NICE Systems has acquired Orsus for $22 Million. While this looks to be a good deal for NICE, it raises many important questions for the state of the PSIM market.
On November 23, 2009, NICE confirmed that it is acquiring Orsus. NICE, one of the leading video surveillance manufacturers, plans to integrate Orsus's PSIM offering (called Situator) with NICE's portfolio of video and security product offerings.
Earlier reports indicate that Orsus raised over $70 Million in funding. However, over half of that funding was raised during the dot.com bubble prior to switching to and developing a security product.
NICE disclosed that Orsus's revenue will contribute "several millions of dollars in 2010."
We see two good and positive signs from this acquisition:
- Given NICE's strength, size and complimentary market position to Orsus's product, NICE should successfully expand the sales and deployments of Orsus's products.
- Given NICE's relatively conservative acquisition history, this acquisition signals that a major player believes that PSIM products can be financially profitable.
At the same time, the acquisition raises some troubling concerns:
- Orsus is one of the leading PSIM providers with the most publicly announced wins yet has low revenue.
- If PSIM is the next 'big thing' as many convergence proponents advocate, a $22 Million acquisition does little to validate this.
- The other PSIM companies (including CNL, Proximex and Vidsys) now have a fairly low benchmark for their own valuations.
We have been bearish on PSIM over-hype for a long time. See our original examination of PSIM's problems
Examining NICE and Orsus
In the premium section of this report, we examine NICE and Orsus's products, how their joint offering is likely to be positioned and the potential impact on the PSIM market.