Danger of Buying Packages

Author: John Honovich, Published on Aug 07, 2008

A dangerous and mass movement is underway for video surveillance companies to sell you packages. Packaging together cameras, encoders and IP video management systems, vendors hope to entice you with an integrated, optimized end to end solution.

One of the great ironies is that while everyone is paying lip service to open platforms, the industry is clearing moving to more tightly bundled packages. I think this is very risky and you should carefully consider the dangers of buying "solutions." "packages". Originally I called this solutions.  I believe this is a poor choice of words. I have now changed to packages to better connote the phenomenon. 

Who's selling packages?  Verint, March, American Dynamics, Pelco, Cisco, DvTel, Bosch, IndigoVision, Avigilon.  You can even see the beginning of this with Axis with their expansion of Cam Station. Today, Panasonic announced it to was moving to selling "solutions", i.e packages.  It's almost easier to ask who is not selling packages (Milestone being the most obvious large player).  And what's key is that, 5 years ago, a lot of these companies specialized in just management systems or cameras.  The trend is expanding.

Vendors love the thought of selling packages because it has the potential to increase revenue (by cross selling) and to increase margins (by bundling). They can also tell themselves that they have moved up market and are delivering greater value, etc, etc.

I do not doubt that some vendors can but when you have more than a dozen vendors all selling fundamentally the same package, you have a very risky situation for everyone involved.

Danger 1:  Packages Are Too General

Video surveillance buyers have a wide variety of needs.  However, most packages are horizontally positioned (that is, they are not optimized for any specific use case). Packages can restrict flexibility and adaptability to different use cases.  Be careful that the package properly addresses your need.

Danger 2: You are screwed if you choose a Market Lagging Package

Since there are so many vendors selling packages, some of them are going to lose.  You cannot expect to have a dozen companies all basically offering the same thing to all succeed.  If you choose a packages that loses, you are in trouble.  It will be very hard to expand the package and you will likely be locked in to its limitations.

Danger 3: You are controlled if you choose a Market Leading Package

If the package wins, you become at the mercy of the vendor. This is why so much ill will exists towards companies like GE Security and Tyco.  They got you into their package and they know it.  Requests for supporting third party products or new features are slow or unlikely to be approved even if you are a giant customer.  This move to IP video solutions seems to risk replicating the same problems we have been struggling with for the last decade.

I am not saying you should not buy packages. I think some of them are particularly strong (especially to the extent they focus on a vertical).  However, you should clearly understand these moves and factor in the risks of them.

Thoughts?

Most Recent Industry Reports

Hikvision Leads Multi-Manufacturer Sales Promo on Feb 21, 2017
Earlier this month, Hikvision launched new 'super value' kits, with 40% discounts, and now Hikvision is offering another promo, but this time they...
Washington DC MPD's Surveillance Equipment on Feb 21, 2017
The Washington DC Metropolitan Police Department's surveillance system was hacked in January 2017. Two immediate questions were: Whose...
Hikvision Ezviz Mini 360 Plus - $80 Autotracking Camera Tested on Feb 21, 2017
Autotracking, integrated IR, local storage, full HD, cloud access: $80. That is the claim of Hikvision EZVIZ's new Mini 360 Plus. But for this...
Lenel Improving Customer Support on Feb 21, 2017
Lenel has faced significant criticism recently (see Lenel Partners Angry, Lenel Does Not Care, Worst Access Control 2016, Lenel Favorability...
'Dirty': Hikvision Attacks Genetec on Feb 20, 2017
Hikvision is angry at the growing public awareness that Hikvision is owned by the Chinese government. They took aim at Genetec,...
Directory of Alarm Company Brokers on Feb 20, 2017
Selling an RMR based business, such as alarm company, can be highly profitable, with acquisition prices of 36 to 48x RMR (equivalent to 3 to 4x...
Hikvision Hiring 50, Direct Out of College, Sales People on Feb 20, 2017
Hikvision is hiring 50, direct out of college, field sales people across the country. This is the next major expansion for the Chinese...
Simplisafe is 'Blowing The Doors Off' on Feb 17, 2017
The company alarm dealers love to hate, Simplisafe, is 'blowing the doors off' according to Michael Barnes, one of the top financial advisors in...
Hikvision OEM DDNS Devices To 'Lose Remote Access' on Feb 17, 2017
The fallout of Hikvision's DDNS discontinuation is expanding, this time hitting OEM partner Supercircuits, who reports that on June 30th: The...
Milestone: "Easy Money Days Are Over" on Feb 17, 2017
Contrary to IPVM's criticisms, Milestone has reaffirmed that glory days remain. But they admit that they 'easy money days are over': Are the...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact