Before I vote, I need to know if 1) there's any commitment, and 2) what the penalty is if I want to cancel my subscription before my commitment is up.
Genetec Launches Subscription VMS
Published Mar 30, 2016 16:32 PM
Are the days of paying $50, $150, $300 up front per camera from VMSes soon to end?
Genetec is pushing forward with an additional subscription pricing model including an all new subscription only plan.
In this note, we share feedback from our discussion with Genetec, examining its competitive impact.
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Comments (24)
Ari Erenthal
Mar 30, 2016JH
John Honovich
Mar 30, 2016No contract, month to month, is my understanding. I'll update if wrong, double checking now.
Ari Erenthal
Mar 30, 2016Well, that seems risky on Genetec's part. Is this confidence or desperation?
JH
John Honovich
Mar 30, 2016I am pretty sure it's confidence, either that or they are really good at hiding desperation.
But, in all seriousness, that is increasingly normal on the IT side. In reality, given the cost / time / complexity in setting up / switching VMSes, how many people are going to sign up for Genetec for 3 months and then switch to VMS B? It certainly increases the risk that if someone hates it, they say "Screw it, dump that stuff" but, if anything that would be a good sales pitch for them, i.e., we are so confident that you will love our software just pay X dollars for a month, cancel anytime.
Matthew Netardus
Mar 30, 2016The way it was pitched at the connect event a few months ago was as a confidence based approach towards an IT buyer that has the rest of his payments already subscription based (except hardware of course); and primarily in takeover opportunities where the biggest argument against switching VMS systems is the sticker shock at a software only change.
A few integrator mentioned using it just to get in the door and then sell a perpetual license, but no discount is available for switching from subscription to perpetual (it seems like Genetec would want customers to stay with whatever they started at).
JP
Jimmy Palatsoukas
Mar 30, 2016Hello
Thank you for the questions. The integrator buys the service based on customer requirements - be that on a month-to-month or one year term basis. Genetec does not get involved with how an integrator contracts with their end-user, in fact some of our certified channel partners are building out a bigger RMR business on our subscription plan and including hardware and cameras in a monthly price. That said, we do not offer a prorated refund to integrators who may have a client unsubscribe part way through their term.
Jimmy Palatsoukas (Product Marketing @ Genetec)
Ethan Ace
Mar 30, 2016I think that no contract/no cancellation is becoming increasingly normal in all industries. It's how a lot (most?) of the cloud camera startups are functioning. Even the cell phone carriers have made moves toward it.
I think from a perception standpoint it puts Genetec in the more "forward thinking" bracket compared to other VMSes using the "old" model.
JH
John Honovich
Mar 30, 2016On the other hand, there is the 'classic model', which is "I buy the box once why should I pay you anything else again?"
UM
Undisclosed Manufacturer #1
Mar 30, 2016Does this mean that your VMS now requires Internet access to continuously validate the license?
This could be a cyber-security issues, as many systems are not directly on the Internet. If you need to transfer a license, as you can with a traditional VMS, this would be a time suck if you had to do it every month...
EC
Erick Ceresato
Mar 30, 2016Hi Undisclosed,
The system needs to connect periodically to validate the license.
The Genetec Update Service is the component responsible for running these checks. This is an independent component of Security Center that can be installed on a dedicated server, which connects to the internet, and acts as a proxy. Consequently, subscription systems can reside on an isolated network.
This is coupled with communications encryption in Security Center to ensure the system is protected.
Thanks,
Erick Ceresato (Product Manager @ Genetec)
U
Undisclosed #2
Mar 30, 2016Do you think this move is a way for Genetec to try and market to a customer base that has been unavailable to them previously?
As an OPEX solution, wouldn't subscription pricing allow those without the CAPEX formerly required to install their products the ability to now use Genetec?
Lack of CAPEX is a real barrier to enterprise level VMS for smaller end users - I think subscription pricing can help them to at least put a dent in that barrier.
JH
John Honovich
Mar 30, 2016Lack of CAPEX is a real barrier to enterprise level VMS for smaller end users
Other barriers:
- Really high license costs
- Server costs
- Storage costs
- Implementation / management costs
If this was a subscription SaaS that included storage/ recording/ hardware, then maybe I see that but with all the other bigger costs still being CAPEX, I don't see it making a major factor.
Matthew Netardus
Mar 30, 2016It's their only way to combat things like "free takeover" and other manufacturers that take over competitor systems for the cost of an SMA/SSA basically; it's a foot in the door for accounts that previously were hard to get in when you're talking a few hundred per camera as a license
JH
John Honovich
Mar 30, 2016Matthew,
Good points! Though if Genetec is successful here, I doubt it would be hard for competitors to replicate the Genetec subscription pricing but at a lower price point. I am sure there are many manufacturers looking at Genetec's move and already contemplating that ;)
Matthew Netardus
Mar 30, 2016I'd be surprised if we don't see subscription based from other vendors by the end of the year, best guess is a milestone or video insight?
JH
John Honovich
Mar 30, 2016best guess is a milestone or video insight?
In fairness, I don't think it takes a crystal ball to predict that Milestone will follow a Genetec release ;)
For Video Insight, do they really need to? Their regular special takeover price is a one time fee of ~$79? Their special takeover price is a one time fee of ~$29? Against someone willing to go that low, hard to see how Genetec can match and maintain its large engineering team. I would think they just need to win on selling more advanced features / benefits of them.
JS
Jack Sink
Mar 30, 2016This is a great option offering yet another degree of flexibility for the end user, and it eliminates the initial investment for licenses/SUP at implementation. It is indeed a solid entry point for clients working with VMS's they are not satisfied with to switch to an alternative without the front end investment in licensing. It will prompt competitors to develop their own offering over the next few months or be left behind.
UM
Undisclosed Manufacturer #3
Mar 30, 2016I think this will become more and more common. The one question I have is how it works when someone stops paying? End user or integrator.
Matthew Netardus
Mar 30, 2016If the account doesn't stay current on monthly payments, then the license goes invalid. basically you'd log in and get a license error and be unable to view or modify the system (From what I have heard though, system config stays the same so if you get current then the system doesn't have to get rebuilt).
EC
Erick Ceresato
Mar 30, 2016Hi Matt, Undisclosed,
Our goal is to ensure customers will not lose access to the system due to an oversight. We will continue to auto-renew customers that are on monthly term contracts, to ensure they can continue using their system. If an account is in arrears, we will notify and work with our channel partner responsible for the system.
Should a customer need to cancel a system, they can do so by providing us notice of non-renewal before to end of their term.
Thanks,
Erick Ceresato (Product Manager @ Genetec)
Brian Rhodes
Mar 30, 2016What happens to the visibility/availability of recorded video if customers stop a subscription?
Do they continue to have access through a viewer?
Matthew Netardus
Mar 30, 2016Nope, if you don't stay current you have no video. So if you do go non-supported, it becomes a race against the clock for any recorded video that may get overwritten as retention period runs out
EC
Erick Ceresato
Mar 30, 2016Thanks Matt. If a customer cancels their subscription, they will no longer have access to Security Center to review recordings. Users can export video of interest prior to canceling their subscription, should they need to retain it longer.
Thanks,
Erick Ceresato (Product Manager @ Genetec)
UM
Undisclosed Manufacturer #4
Mar 30, 2016This is all starting to look like the Alarm industry with their monthly monitoring fees and RMR. It won't be about the equipment as much as what the monthly service fee will be.