Milestone Hires Fired Exacq Rep Firm

By John Honovich, Published Mar 20, 2015, 12:00am EDT

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 *****

**** *** *********** *** assimilation ** *****, ******* with ******** ****** / ******** 'solution', *** ******** *** number ** *** *****.

** **** ** ****, Exacq ***** *** ** their ******* ******* *** largest ****,******, ** *** ** West *****, ********* **** with *** ** *** firm,******.

Milestone *****

************, ********* *** *** used *** *****. ** the ********* ** ****,********* ******* ** *** rep *****. ** *** *** of ****,********* ********** ***** ** rep *****, *********** **** *********** **** helped **** ***** ** the '**** ********'.

***, ********* ******** ******** ** ***** **** Coast *** ****. *** understanding ** **** ****** will **** *** / sell ************** ***/*** **********, *** *** ********.

Competitive ******

**** *** **** ****** potential *** *********.

********* ***** ** ****** its ********* ***** ** it ********** **** ******** only ** ****** ** sell ** *** ***-****** and ** **** *********** dealers. *****'* ******** ********* historically ** ***** ********* lines **** **** **** very **** ******* ******* manufacturer ****.

** *** *** ** Exacq's ******* ****** *** firms ** ***** ************ ***** CVReps *** *************, *********** and **** ********* ** local ******* *** ******* use **********.

*******, ********* **** **** challenges. **** ***********, ***** has * ****** *** diverse ********* ********* (**** 5 ********* *****). ** contrast, *********'* ********* ********* *** fairly ******* *** **** newer (**** ******* ******** end ** **** / beginning ****). ** **** end, ********* **** **** to ***** *** ***** portfolio ** ****** *******. Secondarily, ***** ****** **** reps *******, **** ********* the ********** ******* ******* and ********* *** ******* the ********* / **** licensing **** **** ** giving *** ***********/ ***** ************.

**** ******** ** ***, this **** **** ********** the ********** *** ********* of ******* ** ***** own ******** *****. *** by ******* ******, **** / ***** *** **** it * *** ****** for ********* ** **** incursions ******* ****.

*******, ** ******** ** hear ***** ****** ***** to **** ** ***** reps ** **** ***** them.

Comments (18)

Undisclosed #1

03/20/15 12:34pm

CVReps is a pretty solid firm, good for them to get this (limited) Milestone line.

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Chris Lanier

03/20/15 01:15pm

Every manufacturer has the right to do what they feel is in the best interest of their business, however some underestimate the ripple effect of short term hires/fires. Meaning, regionally the relationships established because of local trust tend to lean towards whatever that rep or firm continues to represent. Whether the manufacturer goes direct, wholesale or a combination of the two, the market is usually best served with both an in-region factory rep AND a rep firm.

Yes, a biased opinion from this rep firm, but look at most long standing industry leaders from various solution categories and you see this model. The integrators, consultants and end users find comfort in this stability and dependability in our opinion.

Undisclosed #1

In reply to Chris Lanier | 03/22/15 04:42pm

the market is usually best served with both an in-region factory rep AND a rep firm.

Can you expand on your logic for this? In the current marketsphere it often seems that rep firms are considered the second-best alternative to a strong sales force. Some products can't always justify the costs of a large in-field sales force, so reps are a natural solution.

Do you mean the market is best served in this fashion when the manufacturer has in-field people that cover large territories and the rep firms can help fill in? Or do you mean that regardless of the number of in-field people a manufacturer has adding a rep firm will make it "better" all around?

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Chris Lanier

In reply to Undisclosed #1 | 03/22/15 09:06pm

Two examples of the combo regional sales force (factory + rep firm) that make for a good 1-2 punch:

1) Factory that sells through distribution- The rep firm typically has multiple reasons to be engaged with a distributor and therefore is usually more in tune to help with timely opportunities than just 1 factory person within an entire region selling a sole product.

2) National Accounts/High Profile Integrators- Because of their status and the nature of their end users, they expect frequent factory attention in addition to rep firm service.

Big Projects versus daily needs, long sales cycles versus the timing of I'm-glad-you're-here opportunities- The more bodies in focus a factory employs, the better.

