Milestone Hires Fired Exacq Rep Firm

The battle between Exacq and Milestone in the US is heating up.

Less than 2 months ago, Exacq fired many of their long-time rep firms.

And just 4 months ago, Milestone terminated their US reps, declaring direct relationships were best for the 'open platform'.

Now, Milestone has reversed course, hiring one of the biggest rep firms. In this note, we break down the situation and examine how it impacts the match-up between Exacq and Milestone.

Exacq Moves

Tyco has accelerated the assimilation of Exacq, leading with their own camera / recorder 'solution', and reducing the number of rep firms.

As part of that, Exacq fired one of their longest running and largest reps, CVReps, on the US West Coast, replacing them with the AD rep firm, Seevid.

Milestone Moves

Historically, Milestone has not used rep firms. At the beginning of 2014, Milestone started to use rep firms. At the end of 2014, Milestone terminated their US rep firms, emphasizing that terminating reps helped them focus on the 'open platform'.

Now, Milestone has hired CVReps to be their West Coast rep firm. Our understanding is that CVReps will only rep / sell Milestone Husky NVR / DVR appliances, not VMS software.

Competitive Impact

This has good upside potential for Milestone.

Milestone needs to expand its appliance sales as it recognizes that software only is harder to sell in the mid-market and to more traditional dealers. Exacq's greatest advantage historically is their appliance lines that have done very well selling through manufacturer reps.

To get one of Exacq's biggest former rep firms is quite advantageous since CVReps has relationships, connections and deep knowledge of local dealers who heavily use appliances.

However, Milestone does have challenges. Most importantly, Exacq has a mature and diverse appliance portfolio (with 5 different lines). By contrast, Milestone's appliance offerings are fairly limited and much newer (only started shipping end of 2013 / beginning 2014). To that end, Milestone will need to build out their portfolio to better compete. Secondarily, since CVReps also reps Arecont, this increases the connection between Arecont and Milestone but without the discounts / free licensing that Tyco is giving for the Illustra / Exacq combinations.

Open platform or not, this move does underscore the importance for Milestone of ramping up their own hardware sales. And by cutting CVReps, Tyco / Exacq has made it a lot easier for Milestone to make incursions against them.

Related, we continue to hear Exacq rivals eager to pick up Exacq reps as Tyco fires them.