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

Lock Keyways For Access Control Guide on Mar 23, 2017
Lock keyways can be the difference between a lock working or not. Understanding keyways is important for access control. Indeed, a member recently...
ObjectVideo Acquired by Alarm.com on Mar 14, 2017
Once potentially the most recognized name in video analytics, ObjectVideo has effectively been sold for pieces. Alarm.com has now acquired what...
Burglar Alarm Screens Tutorial on Mar 14, 2017
Many residential alarm subscribers arm their alarms before going to bed at night. Wiring window screens allow these subscribers to leave their...
Hikvision People Counting Tested on Mar 09, 2017
People counting has historically been a difficult task, requiring specialized cameras, expensive software, and careful camera placement. But in the...
Positive Video Surveillance Outlook - 2017 Statistics on Mar 07, 2017
376 manufacturers and integrators revealed their outlook on the future of the video surveillance industry in a recent IPVM survey. Both groups are...
Integrator Service Vehicle Guide on Jan 23, 2017
Few assets are as commonly used by integrators and installers as their service vehicles. 125 integrators explained to IPVM in detail about their...
IP Networking Course January 2017 on Jan 12, 2017
This is the only networking course designed specifically for video surveillance professionals plus it includes live training, personal help and...
Calculating Video Surveillance Storage / Bandwidth on Dec 29, 2016
Calculating surveillance bandwidth is complex, and inexperienced users can easily underestimate bandwidth, leading to reduced storage durations...
Axis CTO: Deep Learning 'Exciting Space' But Urges Caution on Dec 27, 2016
Deep learning interest is rising in video surveillance. 2016 saw: Hikvision's partnership with Nvidia Movidius launch a neural networks chip...
Lux Rating / Minimum Illumination Guide 2017 on Dec 23, 2016
Lux ratings are one of the poorest specifications to use in selecting cameras. Now, with the rise of integrated IR, they are increasingly...

Most Recent Industry Reports

Everbridge Mass Notification Service Examined on Mar 24, 2017
Everbridge is expanding in the security space. In January 2017 Everbridge acquired PSIM platform IDV, and have also begun integrating with other...
Hikvision Removing Auto 'Phone Home' on Mar 24, 2017
Facing pressure over their cameras auto phoning home and their Chinese government ownership, Hikvision has begun quietly removing automatic...
Axis Camera Vulnerabilities From Google Researcher Analyzed on Mar 23, 2017
A Google security researcher has reported 6 vulnerabilities for Axis cameras, affecting multiple models and firmware versions. In this report, we...
OpenEye Takes Aim At Exacq on Mar 23, 2017
First Milestone targeted Exacq with a takeover offer, and now OpenEye is gunning for them with an offer to swap out Exacq for their cloud-managed...
Lock Keyways For Access Control Guide on Mar 23, 2017
Lock keyways can be the difference between a lock working or not. Understanding keyways is important for access control. Indeed, a member recently...
Broken Browser Support for Video Surveillance on Mar 22, 2017
Modern web browsers have left the security industry behind. Current Chrome, Firefox, and Microsoft Edge browsers do not support NPAPI plugins,...
ADI Favorability Results on Mar 22, 2017
150 North American integrators provided feedback on 6 distributors, and why they do (or do not do) business with ADI. ADI is clearly a big name in...
1 Million Dahua Devices Exposed To Backdoor on Mar 22, 2017
Statistics show that 1 million Dahua devices are publicly exposed and vulnerable to the Dahua backdoor. Despite this, Dahua has downplayed the...
Hikvision Hires Crisis Communication Writer on Mar 21, 2017
Hikvision has hired a crisis communication writer as the company ramps up its efforts to deal with the 'crisis' it feels it is facing. 'Crisis...
Glass Break Sensor Tutorial on Mar 21, 2017
Burglars often break glass windows to get into a house. Using glass break detectors in conjunction with alarm contacts is a good way to protect the...

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