Pivot3 Raises $23 million / Refocuses

By John Honovich, Published on Feb 07, 2012

Last year, we raised concerns that Pivot3 was pivoting away from the surveillance business. Now, Pivot3 has raised a major fundraising round of $23 million lead by Samsung. In this note, we examine how this impacts Pivot3's positioning and why Pivot3 says this show renewed committment and improved focus on the surveillance market.

Let's start with a review of key points:

  • This $23 million brings total Pivot3 fund raising to ~$100 million. The previous round was $25 million raised 2 years ago.
  • As part of the funding, Pivot3 is executing a partnership with Samsung Techwin, a traditional incubment CCTV/security provider.
  • Pivot3 is refocusing on the high end of the video surveillance market rather than the broader approach of the past few years.

We asked Pivot3 about their plans for the surveillance market. They provided this detailed statement:

"The size of this $23M funding round, the participation by Samsung, and our promotion of Mark Modica to VP, Business Development Surveillance are clear indicators of our commitment to the surveillance market. In 2011, we probably cast the net a bit too wide in both surveillance and IT. Now, with the leadership of our new chief executive officer, Rich Bravman [link no longer available], we have returned to the laser focus that made us the top supplier of IP SANs to the market. Here are some indicators of how we will play our hand in 2012.

We are heading "North" in the surveillance market, focusing on larger, centralized surveillance installations that are typical in the transportation, government, gaming and city surveillance vertical markets. These markets clearly benefit from the scalability, simplicity and savings inherent in our Serverless Computing technology. And our investment in a world-class support team is most needed for these complex mission-critical systems.   

We see the implosion of proprietary system companies creating a huge opportunity across the globe as customers and integrators race to evaluate open systems alternatives. From New York to Macao, integrators are running pilot programs to manage their risks as customers become more savvy on what choices are available and the influence of IT grows. We've added staff in the UK, Spain, Netherlands, Singapore, Japan, Mexico, and Hong Kong to capitalize on this unique market window.

Our engineering team still makes up more than half the company and we will continue to invest in this creative engine to make our products unique. Most recently our development team found a cost-effective way to introduce flash technology performance into the surveillance market without exploding the price of our appliances. So this year we will make flash memory ubiquitous across our products as we move upward into the highest performance segments competing with proprietary products from the market leader EMC." 

Our Analysis

Here's our main thoughts:

  • Funding Size: The large round gives Pivot3 resources to dedicate on surveillance which improves their capabilities relative to last year.
  • Focus on the High End: This is likely a necessary and positive action as it as very hard to differentiate on small to mid sized projects (16, 32, cameras, etc.), especially with the VMS vendors increasingly releasing their own boxes/appliances.
  • Competing Against Incumbents for Large Projects: Incumbent CCTV companies are not strong at providing large scale storage, typically OEMing general purpose storage offerings. There are few specialists targeting this market segment (e.g., Intransa, DDN).
  • Samsung Relationship: We are not sure what value the Samsung relationship will bring specifically in security. Samsung is a traditional strong CCTV player but we do not see their core user base of small to mid size projects overlapping well with Pivot3's core strengths.
  • Long Term Future: While raising more money gives a greater runway, it also increases the expectations of future revenue/profitability that investors have. Now at $100 million+ in funding, it will be interesting to see how it can justify its valuation. Certainly, Pivot3's expansion last year to the general IT market is a needed step in accomplishing this. On the other hand, while focusing on the high end of the surveillance market is likely more efficient, it does narrow the overall market opportunity.

Product Positioning

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

One notable development on the product side in the past year is the introduction of the VSTAC Watch [link no longer available], which is essentially the next generation of their CloudBank series [link no longer available]. Like the CloudBank, it incorporates an embedded virtual server. However, the VSTAC Watch uses VMWare and supports flash while CloudBank uses Xen for virtualization and does not include flash.

VMware

We asked Pivot3 about why they are now using VMWare:

"The most important decision factor was that IT departments inside our surveillance customers and the development teams at our VMS partners had already standardized on VMware.  We were going against the grain with Xen and not tapping into their growing Vmware expertise.  

The VMS community, for example, is using VMware throughout their software test and dev environments, so our move Vmware has been really well received there."

It is also our experience that VMS companies most often support VMware. Plus, since troubleshooting virtual machine / VMS issues can be a real pain (see our multiple [link no longer available] discussions [link no longer available] on this), using VMware makes sense.

Flash

We asked Pivot3 about why they are now supporting flash:

"We are seeing an 8x improvement in latency for intensive write operations. How this translates to the number of cameras per VMS archiver is not yet a sound bite. What we know is that late generation VMS applications benefit more from latency improvements because video metadata, such as motion, timestamps, and GPS, is treated more like a traditional database. At the same time, some VMS applications are much better at buffering than others and aren't as dependent on the flash memory.  

We felt that the latency improvement from flash cache was likely to benefit the open systems VMS partners we work most closely with and, as a result, we now include scalable flash cache in all of our appliances."

