Avigilon Acquires RedCloud Access Control

By Brian Rhodes, Published May 30, 2013, 12:00am EDT (Info+)

Avigilon has acquired RedCloud, an access control manufacturer, for $17 million in cash. This post will fill in with details over the next day.

[Update: See our analysis of Lenel vs Avigilon for the potentially biggest impact of this deal.]

RedCloud ********** **********

*********** ******* ** **** ***********. ** ****, *** ******* ********* as ******** [**** ** ****** *********]. In *** ****** ********** ****** ******* market, ******** ** *** ** *** 'newest' ********.

******/******** ********* * ***** ** ~$* million ** ******* ** *** ******* (**** **********,**** **********). ***** *** ******* *** **** in ******** *** * ***** ***** to ***** ***********, ********* **** ****** other *******. ***** ***** ********** ***** staff (***** ** ** ** ****** even ***), ** ******* **** ********** was ****** ****** *** **** ***** all **** ******* ***** ** ** the ~$** ******* *****.

*** **** *** ********** ***** $* to $* ******* ** *******, ***** we ******* ** ***** **** *** at *****.

[******: ** **** ****************'* ******* *** **** *******:

*** *** ***** **** ** ****, RedCloud's ******* *** **** ***** $* million, ******* **** ** * $* million ****** ****. ***** *** $** million ***** ****, ****'* ** ********* high *+ ***** *******.

**** *** **********, *** ***** ******, is **** ******** *** ****** * fairly *********** ****** ** *****. ******** were ******* ****** ******* ******* ** a ******** **% *** ****. ******* being * ***** ***, ******** *** likely ************* ****** ** *********** ** new ******* *****. ***** ***** ********, RedCloud *** **** **** **** **** deal.

****'* *** ******* **** *** ********* report ******** ********:

*********

**** ********'* ***********, ***** ***** ********** *** close ** *** *********** *****, ** is ****** * ***** ******* ****** not * *********** ****** *** ***** investors.

**** ********'* ***********, **** ****** **** ~5x ********'* **** *******, ***** *** the ******** ******** ** ****** **** (more ****** ** ** ** **). However, ***** ********'* ***** ** ***** ratio ** ** *** **** ***** as **** **** **** *** ********, it ** *** **** *** ***** own *********.

Avigilon **** ******

** ** *** **** ***********, *** $17 ******* ********** ***** */*** ** Avigilon's **** ** ** ***** **, 2013. ****** **** ** ****** ***********, given ***** ******* ***** ****** *****, it ***** ** ****** **** *** them ** ***** **** **** ** attractive *****.

Avigilon **********

******** ******* ******** ** ****** ***** end ** *** ***** ******** **** access ******* *******. *** ******** ********* is ********* ********** ********* *** ***** tight ****** / ***** ***********.

*******, **** * ******* ********** **********, direct ***** ** ******** ********** *** unlikely ** **** * ***** **********. Avigilon ** ******* ** * $*** million ****** ******* ****, ** **** if **** ***** ********* ****** ********'* sales, ** ***** ***** **** ** a ******** ** ***** ***** *****.

********, **** ********** ****** ******* ********* are ****** ****** **** ******** ******* (e.g., *****, ******** *****, *********, ***.). So ******* **** ** ****** **** not ** ****, ********** ***** ********* with *********** ****** (**** **** *** work **** ********).

** *** ***** ****, ******** ***** be ********** ** ********* ******** ** attractive ****** ** ******** **** ***** customers ** **** *** ***** ******** access ******* ******** ** * **** Avigilon ********.

************, ***** *** *** **** '** and ******' ****** ******* *************. **** and ** *** ************* *** **** both **** ***** *** ***** **** already (***** ******** ***** *** ****) plus **** *** ****** ** **** even * ****** ***** ** ****. RedCloud ** ****** *** **** ********** pure **** ****** ********* *********.

RedCloud ********

**** ********* ***** ***** * ***** overview ** ********'* *****:

* ******* ******** ****** [**** ** longer *********] **** ****** *****-***** ********** or '*******' ******* ** **** **** end ********** ********. *** **** *** is ********* ** *** ********, *** both ************* ****** *** ********** ************* is ************ ***** * ***/***. ***** versions ** ******* *** *******, ******* from * *** "*******" *******, ** the *****-**** "**********" *** "*******" ********:

**** *****, *** '**********' ******** **** controllers, *******, *** ***** *** ************ by ******. ********** ** *** ********** RedCloud **** *** *******, *** ****** is ********** **** *** **** (******** only) ***** ** *** ** ******* based **** ***********. **** ** *** installation ******* ******** ********* ********** ******** to **** *********** **** *** ******** head ***, *** **** **** ** done **** ***** ********** ********** ********* into *** ******.

