JCI / Tyco Security Acquires Smartvue

By: John Honovich, Published on Apr 03, 2018

Johnson Controls (Tyco Security) has acquired cloud provider Smartvue (see recent IPVM Smartvue profile). Smartvue will join Exacq and VideoEdge in what JCI described to IPVM as a compliment to those offerings.

Inside this note, we share feedback from JCI and Smartvue to IPVM and analyze the competitive positioning of this to key rivals including Eagle Eye, Hikvision, Genetec and Milestone.

******* ******** (**** ********)*** ******** ***** ******** Smartvue(********* **** ******** *******). ******** **** **** Exacq *** ********* ** what *** ********* ** IPVM ** * ********** to ***** *********.

****** **** ****, ** share ******** **** *** and ******** ** **** and ******* *** *********** positioning ** **** ** key ****** ********* ***** Eye, *********, ******* *** Milestone.

[***************]

Smartvue ********

******** *** ***** ** *******, founded ~** ***** ***, that ****** $** ******* in ****. *** *** past ******, ******** *** been ************ ******** ** cloud ***** **********, **** 2 ******** *****: (*) 'enterprise', ***** ******** ***** own **** *** ***** management **** ******* ******* and ** *** ***** and (*) '*********' ***** is ***** ******** ******** primarily **** ** ******* providers (*.*., **** ****** Cable) ** ***** ***** video / *** *********. Strategic ********** */**** ** their *******, **** *** balance **** *** **********.

Complimenting ***** *** *********

***'* *** **** ** to ********** ********'* ***** video ********** **** ***** and *********, **** **** Smartvue ******* *** ***** portion ** ***'* ******* end-to-end ***** **********. ********* would ******** ** *** / *** ***** *** VideoEdge *** **** ******** being *****/********** ** ****** cloud ********** ** ***** offerings.

*** **** **** ***** Illustra ******* **** **** be ********** **** ******** (Smartvue ********* ********** **** a ******* ** ****** of ** ******* *** specialized ******** ***-** *** cloud ********** / ************).

Smartvue ** ***** *****

***** *** ************ *****, ********* * health ********** *******. *** **** *** plan ** ** ******* all ***** *********, **** as ****** **********, ***** access, ***. ** * single *********.

Timing ** *********** *** *** *** ********

*** ***** ****** ** when *** *********** ******* SmartVue *** ***'* ******** ***** offerings **** ** ******** is ***** ** ** determined *** ** * top ********, **** ***.

Pricing ***

******* *** *** ***** cloud ******* ** ** be **********.

Access *********** ***

************, *** **** **** are *********** *********** **** their ******* *** ******** House ********* *** **** is ** ** **********.

Smartvue ******* / **** ********* ******* **** ****

******** ******* ****** ****** told **** **** ** is ********* ** ******* 'long ****' ** *** and **** ******** **** of *** ***** ******** * larger *********** / ************ for ********* ********'* *****.

********* *** **** * concern **** ******** ***********, ***** * **-******** **** shortly ***** ***** ******** **** ended.

Smartvue ******* ******** *********

*** **** **** ********'* ******* provider ******** (*.*., ****** to **** ****** *****) shall ******** *** **** continue ** ** ********* by ********'* ****. *******, the ***** *** *** is ********** *** ******** compliments ***'* ******** ***** products (***** ** * few ******* ******* ****** business).

Key **** - *********

*** *** **** ** see **** ** *********. Instead ** ******** ***** own ******** ***** ********, JCI *** ******** ** outside ******** ********. *** long ** ***** **** to ** **** *** how **** (**** ** deeply *** **********) *** integration ** **** ******* to ** ****. *** optimistic **** ** **** this ***** **** **** features ****** **** **** they ***** ** ** their ***. *** *********** case ** **** ** still ***** ***** **** time ** ********* *** it ********** ****** ** they *** ** *** 2 ************* ********* ********* together. ** ** *** know ***** ** **** turn *** ** **.

Competitive ********** - ***** ***, *********, ******* *** *********

*******, ***** ** ***** ********** limited *** *** ***** surveillance ******* *** ** is ******** *** *********. Here *** **** *** matchups

  • ***** ***: *** ************ is **** ** ** a ***** *** **** has **** ******* ******** and ********* **** *****. Its ***** ********* ** that ** ***** ** cloud **** *** **** beginning ** ** ****** the **** *** ********** of ******* ** * 3rd ***** ********. ***** Eye ** **** **** targeting *****'* **** ********** base. ****, ******** ***'* *****'* ********* of ***** ****** ******* Brivo, ** ******** ** integrated ***** ***** / access ********.
  • *******: ***** ********** * conventional ***, ******* *** been ********** *** ******** ********* (**** *** video****** *** ******) **** **** *****, so **** **** * significant **** ***** ** Exacq *** * ******** engineering ************ ******* ***** development. *******, ***** *******'* pricing *** ******* ***** on *** ****-***, ***** may **** **** ** an *********** *** * mid-market cloud ******** ** *** can *******. ********'* ******* provider ******** **** ******* with *******'* *** ***** JCI's ***** ** ************* their ******** ******* *********, we *** ******** *** being ** ******* / capable ** ******* ** the ******* ******** ****.
  • *********: ********* *** * big ******* ********* ** every ******* ************. ** the ****** **** ********* can *** **** ******* features (*.*.,***) ** ***** *********, they *** **** ***** on ***** ***** ****** or **** ******. ********, Hikvision *** **** ********** its *** ***** ******** for *** ********* (**********) *** ** *** had******** **** ***** *** reliability. ***** ** ********** at **** ** ********* moving ** ******.
  • *********: ********* ** *** least *****-******* ** ***** 5 ********* ********. **** effectively **** *** ***** cloud ******** (********* / ***** ****** Cloud ******* ***** ******, Now *******) *** ** ** not ***** **** **** is ***** ******** *** how ** **** ****** to ********* **** ******** base (****** ** ***** expect ** *** ******** / ******** ***** **** year). **** ****, ********* has **** ******* *** advocating ** **** **** cloud (*.*.**** ****: ********* ******* highlights ********** ************ ** next ****** ********** *** video **********).

Outlook ***

**** ** *********** *** for *** / *****. Most of ***** ***** ****** have **** ********** ***** internally. ** *** *** integrate ******** ******* *** deeply, ** ***** ** an ********* *** **** but **** ******* ** be ****.

Comments (18)

Undisclosed #1

04/03/18 01:44pm

 However, given Genetec's pricing and feature focus on the high-end, Exacq may have more of an opportunity for a mid-market cloud offering if JCI can execute.

JCI has such a significant amount of overhead.  Do you think they could be competitive in the middle market?  In my experience, JCI does really well at extremely large facilities/campuses (e.g. hospitals) but fails everywhere else due to extremely/laughably high cost.

John Honovich

IPVM | In reply to Undisclosed #1 | 04/03/18 01:56pm

It depends on what we mean by 'JCI' and 'medium'. If by JCI, we mean JCI the integrator, than yes I agree not 'medium'.

But I was referring here to JCI Exacq and Exacq does well in the 'medium' (by that I mean systems with dozens to hundreds of cameras) but less well than Genetec in the thousands of cameras range.

Undisclosed Manufacturer #2

In reply to Undisclosed #1 | 04/03/18 02:01pm

You are confusing JCI’s integration business with JCI’s recently acquired security products manufacturing business (Tyco Security Products). This appears to be an acquisition for the existing security products side of their business. 

John Honovich

IPVM | In reply to Undisclosed Manufacturer #2 | 04/03/18 02:06pm

Related: Tyco and JCI Mega Merger and Tyco Officially Becoming Johnson Controls

Undisclosed #3

04/03/18 02:17pm

How much did JCI pay for Smartvue?

John Honovich

IPVM | In reply to Undisclosed #3 | 04/03/18 02:22pm

That was not disclosed. I don't know enough to confidently guess a narrow range but I would think somewhere between $5 - $50 million.

Related from our profile:

The company does not disclose specific financials but a 2016 profile indicated ~$10 million revenue. Smartvue did tell IPVM that they are profitable.

Avatar

Sergey Bystrov

NetworkOptix
04/03/18 08:46pm

Talking about risks..

 
Outside of business risks, there is the execution issue. If you merge the product( complete one with another) which design guidelines you keep? Who will product manage it? Does one philosophy fit into another? Would it be common codebase or ongoing overhead? It must be a perfect balance between timeline(long term vs short term), tech debt, development resources and product quality. 
 
