Milestone has problems. While the company previously excelled in the shift to IP cameras, as IP has matured and competitive differentiation has shifted to AI and VSaaS, the company is now struggling to find its way.
Inside this note, we examine 3 inter-related themes:
The lack of significant new product development
The bungled spinout of Arcules
Their continuous PR problems
Finally, we conclude with observations about what Milestone could do to rectify those problems.
What specifically do you mean by "spin Arcules back"? - kill the product - merge it back - other option
I do not know much about Milestone. But if I think about it as a general software company, likely one of the key issues they have is this one tech debt. If so, merging back Arcules could only add more issues. Besides being a purely technical issue, it also affects team morale( development goes slow and most of the time you fix bugs). Likely this is the number one issue the company has to fight. Now it's especially critical not to release new features but pay the debt. For that, the issue should be recognized and some strong pushers are needed.
Again, this is just an assumption. I do not know the company at all.
actually, i’m being sarcastic; i’ve seen a lot of BS in my day, but this explanation of the “reason” for their name change sounds like pure fiction:
The name of a company says a lot about what the business wishes to convey to prospective customers – its values, goals, mission and the problem it wishes to solve...
As the Arcus Global, Inc. team developed and advanced our technology in the video monitoring industry, it became [apparent] that the business problem we wished to solve and the technology we were building had evolved beyond what the Arcus name reflected...
...it was important that our name reflect that bold [approach]. As such, the Arcules name exudes trust, strength, security and the innovative spirit of our company, our mission and our product. The similarities to the Arcus name are no coincidence, either. With Arcules, we acknowledge our past as Arcus – the technology developed under the Arcus moniker makes the Arcules offering possible. With our new name, however, we wish to communicate growth beyond that technology into uncharted waters.
How they screwed up the original name was the first sign to me they had basic competency issues. To quote myself from 2017:
The name of this company is Arcus Global. Unfortunately, there already exists another company called Arcus Global that "builds innovative Cloud based products" who owns the domain name arcusglobal.com. The Milestone / Canon Arcus Global therefore has the domain name arcusnext.com. For a company investing so much money, naming one's company with a specific name and domain that another cloud company already uses is not well done.
The solution is simple...Arcules should be a connection to the Milestone core...it should be sold through the same channels and should be managed in the same way. The issue is from the top to the bottom you have to know how to market this and technically implement it. Genetec has a solution in place that allows you to "federate" a cloud camera from Stratocast into their core Security Center product. I don't know how successful they are with Startocast in general, but from a technical stand point, this is perfect for any citywide or retail deployment strategy.
If you're Bjorn or one of the other C level people at Milestone, why is this not at the top of the list. You need a small team of developers to put the core engine in the cloud. Sell and market your core product as cloud ready...otherwise prepare to be over ran both at your core product level and at the cloud offering level. See Salient from a core competitor stand point. See: Qumulex, Eagle Eye, Open Eye, etc....everyone is ahead of you. You have not innovated your core product for years and failed to diversify into a vertical market strategy. Good luck...but you have dug yourself a hole. There are ways to rectify it, but change is difficult and can be painful.
I'll add some additional color. The only way to have a marketplace is do have an adoptable revenue generating medium, Apple, Google, etc. How many code writers are writing to a google medium or Apple versus who own the SDK and the knowledge to write to the Milestone core? 1/2 of 1% respectively?? How many people have an Apple dev kit, compared to the SDK for Milestone?
From experience, integration into many of these mainline VMS's can be painful. Many of them have their own internal revenue generating teams that take MONTHS or LONGER to get integration done. Not to mention getting quotes and workflow and or interest in the project itself. Then you have to deal with them making changes to the core software and releasing bug fixes, CU updates, SR updates, version updates...you are always chasing these integrations. Oh did I mention that ONVIF is not always spelled ONVIF?
The VMS space is a difficult always evolving animal. Innovate or go home. That innovation does not have to be as much technical as innovating and adapting to the market. Many times the data is there and just needs to be visualized differently. Again, Milestone has work to do...
Wasn't Arcules part of a failed experiment even before it spun out?
If I recall correctly the old Arcules name was for a limited, embedded version of Milestone meant to run on edge devices. When adoption was low Milestone put it on the Husky M10. I worked at a platinum level Milestone dealer at the time and we would not touch the Husky M10 under any scenario outside of the rare residential project. Then Arcules was spun out and has basically lingered. I voted to bring the product back into the fold where they could leverage the channel that Milestone has in place but I just don't see it being widely adopted under any scenario.
Arcus is one of the least powerful VMSes we have ever seen, with less advanced features and capabilities than a Dropcam, and far less than any of Milestone's other VMS offerings.
Arcus on any Milestone partner device only comes with the rudimentary web client.
Support may be an issue as well. Despite being released more than a month ago, Milestone and WD support were confused, each referring us to the other for support. Milestone says they are rectifying this and that support will be handled by WD, though we are skeptical about WD's ability to effectively support Milestone's VMS.
