Seems like the VCs needed the exit more than Milestone. Though the press release from Milestone seem to indicate that the founders will remain with the company till the transition! No one knows what happens post acquisition!
Following the completion of the acquisition, Milestone’s management will remain in place and they are committed to making this transition a success.
OnSSI says that "Canon’s purchase of Milestone will not have any impact on OnSSI's utilization of the recorder component from Milestone."
OnSSI emphasized that "As our industry continues to consolidate, OnSSI continues to be an open platform VMS manufacturer and camera manufacturer agnostic."
As for numbers, neither Milestone nor OnSSI has ever released any numbers. There's rumors, of course, but nothing verified.
Canon is so big and this deal is so relatively small for them, that I doubt it's material enough that they have to disclose. Now, maybe Milestone will have to do so to the Danish government, but I am not sure.
I really don't know what will happen with OnSSI. It's a peculiar entity, given that it's half partner / half competitor.
My immediate thought is not how Milestone would be affected, but how Canon would benefit. Milestone has worked with camera manufacturers closely, especially Axis. I am guessing Canon would reap benifits from this and that Milestone can help Canon make better CCTV cameras, even if the help did stay within the limits of no favoritism towards Canon.
I am sure Canon could make better / more IP cameras if they prioritized that.
My impression with Canon over the years is that IP cameras have just not been a strategic focus for them. I don't blame them. They are a ~$36 billion conglomerate and even if they were a top IP camera manufacturer, that would still only represent 1% of their revenue.
But maybe, along with this acquisition, Canon will inject more resources / focus on the IP camera side of the business.
For what it's worth, Milestone told us that there are no plans to bundle / discount Canon IP cameras with Milestone VMSes. Obviously, that could change in the future but Milestone was clear that is not their intention.
John, I think they're already on the path of a more relevant portfolio of IP cameras. At ISC West, they were showcasing a line of new mini dome and mini box cameras that were more agressively priced. With the Milestone acquisition, maybe more people will pay attention to their new cameras.
Hi Vance, we have been tracking Canon for some time and it seems pricing has gotten more competitive. Last we looked, though, they were still more expensive than competitors without any differentiating featuresets (unless you call the Canon label a differentiator, which some apparently do).
That being said, because of this acquisition, we're going to be testing their cameras in the next few weeks to see how competitive they are.
I would expect development of tighter integration with Canon cameras; I wouldn't see that as negative favoristism. It would just make sense. As long it does not come at the cost of degraded integration with other brands. For the short term I would think Canon would be smart enough not to pull something like that.
The news hit me this morning almost like when AOL bought Time Warner; quite a surprise. (When I told my co-workers who hadn't heard yet about AOL buying Time, I had to argue with them it wasn't the other way around.) Canon may have bought Miletone as a segway to get their cameras into markets other than Europe.
Is Canon really a "not respected" brand of cameras? Or just not as popular as other rbands. Most of the people I've seen commenting on them seemed to like them. Problem is they were all in Europe.
Luis, Milestone did mention to us that they expected tighter integration with Canon cameras. They also said they expected no impact on integration with any other brands, noting how fast and broadly they have been able to support 3rd party cameras. Of course, in the future, if the 'Chinese wall' is broken down....
As for the 'weak brand' comment about Canon, that's been my impression for video surveillance. Maybe there will be some carry over from their photography business but that has not helped their IP cameras that much so I am not sure how much it will help them owning a VMS.
Agree, I think Canon now is getting serious with IP video surveillance. So far while they've been innovator in consumer grade cameras (& other office biz they have), they have neglected the surveillance. Perhaps they'd like to be the Bosch of the industry but with openness intact. Will they acquire an access control company now?
Yep. A shame. Their products were endlessly innovative. The first megapixel IP camera with HDMI out on the camera body, the first minature MP cameras when Axis and Sony camera bodies where still huge, ugly, ungainly things, the first camera to make edge recording practical (they had this enclosure than help a 2.5" laptop-style hard drive that mounted to and plugged into the camera)... the list goes on. And the prices! They were charging $500-$600 for a camera when Axis was still asking $1500!
True. But my point was that the Milestone acquisition appears to be part of a larger strategy. Last year, Canon had no compact lower priced dome and box cameras in their line-up. Those were introducted at ISC West. It will take years to build a portfolio the size of other manufacturers. Speaking of large portfolios, I'm not sure how beneficial a line of 150+ cameras is, but Canon certainly needs to continue adding models to their offering.
One can argue that $400 is a low price for the quality of product you get. I can't think of another manufacturer that supplies their own sensor, lens and processing and Canon certainly has a reputation for quality in this area. It would be interesting to see a Canon shoot out against some of the other players.
Milestone's lack of cyber-security clue has kept them off my list of interesting VMS solution providers. Canon, like all the other big Asian camera manufacturers, could presumably be heavy hitters in the IP camera space, if they cared. Or they could just foist off their broadcast-grade analog gear and assume soneone stocks enough Grandstream encoders to make it work. It certainly is good to know this happened so the next time someone tells me Axis is the 10,000 pound gorilla I can remind them of yet another giant Asian company they are competing with.
