Verkada's Chairman Touts Lock-In

By John Honovich, Published Nov 23, 2020, 11:04am EST (Info+)

"So, like, you are not taking it down" boasts Verkada's Chairman Hans Robertson as he explained his business model to lock-in Verkada end users, making him more money and putting his customers at severe long-term risk.

This one-minute video explains his tactics:

Inside this note, we examine:

  • Why this shows Verkada's opposition to open systems and customer choice
  • How Verakda's atypical licensing differs from conventional practices
  • Why this makes Verkada much more money and much higher valuation
  • What risks buyers are exposed to long-term with this practice
  • How Verkada's no 'technical expertise' 'sales athletes' model supports this
  • Plus Robertson responds by LinkedIn Blocking

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Licensing ***********

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* **** ****** ***********, ** **** an ***** ** ******* ******* *** quotes ** *********** **** *** ****** Verkada *** *******.

********* ************ ******* **** ******* **** Honovich **** ********* *********'* ******** *******:

IPVM Image

******* ******** ** ******** ** *** request *** *******.

Comments (124)

Seriously what is with the "Like" this and "Like" that. You are the Chairman of this company and you can't speak more professional than this? I guess it's sad this is the first item I noticed in this report instead of the actual story itself. The article is good but I guess I am over hearing about Verkada and their sleazy tactics.

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The article is good but I guess I am over hearing about Verkada and their sleazy tactics.

What I found fascinating is that this is the plan from the very top of Verkada. It's not some sort of accident, it's the 'recipe' as Robertson likes to call it.

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Build it sell it, build it sell it, rinse repeat!

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I like the business model(ok, maybe not). Lock them in. Your technology better not be flawed or buggy ( maybe create an "out" in the terms of use). Read the small print, read it again, be sure you understand what you are getting into, then let your attorneys read it and have their attorneys read it. Now the only thing better (for them)would be to "lease" the hardware units to the end users "as is" , auto-renew the leases, base future auto renewal terms on a random number generator and algorithm based on the average number of chipmunks found in a community in a given full moon cycle. Require them to de-install them at EOL if they figure out the 36-second opt-out window date and time to not renew, and return equipment in pristine condition or suffer additional fees. Charge an administrative lease renewal fee, an upgrade fee and increase the hardware unit monthly cost, call it a "technology enhancement sur charge", let the customer do all of the camera upgrade legwork, roll "0" trucks. Include 6-days of free off-shore tech support (ensure your 3 cs agents barely speak English and have dialup VoIP contact center connections with 150-20000ms of latency) for "crystal clear support". Keep the wait times under 2 hours. Bury this language in a short 3600 page EULA. You then have a solid model.

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This is the best thing I've read about companies who only care about the bottom line. They will fail soon as they do not care about their customers loyalty. Great article.

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Agreed. However, I would imagine the plan is to parachute out with a boat load of cash in acquisition, etc.

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I don't think Verkada will fail financially. Indeed, I would not be surprised if they were acquired in the ~$10 billion range in the next few years.

Silicon Valley's reputation has certainly been damaged, justifiably, for profiting at the expense of the public good but that does not stop them from making billions in the meantime. Verkada is backed by a number of major VCs, including Sequoia, so they have the resources and Robertson's 'recipe' to scale this up long before most understand what they have gotten themselves into.

I'd like to see California or other governments consider legislation or regulation that ensures that when people buy IoT appliances that they include a license to the software inside. Robertson's 'recipe' here is a Silicon Valley 'hack' that benefits private companies at the expense of the public.

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Verkada could release a “free” version that would allow viewing the cameras for limited time periods and reviewing video in 30 second clips or something similar to get around this, provided the customer supplied a static IP address for each camera and you had to log into each directly through a web page making the proposition to leave still painful.

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Exactly! These are former Meraki people so "buyout from a major manufacturer" IS THEIR BUSINESS PLAN.

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Had lunch and dinner with Hans several times and asked him point blank on several occasions about "selling out" like he did to Cisco and his answer was a firm "No, we don't want or need to be acquired - this company is a passion of mine."

Take it for what it's worth, but I'm sure they'll be around in 9 years when I need to replace cameras again

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asked him point blank on several occasions about "selling out" like he did to Cisco and his answer was a firm "No, we don't want or need to be acquired - this company is a passion of mine."

Could be! However, Verkada has taken $139 million in VC funding and the VCs want an exit this decade. If they don't 'sell out' then they would need to IPO so their investors can take their profits.

The scrutiny that publicly traded companies take is significant so I am skeptical that the 'passion' will remain that long but we will see.

A publicly traded Verkada that was legally required to disclose all sorts of financial and operational information would be great for analyzing and finding out what the company is doing!

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but I'm sure they'll be around in 9 years when I need to replace cameras again

Still sure?

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All ANY COMPANY cares about is their bottom line. Verkada and its management is merely overtly verbalizing, marketing, and demonstrating what other CEO’s are either thinking about, wishing, and likely in some cases, actually planning in the deepest, darkest, corner of their psyche.

NOTICE: This comment has been moved to its own discussion: All ANY COMPANY Cares About Is Their Bottom Line.

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God help the human race if what you say is true. I pray 🙏 you are wrong because your statement reduces all companies to nothing but money machines with no collective vision or motivation other than profit.

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Hypothetically, could someone put custom firmware on a Verkada camera to make it work like a traditional camera? Would that break the terms of service?

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Hypothetically, could someone put custom firmware on a Verkada camera to make it work like a traditional camera?

Hypothetically, you could try that with any camera and people have suggested it for, e.g., for Hikvision over the years. In practice, it's not really viable for any camera, given the complexity and risk in trying to takeover a device's firmware/software.

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Depends on if they are using some form of secure boot or not. The capability certainly exists today to make this effectively impossible. Even with Verkada's installed base, the draw for this might be pretty small, you'd need to find customers who are willing to rely on some alternate firmware as the basis of reliability for their surveillance system. Not saying the market is zero, but I'd bet it's pretty small.

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My IPVM membership also becomes a useless brick if I stop paying as well.

I dont see any issue with what Verkada is doing if the customer is fully aware that they need to pay an ongoing fee for the cameras to operate. If the customers are happy and verkada continues to provide value, then who cares? I cant fully understand why so many customers are paying for this. I would never buy it. But there are many customers who apparently would.

Unless you are insinuating that the customer may not fully understand what they are getting themselves into?

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The two do not conflate. Verkada is selling a camera that you need to Additionally pay for to get benefit, IPVM is selling a subscription service that you get immediate benefit from as a consumer. Verkada sells you useless hardware unless you use their service. Seems fairly one-sided and hostile to customers. Most customers outside of the security fields don't understand their options - so this seems like a good idea. Home consumers should just buy a wyze and pay for their service - it's cheaper and has a lower monthly.

Meraki was (and continues to be) a costly option for customers - so the same will be true with Verkada.

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How Verakda's atypical licensing differs from conventional practices Why this makes Verkada much more money and much higher valuation What risks buyers are exposed to long-term with this practice

Think about printers. They aren't any good unless you purchase the cartridge that typically is only supplied by the printer manufacturer. No cartridge no printing and you have a desk ornament.

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Think about printers

Leland, thanks! That's a good example. There's widespread anger about printer ink cartridge markups, the most famous is this 2018 video:

Or this 2019 Business Insider video:

Consumer Reports has a more nuanced take on this: Why Is Printer Ink So Expensive? - Consumer Reports

"Think of the original price tag of a printer more like a down payment," Sulin says. "You're still expected to make periodic payments over the course of ownership."

According to IHS Markit, a global information provider, the cost to build a printer is higher than the retail price of most—if not all—consumer printers.

Consider the CR Recommended $70 HP Envy 4520 all-in-one printer. IHS estimates the manufacturing cost of the printer to be about $120.

That said, at Verkada prices, starting at $599 MSRP for a 2MP / 15 day fixed camera and ranging to $3,000+ for a 5MP / 365 day one, they are likely making good profits on the cameras themselves:

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Any plans to test the 5MP camera with 365 days of storage? I find it hard to believe they are getting 365 days of recording on a 1TB SD card.

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Any plans to test the 5MP camera with 365 days of storage?

No, because that's quite a niche. We are testing the SV11 environmental sensor currently.

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I figure it is niche but I also doubt the 365days of retention is true.

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it is true, we have a mall with 65 cameras that I can go back 1 year to the day. They way they achieve it is with a combination of onboard/cloud storage. No matter what level of retention you buy, the camera only holds 30 days onboard and the rest is unloaded to the cloud

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At full 5MP resolution? What is the total upload bandwidth from the cameras?

When I tested them there was a big warning when you enabled cloud storage saying this will use a lot of bandwidth.

Also, you saying the 30-day cameras have the same SD card as the 6o day camera? They clearly say "onboard retention"

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is that $3,199 per year for 365 storage on 5mp cameras?

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Michael, the $3,199 MSRP is to buy the camera. The separate license is the same price for all cameras, $199 per year MSRP.

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My calculations indicate you could get 365 days recording at 245kbps recording 24hrs per day. Drop it down 12hrs (or less) per day based on motion recording and you could have 490kbps to work with; if their cameras have a good smart codec this seems possible in scenarios where there aren't high amounts of motion for a majority of the day. Not what I would want/quote for a year of recording, but seems somewhat possible.

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if their cameras have a good smart codec

They do not. See Verkada 2020 Cameras Image Quality Test, e.g., excerpt:

As with the earlier Verkada cameras IPVM has tested, both cameras constrained bitrates in our test scenes to a roughly 20% range, averaging 2.5-3 Mb/s, with quantization notably higher than average, ranging from 35 to 37 in the 4K model and ~30-33 in the 5MP camera.

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A better example may be buying a TV that has Android TV or roku built in. But if you stop paying for the roku service, the TV won't work.

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Think about vehicle leases, how popular they are and how similar to this concept.

You pay a down payment (or capitalize it), you pay a monthly fee, if you exceed expected usage you pay a penalty and at the end you return the vehicle with nothing to show but years of paid for use.

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Think about vehicle leases

Sure, Verkada should offer leases then. They don't.

They sell cameras outright but refuse to include any ability to make use of the camera without buying a separate software license.

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Actually, Verkada does offer leasing.

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Verkada does offer leasing.

Citation for that? No reference to that on Verkada's website.

Whether or not they offer leasing, virtually all Verkada end users are buying the equipment and yet has no right to use the equipment without paying more money for the equipment they own.

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A printer isn't a perfect example, as a printer needs ink to work. There have been printers that require an internet connection and auto re-ordering their branded ink. There have been printers that try to restrict ink/toner to their own brand, but that is usually defeated, such as we saw with the Keurig 2.0.

Think of it as a 4G tablet that you get from your cell phone provider. You get it for free, but have to keep the cell phone plan, or you have to buy a service plan for the tablet. But this is standard practice today.

However, what if when you pay off the tablet price, you cancel your cell phone plan, and the tablet bricks.

A camera "Should" be able to work without a service provider in the pro market (The consumer market, ring, etc. people are used to them being VaaS). There are live viewing or closed network applications, but an online subscription model doesn't support this.

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Ed already addressed the first question. Another example is Netflix. Stop paying for Netflix and you can't watch any more videos on Netflix but the laptops, computers, or phones you used were not purchased from Netflix and won't brick. A fair difference?

Btw, Robertson understands full well the difference between his model and typical SaaS product like IPVM, Netflix, etc., and how unlike his business, those need to be 'worried about engagement' and 'not enough people using it':

Btw, as for this:

what Verkada is doing if the customer is fully aware that they need to pay an ongoing fee for the cameras to operate.

Certainly, one goal of our coverage is to make customers better aware of the risks of this. I have never heard of a Verkada salesperson tell prospects, "you might have bought a one year license but you, like, literally bolted the hardware to your ceiling, so you are not taking it down." This quote from the company's Chairman should help prospects better understand the mindset and risks of going down the closed subscription route.

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How long 'til some whiz-kid programmer comes up with a way to "jailbreak" these cameras just like a phone? I bet someone could make a heckuva lot of money doing just that. And seeing as how the client bought the "hardware," it's theirs to upgrade/sideload/jailbreak/whatever-they-want, amirite?

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See above:

Hypothetically, could someone put custom firmware on a Verkada camera to make it work like a traditional camera?

Hypothetically, you could try that with any camera and people have suggested it for, e.g., for Hikvision over the years. In practice, it's not really viable for any camera, given the complexity and risk in trying to takeover a device's firmware/software.

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I would believe someone could hack these, or figure a way to redirect the connection requests or such.

If they were slightly successful it should slip by. If they were very successful I could see Verkada using expensive lawyers in conjunction with industry legal efforts to stop it.

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or pushing a firmware update to break whatever vulnerability was being exploited.

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"So, like, you are not taking it down"

This guy might want to look into some of the trade-in programs that manufacturers have run over the years, like this one: Avigilon Aggressive Trade-In Program Takes Aim At Competitors

A device bolted to the wall means nothing for long-term retention.

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A device bolted to the wall means nothing for long-term retention.

Means nothing is too strong. Robertson has data for both Meraki and Verkada and the numbers are strong, in one video, Robertson says the retention rate at Meraki was 98%.

And that Avigilon plan is the most aggressive one I have ever seen for trade-ins, so that might work for some but is not the norm.

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I wonder what the "retention rate" is for both other camera manufacturers and other VMS as comparison. If, say, Hanwha has done any tracking on customers to see if, five years later, customers with predominantly or entirely Hanwha cameras have replaced or expanded with other brands.

I can't imagine retention rate is 98%, but the retention rate for VMS is relatively high. It's not like you see constant replacement of an open VMS every other year.

Thinking about that 98% figure - haven't Meraki cameras only been out for four or five years? Kind of hard to have an accurate measure in that short a time.

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Thinking about that 98% figure - haven't Meraki cameras only been out for four or five years?

Cameras, yes but Meraki was founded in 2006 so, on the networking side of things, there is a longer track record.

People don't switch VMSes on a whim but if they had to throw out all their cameras to do so (like Verkada), the barriers are way higher.

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Sounds similar to building automation systems. Those systems are generally pretty large and very costly to replace. Usually they get replaced when a large project makes it more viable. Otherwise that shit is there to stay until the end of life.

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But we can't really know if the retention rate is because the customers are ultimately happy with the feature:price ratio, or if it is because they think the cameras are irremovable.

I have personally seen customers in multiple sectors throw out "perfectly good" equipment for something newer/different because they determined the short term or long term benefits were worth doing so.

I do not think the average customer wants to take down installed equipment, but they certainly will if the value proposition warrants it.

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but they certainly will if the value proposition warrants it.

It happens but, on average, it's harder and less common to do so with more barriers. For example, Mercury panels vs closed panels (CCURE iSTAR, etc.). If you are determined enough and have enough money, you can switch out any access control but it's easier and more likely to do so with open access controller like Mercury than closed ones like CCURE or Verkada.

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Buying Mercury is like buying AutoZone parts for your make and model of proprietary vehicle. Exactly the same as using a Mercury istar board to take over a ccure system.

Total crap after market products used to take over OEM equipment.

If the model actually worked perhaps Tesla can take over Porsche, however only common peripherals are exchangeable.

Again, the IPVM dinosaur subscriber logic vs. actual probability vs. expected frequency of the outcome.

This entire thread is full of those thick skulls all watching the coin flip and counting on irregular probability for a functional conclusion.

Anyone still trying to flip locked in cisco phones to your FreePBX set up?

Gee, don't like Brivo you can flip it to Prowatch....tired of Prowatch you can go Genetec....don't like Genetec you can rip it out and put in Vertx panels...or perhaps keep your hardware and go Avigilon maybe get some Lenel Onguard or S2 action.

Seems the SDK to Mercury is locked in while all those other companies are locked in to mercury thus the customer is limited from escaping DUMB to actually driving that porsche or tesla.

Argue all you want, Mercury is not OPEN. It is a single source platform where all the rest of the lazy ass culture built off of it and are now stuck.

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What I got most out of this article is how to sell against "proprietary" camera systems.

From a membership standpoint this has tangible value; And it will help my confidence in arguing with very intelligent Cisco Kool-Aid drinking IT Pro's asking video surveillance questions...

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I wonder how "right to repair" legislation could impact products like Verkada and Meraki.

Generally, I understand this legislation would allow manufacturers to designate firmware as a licensed function, so this kind of completely proprietary "pay or it bricks" model could still be viable.

But if the requirement to facilitate repair could be construed to require Verkada, for example, to provide access to firmware sufficient to perform maintenance on the camera imager and other components - the ability to test and repair the camera without it having to be connected to Verkada Command. That could open the door to a third-party firmware flash that would open those cameras up and use them outside of Verkada's closed system - which also would be protected by this kind of regulation.

* as per proposed legislation at Repair.org: original equipment manufacturer shall make available to the owner and to independent repair providers, on fair and reasonable terms, any special documentation, tools, and parts needed to reset the lock or function when disabled in the course of diagnosis, maintenance, or repair of the equipment

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I wonder how "right to repair" legislation could impact products like Verkada and Meraki.

I think their warranties cover replacement products. You really only get into "right to repair" issues if the manufacturer won't repair it under warranty, and won't allow you to get it repaired elsewhere. If it breaks, and you get a new one, then it is "repaired" and you don't have much of a claim.

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I hear you, but if legislation for IT technology / electronics was modelled after Massachusetts just-reaffirmed ballot initiative for cars, it would seem likely that Verkada would be required to allow third-parties access to their cameras outside of Command:

The measure will require cars sold in Massachusetts... [to have a] standardized open access data platform. Independent repair shops and mechanics would, with owner permission, automatically have access to the vehicle's data to use it for diagnostics and car repair.

That law is regardless of warranty coverage or any promises from the manufacturer. If Verkada had to allow access to a camera's data to a "standardized open access data platform," that's a very small hop to streaming both video and analytics metadata over to a third-party VMS.

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Their warranty is 10 years or until you aren't paying a license.

If you aren't paying a license, there's no benefit to fixing it. "Chicken, meet egg. Now go outside and figure it out who came first"

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I would love to see feedback regarding this from actual customers using Verkada.

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Rick, I think there are many Verkada customers who, today, X number of months into buying Verkada, do not care about being locked in.

The issue and the pain of lockin are not immediate, by definition.

Related, how many of the managers who buy Verkada today are going to be there 5 years from now when the issue of replacing or dealing with a closed system becomes most appearant. As an anecdote, one end user over the summer criticized us for criticizing Verkada. I later found out he had bought a Verkada system and then a month later quit. For him, what does it matter but for his former company, there's a real risk that a few years from now his successor (or successor's successor) is going to wonder how they got locked in.

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About a year and a half ago, we wanted to be able to offer a video security system that would separate us from all the others. So, we decided to become a Verkada partner. To date, we have installed 1000's of the cameras to over 40 different customers. Our largest sites has 900 cameras. Our average customer is 70 cameras. Our smallest has two. It has been a major boom to our business and the single best decision we have ever made. Our experience is as follows:

1. Verkada brings us on average 7 warm hand-off sales leads per month, often putting us on the phone with the customer.

2. Customers are fully aware of the license and what happens if they do not renew it. It is one of the first questions customers ask and we explain it thoroughly to them.

3. Verkada's Cloud VMS is what our customers love most about it. The cameras are nothing special. The edge storage with cloud backup is a nice feature. But the VMS sells it. It is simple, easy to use, yet powerful and constantly being upgraded. When we demo it for customers, it closes the deal. It is the single biggest reason they buy Verkada.

4. We are not thrilled with the tactics of the sales team. We have strongly expressed our concerns. They are working to improve. We have seen progress in that area.

5. In all parts of our business, (switches, AP's, etc.) we are seeing more and more customers acceptance of a license type relationship.

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#9, Thanks!

Verkada brings us on average 7 warm hand-off sales leads per month, often putting us on the phone with the customer.

For sure, that's valuable for you.

Customers are fully aware of the license and what happens if they do not renew it. It is one of the first questions customers ask and we explain it thoroughly to them.

In all parts of our business, (switches, AP's, etc.) we are seeing more and more customers acceptance of a license type relationship.

That may be the future, and it is certainly good for you and Verkada's business! There are a lot more businesses that don't accept this and I believe, over time, as customers realize the downsides of this model, that opposition will grow.

Think about it. What would be the big deal or downside for Verkada to support ONVIF? If they are so confident that their VMS is so great, just add ONVIF in and eliminate any pushback on this.

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I guess because we don't get much push-back.

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I believe you, though, they are handing warm leads over to you, reasonably those ones are buyers they have already convinced and not the ones that refused to consider such an offering.

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The warm leads are usually people who are in the market gathering information. Generally, they have not seen a demo yet but have interest in learning more about Verkada. We take it from there and do a demo which almost always involves explaining the license.

We rarely run into much resistance on the license. Customers are not always thrilled with the cost of it, but it seems they are conditioned to expect it.

Recently, we had a customer get a 10 year government grant. We used Verkada with a 10 year license (deeply discounted). They have a small staff and little IT support. What sold them is that with a 10 year license and a 10 year hardware warranty, their cost to maintain the security system for the next 10 years is almost zero.

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What happens when those cameras are obsolete in 5 years and they want newer better cameras. Do they get charged again for the license?

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No different than any other system. You want new tech, you buy newer cameras.

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So the licenses are not tied to specific devices?

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No,

Verkada only wants you to have a license for each device.

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exactly this.

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Curious what your response is to customer's on number 2 above. When you say it is thoroughly explained how do you overcome any objections?

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I tell my customers, any server based system is going to have ongoing expenses that if you don't pay, renew, or upgrade, it too will stop working.

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any server based system is going to have ongoing expenses that if you don't pay, renew, or upgrade, it too will stop working.

That's not how it works. One, the hardware continues to run, e.g., Genetec or Milestone continues to run on Dell or HP servers, even if you don't pay Dell or HP another dime. Secondly, VMS software providers often requirement payment for new features and some for support but not to run the software you 'bought' itself.

3rd is that since Verkada makes the camera a VMS 'server', it bricks the camera too when not paying the onging license.

Again, returning to Genetec/Milestone on Dell/HP example; They could be connected to Axis/Hanwha/Hikvision cameras, and if you get sick of Genetec or Milestone, you would dump Genetec or Milestone but you could keep Dell/HP and Axis/Hanwha/Hikvision connecting them to someone else's VMS running on the same Dell/HP server. Does that make sense?

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That is not what I mean. I too am a Genetec Partner. If you don't pay for support, if you don't do the software upgrades, if you don't upgrade the operating system on the server, if you don't do preventative maintained, your system will stop functioning.

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your system will stop functioning.

Why will it 'stop functioning'? I think you mean to say that it will eventually fall behind with current technology or not be able to provide new features but, unlike Verkada's approach, it does not literally stop functioning.

Even with the Genetec comparison, the bigger issue is that Verkada bundles server, VMS software, and camera into one, bricking all 3, at once when you don't pay. Whatever Genetec says or does, you can always throw Genetec out and keep your server or camera hardware and do whatever you want with other VMSes. These are not comparable lock-in risks, yes/no?

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because the server will shut down, become corrupted, or littered with viruses and security problems. They are not maintenance free items.

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because the server will shut down, become corrupted, or littered with viruses and security problems. They are not maintenance free items.

Security updates are typically free for OSes and VMSes. And, to the extent, one is looking at maintenance risk, this is over years. Compare to Verkada, where you stop paying, it does shut down, period.

Btw, you did not respond to my second part, copied below for review:

Even with the Genetec comparison, the bigger issue is that Verkada bundles server, VMS software, and camera into one, bricking all 3, at once when you don't pay. Whatever Genetec says or does, you can always throw Genetec out and keep your server or camera hardware and do whatever you want with other VMSes. These are not comparable lock-in risks, yes/no?

Even, if for argument's sake, you conflate Genetec with Verkada, Genetec still lets you use your own servers, your own storage, and your own cameras, that are completely independent of whatever happens with Genetec and one doing business with Genetec. Do you see this as a material difference from Verkada?

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Integrator #9

Agreed. Verkada is a known cost for the next 10 years.

John, Find me a server system/VMS provider that can tell me what my costs for the next 10 years with a warranty will be?

NOTICE: This comment has been moved to its own discussion: Find Me A Server System/Vms Provider That Can Tell Me What My Costs For The Next 10 Years With A Warranty Will Be?

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"3rd is that since Verkada makes the camera a VMS 'server', it bricks the camera too when not paying the onging license."

You keep talking about Verkada non stop

how about Open Path access control?

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But the VMS sells it. It is simple, easy to use, yet powerful and constantly being upgraded. When we demo it for customers, it closes the deal. It is the single biggest reason they buy Verkada.

I believe you.

No end user I've ever met, is delighted with the user-hostile solutions the incumbents are offering. They simply tolerate them. Smile politely, as they down another bottle of Pepto while the system spews out another 20 Mbyte log file that the arrogant tech supporter demands before lifting a finger.

When the iPhone launched, it did not have the same technical capability as the incumbents, and it was a little pricey. Initially, you couldn't even install 3rd party apps. IIRC the phone was locked to AT&T. If you stopped paying AT&T the phone would stop working (unless jailbroken).

Prior to the iPhone, it was inconceivable that Nokia, Ericsson, RIM (Blackberry) would get wiped off the map. They owned the market, and I suppose the assumption was that they could easily offer a competitive product, but had simply chosen not to up until that point.

People who bought iPhones were fully aware of the lock-in, but once they looked at the pros and cons, the lock-in was not a deal breaker. The pros far outweighed the cons. None of the dinosaurs were able to match the iPhone, and eventually they disappeared (their brands lives on, but that's about all that is left).

Verkada should not ever support ONVIF: ONVIF is technically a terrible protocol*. It is bloated and based on outdated tech and it was seemingly invented with the sole purpose of delaying interoperability by refusing to enforce strict adherence where it actually matters. It's not as bad as it has been, but by any metric it is a bad protocol.

Supporting ONVIF would almost immediately cause an avalanche of problems that would damage the Verkada brand as people try to hook up alleged-ONVIF-compatible cameras to Verkadas backend and encounter all sorts of issues.

Furthermore, Verkada would have to divert considerable development resources to support the myriad of ONVIF interpretations, or be forced to maintain a whitelist (a matrix really of models and firmwares). All in all a complete waste of time and effort.

To top it off, Verkada would have to charge the additional cost of development and support plus what they earn on the camera to each license. Every Hikua camera added to their backend would feed a potential competitor. It's much better to keep it clean, and just abandon difficult clients who demand weird features. In fact, passing these bad customers off to the dinosaurs will hasten their demise as they take on unprofitable projects (but I guess profits don't matter in this brave new world of finance).

*Yes, ONVIF is what we have. It doesn't make ONVIF any better, and the reason we now have Verkada gaining traction is - at least paritally - because ONVIF is so awful.

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Morten, it's a good rant but on the wrong premise ;)

as people try to hook up alleged-ONVIF-compatible cameras to Verkadas backend and encounter all sorts of issues.

We are suggesting the opposite. That Verkada includes ONVIF in its cameras so that video from Verkada cameras can be streamed out to 3rd party VMSes.

The point is that people bought the cameras from Verkada. The buyer owns the camera so the buyer should be able to perform basic camera functions, like streaming. Setting a precedent that you buy IoT appliances but that you have no rights to use that appliance without paying infinite ongoing license fees is bad for the public. Agree/disagree?

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As far as that goes, I'd be happy if Verkada exposed any API that you could write a driver for. Doesn't have to be ONVIF. I've written a few scripts that talk to cameras, and I was happy to work with Arecont Vision's API. VAPIX would be better if the documentation covered old versions. ONVIF was so complicated I didn't even bother trying to write my own code.

All we want from Verkada is a way to get video from a camera you own without a subscription to the cloud VMS. Almost any other brand of camera at least gives you a webpage where you can see live video.

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All we want from Verkada is a way to get video from a camera you own without a subscription to the cloud VMS.

Yes, and so to Morten's point, it does not literally have to be ONVIF, though ONVIF is the de facto standard and may be the simplest approach for them to support rather than building their own video API.

Related, Cisco Meraki Unlocks IP Cameras With RTSP Tested, though Meraki won't guarantee RTSP will continue to work without a subscription.

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Would you be willing to pay Verkada a fee per camera to connect?

Would the customer be okay not having a warranty based on the current terms of service?

Should they change their business model?

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ONVIF was so complicated I didn't even bother trying to write my own code.

For starters : Imagine if RTSP endpoints were standard on IP cameras. Something so damn simple, and they just can't do it. You have gigantic tables of RTSP endpoints for cameras because they can't agree on this simple thing.

Axis loves it when you waste spend your time on VAPIX, because it means you DON'T spend time on Arecont Visions API, or Hikuas, or Hanwhas...

I very much doubt that Verkada is going to give you that option - ever - and certainly not for free. It would simply be commercially insane to do so - every capitalist out there wants to see one thing "RECURRING". Every VMS vendor lives by this too, because once installed, customers just keep paying tax, knowing it is too expensive to switch and let's be honest - most pizza is pretty good, so why switch to a different pizzeria?

I have a few Raspberry Pi's converted into IP cameras. This is what I'd like to see more of. A totally open platform (and most cameras HW are essentially an ARM SoC + a sensor, so they could conceivably offer it). So since every manufacturer could have opened up their platform long ago, and DIDN'T I assume it's because it's not commercially viable.

Not long ago you could build and upload your own firmware to Hikvision cameras. This "hole" was closed off.

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I don't know what I was thinking... I have officially lost my damn mind (come to think of it, maybe that happened long ago).

I guess I completely misunderstood because a) I was too caught up in ranting and raving, and b) because adding ONVIF to the cameras seems like such a crazy thing to do - commercially - that it never entered my mind that anyone would expect them to do so :)

I absolutely agree that vendor lock-in is worse for the end user compared to totally standardized.

But the "open" solutions still lock you down (in practice), and if the experience that "open" solutions offer are junk, well, then people might just decide to live with the lock-in. As with iPhones, people tolerated that, and they were very happy about it. I certainly didn't care that I had to pay AT&T "forever" to use my phone. There is no chance that I would have suffered a Nokia phone just so I had freedom to change carrier.

It boils down to this: I genuinely believe that Verkadas end-to-end stack, in total, genuinely offers better value for many clients (not all), than a mish-mash of cameras and archaic UI's from the dinosaurs based on a poorly designed protocol. A crappy UX + "freedom" just don't beat a modern UX + lock-in.

So I think Verkada is doing the right thing. They are taking advantage of the utter incompetence and arrogance of the dinosaurs, and fired up by testosterone, easy money and a total lack of shame they are seemingly relatively successful and will probably completely dominate in the niches they are carving out. It might be that in those areas where they dominate, the cost of just replacing all the cameras vs. messing around with some ONVIF + dino concoction just doesn't make any sense.

Verkadas arrival on the stage was entirely predictable, and now we need to see if the camera manufacturers can get their act together and offer a proper and modern interface between IP cameras and recorders. I can assure you that you are not going to see that happen. You think Axis is going to ever ditch VAPIX for ONVIF? No way.

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You think Axis is going to ever ditch VAPIX for ONVIF? No way.

Axis offers both so a buyer is covered either way - use VAPIX if you want, use ONVIF if you want.

genuinely offers better value for many clients

If you calculate value in the short term, for sure, these clients are seeing value because Verkada made it easy for them to get a surveillance system with minimal time / effort.

The problem is value, in the long term.

Verkada is the Bobby Bonilla contract of surveillance systems. Buyer may be thinking "hey this is great, I got a surveillance system 1-2-3, set it and forget it."

In the long term, surveillance systems are networks with various types of components, technologies, and uses over time. This is where buying Verkada risks destroying significant value as the lock-in blocks you from adjusting for those things.

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Axis offers both so a buyer is covered either way - use VAPIX if you want, use ONVIF if you want.

Axis designed both, but keep them both alive. If they are interchangeable why would Axis spend time and effort on VAPIX? Why not save those resources and pile it all into ONVIF?

The answer is that if you buy an Axis camera (at top dollar), and use it with ONVIF, then you're doing it wrong. VAPIX and ONVIF are clearly not 1:1 protocols and you will be missing out if you switch to ONVIF (by design).

I may be wrong (I am not) but a lot of users do not want or desire some advanced, super-integrated, open platform solution - EVER. They just want a hassle free experience. Many of them have probably gotten stung by false promises about how seamless everything integrates with the "open platform solution".

I'm sure that customers understand what they're getting. They're not being conned over the long term (at least not at a greater rate than the dinos con their clients).

I'd love to see IPVM do some tests where they ditch proprietary drivers completely, but solely rely on ONVIF just see how simple it is and what platform offers the best support for the features the camera offers.

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I may be wrong (I am not) but a lot of users do not want or desire some advanced, super-integrated, open platform solution - EVER.

That's a true statement but not the relevant risk for users. It's not about ever wanting 'advanced, super-integrat'ion, it's about having basic options over time.

Morten, I know you don't like ONVIF. Ignore ONVIF then.

There should be some means for buyers to use the cameras they bought and own without having to pay Verkada infinitely. Are you objecting to that?

Because you can't deny that Verkada's chairman knows that he is gaining a significant competitive advantage by denying his customers the ability to use the equipment they purchased without continuing to pay him.

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I really do not see the problem.

If you are worried about having to pay Verkada forever, then don't buy it. It's really simple. There are other options. People have been given the choice and I take it that most of them knew what sort of deal they were getting.

I have no problem with Verkadas model, nor anyone buying their solution.

If there was an open alternative to Verkada that worked just as well, then surely Verkada would be out of business quite soon. Problem is - the number of realistic contenders is pretty small - largely (certainly) due to the lack of a proper standard that would support something like this.

My point is that there is no open option, because no-one can survive on it. It's binary in the sense that opening up like you suggest will severely damage the company's financial outlook, which means that it has to stay closed. When it is closed, you can make a lot of extra profit if you can capture a big market share. You can capture a lot of market if the incumbents are slow, clumsy and fail to grasp WHY their current tech is useless in building what Verkada offers.

I have to wonder though, how much of a threat is Verkada really? Are we having this discussion because of the principles, or because Verkada is an actual threat to the dinosaurs?

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I have to agree with this. Every single customer who buys Verkada knows exactly what they are getting into and what happens when the license runs out. If they want to be able to switch VMS providers, buy Tyco's product.

Further, Verkada is very liberal with the license. I have had customers go for 120 days without renewing. Turning it off has always been a last resort for Verkada. I have never had it happen to one of my customers.

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If you are worried about having to pay Verkada forever, then don't buy it

That's a good point and demonstrates how Verkada takes advantage of the principal - agent problem, which:

occurs when one person or entity (the "agent"), is able to make decisions and/or take actions on behalf of, or that impact, another person or entity: the "principal".[1] This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard.

In Verkada's main use case, the IT manager is the 'agent' that buys Verkada but the 'principal' is the public entity that the IT manager works for.

Buying Verkada is good for the IT manager that, in Verakda's words, 'hates installing video security camera systems" because it decreases the immediate workload for the IT manager, the agent.

However, it comes at the cost of the principal, who now needs to deal with a closed system that bricks if they stop paying for it and the challenges of not being able to make it work with other surveillance equipment that they may want or need to use in the future.

Your thoughts about how the principal-agent problem applies to Verkada's sales?

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Your way off base with this.

You make a lot of assumptions. First, our "agents" are split between IT managers, Facility Managers, and Security managers. All have different priorities. But the one thing they all share is that doing what is best for the Principal, is what is in their best interest.

I think what you are struggling with is the idea that a customer likes the system so much compared to the competition, that the thought of switching or wanting to switch away some day is remote to them and therefore not given much consideration.

Further, if you are the principal, and your agents are making bad business decisions solely based on workload, then you got far bigger problems that a camera locked into a VMS.

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But the one thing they all share is that doing what is best for the Principal, is what is in their best interest.

That's not a response, that's simply a denial of the principal-agent problem, which is well studied and established.

Take your earlier 10-year government contract example. This is a good example. This buyer (the agent) will almost certainly be long gone before the 10 years is out but the government (principal) is now locked in to Verkada.

that the thought of switching or wanting to switch away some day is remote to them and therefore not given much consideration.

That happens all the time. People make bad decisions when it comes to long term planning regularly, especially when the agent does not bear the cost or pain years down the line, like your 10-year government contract buyer.

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John, Your a bright guy and I like your posts. But you miss it by a mile on this subject. While the principal-agent problem might be well studied, it's conclusions are fundamentally flawed and I would never recommend it for decision making in business.

Academia has let you down on this one.

We can talk all day about the pro's and con's of the Verkada way of doing business and your well established academic studies. The bottom line is this. Customers are accepting Verkada in large numbers. They are gain more traction in the market on a daily basis, not less. There is a good reason for that. It is because the folks making the decisions like it better than the traditional systems. And that is the only study that matters.

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I understand the P/A problem quite well: I am married.

Bad/inappropriate jokes aside, I don't think P/A is being uniquely or unfairly leveraged by Verkada.

Governments make terrible, stupid choices every day. We (the principals) are paying trillions with little to show for it. But that's an entirely different rant for another time. In some cases, an agent may have been "tricked" into buying an expensive, complex and fragile VMS from a dinosaur, complete with an expensive 10 year maintenance plan, when a Verkada system would have worked much better for the use-case over the lifetime of the installation.

You could just as easy paint a picture of the agent leaving, and now we're stuck with an expensive on-prem install that requires constant nursing to stay online, when there's a simpler cloud based solution with a lower TCO.

I'm just struggling to see any viable model for a company that tries to use standard cameras to accomplish the same functionality as Verkada is offering. I believe IP configure is offering something, but they are not as ruthless and shameless as Verkada - perhaps they need to be.

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This can apply to so many cloud hosted or SaaS based systems - Even Amazon AWS, easy to get in and almost impossible to get out (will need to have a Cloud Exodus and lots of miracles to et that done right)

As to taking over for someone that has made certain decisions or course of action, that is the nature of the beast.

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Was the request for comment worded in an offensive way? Why would he block a journalist writing a professional request for comment?

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Moshe, here is my full communication with Verkada on this topic. My original email from October:

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I held running the article in October after VICE Investigated Verkada's Harassing "RawVerkadawgz" and then Verkada Fired 3.

I emailed Verkada back last week confirming we were running the post and asking for comment:

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Note: Christina Schultz is Verkada's official spokesperson

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Yeah, that's definitely a failure on their part. Obviously, you can share this correspondence with us because in fact there was no correspondence :)

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Sorry for the tangent, but this correspondence brought to mind this exchange (read from the bottom). All that the person asked was to confirm the author of the paper. But to be fair, the author probably knew that a negative follow-up would ensue, perhaps questioning the author's claim that jade amulets might prevent COVID-19...

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Most people do not make commitments looking to 'break up', but breaking up with one's video surveillance supplier is generally inevitable. Arecont, Panasonic, Pelco, and Sony were leading providers not too many years ago, and yet the results: bankruptcy, spin out, fire sale, and market exit.

Holy fuck imagine being locked into Pelco!

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Verkada is just selling themselves against themselves. There model won't last. They are in their prime right now, but with this leadership they'll be churning sales people just as fast as lost leads.

Its more work on the integrator sales end to have to sell both cloud and on prem options, since Verkada has only one. Now we have to present another product and while cloud has growing support not really the case when having to directly stack and sell the actual pros and cons of your own proposed solutions againsts each other. It really opens up the guts to see the nasty truth of the cloud.

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How can you trust a company after only being around for 4 years? Someone went to MIT and sounds ridiculous on a YouTube video? Is this guy the Elon Musk of our universe?

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If Verkada doesn't change it's ways soon, there is a competitor that is almost primed to take them out...same type of cameras, same offerings in features, PLUS Onvif support.....we are testing it out right now.

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What product is that?

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A YouTube commenter was quite angry, arguing that "lots of VMS' have licenses that must be paid":

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My response:

The VMS license comparison is excellent to understand the danger of Verkada's model. Even if you are paying a subscription VMS license, if you stop paying that license, the COTS hardware that the VMS runs on continues to work and the cameras that you connected to the VMS also continue to work. With Verkada, you stop paying and the VMS stops working, the 'server' stops working and the camera stops working. Do you see the fundamental difference in these models?

Comparing Verkada's model to a VMS license is highly uninformed, to put it lightly. Does anyone reasonably think this is a good comparison?

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Here are a few more examples

Team viewer

Open Path

You don't pay you get disconnected

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Openpath is similar, though much smaller than Verkada. Rhombus is another example, again much smaller.

Here are a few more examples Team viewer

No, Team Viewer is wrong. It's important you and others understand this. Team Viewer sells/licenses software, you need not buy any Team Viewer 'hardware' nor does canceling Team Viewer mean any of your computers becomes a brick. If Verkada made TeamViewer, it would provide remote access but only if you bought their devices and only if you kept on paying for them; otherwise, the devices would brick. Does that make sense to you?

Btw, I thought you were Team Hikvision, have you pivoted to Verkada?

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"Openpath is similar, though much smaller than Verkada."

You only attack Verkada:)

Why?

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Btw, I thought you were Team Hikvision, have you pivoted to Verkada?

I am Avigilon/HIK team:)

No Verkada for me yet

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We criticize lots of companies. When we criticize Hikvision, you say we are anti-China, now we criticize an American company, Verkada, and you counter we 'only attack Verkada'.

Lock-in is bad across the board. Bigger companies are going to get more attention than smaller ones. Companies in video surveillance are going to get more attention on IPVM than ones in access control.

I am glad you understand how you are wrong about TeamViewer.

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Verkada cannot win with IPVM!

First, you report the apparent lying from their sales team; now that they speak the truth, you also bash them.

As for your overly dramatic video, Is that the same guy that does movie voice-overs? Did you compare a technology product to a Can Opener?

Let's provide some context here because you have not.

This presentation you are using as a basis for this article was a talk Hans gave for South Park Commons, which and I quote, "We are the anti-incubator, an organization that promotes judgment-free exploration and development of new ideas."

Here is a link to their website: South Park Commons

This presentation was billed as a "Fireside Chat" off the cuff & informal to a small audience.

Titled "Adventures in Sales," the agenda was as follows;

Origin and Early Years

Product Transition

Learning Enterprise Sales

Alternate Reality: Life Post Acquisition

Q&A

Here is a link to the original video from the START of the presentation. Unlike your link, which covers the answer to one question at the end of the presentation in the Q&A session:

It's quite an interesting & informative watch if you can spare an hour.

Fireside Chat with Hans Robertson - YouTube

The title of this article should be

"Verkada Chairman Does His Job"

We are learning nothing new here, John; for IPVM to keep harking on about the "Lock-In" is frankly becoming old news.

There is not "opposition" to open systems from Verkada because it is not even in their business model.

To bash the company for not doing what the rest of the industry has been doing is frankly short-sighted; I have said it before and ill say it again "The implementation of video systems is changing and you old folks need to keep up of be left behind"

Verkada is flipping CCTV on its head and approaching from a different angle; sure, there will be bumps in the road and growing pains as you have so diligently published in previous articles.

To respond to a few of your points.

Risk To Buyers

You make it sound like a last-minute drunken decision to head to Las Vegas for the weekend.

"It is explicitly designed to be the easiest possible solution to get in"

So you plug a camera into the internet, and it works right out of the box.... Shouldn't all camera systems be like that?

"they will pay you to attend webinars."

With $25 Amazon gift cards and a free Yeti Tumbler.... Hardly any worse than all the freebies we collect at the trade shows.

"Send you free cameras."

The cameras are Demo units; you don't get to keep them for free indefinitely.

Every manufacture does this before you buy; even my local car dealership will dish out a new car for a week to try.