We do not know either how this will translate into specific performance increases. The one case we recall a VMS manufacturer explicitly advocating using SSD was a few years ago with Milestone for their Enteprise VMS version. However, their architecture with two tier archives is atypical.

Comments : Members only. Login. or Join.

Related Reports

Anyvision Raises $43 Million, Focusing on Access Control And Remote Authentication on Sep 04, 2020
While Anyvision has had a tumultuous 2020 with significant layoffs, the...
Openpath Raises $36 Million on Jul 16, 2020
Openpath has raised $36 million as 2020 has become a boom year for access...
Anyvision Presents AI Facial Recognition and Mask Detection on Jun 08, 2020
AnyVision presented its AI facial recognition and mask detection at the May...
Freebie Face-Off: Rise of ~$30 Giveaways Examined on Dec 02, 2019
The freebies are growing. Verkada started this (see The Fastest Growing...
ButterflyMX Raises $35 Million on Sep 30, 2020
Startup ButterflyMX has raised $35 million for its smartphone based intercom...
Verkada Raises $80 Million, Triples Valuation To $1.6 Billion on Jan 30, 2020
Verkada's rocketing valuation continues. 9 months ago, they got a...
Dahua Creates New Car Subsidiary as Current Electric Car Firm Struggles on Mar 19, 2020
Dahua has started a new "intelligent" car subsidiary, even as its current...
Honeywell 30 Series Cameras Tested Vs Dahua and Hikvision on Dec 11, 2019
Honeywell has infamously OEMed Dahua and Hikvision for years, but now they...
Startup Solink $17 Million USD Fund Raise Expands To Mass Market on Jun 24, 2020
Solink has raised ~$17 million USD, a sizeable round for the company that...
Hikvision Returns To Growth Driven By Overseas Fever Cameras on Jul 29, 2020
While Hikvision's revenue fell in Q1 2020, it rebounded in Q2 attributed to...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Eagle Eye Networks Raises $40 Million on Oct 27, 2020
Eagle Eye has raised $40 million aiming to "reinvent video...
Hikvision Fever Screening Thermal Solutions Examined on Apr 13, 2020
Hikvision is marketing "safer, faster, smarter" with their Fever Screening...
2020 Mid Year Video Surveillance Industry Guide on Jul 27, 2020
The first half of 2020 has been shocking, for the world generally, and for...
Viisights Raises $10 Million, Behavior Analytics Company Profile on Dec 09, 2019
Viisights, an Israeli AI analytics startup marketing "Behavioral...

Recent Reports

Consultants Online Show LIVE Today! on Oct 27, 2020
IPVM's 7th online show will feature 20+ consultants and recruiters presenting...
Eagle Eye Networks Raises $40 Million on Oct 27, 2020
Eagle Eye has raised $40 million aiming to "reinvent video...
Hikvision Q3 2020 Global Revenue Rises, US Revenue Falls on Oct 27, 2020
While Hikvision's global revenue rises driven by domestic recovery, its US...
VICE Investigates Verkada's Harassing "RawVerkadawgz" on Oct 26, 2020
This month, IPVM investigated Verkada's sexism, discrimination, and cultural...
Six Flags' FDA Violating Outdoor Dahua Fever Cameras on Oct 26, 2020
As Six Flags scrambled to reopen parks amid plummeting revenues caused by the...
ISC Brasil Digital Experience 2020 Report on Oct 23, 2020
ISC Brasil 2020 rebranded itself to ISC Digital Experience and, like its...
Top Video Surveillance Service Call Problems 2020 on Oct 23, 2020
3 primary and 4 secondary issues stood out as causing the most problems when...
GDPR Impact On Temperature / Fever Screening Explained on Oct 22, 2020
What impact does GDPR have on temperature screening? Do you risk a GDPR fine...
Security And Safety Things (S&ST) Tested on Oct 22, 2020
S&ST, a Bosch spinout, is spending tens of millions of dollars aiming to...
Nokia Fever Screening Claims To "Advance Fight Against COVID-19" on Oct 22, 2020
First IBM, then briefly Clorox, and now Nokia becomes the latest Fortune 500...
Deceptive Meridian Temperature Tablets Endanger Public Safety on Oct 21, 2020
IPVM's testing of and investigation into Meridian Kiosk's temperature...
Honeywell 30 Series and Vivotek NVRs Tested on Oct 21, 2020
The NDAA ban has driven many users to look for low-cost NVRs not made by...
Ubiquiti Access Control Tested on Oct 21, 2020
Ubiquiti has become one of the most widely used wireless and switch providers...
Avigilon Aggressive Trade-In Program Takes Aim At Competitors on Oct 20, 2020
Avigilon has launched one of the most aggressive trade-in programs the video...
Mexico Video Surveillance Market Overview 2020 on Oct 20, 2020
Despite being neighbors, there are key differences between the U.S. and...