Mobotix Partner Program Changes Examined
In September 2011, Mobotix announced a new partner program that shifts the company's channel approach in favor of stronger protection of dealer/integrators and decreased direct availability of their products online. In this note, we examine the changes and what this means to the market.
We see the program having two aspects - one being a common tactic and one being a more aggressive one. The common one is to support multiple tiers with increased discounts and project registration. The more aggressive aspect is to root out and stop predominatly online resellers with the stated goal [link no longer available] of "maintaining a stable margin."
Today, Mobotix products are frequently available online and are a common choice of IT end users. We asked Mobotix about how this new plan would impact such online availability. They noted:
"We have implemented a MAP (minimum advertised price) policy and training requirements to ensure that only MOBOTIX authorized partners have access to our product line. We will not conduct business with resellers whose business model is e-commerce only and will actively monitor Web sites weekly to make sure our products are not being sold by such resellers. Also, if we find the MAP policy is being violated by any partner, we will serve the reseller with a notice stating they have 24 hours to increase the price or they will be removed from our program. Overall, these partner program components protect our pricing structure and limit the possibility for direct sales online."
MAP policies are not unheard of in the surveillance industry, however, many manufacturers do not actively enforce them.
Integrators love this approach. It is one of the most common cited pluses of Avigilon's channel strategy and a key part of their skyrocketing growth. One of the most common concerns/complaints is being undersold through online sales channels. It is now a regular occurence for end users to take a quote and cross reference pricing online within minutes .
For Mobotix in particular, we think this makes sense. They have a highly technical (some, like us, would say overly complex) product that really demands expertise and training. It is a product that really benefits from professional integration (though as noted we know quite a number of IT end users who have deployed Mobotix directly on their own). Secondly, since Mobotix aims to sell a complete solution (cameras + recording/VMS), it is offering that can be directly and totally delivered by a single integrator.
On the other hand, the primary risk of this approach is increasing end user costs. Protecting integrator margins means increased product costs to end users though proponents would argue that this is offset through higher quality installation, optimization and reduced errors.
The biggest surveillance camera manufacturers in the world almost all have a much more open approach than Mobotix as it is easier to tighly control the channel when a company is small than when it is big. It will be interesting to see how this works for Mobotix as they would be the biggest IP camera company to take this approach (Avigilon and IndigoVision have similar channel plans but significantly lower revenue).
Finally, as much as this should encourage integrators to sell Mobotix, we do worry that this will bias integrators to propose Mobotix even when Mobotix does not make sense for a customer's needs. This is not unique to Mobotix but a natural consequence to integrators having strong financial incentives for Mobotix vs Axis, Panasonic, Sony, etc. While Mobotix has impressive technological capabilities, its overall architecture and approach is not a fit for many users who need a more traditional open and simple experience.