"dedicated 'sales athletes' to woo you in."

Like wooing a prom date? Come on... Having someone at the manufacture that will pick up the phone when you or a potential client calls is a good thing... no?

If a client truly doesn't know what they are getting into when purchasing Verkada cameras and licensing, then that's on them; this is not the amateur hour; it's enterprise sales.

The hardware and licensing are two separate line items on the invoice.

I will also direct you to the very clear pricing on the public website; it even has a nice graphic and table for selecting your options. It couldn't be any more clear.

Verkada List Pricing: Video Security Cameras & Cloud Service

Also mentioned in the Hans presentation and should be noted was Verkada's respect of the channel partners; they could very well sell direct (and they did in the first few months of operation). They now willingly give up 10% to put the deal through a partner and recognize that doing this will ultimately bring them more clients. You make money; I make money.

With technology advancement rates increasing, any camera system you purchase now will be obsolete in ten years, whether you buy Verkada or any of the other brands. Your point is mute.

Lifespan of Video Surveillance Systems

Bring up the sexual harassment one more time for good measure, I see.

What "Billion Dollar" start-up company hasn't had to address sexual harassment and a whole host of other inexcusable behavior from a growing workforce?

I don't need to emphasize that this behavior is unacceptable, and they dealt with it by firing the individuals in question.

I'm not surprised at the lack of response from Verkada management; I'm not really sure what they could say in response to this article. It's taken me a week or so to figure out if it's worth posting a comment.

I didn't realize that IPVM was anti-capitalist.

Thumbs Up on the technical product reviews that IPVM performs.

Thumbs Down on this tabloid nonsense.

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I don't need to emphasize that this behavior is unacceptable, and they dealt with it by firing the individuals in question.

They did not fire the people as they tried to sweep that under the rug. They only dealt with the situation AFTER IPVM started making noise about it. Stop defending them.

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You missed my point, Im not defending them, just stating facts.

Those people involved are no longer employed by Verkada, the court of public opinion decided that for them.

I commend IPVM for exposing it, i just don't see the need to keep on about it.

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No you didn't state a fact which is why I corrected you. You keep spinning this as not a big deal but if IPVM didn't bring this up these clowns would still be working there. You think that is ok?

I have had numerous unprofessional interactions with the greenhorn sales team at Verkada. I can't fathom the BS they tell clients to get a sale as they have no respect for the security industry.

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What is not factual about my comments?

It's a fact that they don't work there anymore. Are you one of these alternate fact guys?

Im not spinning this as not a big deal, my first comment was (and you quoted me) "I don't need to emphasize that this behavior is unacceptable"

I even commented how i commend IPVM for exposing it.

I'm unsure of your point here.

Thanks for sharing your experiences with the Verkada Sales team, a comment which isn't relevant to this post but i guess you needed to get off your chest.

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While I am not a fan of the Verkada business model to be fair the salesperson I have interacted with has been up front and not the least predatory. One of our employees contacted them to learn about Verkada and rather than sell directly to the random employee to get a foot in the door they contacted me.

I may never buy their platform but they have been up front with me and treated me as as a professional.

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Glad to hear they are finally trying to clean up their act.

Here is how their director of enterprise sales responds on professional forums.

ISC West 2019 Report

IPVM Image

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Very nicely said Craig.

I understand Verkada is upsetting the traditional market. But maybe the traditional market needed upsetting? The Verkada VMS is hands down the easiest to learn and use.

When I demo Verkada, all I have to do is show clients the VMS and explain that no servers are needed. The reactions on their faces tells you everything.

I recently won a very large design/build bid for a federally funded agency. I had to bid it with a traditional server base system because that is what the bid specs where dictating they wanted. In the post bid meeting, I did a Verkada demonstration for them. The looks on their faces was priceless. They switched instantly and then thanked us for showing it to them saying "we had no idea something like this was available."

Not only did we get a 600K contract, it is now being expanded to other sites. That is how much customers like the Verkada VMS. This was after fully explaining the licensing and what happens if they choose not to renew.

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Why do so many enterprise businesses lease vehicles instead of buy them?

You pay a deposit, you pay taxes, you pay a monthly payment, you pay to insure the vehicle and you pay a penalty for over-use.

In the end, if all goes well, you return it and gain nothing but it’s use....in time to start the process over.

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Undisclosed Integrator #9

That's awesome! I hope they talk to fellow agencies. We have tried and failed several times to bid on government contracts here in Florida with Verkada as we, too, clearly see the benefits. Every time we cannot meet the "On-Prem" requirement and get kicked out without much consideration. With these RFP's, we cannot approach directly and offer demos before the bidding process; it seems like you found a good way around that.

No pressure, but if you would like to disclose yourself and talk tactics, please do feel free to email me in confidence at craig@bdhtechnicalsystems.com

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Craig,

I will talk to my boss and have him reach out to you.

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But, to get out, you are going to need to throw out your cameras, or good luck selling them on eBay.

Late post here, but can a customer actually sell their Verkada cameras with the license? Say, if they're two years into a five year license, if they sell those cameras on eBay, would the rest of that camera's license follow it to someone else?

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From Verkada's licensing FAQ, they recommend contacting support prior to buying cameras on secondary markets. The camera serial number is associated with a specific organization, so if it was stolen you would not be able to add the camera to your system.

Also, the Licenses are nontransferable. They are not tied to a specific camera, but to the organization.

Can I purchase a new license for a used device purchased on the secondary market?

Before purchasing any Verkada device on a secondary market such as eBay, you are advised to contact Verkada Support to confirm that the device has not been reported stolen from a Verkada trial program or a bona fide purchaser. Please have the serial number of each device available when you contact support. Verkada will not support or sell licenses for devices that have been reported stolen.

Can I move a license from one Organization to another?

Answer: Licenses are nontransferable.

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Thanks Sean! I figured; it's how standard VMS companies do it.

Even more of a lock-in. Obviously standard VMS licenses aren't transferable to other organizations, but you can transfer them to other cameras.

"Evil genius" in a way; treat them like individual units on the front-end but not the back-end.

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True story, my company is a partner (not my decision) and they tried to poach an existing customer...Partnership is fluid for Verkada

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Here is another Hans Robertson statement on video emphasizing how he is well aware that the 'big sunk cost' of buying hardware that bricks if you stop paying the subscription results in really low churn, aka lock-in:

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Much the same as when John gives his speeches.

Just adding that "Terrorism is good for business"

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