Pivot3 Moves From Video to Hyperconvergance

By: Brian Karas, Published on Mar 15, 2016

A decade ago, Intransa and Pivot3 both hit the video surveillance market hard with big money and big claims for advanced storage offerings. Intransa died a few years ago and Pivot3 has gone back and forth with their focus.

Now, Pivot3, with a significant acquisition and more than $50 million of new funding is clearly heading away from video and into 'hyperconvergence'.

In this note, we examine the changes in detail.

* ****** ***, ******** and ****** **** *** the ***** ************ ****** hard **** *** ***** and *** ****** *** advanced ******* *********.******** **** * *** years ****** ****** *** **** back *** ***** **** their *****.

***, ******, **** * significant *********** *** **** than $** ******* ** new ******* ** ******* heading **** **** ***** and **** '****************'.

** **** ****, ** examine *** ******* ** detail.

[***************]

NexGen ***********

******'* *** *********** ** both ******** *** ********* to ***** ************. ** January ****,****** ******** ******, ***** ******** ** *** **** number ** *********** ******. ******* ***********, NexGen's********* *** *-***** ******* arrays, ********* *** ******** diverse **** ***** *** access ********, ********* ** little ***** ** ***** surveillance.

$55M **** *** ~$*** ******* *****

** ***** ****, *************** ~$** ******* ***********, "** **** *** Storage-Centric *****-*********". ****** **** clearly ******* ** *** NextGen ***********, **** *** has ****** ******** *** mention ** ***** ************.

*** ****, ****** *** received ****** ~$*** ******* in ******* **** *** past ****** (*** **** **** * dozen *** *******).

Excessive ******* ** ******** *********

**** ****** ** ****** impossible ** ******* / return ** *** ******** market. **** ***** * decade, ******* ******** ******'* video ************ ******* ** in *** *** **** of ******* ********. ***, that **** *** **** close ** ********** *** overall ***** ** **********. Secondly, ***** *** ***** surveillance ****** ** **** not **** *****, ** would ** **** ** ever **** ** **** their ********** *****.

Pivot's *** ********* ***** **** **** *****

** *** ** ** "*** ******" *** *** ** mention ** "********" ** "surveillance". ****** ** *** messaging "***-***** ************** *** Virtual ******* & *******".

******** ******'*"*** *** ******"***** **** ***** *** new ***** ** ******* in * ******* ***** and ***** ** ****** to ********** ***'*, ****** than ***** ******** ******** makers.

Pivot3's *** *** ************

******’* **** *** ***** to ** ** **** large ***** ******** ***** their ******** *****-** *** server ********** *** ** management ************ *** **** highly ******. **** ******** Pivot3 ***** ** ***, which ** ******* ***** offering *********** ****** *** those *** **** ****** down, ********** ****** ****** to *** ********.

Surveillance ***** **** *********

** ****, ****** ***** the ** ** ******'* Physical ********* ********,*** *****, ** ** ** essentially ** *** ******** business. *******, **** **** 2 ***** *****, ***** was ***. *******, ****** abandoned *** ******** ******* sales ****.

***, ******'* ***** ********* are *********** *** ******* to *** ****** *** do *** ********** ** security *******. **********-***** ******* sales ***** ** **** lucrative ***** *** **** a ***** ****, ******** the ********** **** *** sales **** ****** *********** time ******** *** ********* in *** ******** *****. We **** **** ***** of ******** ****** ******** sales **********.

Trend **** **** ***** ************

  • ****** ****, **** ******* ** STAC, **** ** ** SAN ******* ******* ** video ************
  • *** ****** ******** ******* ********** **** on ***, ******* ** video ************
  • *** ****** ****, *** **** *** to ***** ********* *********, outside ** ***** ************
  • *** *** **** *** acquisition *** ******* ********** that ****

No ******** **** ******

** ********* ****** ******** times *** **** ********* scheduled *** * ****, but **** **** **** was *******. ******* ********, including ********** * **** of ********* **** *********, were ***** ********* ** by ******.

Future *******

****** ******* ** "****************", not ********. **** **** chosen ** ******* **** entrenched ********* *** **** appears ** ** * play ** *** ************** and ******* ******* *******.

****, *** ******** ********* / ************* *** ************** ******** sells ******** ** ******, making **** ******** *** competitors.

** ******* ** ** seen **** ********** ****** has **** ** ***** surveillance, ***** ***** *****.

UPDATE - ***** **** ****

** ***** ********* *****, ******'* ***, *** joined ** ******** ****. He ********* **** *** assessment ** ******'* ******** in *** ******** ********. Surveillance ** ** ***** 50% ** *******, ****** slower ****** **** **** other *****.

** ****** ******** ** the ***** *** ********* team ** *** **** 2 ***** ****** **** of ***** ********* **** from *** ******** ******* NextGen. ** **** **** that ************ ********** ********* were ****.

****** ******* ** ******** their **** ****** ***** and ********* **** ** reach *** ********. **** will **** ****** ******** security ******** ** ****** general ** *******.

*** *** **** ****** NexGen's ***-***** *********** ******** products *** **** ******** to **** ************* ****** the ******** ******, ****** we *** ********* ***** the ********** ***** ** flash *** ***** ************ performance ********** ***** *** much ****** **** ** such ********* *** *** storage ***** ** ***** surveillance.

** ****** ****** ** set ** ******* ** appliance ** *** **** 2016 ******** ** ******* applications. ***** *** ****** did ***** * ******* product,********, ***** *** **** discontinued. ** **** ** curious ** *** *** the *** ******* ******** where *** ******** ******* failed, ********** ** *** competitive ***** ** ***** hardware **********. ** **** analyze **** ******* **** available.

