The VMS Price Wars Have Begun

Author: John Honovich, Published on Jan 11, 2011

Until 2010, the VMS market enjoyed peaceful growth. Now, with unprecedented price drops, the market faces great turbulence and changes. Users should gain from manufacturer's pain.

Out of nowhere, last summer, Milestone dropped the price of its entry level VMS by more than half and then released a new version for free. Their competitors were caught flat footed, most in denial or disbelief of Milestone's actions. After all, VMS prices for software supporting 3rd party IP cameras have been relatively stable for years. For the rest of 2010, the market was rather quiet. Last month, Milestone noted how their moves was accelerating traction in the market.

Now, Russia's most well known VMS supplier, Axxonsoft has not only matched Milestone's moves but doubled the scale of their free offering - providing an even cheaper and more expansive entry level offering than Milestone. We've tested Axxon's free offering and found it to be quite solid.

The move makes good sense for Axxon as Axxon is aggressively expanding into Western Europe and the US (strongholds of incumbents like Milestone and OnSSI). Giving away free VMS software allows them to build their user base quickly while attacking the profitability of their established competitors.

Axxon won't be the last. Momentum is building. It's a vicious cycle for manufacturers. Each new one who drops their price forces the others to match or to suffer the consequences of being priced out of the market.

Projections

We project that by the end of 2011, the new price range for entry level VMS software, per camera, will be from free to $50 USD. This is a massive price drop from the beginning of 2010 when the price range was $100 - $150 USD.

We expect at least 6 more well known VMS providers to release free or heavily discounted VMS software by year's end.

This will put enormous pressure on VMS providers, of course, and will also hurt DVR providers and VSaaS (as they will be forced to match price decreases - these solutions are direct substitutes).

Whatever VMS companies do not match will essentially be waving the white flag and exiting the small to mid size market. Worse, they may hurt their ability in the large scale markets as well. Many integrators will become comfortable with the skills and experience they gain from using the free offerings and then prefer to simply upgrade to that supplier's premium/paid versions.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

How Users Gain

For 10-20 cameras, you should expect to save $1,000 per project. In a small project, this could reduce the total cost of the job of 5-10% - a nice savings.

How This Makes Business Sense

Most VMS suppliers will make money by giving away basic VMS software and charging for more advanced features that are important for larger camera counts or complex security needs.

Because the Internet makes it cheaper to distribute software, this type of model - generally called freemium - is validated as profitable path that provides low cost marketing.

For more on VMS software and these fast changing trends review our in-depth reports on:

What Do You Think?

Vote in our poll:


3 reports cite this report:

Panasonic Free VMS Licenses Program on Apr 21, 2015
Looks like Tyco is a trendsetter. Weeks after Tyco starting giving free Exacq licenses, Digital Watchdog followed suit and now the biggest camera...
Winners and Losers Spring 2011 on Apr 12, 2011
Now that the dust has settled from the numerous new announcements of the last month, we can better understand the impact on the overall video...
Mobotix's 2011 Challenges and Future Plans Examined on Mar 20, 2011
While Mobotix's growth continued and accelerated at the end of 2010, we believe the company faces new challenges as competitors catch up to a...

Related Reports on VMS

Artificial Intelligence Robot Assistant (ACTi) on Feb 23, 2017
Has artificial intelligence come to the video surveillance industry? ACTi has released 'SARA' which it bills as an 'AI assistant that brings...
Cutting Costs 70% Using Milestone With HD Analog on Feb 23, 2017
HD analog and enterprise VMSes are often thought of as being on opposite sides of the spectrum, with HD analog best for small jobs due to its low...
Exacq Favorability Results on Feb 22, 2017
For years, Exacq has been one of the most frequently favored VMSes in IPVM integrator statistics (e.g., see Favorite VMS Manufacturers...
Milestone: "Easy Money Days Are Over" on Feb 17, 2017
Contrary to IPVM's criticisms, Milestone has reaffirmed that glory days remain. But they admit that they 'easy money days are over': Are the...
Panasonic Favorability Results on Feb 16, 2017
Panasonic is one of the largest brands in the world and a long term provider of both video surveillance imagers and cameras. But, like all...
Hikvision Silicon Valley and Canada R&D Expansion on Feb 15, 2017
After massive growth in their sales team, Hikvision is now planning to add two new R&D centers in North America. In this report we examine...
Bosch/Genetec Video Cybersecurity Partnership Examined (CHAVE) on Feb 15, 2017
Surveillance products have been relatively weak when it comes to cyber security. Default passwords, open ports, and weak authentication mechanisms...
Avigilon New VMS Version ACC6 Examined on Feb 13, 2017
Almost 4 years after ACC5 was released, Avigilon is releasing the next major revision of their VMS, which includes their Appearance...
Hitachi Taking On Security Industry on Feb 09, 2017
Hitachi, bigger than Sony and Panasonic overall, with $89 billion USD 2016 total revenue, is expanding into the security industry. They are...
Milestone App - PSIM Lite (Alesys) on Feb 09, 2017
Milestone has many features in their VMS, but it is not a PSIM. Italian PSIM developer Alesys thinks sensor integrations and alarm management can...

Most Recent Industry Reports

Artificial Intelligence Robot Assistant (ACTi) on Feb 23, 2017
Has artificial intelligence come to the video surveillance industry? ACTi has released 'SARA' which it bills as an 'AI assistant that brings...
Cutting Costs 70% Using Milestone With HD Analog on Feb 23, 2017
HD analog and enterprise VMSes are often thought of as being on opposite sides of the spectrum, with HD analog best for small jobs due to its low...
Dahua 4K HD Analog Cameras Announced on Feb 23, 2017
HD analog has been gaining popularity (even if Axis hopes otherwise). Last year, HD analog's max resolution doubled from 1080p to 4MP (see our 4MP...
Uniview (UNV) IP Cameras Tested on Feb 22, 2017
"We're #3," in China says Uniview (UNV). While the company significantly trails Hikvision and Dahua in total sales, one notable difference is that...
Glass Doors and Access Control Tutorial on Feb 22, 2017
The biggest challenge for many access control systems are glass doors. Here's what happens when a maglock is improperly installed to an existing...
Exacq Favorability Results on Feb 22, 2017
For years, Exacq has been one of the most frequently favored VMSes in IPVM integrator statistics (e.g., see Favorite VMS Manufacturers...
The Hot RMR Company - Electric Guard Dog on Feb 22, 2017
The financiers at the Barnes Buchanan conference praised a company named 'Electric Guard Dog'. While the name sounds fairly low tech, the money and...
Hikvision Leads Multi-Manufacturer Sales Promo on Feb 21, 2017
Earlier this month, Hikvision launched new 'super value' kits, with 40% discounts, and now Hikvision is offering another promo, but this time they...
Washington DC MPD's Surveillance Equipment on Feb 21, 2017
The Washington DC Metropolitan Police Department's surveillance system was hacked in January 2017. Two immediate questions were: Whose...
Hikvision Ezviz Mini 360 Plus - $80 Autotracking Camera Tested on Feb 21, 2017
Autotracking, integrated IR, local storage, full HD, cloud access: $80. That is the claim of Hikvision EZVIZ's new Mini 360 Plus. But for this...

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