ObjectVideo's Funding, Future and Challenges Examined

By: John Honovich, Published on Apr 03, 2011

Much maligned video analytic vendor ObjectVideo received a massive investment earlier this year, raising questions about its positioning and future outlook. In this note, we share our findings from discussions with numerous ObjectVideo partners and ex-employees. [Update April 7, 2011: OV sues Bosch, Samsung and Sony.]

In January, an SEC document disclosed $27.75 Million investment into ObjectVideo. The round included a mixture of debt and equity from a total of 17 investors.

This was shocking to most people within the surveillance industry as ObjectVideo's performance has struggled and their market prominence has faded, with attention towards Agent Vi, BRS Labs and VideoIQ all surpassing OV. This is especially noteworthy because just a few years ago, ObjectVideo was by far the best known and most talked about company in the space. ObjectVideo does not even seem to be trying themselves - their last press release was more than 8 months ago. [Update: New Release from OV on adding ARM Support.]

ObjectVideo has not announced new products or versions in quite some time and even new partnerships are rare. Plus, in our discussions with a number of their large brand partners, sales of OV licenses are low. One noteworthy example is how Pelco has shifted from marketing OV's analytics to giving their own away for free. The biggest brand left pushing OV is Cisco, an equally struggling surveillance provider.

Why this huge round? First, it certainly is huge for surveillance standards. It dwarfs even 3VR's $17 Million round from December 2010 (though 3VR's round was all equity).

One easy but probably only partial explanation is the overall 'robustness' of the technology investment market with more and more observers believing that this is a tech bubble. Right now, it's relatively easy to get funding.

Beyond that, we spoke with a number of industry insiders and here are the leading theories / explanations about Object Video's funding:

  • A significant portion of the funding was used to 'cash out' existing investors.
  • OV sees a strong opportunity to license their fundamental trip wire / analytics patents (such as Patent 6696945) - this is distinct from licensing their software which has been their historical focus
  • OV has unpaid contracts on previous license sales (e.g., up to 2009, OV disclosed the number of channels 'sold', maxing out in their press releases at 800,000 channels in Sept 2009). Previously, OV acknowledged to us that only some of the channels have actually been paid (they would not qualify as to the percentage). Those unpaid contracts could be worth a significant amount of money.

We provided ObjectVideo more than a month to respond, including 3 scheduled conference calls which they repeatedly cancelled. ObjectVideo did say there were "inaccuracies in each of our 3 topics" but declined to be more specific. They noted that they were going to provide a statement in the future. If and when they do, we will share it in full in this post.

On the patent licensing front, we confirmed with Axis that they are licensing two ObjectVideo patents for their Cross Line analytic. In the Axis analytic's EULA, it states that the, "SOFTWARE is licensed under U.S. Patent No. 6,696,945 and 6,970,083." Axis stated that they "decided to take a license for some patents in order to save their customers from uncertainties."

The question becomes: How many other manufacturer's analytics might fall under that patent? From a brief scan of these patents, it seems manual calibration is a key element of the claims. Many, if not most providers, include manual calibration. We do not know how OV's patent might impact other analytic provider's specifically. However, if a large company like Axis decided to license the patent, it seems to indicate some concern over the breadth of ObjectVideo's patent.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

Update April 4, 2011: Our spider has picked up 2 additions to the ObjectVideo management team: 

These additions indicate that OV is strengthening its effort to go after other industry players for patent issues.

Update April 7, 2011: OV sues Bosch, Samsung and Sony.

While we believe there is upside for OV in patent licensing and collecting on unpaid contracts, the overall strategic positioning of the company remains weak. Specifically, their approach of licensing analytics software to numerous third parties appears to have performed poorly. One of the key elements we discussed with their partners is the challenges with performance and support. Performance issues are obvious and well covered in overall analytic industry challenges.

However, the support problems seem to be unique to ObjectVideo. In the OV model, each of the partners need to provide support for OV analytics. For example, if I buy a Cisco camera with OV analytics on-board, I would call a Cisco rep and they would help me set up my perimeter detection, people counting, etc. The problem is the skill and experience needed for each partner/OEM to provide such support. Not only is it inefficient, since video analytics is a different field than cameras or recorders, it is hard to provide good support. We tried this with Pelco and could not find a single person to help us with OV's analytics on Pelco's cameras. Other partners also cited this as an ongoing problem.