Comments (17)

Maybe Pivot4 would be more appropriate at this point.

Makes sense to pivot into a growing market?

A note to Pivot3 and other manufacturers: We reach out for comment to give them an opportunity to put their strongest case forward. We may still write something negative but refusing to respond is a poor PR move.

If you respond, we will definitely run your response and it can help your supporters (or people skeptical about IPVM) believe what you are doing. Saying nothing deprives those people of that and strengthens the critical case.

"Hyperconvergence" is a crowded field where differentiation will be all about wowing them with fancy names for your own flavor of the software (virtualization management, etc).

The hardware is effectively commodity and software always wants to be free.

The winners are those with the biggest marketing budgets who can sell to CxO suckers that can't govern their technology with reference hardware and open source software that does all the same things at a fraction of the cost.

Pivot, raise money, repeat.

Note to self: Don't try to read the phrase "CxO suckers" out loud.

The Register Sticks it to Pivot3:

  • "Ageing startup Pivot3"
  • "since being founded in 2003, to almost a quarter of a billion dollars – $247.04m by our reckoning"
  • "An unparalleled presence" and "truly differentiated solutions" sound great but, really? Since when are startups active in two fronts at once – all-flash and hyper-converged – and also late to market?"
  • "You have 18 well-funded competitors [Pivot3 CEO] Ron, many well-established, industry-leading, reputable and with strong channels. You and your market/PR folks can talk the talk for sure, but can you, after 13 years, walk the walk?"

IPVM evidently took it easy on Pivot3....

A year ago, Pivot3 was doing well in the Middle East / Gulf circuit for surveillance projects. But for the past few months haven't heard any chatter.

"doing well in the Middle East / Gulf circuit"

It seems most everyone does well in the Middle East. From my outsider perspective, it looks like the least price sensitive region and most likely to buy based on brand / sales investment. Anyone agree/disagree?

I believe that the Middle East will be a challenging market in years to come, primarily because of the oil money drying up. Saudi A and other GCC countries are running large budget deficits and borrowing money to keep pumping oil.

If OilPrice >= $95

Sell HighEndProduct(myBrand);

else

EnterTheDragon(boo);

The market is / was very brand conscious and is / was very "west" leaning rather than "east". There is significant price competition and like everywhere else, relationships do matter as well in closing large deals.

In the UAE, all brands have to be registered with the Police department. I think similar in other GCC member countries (Saudi A, Qatar, Oman, Kuwait Bahrain etc.). Qatar mandates 120 days of high resolution (1080p I think) storage. With the FIFA Soccer World Cup 2022 (if it ever happens there) stadium construction happening there, I believe there is / was a ton of business.

Anyone care to share the Middle East experience.

Very informative and that's funny:

If OilPrice >= $95

Sell HighEndProduct(myBrand);

else

EnterTheDragon(boo);

I am curious to see when and how steep the oil pricing impact will video surveillance sales. For years, the Middle East has been the region premium brand manufacturers could depend on.

The current oil prices are not a problem for middle eastern oil nations, it is only a problem for the US. The break even for US oil production is $36-$40. Saudi is $9, UAE is $12. Middle East oil producers are still making money hand over fist, and they have effectively killed the US oil production boom. Tens of thousands of people have been laid off in the past few months in the US. Cheap gas is great, but massive unemployment sucks.

We spoke with Bruce Milne, Pivot3's CMO, who joined in November 2015. He disagrees with our assessment of Pivot3's position in the security industry. Surveillance is at least 50% of revenue, though slower growth rate than other areas.

He claims tripling of the sales and marketing team in the last 2 years though many of those employees come from the acquired company NextGen. He also said that surveillance specialist employees were flat.

Pivot3 expects to leverage their much larger sales and marketing team to reach new accounts. They will also target existing security accounts to upsell general IT storage.

The CMO also stated NexGen's all-flash performance oriented products are also expected to have applicability within the security market, though we are skeptical about the additional value of flash for video surveillance performance especially given the much higher cost of such solutions and the storage needs of video surveillance.

He stated Pivot3 is set to release an appliance at ISC West 2016 targeted at smaller applications. Years ago Pivot3 did offer a similar product, Minibank, which was then discontinued. We will be curious to see how the new product succeeds where the previous attempt failed, especially in the competitive space of small hardware appliances. We will analyze this product once available.

I just spoke with various vendors, and they seem to be under the impression that Pivot3 is 50% to 60% dependent on their security sales. I will be honest with you, the system has had some very good results here at my job for 4 years, but if you don't consider a fail-safe for when you need to update the system, their HCI system will not work for you. We are in the process of deciding if they will be part of our NVR refresh, or if we are going to just go with Seneca on a raid 10 solution.

They are definitely a cheaper solution.

They are definitely a cheaper solution.

They being Seneca or Pivot3?

Pivot3 over Seneca on pricing (performance & space per $). I just know Seneca has a reputation with Milestone which is the best. They are excellent I just don't know how good a Seneca would be if you were to run it on Raid5 for example. Pivot3 is all about the HCI and the fact you can saturate to the total capacity available and not affect performance. I can imagine that a Raid10 solution would be faster, but it's more expensive. I am currently boxing these ideas in my head, so I wouldn't go 100% with what I am saying.

After getting the proposal for the refresh. You can definitely cross out these ideas. An HCI solution with Pivot3 is a WHOLE LOT more expensive than going with a Seneca build.

If you're managing more than just the NVR, then yes consider an HCI. However, you could go with a Seneca built with a failsafe, and save a lot of money. The only reason to go would be dependability.

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