Risks are: blurring roles, broken window issues as consequence long-term crew demotivation. 
 
If I had to give one advice to the team: make sure you have well-defined roles.

IMHO, it's super challenging to manage such merge. 

Good luck.
Avatar

Michael Gonzalez

Integrated Security Technologies, Inc.
04/03/18 11:55pm

Maybe I'm just old fashioned or just plain paranoid, but in my mind, cloud and security don't go together.

Avatar

Jon Dillabaugh

Pro Focus LLC
In reply to Michael Gonzalez | 04/04/18 12:28pm

Or maybe old and paranoid? Lol I kid I kid. 

If done well, with 2FA and constant attention from the manufacturer side, cloud solutions don’t have to be insecure. While nothing is 100% certain either way, the only true way to be sure a system is 100% secure is not plugging it into a network at all. Anything more than that is varying degrees of risk. And bigger doesn’t always mean better. Large corps make mistakes too, only since they are larger, they are better bait. 

John Honovich

IPVM | In reply to Jon Dillabaugh | 04/04/18 05:13pm

If done well, with 2FA and constant attention from the manufacturer side, cloud solutions don’t have to be insecure.

JD, how are you ensuring 'constant attention from the manufacturer side'?

 

Michael is coming from the position of security for critical infrastructure so the risk / reward tradeoff differs from SMB and the downsides of 'inattention' from a cloud provider can be very severe.

I get the whole "if they hack my camera, what are they going to see my backyard?" rationale but some organizations have a lot more to lose and should act accordingly.

Avatar

Michael Gonzalez

Integrated Security Technologies, Inc.
In reply to John Honovich | 04/04/18 07:17pm

Agreed, constant attention from the manufacturing side doesn't equate to being more secure. The squeaky wheel does get the oil, but if the concerned emails and phone calls don't come with dollars, they're unlikely to go very far if the solution to the problem comes with a cost.

Avatar

Tim Pickles

Mitie Fire & Security Systems
In reply to Jon Dillabaugh | 04/09/18 08:24am

So who controls the manufacturer side Jon? I think we need to adopt a simple mantra - "If it's in the Cloud - it's at risk". The client has absolutely no control over their data in the cloud and is entirely reliant on others which, personally, I would feel uncomfortable with.

Over the last few years I think we can safely say every single manufacturer of IoT has had vulnerabilities that they have identified, patched and will continue to do so. The obvious point is that before the patch is applied - the door is wide open.

Bringing this back to basics, it's a simple risk analysis. Do you accept the reality that the Cloud will always have inherent risk that does not pose a significant commercial and operational risk to your business, or is you business so mission critical that you need to mitigate every possible risk by screwing down the security to its absolute physical level?

I think I'll stick with the mantra. 

 

Undisclosed Integrator #6

In reply to Michael Gonzalez | 04/04/18 05:04pm

No, you're being prudent with a healthy amount of skepticism.

Undisclosed Manufacturer #4

04/04/18 01:20pm

My prediction is JCI will slowly suffocate Smartvue because they are much better at financially optimizing mature businesses than growing innovative technology.  I expect 2-3 years of gain by introducing Smartvue into the JCI sales channel, then stagnation or even decline due to cost cutting activities, lack of investment and increasing corporate micromanagement. 

Commercial Video SaaS is still in the early adopter phase.  Growth requires investment and agility, neither of which are JCI/Tyco strengths.  

John Honovich

IPVM | In reply to Undisclosed Manufacturer #4 | 04/04/18 01:48pm

much better at financially optimizing mature businesses than growing innovative technology.

I do think that is a fair description of Tyco historically, at least my observations of their security efforts.

At the same time, I am curious how JCI will change things. Some things we have seen / heard indicate JCI is less shortsighted that Tyco.

Undisclosed #3

04/04/18 01:35pm

"Commercial Video SaaS is still in the early adopter phase."

Can something a ~decade long be considered a 'phase'?

Undisclosed Manufacturer #5

04/04/18 01:44pm

Congrats to Smartvue, I remember their first idea... a wireless camera.  John, I do think they took VC in the beginning.

 

Undisclosed

04/04/18 03:19pm

One wonders how this will integrate with Hattrix.

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