Desperate Moves: AVHS and HDcctv

By: John Honovich, Published on Sep 11, 2011

In the last year, quite a number of incumbent security providers have launched VSaaS using Axis's AVHS service or HDcctv cameras and recorders. Rationally, this is bizarre. The business case is weak and the products are far from being competitive with mainstream (analog or IP) options. So why is this happening?

Recently, I was speaking with an executive at a company rolling out an AVHS VSaaS service and we were discussing my concerns. He bluntly responded that this is a really difficult market and that he needs to do something to increase revenues. Then it hit me that this was basically a poorly though out, desperate move.

Many incumbents are in tough positions: While IP is growing, it is cannibalizing existing analog sales. Worse, much of IP's growth is going to outsiders so it is likely a net negative for incumbents.

However, rolling out AVHS or HDcctv stinks of desperation. Neither has much chance of short term major revenue boost or long term major market success. Let's examine each one:

AVHS Challenges

AVHS's channel model dooms it. While most successful SaaS providers develop and sell their services direct to end users, Axis's model continues to grow more complex. For example:

  • Axis sells AVHS software
  • EMC hosts the AVHS software and storage
  • National integrator buys this service from EMC
  • Regional dealer or integrator buys the service from national integrator
  • End user buys from regional dealer or integrator

This is a highly inefficient model that drives up cost and abandons one of the key value drivers of SaaS - the ability to use the Internet to cut out the middleman. Of course, it should be no surprise that AVHS partner end user pricing continues to be uncompetitive.

The second related problem for AVHS is lack of product development, made far worse by these layers of re-sellers and partners. Today, AVHS, compared to even Chinese DVRs, is essentially a toy - lacking dozens of fundamental features expected for years by surveillance customers. Axis seemingly expects partners/resellers to do their own development to rectify AVHS's shortcoming. Instead, we continuously see the same service with simply different logos. Of course, this should not be surprising as almost none of these partners have real software development teams (note: the one IT guy who writes excel scripts does not count).

VSaaS can ultimately be very successful but the current Axis model cannot. For instance, Axis could combine their AVHS powered IP cameras and AVHS enabled on-site iomega NASes, sell it from their own site and offer a free plan for using local NAS recording. This would be extremely attractive and spur selling far more Axis devices than the convoluted current channel model. Of course, the downside is that integrators and partners will revolt (as if Axis's current buy anywhere approach is not disliked enough).

Axis will go direct or others will do so. Either way, the winners in the VSaaS market will cut out the middlemen and maximize their product development without having to cut in numerous levels of partners.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

HDcctv Challenges

HDcctv has many problems and barriers.

The most fundamental challenge is HDcctv's lack of interoperability with any existing system - DVR, NVR, VMS, etc. You want to use HDcctv, you have to change recording platforms. Huge barrier. Anytime you have a new product category that requires this, best case scenario is a long slow march, most likely scenario is collapse. This pattern is common and has equally impacted analytics and IP cameras. For more on this read our note on "Fundamental Barriers to Surveillance Innovation".

The upside of HDcctv is (1) no camera network configuration and (2) reuse of existing cabling (maybe/sometimes). These are certainly attractive. The big question is what are the downsides? Unfortunately, they are many:

  • Inflexible camera choice: One cannot mix and match analog and HDcctv inputs. For example, if you buy a 10 port DVR that has 8 analog and 2 HDcctv ports, you have to buy another recorder if you want to have more than 2 HDcctv cameras.
  • High pricing: HDcctv spokespeople continue to shift back the date when pricing will be competitive with IP cameras. Back in 2009, it was immediately, now it is sometime in the next few years.
  • Limited product availability, looming incompatibility among HDcctv / HD SDI products, no powerful leader, negative promotional campaigns, conflict of interest, etc. All this has been most recently addressed in our September 2011 HDcctv update.

We do believe that HDcctv (or at least HD SDI) can establish a niche position in the market. However, there are simply too many structural problems for it to become a major force in the surveillance market.

Conclusions

The best analogy for these two efforts is what happened with video analytics and ObjectVideo's partner program 6 - 8 years ago. Like analytics, VSaaS is now considered the next big thing and, understandably people do not want to be left out. Even worse, with deteriorating economic conditions, the urgency of 'doing something' increases. However, a careful consideration of the issues each of these offerings face should dissuade reasonable people from wasting their energy on such efforts.

2 reports cite this report:

Axis Guardian - Cloud VMS And Alarm Monitoring - Released on Jun 19, 2018
Axis has struggled to deliver a cloud-based managed service video platform. Video service providers have utilized AVHS for over a decade, and have...
Winners and Losers Fall 2011 on Sep 25, 2011
Now that the dust has settled from the new announcements of the last month, we can better understand the impact on the overall video surveillance...
Comments : Members only. Login. or Join.

Related Reports

Video Surveillance History on Jul 19, 2019
The video surveillance market has changed significantly since 2000, going from VCRs to an emerging AI cloud era. The goal of this history is to...
The Fastest Growing Video Surveillance Sales Organization Ever - Verkada on Apr 17, 2019
Verkada has the fastest growing video surveillance sales organization ever. In less than 2 years, they already have more salespeople in the US...
Surging Wyze Raises $20 Million, Threat To Chinese Brands on Feb 01, 2019
The Seattle Startup that is disrupting consumer IP cameras with $20 pricing has just raised $20 million dollars (SEC Filing and company press...
Sales Cuts At Rasilient on Feb 19, 2019
Over the past 2 years, video surveillance storage specialist Rasilient has expanded its workforce significantly, aiming to build its own branded...
Avigilon Launches 'Renewed Products Program' on Mar 19, 2019
There are lots of 'pre-owned' cars but pre-owned IP cameras? While such programs are common in other industries, in video surveillance, they are...
Closed Cloud Cameras Trashed on May 13, 2019
When you buy a camera, do you own it? Not anymore. In the world of closed cloud cameras, you may think you are buying a camera but all you are...
Axis Will Not Block Resellers on Jun 10, 2019
While Axis generally has strong favorability amongst integrators, the biggest complaint is their channel model, which results in smaller integrator...
'CCTV' Is the Past, Cloud Video Surveillance Is the Future on Jul 08, 2019
A fundamental shift is happening. For decades, video surveillance was overwhelmingly 'closed' and off the Internet. This is changing. More and more...
Top 2020 Trend - AI Analytics on Nov 22, 2019
170+ Integrators answered: What do you think will be the top industry trend in 2020? Why? For the 4th year in a row, AI/video analytics was...
The Battle For the VSaaS Market 2020 - Avigilon, Arcules, Eagle Eye, OpenEye, Qumulex, Tyco, Verkada on Jan 13, 2020
While VSaaS suffered from inflated expectations in the 2010s, 2020 marks a new decade and a much stronger competitive position for VSaaS vs...

Most Recent Industry Reports

Video Surveillance 101 Course - Last Chance on Feb 20, 2020
This is the last chance to join IPVM's first Video Surveillance 101 course, designed to help those new to the industry to quickly understand the...
Vulnerability Directory For Access Credentials on Feb 20, 2020
Knowing which access credentials are insecure can be difficult to see, especially because most look and feel the same. Even insecure 125 kHz...
AI/Smart Camera Tutorial on Feb 20, 2020
Cameras with video analytics, sometimes called 'Smart' camera or 'AI' cameras, etc. are one of the most promising growth areas of video...
China Manufacturer Suffers Coronavirus Scare on Feb 20, 2020
Uniview suffered a significant health scare last week after one of its employees reported a fever and initially tested positive for coronavirus....
Cheap Camera Problems at Night on Feb 19, 2020
Cheap cameras generally have problems at night, despite the common perception that integrated IR makes cameras mostly the same, according to new...
Milestone Launches Multiple Cloud Solutions on Feb 18, 2020
Milestone is going to the cloud, becoming one of the last prominent VMSes to do so. Milestone is clearly late but how competitive do these new...
Video Surveillance Architecture 101 on Feb 18, 2020
Video surveillance can be designed and deployed in a number of ways. This 101 examines the most common options and architectures used in...
UK Stands Behind Hikvision But Controversy Continues on Feb 18, 2020
Hikvision is exhibiting at a UK government conference for law enforcement, provoking controversy from the press, politicians, and activists due to...
IronYun AI Analytics Tested on Feb 17, 2020
Taiwan startup IronYun has raised tens of millions for its "mission to be the leading Artificial Intelligence, big data video software as a service...
Access Control ADA and Disability Laws Tutorial on Feb 17, 2020
Safe access control is paramount, especially for those with disabilities. Most countries have codes to mandate safe building access for those...