Companion is a turn-key product marketed to end-users, and sold directly under the Axis brand by dealers.

AVHS is a framework that Axis sells to a hosting provider who then adds some of their own components or services on top. That is then sold/marketed under a new brand (ex: Secure-i).

End user customers of AVHS most likely do not know that they are using AVHS.

As for the fees, users of AVHS who price shop the product might come across several cheaper alternatives, not just Companion. Or, if they are less tech savvy (which I would suspect), they may not realize what their alternatives are.

Disclaimer - I work for Axis. Not going to comment other than to say that Companion is not a cloud service in the same way as AVHS. Storage for Companion is at the local site, while storage for AVHS is (by definition) in the cloud. Just wanted to clarify.

Agreed, thanks 3.

We think most buyers will be happy with cloud access alone vs cloud access + cloud recording, especially given the relative cost / limitations of AVHS.

The problem is not VSAAS, the problem is the Axis AVHS (why put VHS in your service name???) is just a crappy product. It has been that since day 1, very juvenile.

Lack of traction over the past 10 years is an indictment of the business model (reselling "cloud" service through dealer/integrator channels) rather than necessarily the offering itself.

The history of everything cloudy--or even going back several decades when it was called simply "on-line"--shows that it is an economy of scale business that doesn't need or tolerate a middle-man in the sales and operations process.

The business depends on many happy customers who are paying monthly, receiving a sense of value, and not experiencing too many technical problems. If a middle man is not providing value month-to-month then they don't deserve that monthly revenue. What's more, margins are low which requires tremendous scale, which a small reseller can't afford to support or operate. Everybody loses.

Local central monitoring? Maybe. But scaled up mass-marketed, low-touch, just-cash-the-monthly-checks? No.

Axis is still looking:

Update: Axis promoted RSM Mike King to this position.

So....they couldn't find anyone to apply? Or are they not looking in the right places? Or just admitting that product is a failure due to their execution?

We do not have any information about their decision process / options so could not speculate.

It will be interesting to see what they do with AVHS. They still clearly want to go to a recurring revenue model, they just need to figure out how to do it better than the current approach.

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

Mobile Surveillance Trailers Guide on Jan 17, 2019
Putting cameras in a place for temporary surveillance where power and communications are not readily available can be complicated and expensive....
Avigilon Favorability Results 2019 on Jan 15, 2019
Since IPVM's 2017 Avigilon favorability results, the company was acquired by Motorola and has shifted from being an aggressive startup to a more...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
Bad: Dahua Villa Video Doorbell Tested on Jan 11, 2019
Doorbells are one of the hottest segments in the residential market but Dahua's Villa Video Doorbell is the worst we have tested.   We bought and...
Worst Products Tested In Past Year on Jan 09, 2019
IPVM has done over 100 tests in the past year. But which products performed the worst? Which ones should users be most aware of? In this report,...
CyberExtruder Face Recognition Profile on Jan 04, 2019
CyberExtruder offers 3D modeling face recognition software that they say provides quicker and more accurate matches than other 2D face recognition...
Last Chance - Security Sales Course 2019 on Jan 03, 2019
This is last chance to register for the IPVM sales course: This sales course is customized for the needs and challenges specific to...
European Startup Ajax Profile - They "Stand Against Evil" on Jan 03, 2019
European intrusion detection startup Ajax Systems proclaims: How are they standing against evil? And what are the differentiators and potential...
The Battle For The VSaaS Market Begins 2019 - Alarm.com, Arcules, Eagle Eye, OpenEye, Qumulex, Verkada, More on Jan 02, 2019
2019 will be the year that VSaaS finally becomes a real factor for professional video surveillance. While Video Surveillance as a Service (VSaaS)...

Most Recent Industry Reports

The IP Camera Lock-In Trend: Meraki and Verkada on Jan 18, 2019
Open systems and interoperability have not only been big buzzwords over the past decade, but they have also become core features of video...
NYPD Refutes False SCMP Hikvision Story on Jan 18, 2019
The NYPD has refuted the SCMP Hikvision story, the Voice of America has reported. On January 11, 2018, the SCMP alleged that the NYPD was using...
Mobile Surveillance Trailers Guide on Jan 17, 2019
Putting cameras in a place for temporary surveillance where power and communications are not readily available can be complicated and expensive....
Exacq Favorability Results 2019 on Jan 17, 2019
Exacq favorability amongst integrators has declined sharply, in new IPVM statistics, compared to 2017 IPVM statistics for Exacq. Now, over 5 since...
Testing Bandwidth Vs. Low Light on Jan 16, 2019
Nighttime bandwidth spikes are a major concern in video surveillance. Many calculate bandwidth as a single 24/7 number, but bit rates vary...
Access Control Records Maintenance Guide on Jan 16, 2019
Weeding out old entries, turning off unused credentials, and updating who carries which credentials is as important as to maintaining security as...
UK Fines Security Firms For Illegal Direct Marketing on Jan 16, 2019
Two UK security firms have paid over $200,000 in fines for illegally making hundreds of thousands of calls to people registered on a government...
Access Control Cabling Tutorial on Jan 15, 2019
Access Control is only as reliable as its cables. While this aspect lacks the sexiness of other components, it remains a vital part of every...
Avigilon Favorability Results 2019 on Jan 15, 2019
Since IPVM's 2017 Avigilon favorability results, the company was acquired by Motorola and has shifted from being an aggressive startup to a more...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...

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