Axis Co-Founder: The End of Traditional OEMs In The Way It Has Been

By: IPVM Team, Published on Sep 07, 2018

Big changes are coming, predicts Axis Co-Founder Martin Gren. He contends that the end of traditional OEMs is coming, in the video embedded below:

Is he right? Inside this note, we examine the issues involved, including:

Risk *** *********** ****

** **** ********, ***** is * ***** ************* risk *** *********** ****, i.e., ********* *** **** finished ******** *** **** their ***** ** ** (whether **** ** *********, ADI, **** - ****** they**** ** '****' ** Dahua,******, ***., ***.).

**** * ************* ** found, *** ***** ******** are ******* ****** ** get *********. *** **** prominent ******* ** **** was**** **** **** ***** and ***** ****, ******** from ******* ******* ********** ** *****'* ********(*).

**** **** ** **** worse **** *** ******** manufacturer ******* **** *** dependent ** (*) *** manufacturer ** *** ** and (*) *** ************ to **** **** *** available ** *** ***. Compounding **** *******, **** are ****** ****** ********-******* companies **** '**' ******** just ****** ** **** the ********. ***** ********* are ****** ******* ** software *** ******* ** professional ********** ******** ***********.

**********, *** *********** **** often **** ** ******** expertise **********, ********* ** the ******** ************ *** that.

Ban ******

**** **-******* ***** ** IPVM **** **** ***** was ****** ***** * months *** *** *** only ******** ********* ** YouTube. ** ****, ****'* remarks **** ****** *** US ********** *** *** even ***** ******** ** Congress.

*******, *** *** ********* makes ******** *** **** much *****. *********, **** cannot **** ***** ***** nor ********* ***** ******** to *** ** ********** so *** **** *** faced **** *** **** unconformable **** ** ******** out *** ** ******** / ******* **** **** happening. *****,** *** ** **** director **** ************, *** ** ********** intends ** **** *** any ***** ** ********* OEM ** **** ** the ** ********** ** all, ***** ***** ***** the *** ******* ******** between ***** ****** *** one ** *** ******* 'customers' ** *** *****, the ** **********.

************, **** ** **, recently, ** **** **** a ****** ** ******* signs **** ***** **** that **** *** ******* concerned ***** *** ****** of *** *** *** are ****** ** ********* how ** ************ ********** with ***** ****.

Motivation *** **** ** ********

** *** ***** ****, OEMing *** **** * very ********** ******** *** a **** **** ****. The ***** ****** ** hundreds ** **** ****** to *** ******* *** can **** ** ****** low-cost (*********) ******* **********, slapping ***'* ******* **** on ** *** ******* it ** ***** ***. As ****, ***** ** a *** ** ***** for ***** ********* ** lose ** **** ****** OEM. *** ********, *** how*** ** ** ****** of **** ***** ** their ******* *** ******* complain.

*** *** *********** ** actually ********** ***'* ******** is ********* *** **** OEMs. **** ***** ******** manufacturing, ** ******* ***'* own ******** ******** ********* firmware *** ******** ***********, which ** ****** *** assumes *** ******* *** reasonably ***** **** ***** inside ***** *** *************, which ***** ** **** for ****.

** ****, *** **** OEMs, *** ****** ** either ** ******** **** and **** **** ***** increasing ******* ** **** entirely. *** **** '******' option ***** ** ** switch ** ***** * distributor *** *** ** the '******' *************, ******* under ***** *******'* ******, whether ** ** *****, Hikvision, ****, ********, ******, etc., ***. *******, ***** a *********** ** *** less ********** **** ****** being ***'* *** ************.

Consumer ***** *******

**** **** **** ** a ******** ***** *******. Just **** ****** **** a ***** ** **** what *********** ***** *** in ***'* **** **** purchase, **** ****** **** who ** ******** ********* the ******** / ******** in ***** *** *******, which **** ***** **** and ******** ** ****. OEMing, ***** ****** *** source, **** ********* ** risk.

Vote / ****

Comments (25)

As integrators and customers become more educated on the source of their products in the information age this seemed to be inevitable and overdue.  5 years ago I could not have identified who was actually making product such as the Bosch DIVAR80 or the (discontinued) Panasonic value series cameras but assumed they were OEMed or ODMed.  Now I can usually tell just by looking at the picture of the unit what the true source is.  OEMing has run rampant for far too long and the quantity of sources overseas has been slimmed to too few.  The DNA pool is very shallow with only a half dozen sources.

#1, that's a good point. A big part of that is because the original manufacturers are now so publicly competing with their OEMs. 5 years ago, many had never seen a Hikvision or Dahua web interface or camera housing, now with their extensive marketing, it is much easier to recognize.

One thing we are seeing is a shift to smaller OEMs (e.g., Avycon / TVT) as it is easier to hide since TVT does not sell / market directly in the US.

I've always thought of an "OEM" as the "Original Equipment Manufacturer" and the actual maker of the product, not the company that applies their brand or skin to another manufacturers' equipment.  Am I the only person confused here? 