Finally, we do suspect that a significant portion of the funding was used to buy out existing investors. We believe this because we have seen no signs of significant ramp up in hiring, expansion or new product releases. Companies receiving $27 Million in new cash, especially in our small market, generally respond with aggressive expansion.

Ultimately, the big challenge for OV is the quality of their analytics and their poor go to market strategy. Unless they make major changes to one or both of these elements, we expect their deteriorating market position to continue.

Comments : PRO Members only. Login. or Join.

Related Reports on Funding

Paravision AI Face Recognition Company Profile on Nov 01, 2019
Paravision (formerly EverAI) toutes being #1 in NIST testing and "America's only mission-critical face recognition" provider. We spoke to...
nFlux AI Startup Profile on Oct 28, 2019
nFlux, an Amazon, Google, and Microsoft funded AI startup told IPVM their mission is to build the most intelligent video analytics platform in the...
Directory of 70 Video Surveillance Startups on Sep 18, 2019
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known. 2019...
Schmode is Back, Aims To Turn Boulder AI Into Giant on Sep 16, 2019
One of the most influential and controversial executives in the past decade is back. Bryan Schmode ascended and drove the hypergrowth of Avigilon...
Calipsa - UK AI Startup Profile on Jul 10, 2019
Analytic startups are a major industry trend. One UK company, Calipsa is aiming to use AI to filter out false positive alarms for live video...
IFSEC 2019 Show Report on Jun 19, 2019
The UK's largest trade show, IFSEC, is underway and IPVM has been examining what is new and happening at the show. Inside, we cover: Huawei...
Startup Vaion Launching End-to-End AI Solution Backed with $20 Million Funding on Jun 17, 2019
An EU / USA video surveillance startup, Vaion, founded by ex-Cisco Senior Directors is launching an end-to-end VSaaS platform with $20 million in...
Embattled $400 Million China Funded Philippines Surveillance System Proceeds on Jun 13, 2019
An embattled 12,000 camera surveillance system project that will cost ~$400 million will proceed. The project contract was awarded, had its...
Actuate (formerly Aegis AI) Gun Detection Video Analytics Startup on May 07, 2019
Gun detection analytic startups are increasing as the promise of AI and the threats of active shooters grow. One company, Actuate (formerly Aegis...
Bastille Cell Phone Tracking Profile on Apr 30, 2019
Is tracking someone by their cellphone the next generation of surveillance? Bastille is a US startup which tracks people by their cellphone or...

Most Recent Industry Reports

Disruptor Wyze Releases Undisruptive Smartlock on Dec 06, 2019
While Wyze has disrupted the consumer IP camera market with ~$20 cameras, its entrance into smart locks is entirely undisruptive. We have...
Bosch Budget 3000i Cameras Tested on Dec 05, 2019
Bosch has long had a hole in its lineup for, as it describes, "competitively-priced cameras". Now, Bosch has released its 3000i series cameras...
Anixter Resisting Takeover From Competitor on Dec 05, 2019
Mega distributor Anixter is going to be acquired but by whom? Initially, Anixter planned to go private, being bought by a private equity firm....
Security Sales Course 2020 - Last Chance Save $50 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...
Ireland National Children's Hospital Chooses Hikvision End-to-End With Facial Recognition on Dec 05, 2019
The world's most expensive hospital project ever, the New Children's Hospital in Ireland, has chosen an all-Hikvision surveillance system including...
AVTech ~$70 IP Cameras Tested Vs Dahua and Hikvision on Dec 04, 2019
Taiwanese manufacturer Avtech is taking direct aim at low cost leaders Dahua and Hikvision with ~$70 starlight and white light illuminator...
Ultinous European Analytics Startup Company Profile on Dec 04, 2019
European analytics-startup Ultinous pitches customers to "Have your own video analysis service!" We spoke to Ultinous to better understand their...
Access Startup Multi-Mount Aims To Streamline Reader Installs on Dec 03, 2019
Startup Multi-Mount claims it makes installing access readers 'Fast', 'Secure,' and fit 'any size frame.' The company states its bracket 'fits most...
Resideo CEO To Step Down on Dec 03, 2019
Resideo's CEO, Mike Nefkins, is stepping down, just 18 months after being brought in to lead the now plagued spin-out. Inside this note, we...
Arcules CEO Retracts False GDPR Claim + Dahua and Milestone Claims Examined on Dec 03, 2019
Arcules CEO has retracted a false claim about his organization being a "fully compliant GDPR company" after IPVM reporting (Arcules CEO Threatens...