Canon acquired 100% of Milestone shares. It is pure strategic investment. I don't think that multibillion Canon is interesting in profit of relatively tiny Milestone. Canon claims: "This strategic investment is a first step toward realizing our ambition of becoming a leader in the network video surveillance market". What motivation current management has to keep independent policy? They are not longer shareholders. They sold out their shares and now work to fulfill new shareholders expectations! They are not dreaming anymore about IPO and becoming Microsoft of VMS market. Just make Canon number 1 and you'll get your bonus. Bad for current leaders of IP cameras market. Good for other VMS companies. Who will be number 1 open platform in next 5 years ? I don't think that anyone has an answer. Great opportunity :)
John, yes...can't hide it :) I knew that Milestone's VC was looking for exit, because initial plan to make quick IPO failed due to slow growth. But I never expected that new strategic investor will be camera vendor. Because I thought, that founder and management want to go further, become real number 1 (in each country, not in general because of widespread) and make IPO in future. As a result of this acquisition, I don't think that Milestone is going to limit technically other integrations. Also Canon sent email to other VMS vendors hoping to continue cooperation. But we all know, that big projects are the result of hard work from both vendors (VMS and cameras). Usually camera vendors share their projects with VMS vendors, because most of the features requested by customers implemented on software site. Customer want to directly contact VMS vendor to be sure that all his requests will be implemented. So, Milestone, as any VMS vendor is managing relations with many customers got from Axis or others. This is the way to get Canon in. Just share information directly to customer about "more efficient" solution. Our market is becoming more customer driven, I believe. Now customer is deciding which camera/software to use, not system integrator or distributor like it was in a past. So, this move is real trouble for sales channel. In each country, biggest distributors are carrying Axis and Milestone. Second or even third tier are carrying Canon. Now this biggest distributors will start to loose camera contracts to second tier integrators. Software part is 5-10% of hardware contract size. So, this is huge loss. They can't just start to sell Canon also, because they have commitments to Axis (for ex) and can loose Axis. So, the only way is to look for another VMS vendor :)
I am one of the 30 (so far) that think this partnership will strengthen Milestone.
How? I don't know! One would like to think that both parties clearly see the value in Milestone as an open Platform. With Canon sitting on a bunch of cash this is an excellent investment for them even if there are no concrete plans for the partnership. Although it appears Canon see oportunity the surveillance industry. Who would not.....there is only a hand full of players. A company like Canon with its arms around the globe experienced and eager to diversify further, is an ideal candidate to take on the challenge.
I'm guessing a figure closer to US$1B was paid for the acquasition, which is a drop in the ocean for Canon. Why watch Milestone be acquired by another party?
I think your emotions played a roll in the poll folks, as in "oh no.... our precious Milestone has been acquired. What are we going to do now??? How could you do this Milestone???" ....VOTE=weakens
I too thought this for all of one second. Then I thought "you dummy....this can only strengthen Milestone.
Who knows what deals Canon are into globally and the influence they have that will benefit Milestone. Canon has a huge medical division. No doubt hospitals are or will be built by the 100's in China. Perhaps with Canon's influence Milestone will get those projects?? Pure speculation ... I know!
Let's not forget that given Milestone is an industry leader it still only has 8.7% of the market. This is a delicate position where the company needs to look over its shoulder constantly for an aggressive move by a compeditor.
This acquisition puts Miletone in a much stronger position with their 8.7% share. They are now able to make strategic decisions quickly if forced to do so, to protect and grow their share, now with the help of their "new best friend!"
IMO, no what how you view this deal it strengthens Milestone as a company tremendously. "Bottoms up"
Richard, I know you come from Silicon Valley but $1 billion??? - that's Snapchat numbers, not surveillance ;)
I don't know how much Canon paid for Milestone but if it was $1 billion, they way, way over paid. For example, that's higher than Avigilon's valuation, who is just as profitable , has 2x more revenue, and is growing far faster.
As for your 'pure speculation':
"Who knows what deals Canon are into globally and the influence they have that will benefit Milestone. Canon has a huge medical division. No doubt hospitals are or will be built by the 100's in China. Perhaps with Canon's influence Milestone will get those projects?? Pure speculation ... I know!"
So you think the Chinese are going to buy Japanese owned video surveillance when they have their own huge domestic companies? And given the historical ill will between the two countries?
Even leaving aside that example, I think leveraging one's existing channel to sell acquired products is easier said than done, e.g., Cisco.
Finally, as for:
"They are now able to make strategic decisions quickly if forced to do so, to protect and grow their share, now with the help of their "new best friend!""
I am curious how much money / additional resources Canon will provide them. I don't know. Will they throw a lot of money to Milestone for expansion? I guess we will see how they shift over the next year.
It has been my experience that acquisitions of this type (expansions of scope) lead to an initial fall in efficiency and effectiveness in the acquired company. It remains to be seen whether the economies of scope anticipated by Canon are achieved over the next several years as the two cultures attempt to merge.
Also important to add, that Canon cameras are really good. With many advanced features, including embedded analytics. And brand awareness is very strong, because of consumer origin. For customer, who is not familiar with security market, this brand will be easily preferable. We had many projects together brought to us by Canon. Interesting to see if we get any from now. Co-marketing activity is already suspended from their side.