Which Video Surveillance Companies are at Most Risk?

Author: John Honovich, Published on Dec 07, 2008

Assessing risk during a recession is critical. During boom times, company failures are rare. As such, partnerships or product choices can generally be safely made with almost any vendor. However, in a downturn, companies can fail or be forced to dramatically reduce their development and support efforts. Such actions can have a significant impact on partners and users.

This assessment considers the risk of a company (1) suffering significant cutbacks, (2) being sold in distress or (3) going bankrupt.

The 2009 Video Surveillance Industry Guide provides extensive analysis on the risk level of 27 leading video surveillance companies. 

This report provides an overview of the analysis to help present the fundamentals and key points in examining company risk.
Criteria for Assessing Risk
I recommend 4 main criteria for assessing company risk:
  • Growth Rate of Segment the Company is in
  • Profitability of Company 
  • Cash Position of Company
  • Competitive Positioning of Company's products

This certainly requires some estimation as companies often will not disclose or will try to mislead analytsts and industry participants on these facts (e.g., how many companies will admit their products are uncompetitive).

Summary of 10 Company's Risk Profile

In the Industry Guide, I assessed 27 companies. Here are a sampling of 12 of the most well known companies and the assessment I provide.

Company Risk Level Product Category
ObjectVideo High Video Analytics
Vidsys Medium to High PSIM
Cisco Medium to High Video Management, IP Cameras
IBM Medium to High Video Analytics
Cernium Medium to High Video Analytics
March Networks Medium Video Management, IP Cameras
American Dynamics Medium Video Management, Cameras
Pelco Low to Medium Video Management, Cameras
ioimage Low Video Analytics
Envysion Low Video Management
IQinVision Low Megapixel Cameras
Milestone Low Video Management
Axis Lowest IP Cameras

Examining Cisco's Risk

Let's use Cisco as an example to examine risk. While they are targeting a high growth rate segment and they certainly have plenty of cash (as a company), it's highly unlikely that the video surveillance offerings are profitable and it is abundantly clear that the products are not competitive.

In such a case, one of three options are likely for Cisco: (1) reset, (2) slow down or (3) exit from video surveillance.  A reset is where they buy new company or companies to rectify their uncompetitive offerings. A slow down is where they keep their existing products but limit new product development. An exit means they end of life their product offerings and simply partner with existing video surveillance companies.  

Cisco, as a company, would likely maximize profits by simply exiting the market and partnering with video surveillance leaders. Their current strategy is not working for them and has simultaneously created fear and distrust among most video surveillance companies (organizations that could otherwise be key partners).

Note: I do not believe Cisco has any risk of bankruptcy. The risk factored is solely for their video surveillance business line.

Conclusion

It has been over 7 years since the video surveillance industry has experienced a downturn. As such, most video surveillance professionals have not seen a downturn in the industry. It is easy to underestimate the significance of this.  Nonetheless, major changes are bound to occur and the impact on partners and customers can be very significant.

Related Reports

Arcules Cloud VMS Tested on Nov 19, 2018
Arcules is a big bet, or as they describe themselves a 'bold company', spun out and backed by Milestone and Canon.  But how good is Arcules cloud...
French Government Threatens School with $1.7M Fine For “Excessive Video Surveillance” on Nov 14, 2018
The French government has notified a high-profile Paris coding academy that it risks a fine of up to 1.5 million euros (about $1.7m) if it...
Beware Amazon Go Store Hype (Tested) on Nov 13, 2018
IPVM's trip to and testing of Amazon Go's San Francisco store shows a number of significant operational and economic issues that undermine the...
Genetec Privacy Protector Tested on Nov 12, 2018
Genetec has built Kiwi Security's Privacy Protector into Security Center, an analytic which anonymizes individuals in cameras' fields of view...
Kogniz Silicon Valley AI Startup Profile on Nov 07, 2018
Kogniz is a Silicon Valley company that aims to bring AI analytics to security and surveillance, centering on their own smart cameras: We spoke...
Avigilon Opens Up Analytics And Cameras on Nov 06, 2018
Avigilon is opening up. The company historically famous for advocating its own end-to-end solutions and making it harder for 3rd parties to...
Winter 2019 IP Networking Course on Nov 05, 2018
This is the only networking course designed specifically for video surveillance professionals.  Lots of network training exists but none of it...
HID: Stop Selling Cracked 125 kHz Credentials on Nov 05, 2018
HID should stop selling cracked 125 kHz access control credentials, that have been long cracked and can easily be copied by cheap cloners sold on...
Video Surveillance Hard Drive Failure Statistics 2018 on Nov 02, 2018
Hard drive failures can be significant service problems but how common of an issue are they in video surveillance? How long do drives last when...
Contactless Access Credentials Guide on Oct 29, 2018
Contactless credentials are the most common component used in an access control system and while many look alike externally, important differences...

Most Recent Industry Reports

Openpath Access Control Tested on Nov 20, 2018
Big investment in access startups is uncommon, but Openpath has recently attracted $20 million doing just that. The company has limited security...
No GDPR Penalties For UK Swann 'Spying Hack' on Nov 20, 2018
The UK’s data protection agency has closed its investigation into Infinova-owned Swann Security UK, the ICO confirmed to IPVM, deciding to take “no...
Milestone Disrupts Milestone With Arcules on Nov 19, 2018
Milestone is now competing against... Milestone's own spinout Arcules. New IPVM testing shows that Arcules has incorporated a substantial amount...
Pressure Mounts Against Dahua and Hikvision Xinjiang Business on Nov 19, 2018
Pressure is mounting against Hikvision, Dahua, and other companies operating in Xinjiang as an international outcry brews against the Chinese...
Arcules Cloud VMS Tested on Nov 19, 2018
Arcules is a big bet, or as they describe themselves a 'bold company', spun out and backed by Milestone and Canon.  But how good is Arcules cloud...
'Sticker' Surveillance Camera Developed (CSEM Witness) on Nov 16, 2018
The Swiss Center for Electronics and Microtechnology (CSEM) has announced what it calls the: world’s first fully autonomous camera that can be...
ISC East 2018 Mini-Show Final Report on Nov 16, 2018
This is our second (updated) and final show report from ISC East. ISC East, by its own admission, is not a national or international show, billed...
Facial Detection Tested on Nov 16, 2018
Facial detection and recognition are increasingly offered by video surveillance manufacturers. Facial detection detects faces in an image/video...
Throughtek P2P/Cloud Solution Profile on Nov 15, 2018
Many IoT manufacturers either do not have the capabilities or the interest to develop their own cloud management software for their devices....
ASIS Offering Custom Research For Manufacturers on Nov 15, 2018
Manufacturers often want to know what industry people think about trends and, in particular, the segments and product they offer.  ASIS and its...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact