Genetec: Gutting of Mid and Low End Players Coming

I voted "no" because it has already happened.

Disclosure - I work for Genetec

I agree with both Andrew and UI1 - The industry has barely begun to see the bloodletting.

Many of the small and mid tier players are running on VC money since their growth has been nil (or negative) over the past couple years. In some cases that's all they've ever run on.

I'm personally aware of one which just released the majority of their sales team, less than 2 years after a new sales leadership was installed. This particular company is (and has been) on VC funding since inception and actually touts any new infusion of cash in their sales presentations.

Those VC plugs will eventually be pulled as sales continue to drop. The VC investors will hope to recoup pennies on the dollar on the sale of intellectual property, assuming there actually is intellectual property worth acquiring

Strategically you're already seeing bundling by some of the E2E cam providers. VMS /camera licenses are being included at NC if cams / NVRs are purchased. This will continue to put downward pressure on those mid - low tier VMS / NVR providers.

That's a short term fix for the E2E providers though. Unless their HW growth rate can accelerate past the declining prices brought on by commoditization, they'll be playing a zero sum game as the the feature sets of the Chinese products will continue to improve as they attempt to grab share up market.

Hello,

I wanted to take a moment to clarify my comments mentioned in this article:

The comments I made were in response to a journalist’s questions about very broad industry trends. They were meant to describe, at a macro level, changes that I see taking place in our industry. Trying to draw a straight line between such broad observations and specific activities of individual companies, their management, or investors, greatly oversimplifies a very complex market dynamic.

I doubt very much that anyone would argue against the fact that our market is going through a major period of change. And, that part of this change is the commoditization effect that is being felt in mid- and lower-end segments by both software and hardware companies. But this is not to say that other segments, including enterprise, are not seeing/feeling the impact of these broader market dynamics; it’s just that the challenges associated with this one, specific trend are likely to be felt more acutely by manufacturers who position their offering in this space. Will it mean that every manufacturer in this space will be eliminated because of this trend, no. Will it force a change in how these companies design, deliver, and position their offerings, I think it will.

So, while I could have been a bit more diplomatic in my characterization of this trend, I do feel broadly that this will be an industry shaping force in the months and years to come.