Cernium Layoffs and Restructuring

Author: John Honovich, Published on May 02, 2011

According to tips provided to us and confirmation from a source close to the company, video analytics manufacturer Cernium has made sizeable layoffs and restructured their operations.

Historically, Cernium focused on the enterprise / government market with products such as Perceptrak (a centralized video analytics offering) and ExitSentry (for airport checkpoint monitoring).

In the past few years, Cernium has expanded into the consumer / residential market with their Archerfish product line - an IP camera with embedded analytics and on-board storage that is managed by Archerfish. For background, review our in-depth field test results and criticisms from Amazon reviewers.

One tip provided to us claimed that a few dozen employees were laid off including the CEO. A source close to the company would not confirm or deny the specific points but did note, "Cernium is committed to growing their security presence and as such are 'moving away from some of their legacy offerings'. Cernium should be issuing a press release within the next 24 hours regarding these new developments."

It would appear, then, that Cernium is shifting more towards the consumer market. Operating in both the enterprise and consumer markets is difficult for most companies to manage. We believe this has been a challenge for Cernium. Moreover, the enterprise video analytics market has not been robust over the last few years (Cernium's Perceptrak is similiar in market adoption and technology to Vidient which recently failed).

[Update May 5, 2011: No official release or word from Cernium yet but another tipster reports that the focus will not be Archerfish but CheckVideo (alarm verification). This person also confirmed layoffs and exit of key management team members.]

[Update May 9, 2011: No official release from Cernium. However, the management team page from Cernium's website has been removed - the first notable public change from Cernium.]

On the other hand, their approach to the consumer market has major concerns. While Cernium's Archerfish is the only VSaaS offering to integrate analytics, it is one, if not the most expensive offerings in it segment - at about $300+ online pricing. The main justification for the premium is the analytics. However, we are skeptical about consumer's interest in using analytics and, more importantly, the ability of those analytics to work robustly enough to satisfy consumer's need to avoid nuisance notifications.

We believe Cernium has raised over $30 Million in VC funding in the past 10 years (see our Investments Directory for references). Despite this, we estimate the company's annual revenue at less than $10 Million and would be surprised if Archerfish revenue is more than $1 - $2 Million for 2011. It is likely that Cernium is projecting a significant ramp up of Archerfish sales. However, given our concerns noted, we think Archerfish will struggle without major product improvements.

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