Undisclosed #1

In reply to Chris Lanier | 03/23/15 03:59am

OK, but neither of those examples (IMO) show anything truly unique to a rep firm, other than the ability to have more coverage.

Let's suppose a given territory is optimally covered by 10 people. Do you think there is a mix of factory/rep people covering that territory that is truly better than the manufacturer employing all 10 people directly? Or is the prime benefit of a rep firm that the manufacturer can essentially get "part time" people cost effectively. I say part time because most reps handle multiple lines, so you can reasonably assume they are splitting their time across the multiple lines, even if some (or many) jobs incorporate mutliple product lines together.

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Chris Lanier

In reply to Undisclosed #1 | 03/23/15 01:34pm

Cerainly if a manufacturer has the resources to employ 10 fulltime people in this example, that would be optimal for them to promote their solution. In 30+ years in this business, I've yet to see this happen regionally, so yes "part-time" reps at a fixed cost of sales is an attractive model to supplement factory employ.

In the distribution also analogy, many factory people can't seem to find the time or have the persistance necessary to increase mindshare at these resellers who have 200+ vendors to choose among. With multiple lines, independent reps can have more ROI with this portion of the supply chain.

John Honovich

IPVM | In reply to Chris Lanier | 03/23/15 01:41pm

"Certainly if a manufacturer has the resources to employ 10 fulltime people in this example, that would be optimal for them to promote their solution. In 30+ years in this business, I've yet to see this happen regionally"

Ever hear of Avigilon ;)

That said, I agree with your meta-point, there are only a few exceptions like Avigilon and Axis who are either so large and/or sell a full solution that they can justify the expense.

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Chris Lanier

In reply to John Honovich | 03/23/15 02:35pm

Hi John- To your point, I concur. Axis can certainly afford to pile on. They and Avigilon are certainly the exception to the norm. I should have also clarified the definition of a "region" meaning say, a 4 state area versus a Time Zone.

Good topic exchange.

Undisclosed Manufacturer #2

03/20/15 01:53pm
So now we see more trickle down with Badger having signed with Digital Warchdog who them displaced another firm and so on....

Undisclosed

03/20/15 03:24pm

CVReps sells Arecont Vision which I consider to be a bad habit that needs explaining. Thats worth a visit to the DELETE button every time they send me an email advertisement.

Jerking around your channel partners is bad for business especially in a business where people are dealling with decades worth of bad and good vendor decisions.

Undisclosed Manufacturer #3

03/20/15 10:55pm

This has nothing to do with Milestone and Exacq. Who else was CVREPS gonna pick up? They had no choice.

Undisclosed #1

In reply to Undisclosed Manufacturer #3 | 03/22/15 04:32pm

I find this comment interesting. It seems like you're implying CV Reps is/was in a position to pick up whatever VMS line they wanted?

Rep firms come and go all the time. I would think the other option would be that CV Reps didn't pick up Milestone because Milestone went with another rep firm and CV Reps went under.

Undisclosed Manufacturer #3

In reply to Undisclosed #1 | 03/22/15 11:10pm

I guess that was my point. CVREPS is a powerful rep firm that shoudn't be underestimated, but they really didn't have a choice other than Milestone. Desperation is kicking in.

Had Milestone said "no" it would have made things difficult. So no, they were not in a position to pick up anyone, but still highly desired given their position and strength with Exacq before. Pretty sure that Milestone weren't the ones hunting after CV and likely were able to pick them up on pretty favorable terms.

CV's days are also numbered with Miilestone as the Arecont stench starts wafting over into the Axis camp.

Undisclosed Manufacturer #4

In reply to Undisclosed Manufacturer #3 | 03/23/15 05:15am

As a VMS manufacturer who was actively soliciting Chuck Gorley of CV Reps to try and pick up our VMS and full product line, and competing heavily against not only Milestone, but at least one more that I know of on IPVM's list of independent VMS, your comments seem to be either ridiculously uninformed or willfully derogatory to CV Reps. Perhaps because of some other personal gripe you might have against them?

By your logic, Milestone, who has no other reps in N. America and has US offices and a strong regional sales force on the west coast, picked up CV Reps at a cut rate because CV Reps was desperate for a product line so Milestone could actually get them cheap?

