Vicon CEO: Market Acceptance of IP Quicker than ExpectedBy: John Honovich, Published on Apr 17, 2010
Following a string of poor performing quarters and plummeting revenue, Vicon's CEO offers a frank and challenging outlook for his company and analog incumbents. In his letter to shareholders in Vicon's 2009 shareholder report [link no longer available], he admits the following key points:
- For 2010, Vicon "anticipates capital expenditure funding, particularly in the private sector, to remain tight with intense competition for funded projects."
- "The security industry transition to IP or network video greatly accelerated in 2009. In fact, almost all of the projects we now compete for employ network video to some extent."
- "Quicker than anticipated market acceptance of IP video has accelerated camera technology and related user situational management applications"
- "Anticipating the future of electronic security, it is apparent that software development will be a significant hurdle for the Company."
- "As the security industry inexorably moves to software solutions from a predominately hardware orientation, the challenge of revenue growth becomes more acute."
- "Given today’s user preference for IP based systems, Vicon’s future growth potential may be limited as a video only company."
We think this is a frank and fair assessment both of Vicon's challenges as well as their peers including American Dynamics, Pelco, Dedicated Micros, Honeywell, etc.
We called attention to the acceleration of IP video transition in March 2010.