The Fall of Dedicated Micros - 2014

Author: John Honovich, Published on Jun 11, 2014

Not even a decade ago, Dedicated Micros was one of the biggest manufacturers in the video surveillance industry. At their peak, the company did ~$135 million USD, a number that none of even today's largest VMS / NVR manufacturers have reached.

Since then, the decline has been continuous and incredibly steep.

In this note, we review Dedicated Micros' financials and why they have fallen so far.

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Comments (14)

A few years ago I gave a presentation to an audience of network professionals in London at an event aimed at the network infrastructure industry. My theme was 'IP Video and the benefits of an Open Platform in Creating the Intelligent Building. (I still have the presentation saved even now).

This was to an audience of around 50 IT professionals. Immediately afterwards the next presenter was from Dedicated Micros. He presented the theme of 'Closed IP TV solutions - the Best Aproach'

It was so opposite to the Open Platform discussion that most of the audience left - and those that stayed were completely baffled.

So I'm not surprised to read this information about their poor results. They have just turned themselves off from the market with their poor messaging if nothing else.

Glenn, that's classic :)

Agreed that DM closed Cctv talk, I cringe thinking about it!

At their peak, the company did ~$135 million USD, a number that none of even today's largest recording manufacturers have reached.

What manufacturer group of firms are you comparing them to? The Milestones or the Digital Watchdogs or the Axises? I don't know if they make them or not, but they do at least sell cameras, unlike Milestone, so they are not a pure recording play. And obviously Axis' sales are greater than > 135 million. So vs appliance makers?

I am comparing to Milestone / Genetec / Exacq, etc.

Back in 2006, DM only sold recorders (see their 2006 website).

One can argue that DM always sold appliances, not software licenses, that DVRs were far higher priced back then, etc.

Even with that, $135 million annual revenue is a lot. Those comparables, even today are doing about half that revenue.

can anyone say Betamax?

Lesson here: never be afraid to take a risk, but don't double down on failure, either.

The trick is knowing when to cut your losses.

More importantly now DM can no longer afford to race in LMP2. At least Mike has scraped the pennies together and bought a car company so can continue to race:

Tiga Race Cars

As long as the finance is there to support your hobbies all is good right?

Back in '06 there was a deal on the table to sell DM but he blew off a key meeting to go racing and the deal died. I'll bet they'd like to have that one back...

Holy cow, there's actually a real Wikipedia page about DM's CEO being a race car driver.

Surreal....

Money quote: "In recent years the AD Group has seen significant financial hardship, compromising Mike's aspirations in motorsport."

In Mike's defense may I point out that all his racing was "Closed Circuit"...

Studies have shown there's generally an inverse relationship between a CEO's golf handicap and performance of the company. This is probably just another good proof point that running any company successfully takes significant focus.

From now on, before I buy stock I'm researching the CEO's hobbies....

As an integrator, I tried to speak to the Regional Management in the region on the challenges that the end-customer and the installer/integrator face with the Closed-IP solution soon after we purchased the SD-Advance NVRs. The customer wanted to use a well known 3rd party PTZ camera and we found out that neither a 3rd party encoder could be used (analog version of the camera) nor the IP camera. I arranged a meeting between DM and the camera manufacturer, but was really surprised to learn that DM was so adamant that they are not going to change their platform or support the integration.

That was 3 years ago. Today, the customer have moved onto IP - with an Open Platform VMS and IP cameras being used in all their expansion requirements and other new developments. I have seen how DM is losing its ground, and unfortunately there are no signs of change.

Before all of the "Closed Network" issues, was the fact that they could not provide a mobile APP ...directly. That third party app company was ridiculous.

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