In retrospect, naming your ambitious cloud spinoff after your failed on-camera VMS was probably not ideal.
Are the Danes (or the Swedes) known for innovation in this space..like their parent company Canon they are great imitators. Due to their conservative culture and 'decision by committee nature' innovation is hard. Cultural issues aside, the code base of XProtect is long in the tooth like its underlying Windows-centric dependencies (SQL 2016, .NET 4.7, and DirectX 11). Folding Arcules into Milestone would give them a fresh slate and better chance to innovate.
People are underestimating how much IT decision makers dont like boxes. Axis cloud - no box, Verkada - no box, Stratocast - no box. The word cloud has a far different meaning than what many in our industry think defines it.
When old school decision makers call the shots, solutions with appliances can fly. Throw that single point of failure in front of tech savvy CIOs and they will nix the glaring single point of failure in a heartbeat. Distributed, resilient, etc - these are things that matter to those that have to maintain the technology and the network it rides on.
People in our space look like deer in the headlights when terms like SD-WAN are brought up.
Not saying this is the only cause of problems but it is concerning that such core design concepts are ignored.
100% agreed that there is a time and a place. Not at all a fit for all customers.
Unfortunately for traditional prem suppliers, the majority of those types of customers have planted their flag in one solution or another. Let's call it either Genetec Security Center or Milestone XProtect for arguments sake. Net new logos in that space are much harder to obtain when compared to exploding businesses that can benefit from the flexibility of cloud. This includes financial factors like consuming the product as a service in order to keep capital free for funding that explosive growth. It is a much more limited space now than 10 years ago.
It is a much more limited space now than 10 years ago.
while I agree with your 'planting of flags' comment - regarding both VARs and end user enterprise customers (based largely on manufacturer incentives, over time for VARs, and customer investment in a particular manufacturer, also over time) - can you explain what you mean by 'limited space'?
i would suggest that the enterprise 'space' remains at least similar to what it has always been, and it is the 'non-enterprise' installations (that far outweigh enterprise installations in numbers of channels installed based on sheer volume) which have far more openly accepted the cloud as a legitimate storage solution.
Whole heartedly agree. I would add though that cloud is also huge for orchestration, maintenance and function more so than just storage. Resources are nearly limitless in the cloud which make it a compelling place to perform compute functions as the price of bandwidth continues to drop.
I would tend to disagree with the statement of Axis cloud doing poorly (over the past 2 years that is). New management and new direction of the program has been widely successful from our point of view.
Not an oddity for my company alone to help partners bring in cloud agreements with several thousand cameras (Not an Axis employee). The only caveat we have seen is the time it takes to roll out a few hundred locations to bring the devices into a billable state. Regardless, I would argue the new platform has been doing exceptionally well compared to the old.
It doesn't take much research to conclude that Milestone's once overwhelming impetus all but disappeared after their acquisition by Canon. Many of the key innovators within Milestone have simply moved on or have more disposable income as a result of the acquisition and would rather spend their time enjoying their new lifestyle in preference to slaving away at work (if you don't believe me check out their parking lot). This reminds me of the Silicon Valley bubble of years gone by and the mountains of millionaires that were left in its wake.
Why would they want to make it part of their core? They are both generating substantial revenue? I get it from a user standpoint, but from a business stand point...no way. Plus the install file would be a MONSTER...
Interviewer: Where would you say we are currently in this cloud migration and what are some of the things still holding the industry back?
Arcules CEO: So I think it's a matter of education and a lot of the integrators today they're very focused on selling hardware on a monthly basis to win big projects and getting them to understand the true value of a monthly recurring business model is really what's gonna make the difference for a lot of the integrators
getting them to understand the true value of a monthly recurring business model is really what's gonna make the difference for a lot of the integrators
It is my belief that a significant quantity of integrators (my company included) are not setup to handle recurring revenue. For a relatively low incremental value cloud based RMR product tends to bog down our accounting department on billing and collecting and our project managers resent low value projects. From my perspective as a cradle to grave project manager I would rather have a 100 camera $500k project that is one and done than to have a 100 camera $200k project that I have to babysit invoicing $10k each month for the next 5 years. Further the implication that the RMR has ongoing service baked in from the integrator makes it a even greater challenge.
All of those items are possible to work around. From the perspective of an integrator - why would I want to?
I work at a cloud video company - but which one it is isn't important to this point ...
Some people/companies don't work well with RMR. Also, some customers will not buy a platform on an RMR model. However, there are a lot of customers that will and a lot of companies that can succeed in doing it.
Specifically to answer 'why would I want to?' There are several answers.
1) Better valuation on your business
2) Cash flow predictability
3) Long term relationship with your customers (many benefits to this)
4) Provide buying options for customers sensitive to capital outlay or unwilling/unable to do regular upgrades or maintenance
Milestone has had problems for a long time and the cracks just keep widening. We lost faith after they totally bungled a Corporate deployment of 180 cameras - Which ended up costing us thousands and ultimately the client after years of struggling & turmoil. We used to be a gold-level partner but at this point we have zero Milestone deployments.