Verkada Gets Half Billion Dollar Valuation

How does Verkada handle system design for 100s of cameras in locations across the country with a mostly inside sales force?  I don't think I've seen this addressed in the previous Verkada articles.

As a participant in the recent discussions about this company, I will restate how I’m not a fan of their tech, sales approach, or closed system. I am completely impressed however with the disruptive mess so far! This is nothing more than the updated battle between the pony tailed grizzled alarm tech installing cameras and the 20 something in the IT department hanging up 4 cameras for the price of 1. 

I can not imagine anyone in this day and age buying and implementing a closed system.  Even if it was levels of magnitude better than everything else out there. 

They are growing so quickly because they have their own internal sales team (60+) that are mass calling end users directly. They have made themselves independent of dealers, distributors, consultants, reps, etc. and as they told us in our profile of their sales organization, their "sales always own the relationship with end customers".

IMO, this is the primary reason for their growth, not the SaaS model (and certainly not the current feature set).

If Avigilon started selling direct, they would crush Verkada, easily.

IP surveillance systems are crossing the chasm of being DIY-friendly, much like PCs/Printers/Networks have become, VoIP, etc. There are a very large number of end users that are completely capable of designing, installing, and supporting their IP surveillance systems, and Verkada is one of the first companies to capitalize on this fully.

Verkada's model is a lot different than the "buy some crap online from a website" model, where users are often forced to choose no-name inferior product and risk not getting any kind of support post-sale for their system.

I am less interested in Verkada than I am in the response of the "stone age" companies to their sales approach. Verkada's growth is a major dent in the armor of the integrator channel model.

We have just learned that there is an active RFQ on the street in Memphis for ~1000 Verkada cameras and cloud storage. We estimate the contract will be worth ~$1 million. We're working on a story and plan to post on Monday, but wanted to post a comment here in case anyone had information, comments, or feedback. Here is a copy of the RFQ, which can be found on the city's website here by clicking on the PDF FIle link in the upper right-hand corner.

Anyone with information, please feel free to comment here or email me directly at dan@ipvm.com.

They have an aggressive sales strategy. I found it unflattering.   One of their sales guys somehow got ahold of one of our Senior Directors (who has nothing to do with Security or IT) our C-suite directed the Verkada rep to contact me instead.  The rep then told me that *my* senior director had personally requested for Verkada to show me a demo (he didn't).

Instead of explaining the product whatsoever he just started listing off dates for a webinar. This all happened in the first 20 seconds of the call coming in.   Told him I wasn't interested until I could research the company; now the rep contacts me every week or so trying to set up a webinar.  

It all feels very used car salesman like.   I deal with sales frequently and this was not a positive interaction. 

What if we're wrong?

I hate lock-in, but I bought a 1st gen iPhone (no 3G, no copy-paste, and initially, you couldn't do native apps for it). Up until then, I had used a plethora of Nokia phones and before the iPhone I had an HTC candy-bar phone running WIndows CE.

There was plenty of reasons to laugh at the iPhone, and I had lots of colleagues who were still on their Verizon junk-phone for another 9 months, and few of them knew what a SIM card was. They were locked in - hard - with Verizon, AT&T etc. I got locked in too with AT&T, and later, when I bought a contract free iPhone 4 for my wife, it was STILL locked to AT&T (jailbreak was available). The "freedom" that Windows CE provided was promptly sacrificed when I tried the iPhone. And the damn thing wasn't cheap either.

The iPhone totally reconfigured the market. Nokia, Ericsson, Motorola, HTC, Blackberry... titans of the pre-iPhone market, got completely pummeled. Sure, today, you can get decent phones with those brand names, but the original divisions - pretty much eradicated. We've now come full circle, and I think that people buying iPhones are a bit foolish. The alternatives are as good, if not better, and cost a 1/3 (yeah, it shares my location with the Chinese government, but I don't care).

I'm not suggesting that Verkada or Meraki are the iPhones of the IP video industry, not by a long-shot, but I am willing to suggest that perhaps we're wrong about our assumptions as to what end-users want and value and are willing to tolerate.

Maybe we're too deeply engaged in group-think, that causes us to eventually miss the boat here. We've been drinking the "open platform" cool-aid for so long that we've forgotten the bitter aftertaste of sweaty armpits and red faces when the customer lost all recordings due to crap UI's and convoluted installations. We've been able to get away with blaming the customer for making "stupid mistakes" for so long that we now think we're the gods of IP video ruling over a herd of ignorant peons. Everyone, at some point, has bumped into the arrogant supporter who thinks the customer is a total idiot because he didn't enable X, Y, Z, then disabled Q, set up a rule for P and then examined the log in /users/data/somefolder/somefolder/logs/year/date/month/00001.xml as everone with a brain knows!

