ObjectVideo's Funding, Future and Challenges Examined

Author: 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 Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

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

Cybersecurity Startup VDOO Disclosing 10 Manufacturer Vulnerabilities Starting With Axis And Foscam on Jun 20, 2018
Cybersecurity startup VDOO has uncovered significant vulnerabilities in Axis cameras along with many others not yet disclosed. In this report, we...
Netwatch / NMC Mega Deal Targets Global Remote Video Monitoring on Apr 27, 2018
Big money has entered the remote video monitoring market. While remote video monitoring has been done for more than a decade, the market has...
Rare Video Surveillance Fundraising - Verkada $15 Million on Apr 19, 2018
Fundraising in video surveillance (and the broader physical security market) has been poor recently. Highlights are few and far in between...
3VR Firesale to Identiv on Feb 07, 2018
A decade ago, 3VR raised more than $60 million to deliver facial surveillance and video analytics in a '3rd generation' video recorder. Now, 3VR...
Dahua's Car Manufacturer Raises $63 Million on Feb 01, 2018
Not only has Dahua's car manufacturer raised $63 million USD, one of the best VCs in the world led the round. Is Dahua's car manufacturer ready to...
The 2018 Surveillance Industry Guide on Jan 16, 2018
The 300 page, 2018 Video Surveillance Industry Guide, covering the key events and the future of the video surveillance market, is now available,...
Honeywell Crowdfunding Bombs on Nov 08, 2017
100,000+ employees and $40,000,000,000 in annual revenue. That's Honeywell. ~200 backers and ~$67,000 in funding in a week. That's Honeywell...
Assa Abloy Acquires August on Oct 25, 2017
The mega access control manufacturer, Assa Abbloy, has acquired one of the most well funded access control startups, smart lock...
Verkada, Silicon Valley VSaaS Startup, Targets Enterprise on Oct 19, 2017
Verkada says they are building an enterprise-class VSaaS offering, calling it "The new platform for video security". This is a departure from the...
Knightscope Rockets To $20 Million Funding on Oct 03, 2017
Knightscope is celebrating. 15 months after running over a child and 3 months after a Knightscope robot drowned, Knightscope is having the last...

Most Recent Industry Reports

'Secure Channel' OSDP Access Control Examined on Jun 21, 2018
Despite claiming to be better than Wiegand, OSDP's initial releases did not address the lack of encryption between reader and controller, leaving...
Most Wanted Improvements In Manufacturer Technical Support (Statistics) on Jun 21, 2018
5 key areas of improvement and 1 clear wanted support feature were voiced by 140+ integrator responses to: What improvement in manufacturer...
Last Chance - Save $50 - July 2018 IP Networking Course on Jun 20, 2018
Today, Thursday the 21st is the last chance to save $50 on registration. Register now and save. This is the only networking course designed...
GDPR / ICO Complaint Filed Against IFSEC Show Facial Recognition on Jun 20, 2018
IPVM has filed a complaint against IFSEC’s parent company UBM based on our concern that the conference violates core GDPR principles on...
IFSEC Final Show Report on Jun 20, 2018
IPVM is live from London reporting on the IFSEC show. The Chinese have taken over the UK, centered on Hikvision, flanked by Dahua, Huawei and a...
Mobotix Releases 'Move' Into 21st Century on Jun 20, 2018
For years, Mobotix stood resolutely against, well, every other manufacturer, selling it as a virtue: MOBOTIX equipment is designed with no...
Cybersecurity Startup VDOO Disclosing 10 Manufacturer Vulnerabilities Starting With Axis And Foscam on Jun 20, 2018
Cybersecurity startup VDOO has uncovered significant vulnerabilities in Axis cameras along with many others not yet disclosed. In this report, we...
Axis Guardian - Cloud VMS And Alarm Monitoring - Released on Jun 19, 2018
Axis has struggled to deliver a cloud-based managed service video platform. Video service providers have utilized AVHS for over a decade, and have...
IPVM Vulnerability Scanner Released on Jun 18, 2018
IPVM is proud to announce video surveillance's first and only cybersecurity vulnerability scanner. This tool allows quickly and simply...
Hikvision Corrects False Cybersecurity Announcement on Jun 18, 2018
Hikvision has corrected a false cybersecurity announcement that claimed a British government-sponsored program endorsed the cybersecurity of...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact