Cisco Restructuring Physical Security Business

By: John Honovich, Published on Sep 17, 2011

After a rough 5 year period in the physical security industry, Cisco will be restructuring their Physical Security Business Unit (PSBU) that includes video surveillance and access control offerings. In this note, we share our findings from speaking to Cisco officially and to our sources.

Here's what we know:

  • Officially, Cisco will be holding a major presentation at ASIS on Tuesday at 8 am EDT at their ASIS booth that they say will unveil their next generation safety and security innovations.
  • Officially, Cisco is conducting layoffs throughout the company as part of planned, previously announced, cost reductions. Cisco would not comment about any specific cuts in the physical security business unit.
  • Our sources indicate that a majority of employees within Cisco's physical security business unit have recently been let go as well as the GM of the Division [Update: Cisco officially denies both claims]. We are told that this happened just this week. They believe that the business unit is being shut down.

Update: Cisco sent us a prepared response, which we have copied verbatim: “As part of our overall portfolio review process, we have made the decision to evolve our strategy in the physical security market. Cisco is not exiting the physical security market but instead will work closely with our customers and partners to accelerate the focus of our strategy on a solutions-led and services-oriented approach. We do not have any additional details to share at this time."

What does solutions lead and services oriented approach mean? It sounds like they may develop less of their own products in the surveillance market and take more of an integration approach. However, this is just a guess. We will need to learn more and report later in the week.

In a situation such as this, it is difficult to get an exact account. The company may want to obscure details. Likewise, our site has been a long standing critic of Cisco so readers should factor in bias or our desire to see this happen.

Besides Cisco's general market struggles and their inability to dominate physical security as they expected, Cisco has recently discontinued a large number of video surveillance products, including 1 of their 2 VMSes, the 2000 and 2500 IP cameras, SMB VMS software and a variety of SMB cameras.

Beyond that Cisco has often mentioned their desire to focus on markets that they are the top 1 or 2 suppliers in. For surveillance, they are nowhere close. They are not even in the top 10 for IP cameras and do not have a real offering for the VMS software market (their VMS is primarily a NVR appliance offering - see our review).

Update 9/19/2011:

Take a look at Cisco's booth design from the ASIS 2011 showfloor:

A few key things immediately are evident:

  • The slogan of "Improving Safety and Security Together" demonstrates the focus more on integration than on particular solutions.
  • The minimal role of individual products: On the right side, you see that IP cameras have a single stand and share that with video analytics.

Cisco seems to be morphing into more of an IBM style provider, with less and less of their own products and more of bundling third parties. However, just like with IBM, we question how succcessful this can ultimately be.

Update: See our interview with Cisco on their new strategy and the launch of their open MediaNet architecture.

2 reports cite this report:

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