Bryan, technically, I think that is correct. In practice, in this industry, it is almost always used the opposite way.

I am happy to use it either way but my perception is common practice is to call companies like Honeywell 'OEMs' or 'OEMing'.

I was just banging my head regarding this before I saw your comment...

I was confused too.  like 4 years ago!

definition of OEM confusing?

I tend to agree with him.

Much of the market has become more aware of who is actually producing unique hardware or firmware vs. doing light cosmetics on essentially stock hardware/firmware.

 

I agree. And more importantly, the market is starting to care about the source, albeit very slowly.

Five years ago, no one knew and no one cared who made product XYZ.

Today, anyone with industry and business intelligence researches, knows and cares about product origination.

Unfortunately, there's still a whole lot of "security professionals" who still don't care. 

As others mentioned, when it was done 5-10 years ago, it was pretty obvious.

Pelco OEMed some Panasonic analog cameras.  They looked IDENTICAL to the Panasonic, except for the logo and model number.  The manual was done up in Pelco formatting as well.  But if someone asked, they were told the truth.

 

I can name plenty of other examples where a true manufacturer wasn't up to speed on a technology like IP and OEM to get out the door quickly or vice versa, OEMed tried and true to devote engineering and manufacturing to the new stuff.

 

The current OEM is smoke and mirrors and pretending you are a manufacturer when in most cases they don't manufacture anything.

I agree that the traditional OEM where there is no value add will go away for the Pro side.  Sure, the consumer or DIY $99 stuff will stay there, but who cares about that.

 

Hopefully, more companies will actually manufacture new products, or just do a reseller agreement and call it what it is....

I respectfully disagree.

I understand that OEM'ing will become more difficult for Hik and Dah, but I dont see overall OEM'ing going anywhere at all. Not in the tech industry and more specifically, not in the surveillance industry. No way at all. Here is why:

- There are alot of good surveillance non-USA manufacturers out there still. And many more will popup or get more attention and grow larger. However, they have no interest in setting up shop in other countries such as the USA. If you really want to sell your "brand" as a manufacturer, you really need to have a USA based tech and sales presence to be wildy successful. This takes alot of money, expertise and headache for these foreign manufacturers. Their next best option is to allow their OEM partners to build their own brands and for the manufacturers to support them with their venture. This is true across many tech industries.

- The cybersecurity threat, as Mr. Gren mentioned, will have little impact for USA suppliers to OEM manufacturers products IMO. Granted, they may change manufacturers, but it most definetely wont decrease OEM'ing.

- I acknlowedge that you have much more control if you uniquely create the products yourself. However, as the article mentioned, this would take alot of money. Millions. Its much easier for a USA supplier to ask an OEM manufacturer to alter their products to their liking. Matter of fact, if you get a compliant enough manufacturer, you can completely alter it so much that it is unrecognizable from the original manufacturer default product. Going this route is a much more attractive option cost wise for most USA suppliers.

- (a little off topic of my point) As previously spoken by other commenters, customers usually know who the manufacturer is of an OEM product if it comes from a popular manufacturer such as HikuaView. Personally speaking, I prefer to sell the OEM version because it usually means its lower cost for the same exact product with a slighly different firmware base. Rightfully so that its cheaper, we are supporting the product for tech and warranty related issues. Some customers prefer to deal directly with the manufacturer and are ok with paying the higher price. However alot of customers simply dont care about that and will go for the cheaper price, especially if it means they still get good quality customer service. 

Personally speaking, I prefer to sell the OEM version

Sean, but Nelly's is different from most OEMs in that you don't claim to be a 'manufacturer'.

Nelly's - "We are a retailer and wholesaler"

vs.

Avycon - "We pride ourselves on manufacturing and supplying state-of-the-art products"

Since Nelly's is transparent about what they are selling, it is more effectively like a discount reseller than a pretend manufacturer?

Well if thats what Mr. Gren meant than I agree. It will be harder to state that you are a manufacturer when you arent. I never really agreed with that to begin with and they really should not have done that in the first place. If anything you should call yourself a designer, but even that is subjective.

 

But all I'm saying is that General OEM supply and demand will resume as normal.

 If anything you should call yourself a designer

In the case of some of the examples from large manufacturers, they should call themselves a Print Shop, Housing Painter, or Web UI Modifier.

Not surprisingly, the resident hammer treats everything like a nail. 

The point of this article isn't that OEMs still have a desire to make money by slapping a label on someone else's equipment and reselling it -- that's obvious. The point is that customers (and more importantly, integrators) are now wising up to the fact that many, many OEM products are built on a platform that is inherently pure garbage, and they are putting themselves at significant risk by continuing to use these garbage platforms and products. The reason that so many of these products are so cheap relative to their competitors is that they devote no resources and pay no mind whatsoever to security. Shocker -- crappy engineering is cheap!

The MARKET for OEM products is almost certain to decrease, regardless of how many OEMs want to hang a shingle.

There are many quality security products coming from Asian countries, namely South Korea and Taiwan. It is quite possible that OEMs will just shift from China to Taiwan and South Korea.

I have seen this happening over the past few months with my own eyes.

I'm not sure how it works in the states. But in the Middle East OEMs are suffering of course due to competition from Hikua, integrators buying directly from China through AliBaba, increased awareness of the importance of cybersecurity, etc.

However many still survive because ultimately we have better margins than distributors so we're able to offer more services to our integrators/sub-distributors in terms of:

- RMA - we have enough spare parts to quickly repair things in-house. Because of better margins, we can afford to spend more on spare parts/service centers than distributors.

- Credit - distributors have less margins so naturally they aren't able to offer payment terms as good as ours

- Better sales channels control - if there is a bid for a project, we can easily lock the project for one integrator. This would be impossible for Hikvision to do for example

While I agree that most OEM's nowadays fake "being one's own manufacturer."

We don't do that, I have been pushing my staff since at least 2015 to be very clear with our clients:

We are an OEM supplier. We stick our name on products from factories that we audit. Our top 10 clients at least know all of our manufacturers too because we disclose that information to them. You can buy from us instead of the original manufacturer because we can offer better sales channel control, better credit facilities, faster RMA, etc.

we disclose that information to them. You can buy from us instead of the original manufacturer because we can offer better sales channel control, better credit facilities, faster RMA, etc.

Abaas, I think that is reasonable and fair for customers to make informed decisions.

However, as the old saying goes: Where there’s mystery, there’s margin. When it's your own 'product', even if a company is faking, they can typically command a higher margin / profit; ergo why so many companies pretend to be manufacturers.

Sorry for crowding this space with 3 separate comments, but I believe the topics are too different to fit in one.

I understand that the article and Mr. Gren are referring to Chinese manufacturers when they talk about the decline of OEM suppliers.

There are though some high end OEM suppliers in Taiwan and Korea like Hunt, Dynacolor, CPRO, ITX, etc.

Is there any way to find if the product is actually manufactured by the company which displays their name on it or someone else?

And as mentioned by Bryan, whom to call OEM in these two is difficult.

Good question. There are many ways. One is by checking the mac address and using tools like this one https://macvendors.com

Another way is if you don't have the actual hardware with you then just look at their marketing material. Select any of their product images online and do a reverse image search on Google. Most OEMs are too last to take their own photographs of the products and rely on the manufacture's ones.

Similarly, you can take any random part of text on their website and search for it in quotes "".  Google will return all instances of that exact phrase. Again, most OEMs are too lazy to create their own content. Even spelling mistakes will carry through. Bonus: if you find a spelling mistake, search for the phrase that contains the mistake.

Another similar way is to download their cms. Usually it's free on their websites. Look at the "about" section. Or you can even look at the name or model number of the cms. Usually it's a copy paste. 

Panjiva.com or other similar tools can show you shipment information.

 

Edit: to demonstrate:

I suspected www.galaxysecurityinc.com was not a "a leading manufacturer in the distribution..." (whatever that means). So I went to the downloads section and downloaded one of their manuals. I chose the phrase "The Linear Scan can be enabled to trigger the scan in the horizontal direction in the predefined range." on their manual. I did a google search for that exact phrase. One of the results was this https://www.manualscat.com/en/hikvision-ds-7108ni-e1vw500g-manual

So they obviously bought that device from Hikvision as the rest of the catalogue looked exactly the same.  The funny thing is they call the file name "Neutral User Manual of ST & FT Series IP NVR".

Quick google reverse image search of their NVR8832R revealed UniView as their supplier for that particular model.

Looking at https://watchnetinc.com, if you do a search on Pajiva you can see they buy from Dahua. But that one was really obvious any way from their models.

Thank you Abaas, but you're killing me with these tricks of the trade so conveniently consolidated into one post.  Similar tools and methods have been referenced before on IPVM articles and comments but this post is comprehensive and quite useful to keep in your back pocket when competing against OEMs for specific projects or marketing claims that are overly aggressive/disingenuous/dishonest (very thin lines).

If I were an end user or integrator in today's world, I would value performance of the product relative to the application and customer support/service from the 'provider' much higher than the brand name on the product.

 

I'm torn on this. I don't want to support the apple/avigilon "whole widget" approach, where if you don't use all one brand things get janky/don't work/lose features. But i've always thought white-labeling was a bit dishonest--at the very least, admit it was "developed with" or "using tech from" the real company, so if we NEED a fix, we can demand it from people who can help.

Ending the OEM practice will be difficult. OEMs are used in areas other than cameras and in many industries. In physical security, there are Mercury stands out as an OEM manufacturer of access control hardware. Card readers and door contacts often come with a private label that conceals the original manufacturer. 

Do away with the proactive of using an OEM? No. Making it easier for the purchaser to determine who made the product and which version of software is being used? Absolutely. 

I have a dislike of HIK and Dahua but I can't let that color my view of the practice. As long as I can find out where the firmware or software came from so I can track security notices, fine.

Thanks for reminding me to be diligent in determining who is the original manufacturer of the products I provide.

 

 

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