The End of Integrators?

Author: John Honovich, Published on Feb 13, 2010

By the end of the decade, security and IT integrators are likely to be displaced and replaced by the forces of Internet services, commerce and information. While integrators solved a clear business need over the last half century, more efficient ways are emerging to meet those needs. We think this will be a painful and critical process impacting the entire industry - from users to the channel and manufacturers.

What Do You Think?

The Value of Integrators

Historically, integrators provided great value to end users and manufacturers.

It has been too expensive for manufacturers, operating from one or a few locations, to reach and service end users around the world.

Integrators bridge this gap, providing expertise of global products to local end users. In doing so, integrators bundle sales, design, installation, optimization, training and service. End users were saved the expense and complexities of mastering selecting, using and servicing products. At the same time, manufacturers could better scale their sales and support resources to sell more products globally.

The Disadvantage of Integrators

At the same time, important inherent disadvantages exist in this structure.

Expertise is needed close to the end user as systems are physically managed and optimized at the end user's site. This increases costs as it forces training of more people in physically dispersed locations or the expense of sending people out to locations. Furthermore, because this can be quite costly, often insufficient expertise is available in certain regions for certain products.

Integrators cannot physically or economically become expert in more than a fraction of the available products. Because of this, integrators need to limit or align themselves with a few manufacturers. This often results in restricted choice for end users.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

Prices are often artificially high because of limits of integrators qualified for specific products in a region. Integrators have historically had 'pricing power' in their regions which is good for them but results in higher prices for end users.

Forces Disrupting Integrators

We see 3 key forces that are disrupting integrators and resolving historical integrator disadvantages:

  1. Managed/hosted systems are reducing the need for on-site expert integrators to deploy, configure, optimize and service systems (see our analysis and comparison of managed/hosted video providers for an analysis of this).
  2. Access to on-line, in-depth information of products allows end users and consultants to make decisions with reduced dependence on integrator's recommendations (see our pro service as an example of this).
  3. Buying products on-line increases price competition and reduces pricing power of traditional integrators (see our discussion on buying products online).

We definitely think all of these forces are early and not completely developed. However, consider where we were a decade ago and where we are likely to be a decade from now. In 2000, web based email, amazon and blogs were novel. Now, they are mainstream. In the same way, managed/hosted systems, on-line product info and product sales are all likely to become common. No great technical barrier exists to these forces. It's simply a matter of technological maturation.

What Happens to Integrators?

We think the roles of traditional integrators will be split up. A lot of what traditional integrators do (such as recommending and selling products) will move on-line and others will become unnecessary (on-site software setup, upgrades, some troubleshooting).

Most end users will simply not need nor value the full bundle of services that traditional integrators provide. This will force integrators to make difficult decisions.

As in any period of change, some will not make it. Others will likely move into 3 areas of specialization:

  • High End Integrators: We believe the very high end of the market, for complex projects servicing customers with critical security needs (such as government and critical infrastructure), traditional integration will remain the preferred approach longer than the rest of the market.
  • Local Experts: As end users can do more by themselves, they will not need the 'full' services of a traditional integrator but are likely to value the help of a local expert who can design, manage and troubleshoot issues. This expert is likely to be a single person or a small team of highly qualified specialists.
  • Installation Services: Physical equipment will still be necessary but this equipment will not require complex on-site integration. This will drive the need and value of low-cost, highly efficient install providers (the 'Wal-Mart' of integration, if you will).

At the same time, we believe two groups will be the most negatively affected:

  • Traditional Sales: Sales based on relationships and personality will become more difficult. As prices and independent information becomes easier to access on-line, even great sales people will find the number of willing prospects to diminish.
  • Semi-Skilled Technicians: Technicians who know just enough to setup and troubleshoot the basics of systems will find themselves replaced by managed/hosted systems. They will either have to move down to the lower pay of installing equipment or forced to become experts.

The End of Integrators

Such changes are certainly processes and will not happen all at once. We do not see one day where integrators are healthy and the next when they are 'dead.' Indeed, many argue that the health of integrators has been declining for years. We believe this trend will accelerate and that the forces of on-line services, information and commerce will drive the transition.

Addendum:

Thanks for the extensive feedback in the comments. It is clear that I made a mistake by titling this provocatively about the "end of integrators." While I do think that integrators as we know them will be replaced in the next decade. However, it's the more specific points that I think deserve emphasize (gain for local experts, installation services and fall for traditional sales and semi-skilled technicians) - not whether or not end users will simply buy and install themselves.

Specifically, by 2015 to 2020:

  • Techs who maintain and configure VMS servers or IP cameras will become increasingly obsolete, replaced by centralized services and remote engineers. 
  • Sales people who over-hype video surveillance products will be shut down. As reviews and technical analysis of products become commonplace on the Internet, users will be able to check and avoid over-selling.


1 report cite this report:

February 2010 Video Surveillance Monthly Summary on Feb 28, 2010
Lots of research and heated discussions in February, despite little industry news. Most read topics included our megapixel camera test results...

Related Reports

IP Networking Course May 2017 on Apr 26, 2017
NOTE: Registration ends tomorrow, Thursday the 27th. This is the only networking course designed specifically for video surveillance professionals...
Axis Posts Strong Q1 2017 Financial Results on Apr 24, 2017
Axis posted strong numbers for Q1 2017, after having some challenges in 2016 (Q1 2016, Q3 2016). Inventory levels and overall spending show...
Ring Floodlight Cam Tested on Apr 20, 2017
Ring has released their latest entry, the Floodlight Cam, calling it the "Evolution of Outdoor Security", touting motion activated floodlights,...
Dell EMC Surveillance Division Profile on Apr 20, 2017
With revenue growth from traditional IT customers slowing, Dell has set a focus on the security industry as a market where the company can offer...
Top Selling Video Surveillance Distributors on Apr 17, 2017
These are the top selling video surveillance distributors in North America, as reported by 150 integrator survey respondents. In this report, we...
Hide or Show Models on Quotes - Integrator Statistics on Apr 13, 2017
Customers like to know what they are buying, but they might use an integrator's detailed quote to shop the system designed. This is a challenge...
Hikvision Major OEM LTS Now Distributing Hikvision on Apr 12, 2017
In a rare move, one of Hikvision's top North American OEMs, LTS, has become a Hikvision distributor, as demonstrated in LTS' ISC West booth: In...
PSA Distributor Favorability Results on Apr 11, 2017
To most integrators, PSA is is a vague unknown entity but to some, PSA is exactly what a distributor should be.  In this report we provide an...
Best and Worst - ISC West 2017 Show Report on Apr 10, 2017
IPVM went to Las Vegas, examining what vendors are showcasing and what is new. Attendance was up, according to the show, and was certainly well...
VMS Vs NVR Usage Statistics on Apr 07, 2017
What is used more often? VMS software or NVR appliances? 160 integrators told us what they most commonly use and why. [premium_content] Key...

Most Recent Industry Reports

IP Networking Course May 2017 on Apr 26, 2017
NOTE: Registration ends tomorrow, Thursday the 27th. This is the only networking course designed specifically for video surveillance professionals...
Tri-Ed Favorability Results on Apr 25, 2017
Tri-Ed, owned by Anixter, far outranked Anixter, the lowest ranked company in our distributor favorability series. Still, Anixter's ownership did...
Chinese 'Attacking Us From Every Direction', Says US FBI on Apr 25, 2017
"Chinese eating our lunch. Attacking us from every direction" said the US FBI's Deputy Director Andrew McCabe at the ASIS 2017 CSO Summit. .@FBI...
Eagle Eye Exec On Mountain Of Servers - VSaaS Growth Analysis on Apr 25, 2017
Eagle Eye VP of Operations, Hans Kahler, posted a picture of himself sitting on top of a shipment of new servers, as a testament to the companies...
Axis Posts Strong Q1 2017 Financial Results on Apr 24, 2017
Axis posted strong numbers for Q1 2017, after having some challenges in 2016 (Q1 2016, Q3 2016). Inventory levels and overall spending show...
Axis Lowest Cost Outdoor IR Camera M2025-LE Tested on Apr 24, 2017
Axis has lagged offering low cost IR cameras while their Asian competitors have made IR standard even in their most entry level cameras. Recently,...
IPVM First Dean's List W2017 - Thomas Atkinson, Matt Hurly and Fredrik Lundqvist on Apr 24, 2017
IPVM is happy to congratulate and celebrate our first "Dean's List", the top students in our courses. For the Winter 2017 IP Networking course...
Splicing Alarm Circuits Guide on Apr 24, 2017
Alarm installers commonly connect multiple sensors to a single zone. They do this by splicing the wires together. In this report, we will explain...
PureTech Video Analytics Examined on Apr 21, 2017
PureTech's analytics were chosen for a US border protection system (see related post), which the company claims no other analytics vendor was able...
US Border RVSS / Video Analytics System Examined on Apr 21, 2017
US Customs and Border Protection has been rolling out a video analytics-based detection system along the US/Mexico border, with detection ranges...

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