I've spoken to end-users who put on a brave face, and try to impress me by saying that they appreciate the myriad of settings and configurations, but then - when I say that I think it's a terrible UI, they come to their senses and more often than not, they admit that it's not really a delightful experience, oh, and there was that time a few weeks ago, when the whole thing stopped working "but then I just rebooted the server and then it came back online".

Then there's the tech...

ONVIF is an abomination. It was borne from a desire to obstruct and prevent interoperability and the emergence of a usable standard. It shows. Imagine if, instead of ONVIFs hundreds of spec pages, we just had one page: Live video ALWAYS comes from rtsp://[ip]/live/profile1 if you want to do PTZ, then use http://[ip]/pts?x=0.1&y=1.0&z=0.0 etc. but noooo... we have to have hundreds of pages, and we have to use SOAP, and one of the founders of the spec will decide to disable ONVIF per default - for "security reasons". For 10 years, the plot worked, and it successfully prevented commoditization of the cameras, but it also prevented a "plug and play" solution from emerging, that would also be "open".

So say you wanted to fight Verkada (boy, do I want to), and offer an "open" solution based on ONVIF. It wouldn't work. ONVIF specs RTSP as the media transport, a pull-protocol. This means that to get to the camera, you need to have inbound access to it from the outside - your VMS is actually a "client" when seen from the camera. What you need is something that autonomously can act as a client and push video to a server. RTMP lets you do that, but it ain't in the standard. Basically, Verkada, and everyone else who wants to do something of that ilk will have to be proprietary.

Verkada could publish the specs, sure, but lock-in is every manufacturers wet dream, and if they can score enough customers without doing so, it's the right thing to do (commercially). They can always do it later, but there's zero value in doing it now.

Axis snubbed an emerging Dropcam (who were re-flashing Axis 205's to support RTMP). Dropcam then decides to make their own camera, and are later swallowed by Nest. Dropcam/Nest paves the way for an avalanche of cheap and simple DIY solutions for video surveillance (all proprietary). Amazon picks up Ring, and introduce a bunch of other security features beyond video. In 6-18 months, Amazon will buy Verkada for at least a billion dollars, and maybe then the typical end user will suddenly see the solution as an "iPhone" of surveillance, and then there'll be some boardroom meetings where veterans will laugh at how foolish it was of Amazon to buy these know-nothing, hotshots.

Now, I gotta go...

I've got to get my soapbox, my sign and get down to the park and warn everyone that the world is ending.

Verkada, “A pig in a poke”. Selling old technology, on the edge SD card technology that according to IPVM did not see adoption 3-years ago.  What they are showing is that manufacturers who have “watered down” their sales channels, selling to anybody, including amazon should look at turning back the clock.  Protected territories are the way to stop this Verkada nonsense.

 Verkada, a 3-camera offering with a technology that avoids logical sense, or cost sense, and requires a whole lot of expensive bandwidth to even operate.  A system that pays no attention to meantime between failure.  A ridiculous annual license fee that holds the users hostage.  

Appears to be a group of Silicon Valley brats that Sell,sell,sell, without offering a whole lot of features and benefits,.  

John,  Interesting point.  The operative word is "Telesales".  They are trying to drive sales and service remotely.  My understanding is they ship the cameras and it is up to the owner to install their own cameras.   Their claim of 15-minutes / camera is not "real-world"  This model looks very similar to a DIY model, where again the customer is being held hostage by software licenses and expensive cameras.  

Has IPVM conducted research comparing robustness of SSD drives vs. SD drives?  What is the  average life of the SSD's?  Will they require replacement, similar to a battery after so many cycles?  What is the duty design for these SSD's?  (example any hard-drive can be used in an NVR, however the  WD purples have built in video duty design) What happened to Onvif and all the struggle to prove open architecture between multiple manufacturers?

It appears they are trying to say they are a new cloud technology but from what I have learned so far it seems the video is left on the camera and there is no backup to the cloud.  The internet is used to gain access to the cameras through IP addressing.  This is not the same as continually backing up to the cloud. Not sure if this is how the "cloud" comes into play with their offering?

The only way friction can be reduced in this "Telesales" model of selling is by limiting distribution to (1) sales channel, otherwise with multiple distribution channels competition will be forced upon the manufacturer as the client will always look for the best price through multiple bids.  How they are able to lock out competitors who offer superior cameras and recorder technology is what baffles me.

Yes I get they are trying to simplify cameras.  They are trying to simplify with a "skeleton offering" with lack of VMS features and no local service.

The other interesting point is it seems they  are able to promote these "sole-product" offering is by calling this a "technology sale" , thus throwing to the wind standard bidding procedures set up for government, schools, and municipalities. 

Flock is doing the same thing in the HOA and self-standing camera industry (shopping centers, etc.).  Locked in camera agreements with a self-built camera.  Raise a lot of money, get a lot of sales.  We have had 3 people leave Flock because of the system limitations but still owe a year of money before those cameras become a brick, or more likely Flock takes them back.

Hi All, 

True story..............

I installed a Milestone system for a school district five years ago........today consisting of 584 cameras, oldest cameras are 5 years old, (Panasonic, Sony, and Axis).

Customer was due a server refresh.......IT department explored options.........IT department really preferred a cloud solution for perceived simplicity.........customer considered (3) options Cisco Meraki, Verkada, and staying with Milestone..........I proposed a Milestone solution with on-premise servers with a full suite of managed services to offset everything "the cloud" offered, my goal was to limit any burden on the IT department............made a presentation to the board of ed with a 5 year TCO analysis.......my Milestone solution with managed services was approximately $10k a year less then the Verkada solution.....including factoring the cost for the customer to replace all 584 existing Panasonic, Sony, and Axis cameras with Verkada cameras.........

The customer choose to go with Verkada..............

I asked the security director and maintenance director why......stating "in good conscience I would never be able to recommend a solution from a company that is only two years old, locks you into only their product end-to-end, with only (4) cameras to choose from, with no 3rd party integrations, and an unfavorable product review from IPVM"........

My 10 year relationship response........"we have a lot of tech savy people in our IT department and if they are ok with it so am I"

What did I do.............

Become a Verkada dealer..............as the old says goes "if you can't beat them, join them"

The disruption is Real...............

After looking at Milestone, Genetec, and OnSSI, and subscribing to IPVM for a "neutral" viewpoint and reviews, we just decided on a Verkada system for our school district.   

While I don't necessarily like the fact it is a closed system; our goal was to move maximize surveillance coverage given minimal funding and provide easy access to the users who need to use it regularly.   Verkada was the best choice in our situation. 

It's going to be a viable choice in a lot of situations, especially from what I see in K-12 and how funding generally works in our vertical.   

Many states require electronic security sales people to be licensed, after undergoing certification training and testing.

Do you think Verkada's sales model anticipates state security licensing requirements?  Do you think their inside sales people need to have licenses for the states where they are calling on customers?  

Is there some safe harbor since their camera installs seem to be DIY by the IT department? 

While I would love to hate this company, after going through their website and documentation I was impressed.  It could be all BS I guess.

Who hasn’t heard about Ring?  How old are they and what did they start with?

Of course, I wouldn’t own one of it stopped working without paying the subscription.  Interestingly enough, while I have an NVR and cameras around the house....I subscribed to Ring, cancelled it for about a year and recently subscribed again.  I didn’t see the value in their Cloud service, and then I did after it kept sending me alert clips from the neighborhood.

I guess there is a butt for every seat as I was taught long ago. 

Is anyone else on their free Yeti live webinar?  It's something else.. they were hot mic'd by accident and they must have dropped about 20 f-bombs in about 45 seconds.     The live chat is pretty funny too. 

Lots of talk about sales, sales, sales and little mention of support and integration. What happens after the sale? What happens in year two, three and beyond when stuff starts to fail? Closed system or not, things are going to go wrong and if they don't have the technical support teams behind them, things are going to sour, and fast. We all know, bad news travels faster than good and all it will take is one major FU to burn down the house. Ring is NOT a surveillance system. Security and surveillance in government and enterprise are critical infrastructure. Like IPVM, I may be "stuck in the stone age", but boiler room, high pressure sales tactics don't belong in the security industry.

Verkada, takes cues from Crazy Eddie...   No?   https://www.youtube.com/watch?v=Ml6S2yiuSWE

I did the webinar today.. it started with an open mic, lot of cuss words on how they are having a switch problem.. Ryan  later took over and was going 100 miles an hour. Intially tried to scare people " you will be fired if you don't do this" .. have a closed system with no open firewall is the way to go.. then claimed that they are the only company that can go real time shared video, mutua-link and many others have been doing it for years. Then Ryan pitched analytics and then concluded with pricing.

I really felt the demo was weak. Maybe I am wrong.

$100 a camera with 10 year warranty is very interesting. It finally elevates software and makes it not important than hardware. Good luck to them.

If they can make it work it's a win for the US

Update: Verkada has filed a fundraising Form D. Notably, it says they are seeking to raise nearly $51 million but that none has been sold yet:

We emailed Verkada asking for clarification. In past Form D filings, a higher amount being offered may indicate that the company will soon raise more (e.g., in this instance possibly another $10 - $11 million).

Update: Verkada raises $80 million at $1.6 billion valuation - Verkada raises $80M at $1.6B to be every building’s security OS – TechCrunch

We will be doing the post in the morning with full analysis.

Also, what does this statement mean??

They just raised $80M now and will develop access control

Our new report covering Verkada's new $80 Million raise / $1.6 Billion valuation was published this morning: Verkada Raises $80 Million