Verkada: "IPVM Should Never Be Your Source of News"

What is the IQ level needed to participate in such a poll? Free for all?

#Thanks

Passive-agressive is a Bay Area thing for sure. So this makes sense.

Love it

Wow, this was just...good.

Found the Verkada employee.

I don't know that I'm 'terrified' - maybe so. If I am it's not necessarily of Verkada, but maybe the lowering of standards. If it's so easy to bullshit your way into a customer then why should anyone try to do the "right thing."

Verkada is to CCTV what SimpliSafe is to the alarm industry

LOL, SimpliSafe is the company who freed security customers from long-term contracts, Verkada is the one who is trapping them but, heh, I get your point!

What would be real financial engineering genius is if, in 2025, Hans starts a new company whose premise is to free security users from the lock-in jail that Verkada has put them into. "Open Systems?!? What a great new idea!"

Like it or not, Verkada is where we’re headed.

I think Verkada is going to get acquired for a ton of money because Silicon Valley loves SaaS and loves no-churn (i.e., locked in businesses). We are certainly headed for more VSaaS, for more direct customer marketing but I don't think lock-in will be the norm. There are enough sophisticated customers out there and there will be enough horror stories over the next few years as many Verkada users realize what it means to be stuck... unless Verkada opens up before then.

I've sat thru the demo and I drink from my Yeti every day. That being said - selling a completely proprietary surveillance solution that doesn't work with any standard out there is embracing the world of IoT. It is embracing those that find something, pick their narrow target market and make their millions without understanding or caring what that does. Most people sell some type of semi-propritary access control solution where at least some parts can work with other systems if the client dumps that system down the road. In the case of this solution, if their investors are tired of feeding the beast and cut them off down the road - the clients are left with cameras and access control (haven't looked at the access solution yet - maybe you can reuse the readers?) that must be fully ripped and replaced, no audit trail, no video backup. At least if the VMS company goes out of business you can buy the VMS of your choice that works with standards based cameras and get back going. On top of that you could take the old servers and put them on the shelf to save data if you need to... Startups are an important part of innovation and we need that. But, as industry professionals we owe it to ourselves and our clients to make sure we are providing a solid solution that provides a true security solution and is not just lining peoples pockets for the short gain while possible leaving our clients hanging. I may be wrong. Verkada may take over the world and become the next Microsoft or Apple or Google. But - at least for me - I'm gonna drink from my free Yeti, watch a webinar or 2 to keep up on the new stuff to make sure I stay ahead of the curve and sell the tried and true stuff. Just my 2 cents.

Verkada sells a lower-cost, acceptable quality camera with an onboard storage device and a convenient cloud-routed connection strategy for reviewing the remote storage at the device.

They don't support ONVIF, so you have to use their platform to use your cameras. You pay a relatively significant fee per-camera, per year, to use this platform.

After your reach scale, it becomes difficult and expensive to change. With essentially any other party, if you wanted to change your VMS, you buy new licenses and spin up new servers. With Verkada, you have to also rip and replace your cameras, which will be prohibitive to most SMBs.

Verkada is the new lock-in alarms provider, trying to use their venture capital to tip the industry away from open standards, which is going to be frustrating, expensive, and will ultimately reduce innovation.

This is a fantastic post, Jacob -- very well said.

I completely agree with you that the core technology of Verkada is solid and downright impressive in some respects, and it's crazy to argue that. There are some huge drawbacks to the platform -- i.e. vendor lock-in, lack of compatibility with third-party cameras, lack of integrations options, etc -- but the base video technology is very good.

What you didn't come out and say is something that I will say outright -- based upon my experiences with them, I consider them to be not only largely misinformed and misinformers about the industry as a whole, I simply find them to be complete slimeballs. They may be good with the fact that they don't understand the "traditional" industry, but that doesn't mean that you can just lie and make things up because it fits your narrative. I've seen that happen on multiple occasions.

Additionally, their entrance into the access control market is an absolute joke. The lack of OSDP support is a significant piece, but is hardly the full missing piece of the puzzle. I'm not going to go into detail on some of the other issues that exist in their products by default, but they'll be discovered and discussed soon enough here I'm sure.

I expect that one of these days, Verkada will "grow up" and develop into a decent, reputable company with a suite of products that make them competitive across the board in the marketplace. But that day is not today, and I don't expect that it will be for another 4-5 years at least. Their products need to mature, and their company needs to mature A LOT before they'll be a serious player for anyone other than small companies with IT guys running "security".

My sentiments exactly. The actual product could be good (though I haven't tested it), but the shady marketing just keeps overshadowing that--to the people who pay attention to the industry, at least.

I think this hyper-aggressive approach will only get them short-term wins. You can only get so far by lying and insulting. Eventually the bad reputation you accrue won't be limited to just people in the know. It will leak into popular opinion and then you'll have to spend a lot on PR to fix it.

For the first few years, Verkada has seemed to be perfectly okay with this strategy. Hopefully they'll change soon.

From a Capital prospective (having worked in the VC business for more than 10 years) they are with their back against the wall. They raised $40M at $500M pre-money valuation which was 25x of revenue (already insane valuation) burned through this money in less than 9 month just to raise $80M at $1.5B valuation (est. $60M revenue at best). For what? A little bit of software - no real IP?

1st this is a Texas HoldEm style game "ALL IN"

2nd Let's put perspective, let's take a highly successful security company such as Arcsight which after 12 years and at $350M in sales (hard, hard work) with a direct sales force, SEs, presales, sold for $1.5B (4.28 x sales which by the way is a reasonable number and in the VC industry you get up to 10x before a company is fully established - Series A or B).

What is the conclusion of this?

a. I can't see an easy exit, because last money in wants to see profit which means we are looking at an M&A price north of $2B which conventionally means at the minimum $400M in sales

b. What happens if they burn through this money again - closure? Especially in the current financial markets it is not easy to raise another $80M and get a severe down round if investors believe in the fundamental technology.

So the entire marketing and pasturing sounds to me like a Hail Mary

Some could argue Avigilon. My opinion of them when they first gained notoriety was very market department led (Or sales I guess you could argue). Their classic replace 28 cameras with one Avigilon camera sort of nonsense. Heavily pushing their own codec.

They seem to have matured quite a bit, now being apart of Motorola.

Next time someone accuses IPVM of being anti-China and pro-America...

#12, thanks, that's very insightful!

But btw:

Relentless sales team of good looking silicon valley duchetard mimbos

Sigh, and this is coming from someone who is on net, pro-Verkada. Hans, take note.

So with all that in mind, out of the three, which would you pick & why?

Good question, tough question! I can help with feedback on financial health. I don't think that Rhombus has much of a chance of going out of business and while Verkada will certainly 'be here tomorrow', the tougher and more appropriate question is in what form these companies will be in.

Take Verkada -

The best-case scenario for the company is that they continue to grow revenue quickly allowing them to develop features both broadly and deeply, meaning their customers get a wide array of functionalities. As such, despite the lock-in, Verkada is so 'good' that most are happy to be locked in.

The worst-case scenario is that growth decelerates, investors become frustrated, the company constrains R&D investment, and while the company is alive, the offering's growth in features and capabilities is poor. Customers grow increasingly frustrated by being locked into this

As in most cases in life, the reality is typically somewhere in between and it's hard to project the future.

it's a one-time cost for a fixed term (5-10 years) and then I refresh. I mean, when you buy a copier for your work, do you think "but what will this be like 30 years from now?", I sure don't - we refresh copiers every 5 years like clockwork when a lease runs out.

Maybe you use video surveillance systems like you do copiers and, if that is the case, the future does not really much mater as long as the company goes out of business.

I think most video surveillance buyers do (or at least will need) to have their video surveillance systems evolve over time. One fundamental element is the sheer number and types of devices (from PTZs to fisheyes to multi-imager to covert to anti-ligature etc.). Another is the variety of software functions one may want and the benefits of integrating various types of security systems. Open systems are critical to being able to deal with that, most buyers soon or later are going to realize that being locked in is a real problem.

I do get it's the easy button today but I am quite confident that down the line (and it may ironically fall to the buyer's successors 3 or 5 years from now) that the customer will be frustrated by the problems with lock-in.

then shouldn't I be focused on the 98% of my other duties and not worry about it so much?

Btw, this is a really insightful point too. I do agree if video surveillance is an afterthought, I totally see the logic of getting the easiest thing so you can move on.

On the other hand, I am still confident that most users will realize over time getting locked in will cause more problems. But we will see!

A correlation between vendor lock-in and auto patching/maintenance is a total myth. RingCentral for example does not make phones. RingCentral prides themselves on being open.

The same is certainly true in the surveillance industry. Very easy to get a modern cloud platform that auto-patches Axis camera firmware for example and then there is no fear with the lock-in. The two are not synonymous. I know that both Arcules and our platform both handle full lifecycle maintenance on Axis cameras for example. I'm sure there are others.

Fire us or Arcules and that massive hardware investment is still safe.

As for cost, yes, it's likely Verkada is highest priced of these three vendors and may even cost more than virtually any other system over the long haul. How much more? I wish I knew, and sometimes, I just don't care.

does anyone in the company "care" about the value proposition? or is the difference in cost just a drop in the bucket for your firm?

The above makes a lot of sense in relation to SMBs and low-risk organisations which won't be needing to review their systems all that much. And there's a massive market for buy-it-and-forget-it security that makes it really simple to go look at a couple cameras a few times a month if you really need to.

Businesses in a growth phase that goes from tens of cameras to hundreds or thousands of cameras deployed, especially once they build up some sort of security center which has to regularly be in their cameras, will start missing a lot of the more detailed and powerful automation a dedicated VMS or 3rd party systems enable. It'll be too bad at that point when they're looking at a very big spend to replace lots of hardware.

option #4 = none of the above. It is a fallacy to be limited in choice to only those 3. If you want to 1 - not have on premise servers, 2 - not have thick clients, and 3, have continuous updates pushed automatically = then there are options through companies like Vaion, Open Eye, Eagle Eye and coming soon - Qumulex where you can accomplish all of the above with non-proprietary cameras with on-board storage. The bridge would be the only piece of equipment that would be worthless if you switched platforms. I'm all for your proposal of a 5 year life cycle and have any customers who don't have a piece of equipment on site older than 5 years, and some even 3 years. However, what happens when next year you need to switch to a platform that meets a business need and now you have to do a 100% forklift of existing equipment in order to make the switch. There are many reasons that we don't even know about that could make this a reality - ie - Covid-19 response. I'm not your CFO nor am I accountable to those with financial interest in your company but in my opinion, the decision to go down that road is fiscally irresponsible when there are other platforms that exist that do more for less money and don't lock you in.

i think you are exactly right that they chose their GTM strategy using this Boiler Room sales method for specific reasons... i.e. to spawn immediate and spiking growth.

this adds value for the investors - at least on paper.

as long as they can continue the ramp-up in new customers, they continue to grow in 'value'. once that growth spike ends, expect to see hundreds of former sales people looking for new opportunities.

Is Vaion selling / developing cameras with onboard storage, or is it just NVR & cloud options?

Yep this is the answer. The solution that ticks all of these boxes is going to be the way forward.

Related: Verkada Attacks ONVIF and The IP Camera Lock-In Trend: Meraki and Verkada

For others, Verkada has been steadfastly opposed to opening up their cameras. Oh, and Meraki is now supporting RTSP, we tested that last week and will be releasing results of that soon.

Yes, they have a training program for door access. You must take the training and pass 3 different tests before you are allowed to sell the product. Total time to get through training is about 8 hours.

To answer your question - Verkada sales reps hammer direct end-users and then "toss the deal" over the fence to a partner. They get the deal all but sold and use it to try and "steal integrators" (this is in quotes for a reason). We have had some very loyal integrators tell us flat out - "your product is way better, but I'm not going to tell Verkada no when they hand us a signed deal".

I have seen this done with CDW quite a bit from Verkada as well. They have dedicated sales reps for the CDW account and they will go out and sell a deal and throw it to CDW to run through the web store. They do a nice chunk of revenue there.

Yeti is old, new for Verkada is $40 Uber Eats gift cards:

In fairness, the Verkada $25 Uber Eats giveaway is more common, including at the broken Verkada Fortify conference last week.

It is interesting to see where Verkada is setting the bar at giveaways.

Like a computer systems engineer starting an electrical engineering company on the basis of "I'm an engineer, too."

While I kind of agree with you, I think you're oversimplifying the situation a little.

The Twitter hack was bad, yes. But the majority of the cloud "hacks" I've been seeing in the news were different. Most of it has been companies leaving unprotected databases exposed to the Internet. Don't get me wrong - that's still pretty bad - but it's a different type of threat. Thanks to the Meow attacks, I expect this to happen less frequently in the future (could be wrong though). Hopefully, developers will learn security 101 if they can't leave a database online for more than a few hours before it gets wiped.

Now, you mention cloud attacks, but what about attacks against the end-users? Every week it seems like there's another company or organization that winds up with ransomware and has to fork over a few hundred thousand or a million dollars. Unlike the cloud database situation, I expect ransomware to continue to be a threat and possibly get worse. Leaving unprotected databases online is a simple no-brainer don't-do-this thing. Ransomware is an intelligent threat run by criminals who adapt every time we find a way to stop them.

The upshot is that once you ignore the unprotected databases, the cloud may be (or become) safer than on-prem solutions.

Think about budgets. When you work in the small-to-medium business world, you probably don't have much budget for cybersecurity training. Cybersecurity has a visible cost but hidden benefit. But for cloud companies who know they're going to be attacked, well, it may be easier to get the budget approved.

That said, as an IT director, I'm still a little suspicious. Even though I know I'm not the best, I'm extremely uncomfortable delegating responsibility outside of my organization unless it's a company I really trust. Rogue admins, irresponsible admins - they really are a threat, even thought it may not happen often. (Kind of like lightning strike or shark attack fatalities - it's real and you can be scared, but it doesn't happen that often.)

For the moment, cloud is kind of new. You have lots of startups still learning their lessons the hard way. Would I trust a company like Verkada? Well, considering that half of their headcount is sales, it makes me question what their priorities are.