Does that about sum it up for your reasoning? You figure that's how Milestone, a >than 1/4 $B company makes massive strategic market moves when partnering with a coastal rep firm that has been actively and decisively competing against them for the past ten years in that same geographic market? Seems like a pretty big insult to Milestone to go with your insulting tone towards CV Reps.

Or perhaps you have some, ya know... actual evidence or something to validate any of your "wafting stench" above?

Miloš Kohout

03/22/15 01:28pm

"free licensing that Tyco is giving for the Illustra / Exacq combinations."

I would like to make just one note, it is mentioned in almost every article about Exacq and Tyco. And it is repeated so many times that many people take it as a fact that Tyco gives licenses for free with Illustra cameras.

There is not such practice and in my East Europe region it has never happened. We support our Exacq partners in projects no matter what camera brand they use.

The confusion probably comes with the fact that Tyco Security Products has another IP video platform called VideoEdge/Victor, it is not open platform, we do all integrations and video analytics by ourselves, it is tightly unified with our access control in the way to make one compact system for the end user.

There we support our total solution with licenses for free for our “PRO” line of Illustra cemeras (not for entry level and middle range models).

John Honovich

IPVM | In reply to Miloš Kohout | 03/22/15 01:47pm

Milos,

No, I can tell you definitely that this is happening regularly both in North America and in Australia as we have many trusted reports of such discounts / free licenses.

Now, perhaps Tyco Europe does not do this and, if so, I appreciate your feedback.

Finally, Tyco corporate itself did not deny discounts / free licensing in a statement to IPVM, they simply denied that it was a formal 'program':

"There is currently no program to give free Exacq licenses for AD cameras. We will look at ways of incentivizing a full portfolio sale, but not a formal program to give free licenses."

From the numerous reports we have, these incentives are not 'formal' but are give ad hoc frequently.

Miloš Kohout

In reply to John Honovich | 03/22/15 03:28pm

I would say that giving licenses FOC is a regular practice of many VMS manufactures to give a discount for their systems to fit into a budget and so on.

I did it for partners selling SONY, Arecont and so on. There was also a project that we designed with Sony partner and meanwhile our long term American Dynamics partner came with the idea that he would do the project with Illustra cameras and Exacq but he would need extra project price.

The answer from our site was NO and we did very nice project with the Sony partner, we do our best not to mix our two businesses together.

It is true that we promote our Illustra cameras on Exacq pages and we are ready to extend the offering to existing Exacq partners, it is true that Illustra cameras will have always priority to be fully integrated into Exacq with as many features as they have but that is all.

In the future we could also promote our Kantech access control or DSC intruder there as the integration is already exceptional and for many Exacq partners it could bring nice advantage against competition to sell those solutions together. It is easier than to wait for a development of some descent access control solution as many VMS developers try to do now. It exists already, it has history and trust, no baby illness could be expected. For us it is easy to joint those systems together and offer the nice solution.

But it is just about promotion of our solutions, we do our best not to harm the sales channel we do our best to give excellent solutions to our partners and end customers.

It was obvious that the acquisition will harm the trust of Exacq sales channel and integration partners, it is the same like with the Canon now, they can say whatever they want but they will be doubted in similar way like Tyco and they will face the same temptationsJ

I believe that we have experience and internal processes how to cope with those situations, we can prove that we are able to manage several product brands that are competition to each other (Software House, Kantech, CEM or DSC, Bentel, …) without harming our partners by giving advantage to one or the other.

John Honovich

IPVM | In reply to Miloš Kohout | 03/22/15 03:33pm

"I would say that giving licenses FOC is a regular practice of many VMS manufactures to give a discount for their systems to fit into a budget and so on."

Certainly but what I am saying is that Tyco / Exacq is giving discounts / free licenses specifically for buying Illustra cameras in combination with Exacq. This is not typical for independent VMSes. As an example, Genetec will give discounts for very large jobs but doesn't ever give away their VMS licenses just because the end user is buying Axis.

Milos, I believe you are doing what you are saying in your area, but that does not contradict the numerous contrary examples that have been reported in North America and Australia.

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