Milestone to Release Support for ONVIF and PSIA

Milestone plans to release support for both ONVIF and PSIA IP camera specifications in the 4th quarter of 2009, allowing 3rd party camera manufacturers using either specification to interface with Milestone's IP video surveillance software [link no longer available].

While a number of camera manufacturers have declared their intent to support one or both of the specifications, Milestone is one of the first VMS providers and the largest to confirm timetable for release. The participation of the VMS providers, especially ones with large market share, is critical to driving the growth of interoperability.

Expectations on Roll-Out

While Milestone plans for release by the end of the year, they expect additional time may be needed for optimization to occur:

"We will be aiming at covering the full functionality, but this depends on when a sufficient number of compliant cameras can be available for our work and testing. The initial drivers may therefore be more limited and not cover the full feature set of the standards since our software support depends on when we get the cameras that offer them."

This will be an important factor in determining how soon, well and widely the specifications can be used in production.

Competitive Implications

As we have discussed over recent months, interoperability specifications can shift competitive positioning. As a company with one of, if not the largest 3rd party IP camera support base, Milestone has risk here. Milestone responded:

"We are aware that the establishment of standards in the market will be changing the competitive landscape in the long run. Providers will therefore be competing more on having the strongest product capabilities, performance, usability and reliability and less on having the broadest device support. We are confident we can compete in this respect, not least because the standards will allow us to redirect our resources toward other innovations.  We also embrace the standards for their ability to significantly accelerate the convergence from analog to IP."

Outlook

Milestone's large size (individually and from their OEM distribution to OnSSI) will motivate large end users and specifiers to factor in using ONVIF/PSIA specifications in next year's deployments. It may also be written in to job specifications which could provide Milestone a short term advantage. However, if this does become the case, expect Milestone's major competitors to follow suite quickly to eliminate this as disqualifier.

With its size, Milestone may be the one company that can drive rapid adoption of the IP camera specifications - both directly and indirectly, through motivating its competitors. Note - Axis has already declared its plan to release ONVIF support this quarter (Q3).

Competitive Positioning of PSIA and ONVIF

Over the last few months, public validation and momentum has been swinging towards ONVIF. ONVIF members have much larger share in IP cameras. PSIA's public face, Cisco, joined ONVIF.  Then, an ONVIF member released the first production ONVIF camera. In my own ongoing conversations with manufacturers, the support for ONVIF was overwhelming outside of the US and especially with smaller Asian camera manufacturers.

Milestone's move to support both helps PSIA out significantly. Now, PSIA members can at least be confident that their work will provide them support for Milestone's large customer base. It does not resolve the underlying lack of support for PSIA but it makes it less likely for PSIA to get eliminated from general consideration.

Camera Manufacturer Response

Camera manufacturers want to be supported by Milestone. Because of Milestone's market share and their refusal to sell their own cameras (unlike many other VMS providers), gaining Milestone support is very attractive for camera manufacturers. Camera manufacturers know that Milestone users are open to 3rd party cameras and that Milestone will not compete against them.

For smaller camera manufacturers who are currently undecided about the specifications, Milestone's support is a strong reason for them to start developing.

Competitive Positioning of VMS Manufacturers

Milestone's size will force other VMS manufacturers to carefully consider the timing and level of their own support. Many manufacturers may delay adding support. The top reasons are likely to be (1) concerns about support costs of dealing with new manufacturers using new specifications and (2) concerns about undermining the competitiveness of the VMS manufacturer's own cameras (where applicable).

While I am sure many VMS manufacturers will delay adding support, Milestone's decision makes this a more difficult as it could place the competitors at a competitive advantage.

Milestone Future Market Growth

What's surprising about Milestone's move is that it will accelerate a shift away from breadth of camera support as a key differentiator - an area where Milestone clearly has an advantage. This lowers the barrier for new providers to enter the market and for existing one's to offer basic VMS software for under $100 per channel (or even free). Eventually, this would happen one way or the other but Milestone's early support means it will occur quicker.

As breadth of camera support becomes eliminated as a differentiator, Milestone will likely be pushed up market to larger scale and more complex deployments. Competition from low price or free but good enough basic VMS systems will make it harder for Milestone to make money in the lower end of the market. Milestone's growth opportunities are likely to come from the higher end and more head-to-end competition with analog incumbents for the larger-scale systems that are still all or mostly analog.