I certainly can believe companies pressured on the video side, may turn to access control but structurally not convinced that given the regulation, life safety issues and complex installation elements that a race to the bottom would be that impactful. What do you think?
Totally agree with John here. It is far more complex, and far less sexy, to wire a door for access control as it is to hang a camera on a wall. It is also far more disruptive when a door fails than when a camera does.
I wish they would spin off. Actually I wish UTC would just give Lenel the attention it needs to get it back to a well oiled machine. The fact that they still charge like it is a well oiled machine is particularly upsetting to me.
As some one who only used Lenel briefly in early 2016, was it actually good? Because I had always heard of Lenel, but never used it. When I finally got around to installing some I was quite underwhelmed by the software. It seemed very dated, and not all that powerful. And the support, wow was it...not very helpful.
So has Lenel more or less just stuck where it was, while others have innovated, or what? From what I saw with Lenel, I felt like I could do a lot more with Keyscan, or even Kantech. The database management with using full SQL was nice, but outside of that, very meh.
Companies in this space tend to follow a standard trajectory:
1) An upstart company, with a core group of competent engineers and salespeople with industry experience, develops a product.
2) Product sees success in a key niche.
3) Rapid growth clutters the product, technical debt inserted.
4) Company is acquired by a larger player, customer base increases further, making it much harder to fix the product's warts.
5) Founders and original engineers leave, replacements are never quite as knowledgable nor passionate about the product, making significant changes damn near impossible.
A lot of currently successful products in this business were principally developed in the mid-1990s. The original engineers are now retired or deceased, and current teams largely are in maintenance mode. Occasionally a push is made to overhaul the product, with a junior team with no industry experience, or with resources overseas, but high turnover dooms the effort.
Ultimately, the company acquires a another upstart company, migrates the installed base, and the process repeats.
I am sure that it will be a success at about the same level as the Axis A1001.
Here's the grim reality of the access control business: No one likes to pay for services and software, so these things tend to be bundled into markup of the hardware along the supply chain. This requires a disciplined and limited partner model to limit general availability.
The A1001, which is a decent product, hasn't been a rip-roaring success because you can get it anywhere, even eBay. So you can't spread your costs by marking up hardware when 50 companies are willing to sell you a commodity A1001 online for 300 bucks or less.
Hikvision will find some success with some small PACS providers, but I doubt this will make a dent in the overall market.
The cheaper it gets, the more pronounced the conditions I described will be.
If the unit is $200 and broadly available, it will be near impossible for a PACS vendor to charge more than that for the hardware. This means they would have to increase prices elsewhere (software) where the market has already proven resistance to that.
Usually, new controller players go one of two routes: Either go the OEM route (Mercury, HID), or offer a full vertical solution and offer management software and services as well (Brivo, Isonas and others).
Going the OEM route generally involves wooing existing Mercury and HID partners to support your controllers also, because they already use the OEM model. You rule out Lenel because they'll never talk to you, so you target to their other top-tier (Platinum) partners. There you have some success and they add support for your controllers in their PACS, but because your stuff is available everywhere for $200, they have no pricing power. Hence they never "lead" with your stuff, but you pick-off a few doors here and there.
Next option is that you provide the full vertical solution, like Brivo, Isonas, Kantech, etc. There you make a lot more headway, particularly at the low end, but it's a lot more work and you become a service company.
My prediction is that Hikvision's only hope for success is to provide a centralized cloud solution of their own to go with this. Otherwise their panel will become like the A1001: an interesting curiosity in their booths at trade shows, gathering tidbits of attention from people who came by looking for something else.
It's not my solution John. I'm saying the only way they will have a chance at market success is by following that model.
In light of that concern though, I suspect they might lean more towards the Kantech model: not running a central cloud service per se, but license the software for integrators to run their own mini-cloud offerings.
The bar for entry large-scale is much higher in access control. There are a lot more moving parts to access control than a panel and a reader. Unless Hikvision starts buying door hardware companies and somehow selling that equipment I see it as no more of a threat than the numerous other low cost access control vendors simply because they cannot create DIY kits.
Hikvision/Dahua has had their most success in the DIY market and with small clients. DIY folks are much less likely to cut a strike in, install a latch retraction kit, or even select the right equipment.
I know a lot of the Lenel folks that are in the trenches. They are trying very hard to get on track and they certainly have an advantage when it comes to large scale integration and enterprise class systems. They are still an industry leader regardless of their issues at this time.
I have a few clients and businesses I know going to more inexpensive access control systems / cloud, but when you play in the enterprise space, there is no room for some cheap controller that may have bugs (Chinese cameras) or a cloud outage. This stuff must work.
I don't know if the change is good or bad, but Lenel has been making serious headway lately and they have a plan that, if management supports them, will keep them moving in the right direction.
There is another possibility that hasn't been mentioned here. This new guy has no experience in the industry but is good at cutting costs it seems. What value does this have for Lenel really? None, future wise. In other words, this guy knows how to make companies look good on paper. UTC might be looking to sell. Just trying to look at it from all angles.
Could be good or bad depending upon the direction they take. There are a lot of good people trying to move forward, but it consistently appears that the corporate business model driven by shareholders hinders any great strides. It's a shame, as they have so much talent, potential and resources.
I've given up on any stability in our markets.
It certainly could signal a clean up for merger/sale. The overhead savings alone is significant and would make sense to merge in with another group rather than fight for market against each other.
I also think they are trimming fat to tighten up the ship as the margins are slimmer, there is a gluttony of competition and a race to the bottom in some markets.
Who knows. Ron may have gotten a great offer somewhere else that he couldn't pass up and Alex may take us to the top of the market. Let's hope.
I have been using Lenel since 2001. There was a time, before Lenel was sold to UTC, when the software quality and innovation were the top of the market. The software quality and especially the software innovation have been on a downward slide for a while.
Management abandoned the government by not focusing the resources or efforts to maintain a product that was usually a step ahead of the competition.
Management has continued to allow the air of arrogance without having the product that raises them above the competition. Though, having the quality of the product slide is a lot easier than adopting an air of unpretentiousness.
So, where has Lenel lagged? They have been slow to move to the browser interface and cloud-based functionality. They have tried, repeatedly, to be a bigger player in the video market and failed - failed to have a good video product, failed to maintain the video product they had. They continue to make it difficult to integrate other products with OnGuard.
The browser interface is a huge issue. Making it easy for the casual user, sometimes administrator, viewer of 1 or 2 cameras, to log in and use the system has been a failure. Yes, there may need to be a full blown client for the power user; but the boss is often a casual user and making it easy for the boss is important.
Do we need cloud-based functionality? Really? Well, yes. We have moved past the idea of having servers in the control room or command center. All the servers are in the data center. So, having the functionality that allows the servers to be in the data center is important. Whether the data center is across the hall, across the campus, across town, or across the country should not matter.
So, will UTC expend the effort and resources to bring Lenel back to the top? That is a question of short term gains vs long term viability. If the effort is not made, the attrition will continue. It does not make sense to continue to pay more for a product that does not provide more than the competition. As the software of the competitors gets better, the downward trend will continue to snowball unless powerful moves are made to reverse the trend.
Momentum is always in the direction you are moving. It takes twice as much effort to reverse momentum. It took quite an effort by UTC to reverse the market leadership of Lenel. It will take quite an effort by UTC to reverse course, start in the right direction, and regain ground on the competition.
I hear that the fee they charge is what turns most people off to working with them. Not sure if it the fee amount or just that they charge a fee? I have no idea how that normally works, but apparently the way they do it is far from the norm.
I am a VAR so I don't have to do the integrations.
Listening to the manufacturers that are integrated to Lenel, their complaints are that 1. It costs too much; Lenel charges each time they have to put a product through the Lenel Lab to verify proper integration.
2. Each time there is an update to OnGuard, Lenel expects that you will put your product back through the Lab. This is time on the manufacturer part to review what Lenel has changed. Also see #1 because Lenel charges again.
From my perspective, when I have a 3rd party integration, somebody that is a Lenel OAAP partner, upgrading versions of OnGuard can be difficult. You have to make sure the other product is still compatible with the new version of OnGuard. And if the other product isn't compatible with the new version of OnGuard, is the new version of the other product compatible with the old version of OnGuard. If not, then you are doing 2 upgrades at the same time. Such a hassle.
They've played politics here for years in terms of who they will / won't integrate with. Funny that years ago, they were pretty much blocking any integration with Milestone because of the threat to their own LNVR business, and that now they're reselling it.
The dual-licensing aspect of they're integration capability (and not only them, but also AMAG) has limited their success in this particular area. I'm curious about how much success this Milestone deal will have because of the benefit of clients not having to pay the dual licensing to integrate it. Lenel is still trying to control too much, and they'd be better off not trying to milk it when other VMS companies are involved.
We'll see, I guess. Ron Virden was a decent guy...I hope that his exit was planned and desired on his side for his own sake. Regardless, though, he'll land somewhere strong. With AMAG's leadership basically tearing that company apart from the inside out, there might be opportunity there assuming he doesn't have any non-compete issues to deal with. Huge risk there, but there's also the possibility of a great reward, too.
Its hard to Watch greed consume a product that WAS clearly a top tier in its industry...Customer and Integrator Partners drive the demand and the Value of your product. Both need to be solid in order to stay on top....LENEL didn't just lose one of those key factors they turned their back on both....Odd business choices on their part to say the least.