Key ***********

***** **** ****** ******* ******* *** positioned ** ** ****** ** *** traditional ******** ********, ******** ***** * notable ** ******** **** ** ********* and ********** *** ********. ******* ** focusing ** '***********' ******** ******** ******* like ********** ****** *** **** ******** types, ********'* ********* ****** *** **** regarding ** ********** ******* **** "********" ******* *** "****-********" ********** ********.

***** ******* ******* ** * ******** system *******:

  • *** *****:*** ******* ********** ** ** ******** via *** *******, *** ********** * thick ****** ** *** ********* ** access *** ******. *******, ** ********* for ****** ************ ** *********, *** all ********* *********** *** ***** **** also **** *** ****** ** ** included ** *** ******.
  • **** ********: *** ***** ** ***********, *** does *** ******** ******** ** ************* with *** ****** ******** ******* ** is ****. ******, **** ****** '****' Mercury ******** ** *** (**** ***) controllers *** ** ****. *********** ** panels *********** ** ***** ******* ****** simply ** ***** ** * ******** system.
  • ********* ******: ******* *** **-******* ****** *******, RedCloud ***** *** ********* ***** ****** as ** *********, ****** *** **** and *******-**** *** ** * ***-******* head ***. **** ******* **** *** web *************, * ******** ****** **** 'needs' *** ******* ********* *** *** utilize ******** ************ ** *******.
  • ****** *********: *** ** ************* ************* ** virtual ********, ******** ******* **** ******* providers *** ******** * '******* ******' only *******.

RedCloud **********

******** ** * ********** *** ****** in *** *** ******. ** * market ******* ***** ********* ******* **** for *******, *** ***** ******* ****** creeps ******* *********** ******/****** ******** **** Lenel, *************, *** '*****' ** ******* like ** ** *****, ********'* ********** has **** *******.

******* ** *** '********* *************' *** the ********* ***** ************, ******** ** best ****** *** *** *** *******. Unlike ***** ************ **** **** ******** integrator *************, * ***** ******* ****** will **** * ******* ** ******** vendor ****** ** **********. ** **** way, ******** ** ****** ** **** the ******** ******* ***** **** ** a ********* ******** ******* * ******* IT ****** ** ******* *************.

************, ******** ******** ********** **** ****** *********-***** ****** ******* using ******* *** *** ***********. *******, unlike ****, ******** **** *** **** a ******* ********** ***** ********** ** video ********* ***** **** *** *********.

Avigilon ***'* *********

******'* ******** **** ******* *********** ********'* CEO (********). *** ****** ****:

  • ********* ******* **** ************ ***** **** use ****** ******* *** **** ******** dealers **** ******* ****** *******
  • ******** ***** ** ** * ******* in *********** ****** *** ***** **** one *******
  • ****** ******** ** * *** **** shop *** ******** ***** ***** *********** to **** **** ********

*** ** ***** *** ********** *** somewhat ******** ****** **** ******** *********** already ********* ****** *** ***** **** one *******. ** ***** ******* ***** that ******** **** ** ****, ****** that **** **** ** ** *********.

******: *** *** * ***** ********* with ********'* *** [**** ** ****** available]. ** **** *** *** *** new ********* ******* *** ** ********* the ********** ** ***** ********* **** technical **** (****** ** **** ********* the ***** ** ******* *********** *** integration).

The $* ******* ******

******** ** *********** **** ****** ******* is (** **** ******) * $* billion ******. **** ** ********** ** multiple ******. *****, ******** **** ***** server ******** / ********** *** **** not ***** *******, ******, ***********, ***. that ********** *** **** ** ****** ******* revenue. ****, *** ********* *** **** number *** ********** ** $*.* *********** * ****** ****** ****** ****. There ** ***** ****** ** ****** for ********* ****** ******* *****, *** the *****-******* ******* *** ********'* ******* market *** **********.

Comments (18)

Crazy(in a good way I think)! I thought for sure it would be Schneider Electric taking a look at RedCloud, given their recent announced partnership.

Btw, RedCloud's featured video manufacturer partners include Exacq, Schneider and Verint. It will be interesting to see how Avigilon runs RedCloud, i.e., do they foster working with their surveillance rivals or do they pull it close in for their own surveillance products.

Red Cloud didn't even make door controllers so you had buy an HID or Mercury Security box controller instead? Sounds like they bought half of an access control company instead. I don't think this acqustion is that big of news unless they plan on dropping their other access control intergration partners like Lenel.

I doubt Avigilon would want to drop Lenel (or Software House) integration. Those two are in too many large accounts. However, will Lenel or Software House be motivated to block Avigilon now?

To the point about using HID or Mercury controllers:

Using someone else's controller is not really a sign of a half-baked company, as a number of electronic access control companies use HID/Mercury controller hardware, notably NLSS.

Mercury's list of hardware customers include: OpenOptions, Keri, Lenel, and both ASSA and IR.

I agree that it isn't a big deal in terms of the current market, but I also don't see the reliance on HID or Mercury for hardware to be atypical.

I imagine they'd continue working with those partners (Pelco, Exacq, etc.), but it wouldn't surprise me if they stopped doing additional development on the integrations.

I'm most curious what this is going to look like on the client side. I would imagine they'd move access functions into ACC, and not pull ACC video into the RedCloud client. I really doubt Avigilon users are going to want to use a web based interface just to see access/video together.

RedCloud's use of Ruby and Rails as its web application platform raises security concerns. Earlier this year, there was an especially scary round of critical bugs (e.g., this threat) and wide spread coverage of Rails being insecure (e.g., insecure defaults) and even one respected developer calling the issues 'apocalyptic'.

We've been developing on Rails for more than 5 years and love it for what it does for web startups (which is where it's mostly used). However, for an enterprise appliance that controls the records for corporate employees and access to buildings, that strikes me as more risk than one wants to bear. Rails simply does not have the maturity or the deep experience that apps running on Java or .NET have.

On the one hand, having these RedCloud appliances inside Corporate LANs could make them more protected against Rails threats. On the other, if those appliances are out of date, they could be more exposed to widely known issues. We've reached out to RedCloud to ask a number of general questions and hope to get some feedback on this.

now that avigilon owns redcloud they may want to make a new sales video where they don't talk down pc based servers... after all if they are all "expensive and hard for it groups to maintain" where does that leave the surveillance servers they sell... and why not build the servers to host accc and red cloud... maybe it is just me but I am struggling to see this purchase as a benefit... hopefully it works out well though... the concept isn't new see the clearpix and the clearpass access control line... appliance based built on mercury hardware...

Keefe, RedCloud is a Linux based appliance, not a PC based server so I am not sure I understand your point here?

John my point was that I had (mis)heard them discussing "pc" based servers as "expensive and hard for IT groups to maintain"... this was in fact not what was said the video stated that servers are expensive and hard for IT groups to maintain...

before realizing i had misheard it I was making light of the fact that RedCloud is talking about how troublesome (my words) traditional servers are and that Avigilon sells traditional servers... if there was an emoticon for egg on face or eating crow i would be displaying it right now...

ps. please don't ever have emoticons available on this site...

I'm so use to our access control company we use (Stanley PAC) which has an complete end to end solution from proximity tokens all the way up to the head end software. In my book you need to have your own door controllers to be condsidered a major player in the access control market. If Avigilon dealers are able to buy the HID or Mercury door controllers though the Avigilon channel that would catch Lenel's eye but, I'm thinking Lenel like me looks at Red Cloud as just a software company that was bought by Aviglion. There are too many funtional S2 or Lenel access systems out there for Avigilon to exclude intergration with them

I don't think you'll see Lenel try to exclude Avigilon from integrating with their system. Genetec has it's own Access Control platform and master door controller and they're still collaborating with Lenel on several large projects. Many companies in our industry have competing lines and still collaborate with each other, no one product is going to take 100% of the market so it doesn't make commercial sense to end technical partnerships simply because they have overlapping product lines.

I think they have acquired some solid talent(tech and engineers) in the ac space that they can build from. We haven't seen a demand for complete ac integration with our clients but this might make us consider the advantages and present it moving forward.

Paul, most integrators in our survey about video / access integration have not, as well. However, the larger the camera count, the more likely access control integration is desired, if not required.

This is why you should always know the private equity position of companies before you sign long term agreements with them or make them a large part of your business plan.

1. They could be weeks away from closure.

2. They could be weeks away from a sale.

3. 1 and 2 about sum it up.

@ Nathan

That sounds like experience speaking... living the dream!

Fool me once, shame on you... Fool me twice shame on me.

(not to say Red Cloud isn't a good product. I simply refer to PE firms.)

In my view, not using your own hardware is the way forward. The access control section of the industry is slowing moving towards the video model where you buy the best/cheapest hardware for the job (like an IP camera) then connect it to the best/cheapest software for the job (like a VMS).

For me Genetec have been the pioneers here as they have been doing this with HID for about 5 years now. Maxxes is another one that see this model, the bigger players like Lenel and Honeywell use mercury hardware but with custom firmware effictively locking user in.

I saw a note here on IPVM a while back about Axis possibly manufactoring access hardware, I think this will accelerate change if it happens as they have the clout and are a very trusted brand (not that HID are not), I wonder if Avigilon are aligning themselves with an immenent Axis announcment?

Phil

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