Axis to Enter Access Control MarketBy: Ethan Ace, Published on Nov 08, 2011
[UPDATE 2013: Axis has officially entered the access control market.]
The most powerful company in IP video surveillance, Axis, has its sights firmly set on entering the access control market. Multiple sources have confirmed that Axis is preparing to release at least one model of IP-based controller and potentially a line of controllers/IP edge readers. This has the potential to be a major strategic shift in the market as surging IP video companies look to overtake access control providers.
Access Control Product Overview
Our sources indicate that the Axis IP controllers will most likely resemble products such as HID's Edge and Mercury's EP1501, which are PoE-powered controllers containing all the inputs and outputs needed to control a single door. At least one source has mentioned that more than one controller model is planned, which also seems likely. A controller model with two reader inputs, followed by a four-input model would be the next logical steps.
From what our sources have shared, the controllers will integrate to access management systems via an extension of Axis's existing VAPIX API. Theoretically, the inputs and outputs of the controller will be integrated the same way camera inputs and relays are integrated today, making it easier for providers familiar with the Axis API, such as VMS manufacturers, to integrate this line of controllers and expand into access control.
We asked Axis for comment on this matter. While they declined to comment on specific products, pricing nor availability, they did acknowledge: "Axis continuously explores the market for the use of network-based products. We see Physical Access Control products as an interesting area and a natural complement to our existing network video product portfolio. We continue to explore the possibilities in this market." As we have heard details about Axis's access control offering from so many credible industry insiders, we believe that a release is likely in the next half year.
Compared to the fast moving IP video market, access control is a sleepy country town. Axis's impending entrance will make an impact. What no one knows yet is whether they will ultimately leave with their tail between their legs or whether they can genuinely shake things up.
We see a number of potential concerns and key issues:
- How hard is it to compete in access control and who will Axis be competing against?
- How does the Axis business model fit or conflict with the traditional access control channel model?
- How will Axis likely market itself and how might that match up with powerful incumbents?
- What impact or leverage exists from Axis's core strength in video/VMS partnerships?
- What potential for expansion into hosted access does Axis have?
Inside we dig into each of these questions and provide recommendations.
When it comes to single-door PoE, a number of options exist today. The two biggest names are Mercury and HID, as mentioned, with numerous providers OEMing or reselling these products, including Lenel, Genetec, and NLSS. However, a number of other proprietary contollers exist, from most of the major manufacturers, such as GE's DirecDoor, Honeywell's NetAXS-123, Infinias Intelli-M, S2's MicroNode, and the Software House iStar Edge.
It should be noted that Axis entering the access control market puts it in direct competition with Lenel, previously one of their largest resellers. Lenel, until recently, resold Axis cameras as part of its video offering. Lenel also recently started producing their own proprietary access hardware (subject of a lawsuit, see our update on Mercury v. Lenel).
Stability is the number one concern in access control hardware. Unlike surveillance, where if a camera fails, users simply lose video, a malfunctioning access controller may not open doors when requested, either when entering or exiting. In an emergency, this can be fatal if the system is improperly designed. Because of these issues, experienced access control buyers are often hesitant to try new hardware. This makes maturity a critical advantage for incumbent access control companies. While Axis is a top tier IP camera manufacturer and knows how to build edge devices, this will be their first entry in the physical access space. The Mercury and HID platforms especially have had years to mature. HID went through multiple revisions before their Edge and VertX platforms were completely stable.
HID and Mercury also have an obvious integration advantage. Both of these manufacturers' lines have, at this point, been integrated with many different access management platforms. Axis will be playing catch up upon release of these controllers, with potential for bugs being introduced with each new release.
The last competitive aspect, important to integrators especially, is variety. Single-door PoE controllers are great for adding a few doors, but have limitations, as we dicussed in our comparison of IP Readers vs. Control Panels [link no longer available]. For instance: what if PoE doesn't supply enough power to operate the lock? What if the user prefers to centralize their control panels and cabling? Axis will be competing with Mercury, whose line has been fleshed out over a number of years, with multiple methods of adding doors to a system: centralized controllers, distributed controllers, and door interfaces which connect to both of these types of controller. In short, they have an option for all scenarios, which Axis will need to flesh out, eventually. This is the opposite of the surveillance world, where Axis benefits from having the industry's greatest variety of IP cameras.
Channel and Margin Impact
Axis has the potential to disrupt traditional accesss control channels. Normally, access control systems sold through distribution, with no dealer requirements, are regarded as lower-end, for use in smaller systems. Enterprise-level systems, on the other hand, have maintained strong, strictly-managed dealer networks. We would expect Axis would maintain their broad distribution model (i.e. anyone can buy it from anywhere), making their access control product available through normal channels, using their current, minimal, discount structure. This could squeeze margins in the access control business as Axis has done in surveillance.
Additionally, while chances are that the initial offering will be a better fit in smaller applications, it is most likely only a matter of time before Axis fleshes out the line to a fully-featured offering on par with larger players in access control, specifically Mercury. When Axis entered the surveillance industry, they had to compete with incumbent lines with closed dealership, as well. Today, they're one of the largest manufacturers in the industry despite the fact that many integrators loathe Axis ready availability and narrow margins. Given their revenue and R&D spending today, they could potentially supply product to challenge encumbent enterprise lines in a much shorter period of time than it took them to penetrate the surveillance market.
Axis Pushing Open Platform
Given Axis's emphasis on 'openness' and integration with huge numbers of VMS and NVR systems, we expect them to emphasize the same themes within the access control market. What's critical here is that this runs directly against the approach of most major access control providers today. While there are a few open platform hardware providers (Mercury, HID, Schlage, Sargent, etc.), for the most part proprietary systems are still seen as the norm. Software House, Honeywell, GE, and Lenel, with recent moves, push closed, proprietary panels, that helps lock in accounts and increase margins. We would expect Axis to use its sizeable marketing muscle to attack this approach seeking to damage the perception of buyers of traditional systems.
Enhancing VMS Providers
Axis's access control hardware may embolden VMS providers who have shieded away from access control to add it to their offering. Certainly, their engineering staff would be more likely to have a certain comfort level with the VAPIX API, as opposed to integrating traditional access control manufacturers, such as Mercury and HID.
This could lead to market leaders without their own access control offering, such as Milestone, to add this functionality. For integrated VMS and access providers such as Genetec and NLSS, it adds another controller option, which may drive some of their more IT-centric integrators using Axis cameras, who normally only provide video to seek access control business, which they have traditionally left alone. Additionally, Milestone recently discussed adding access control to its offering in the future. Working with its long standing partner Axis would likely be appealing to Milestone.
Hosted Access Possibilities
Given Axis' strong marketing push with their AVHS VSaaS platform, we expect that the access control products may follow the same path. Axis could implement similar one-click functions to make provisioning of remote access controllers simpler. Addition of this functionality to AVHS would put Axis in competition with companies such as Brivo, who offers hosted access control, as well as VSaaS offering based on the AVHS platform.
Unlike with hosted video, where Axis continues to struggle with overcoming bandwidth limitations and restrictions on camera counts, IP enabled edge readers preload with their one-click 'phone home' firmware could easily be adopted on a broad scale (presuming hosted providers have sufficient maturity and feature sets to compete).
Even though hosted access control has less technical barriers than video, it hasn't really been pushed hard by any very large players. We would expect Axis to change that, taking a similar approach to their aggressive marketing of hosted video to large incumbents.
Today we gathered feedback from a number of our integrator members. The responses we received echoed our analysis above in several respects, especially the issues of reliability and margins. Responses, in most cases even from the same individual, were mixed, with many expressing opinions on the negative side:
- "Axis has quite a lot of work ahead of them, because it's hard to consider that they'll have any card to play that's better than HID's market share. Yes, Axis could do remote access control management, but that option's been available for years. Axis could work with major VMS providers, but again, that's pretty much the standard anyway."
- "The access control business is life-safety and building code reliant, which are construction trade issues. Axis has no experience in this business, and there are many comparisons to make with manufacturers thinking they could do this as an adjunct to successful video or IP offerings, and failing."
- "Axis is a leader in low margin offerings, not meaning inexpensive, the margin of profit is very thin, which is not an attractive comparison when the access control manufacturers have generally supported the idea of margin support for their VAR community."
- "I am not sure how much of a player they can be in that market, perhaps as a compliment to their hosted video service."
- The IP transition for access has been slow and hard: "Software House has a huge piece of the market in access control, relative to other manufacturers. Their founder, John Moss, sold the company to Tyco and founded S2 Security some ten years ago, with the vision that access control was moving to pure IP communications from the panels to the controller. Software House still has a better market position after all that time, without much innovation."
- "Facilities people aren't learning IP, and IT people aren't learning mechanical maintenance. This makes troubleshooting into a two-man job more often than the old way did. So, given the choice between buying a cutting edge system of dubious value and just giving facilities the green light to get IP addresses / ports / rack space from IT for an old-school system, most companies are still choosing the latter because there's not enough motivation to complicate the long-term ownership of the system."
But of course, there were also a number of positive opinions:
- "Axis’ cameras are rock solid, therefore I have to make the assumption that whatever they release will be a quality product."
- "Interesting possibilities... using motion on a camera as a REX device... an integrated camera/door controller in a single unit"
- "Axis has been very successful with product development and hardware/firmware support, which means they can make a product that works."
- "With [Axis'] hosted services capabilities come the practical knowledge that could include the same support for managed access control."
- "Axis already has an extensive VMS partner network, and a handful of those (DVTel and Genetec come to mind) already extensively support the Axis product line. It won't be a stretch for them to integrate an Axis controller into their software as they are already accustomed to the VAPIX interface."
- "Except for a handful of no-name brands, there isn't any significant competition for HID right now in this market space. I think that leaves the door wide open for Axis to come in an compete head-to-head with HID."