If You Have 4 Cameras, You Can Throw Them Away, If You Have 400, They Throw You Away

Author: John Honovich, Published on Jan 19, 2018

Do users care about anything but price?

Do user care about cybersecurity?

Do users care about trusting their supplier?

These have become pressing questions given the fall in pricing, the surge in cybersecurity issues (e.g., widespread hacking) and the growing ethical concerns of surveillance manufacturers.

A critical difference is the size of systems. A user who buys 4 cameras, is generally content to throw them away, ignore them or try to fix it themselves if they work poorly. However, a user who buys 400 cameras is generally going to fire, blame or punish the manager who specified a system with such problems.

Cost

Users with small systems are generally content to live with problems or to spend time nights and weekends trying to fix things, downgrade firmware, try workarounds, etc. Users with large systems simply have too many cameras / too large a system to do that without hiring or spending significant money. Moreover, larger system users generally recognize the business cost of staying up all night to downgrade firmware or other DIY techniques.

Cybersecurity

Most people with a handful of cameras do not really care about cybersecurity. If someone sees inside their backyard or pizzeria, they typically can laugh it off. But users with large systems typically are protecting the assets of a corporation or a governmental entity and those organizations generally have a lot more to lose across a combination of brand damage from attacks, their Intellectual Property, their IT equipment, the productivity of their people, etc.

Trust

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If you are only buying a few cameras, you are generally willing to 'trust' whatever is on the Costco shelf or has decent Amazon reviews (even if faked). The sheer time to learn and analyze various competitive options is generally not worth it. Most will make do with the most readily available seemingly decent option, especially if it has much lower pricing. And if it really breaks, through it away and repeat.

But larger system buyers who are committing to capital expenditures and long-term staffing and maintenance spending have a lot more motivation and typically resources to evaluate purchasing decisions. For them, it makes sense to meet with various suppliers, to research things, to hire people with experience using various systems. Moreover, throwing away large systems is impractical. You buy it in 2018, you are going to be dealing with it good or bad, in 2023 and sometimes even to 2028. So trust in the quality, ethics and commitment of the manufacturer one selects is typically quite important. 4 years from now, if a buyer has serious problems with a system, telling people "Yeah but I saved you 30% back then" is not going to go far given the various operational problems and costs when systems malfunction or underperform.

Rule of Thumb, Not Universal Law

Surely, there are exceptions to this pattern. Some people buying 4 cameras will study it obsessively and only buy the 'best'. And some people buying 400 cameras will take whatever cheap offering a friendly salesperson will offer them. But those are exceptions, given the more common differences across these groups.

Impact on Competitive Positioning - Small vs Large System Market Success

Some ignore this contrast and come to conclusions that everyone uses whatever is cheapest or no one would use that cheap stuff. The reality, though, is more nuanced. Many manufacturers can do very well in smaller systems and then struggle mightily with larger systems. The reason is simple - the needs and the risk that larger system buyers take is typically vastly different than their small counterparts.

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