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

D-Link ONVIF Switch Tested on Dec 04, 2017
D-Link's surveillance switches claim to "enhance ease of use and streamline management" for network administrators, with simplified UIs and...
Top Recommended Home Video Surveillance Systems By Integrators on Dec 01, 2017
Friends regularly ask security integrators for their recommendations for video surveillance systems, trying to tap into the expertise of their...
Hikvision Door Station Tested on Nov 30, 2017
Hikvision has entered the video intercom market, aiming to bring the race to the bottom to a whole new audience. To see how it stacks up, we...
Hikvision Vulnerability Permits Wi-Fi Attack on Nov 28, 2017
Hikvision acknowledged a Wi-Fi cyber security vulnerability on November 27, 2017. No special passwords, text strings, or programming...
Camera Multi-Streaming Usage on Nov 22, 2017
IP cameras typically support multiple streams, allowing a single camera to transmit multiple streams at different resolutions, frame rates and even...
Law Breaking Longse Enters USA on Nov 22, 2017
Longse has established itself as world class, at least in spamming the industry, ripping off Milestone and Video Insight as well as Hikvision. But...
Panasonic Unified Surveillance Strategy Analyzed on Nov 17, 2017
Panasonic is now a "Unified Surveillance" offering, as their ASIS 2017 booth proclaimed: Looking to make a comeback in the security industry,...
Hikvision NVR 4.0 Improvements Tested on Nov 14, 2017
Hikvision has released firmware version 4.0 for select NVRs, touting two years of research and development, and claiming "the new generation GUI...
Hikvision 4K IR PTZ Tested (DS-2DF8836IV-AELW) on Nov 10, 2017
The IR PTZ trend continues, now with 4K resolution, with Hikvision releasing its DS-2DF8836IVAEL-W camera, a 4K 1/1.9" PTZ model specifying 200m IR...
Milestone XProtect Essential+ Free VMS Tested on Nov 09, 2017
Milestone continues to expand its aggressive free and low-cost offerings, with this year, Milestone releasing XProtect Essential+, part of their...

Most Recent Industry Reports

Hiring Camera Calculator Product Manager on Dec 12, 2017
We are working on making the Camera Calculator even better and hoping you can help us find the right person to join our team. IPVM is hiring a...
Testing $20 WyzeCam, The Money Losing Amazon Vet Startup on Dec 12, 2017
This startup is perfecting the old adage: We lose money on every sale, but make it up on volume But it is no joke. The company, Wyze Labs, is...
Xiongmai New Critical Vulnerability - Same Manufacturer Whose Products Drove Mirai Botnet Attacks on Dec 12, 2017
The Chinese manufacturer whose products were primarily responsible for the 2016 Mirai botnet attack has a new critical vulnerability, confirmed by...
Robot Vandalism on Dec 11, 2017
Vandalism of security systems is a common concern. It is so common that camera vandalism statistics show that designers routinely sacrifice camera...
Access Controller Software Guide on Dec 11, 2017
Properly configuring access controllers software is key to a professional access system. These devices have fundamental settings that must be...
2018 Video Surveillance Cameras Overview on Dec 11, 2017
This report concisely explains the developments for surveillance cameras offered in 2017 and the state of offerings going into 2018, including...
Imperial Capital Security Investor Conference Review on Dec 08, 2017
Investment bank Imperial Capital holds an annual Security Investor Conference where 60+ companies present, including this year: IPVM bought a...
Integrator GPS Vehicle Tracking Statistics and Success Examined on Dec 08, 2017
GPS vehicle tracking is a growing but somewhat controversial topic. On the plus side, tracking may increases productivity by providing greater...
Hikvision NA Biggest Sale of 2017 on Dec 07, 2017
Hikvision North America has been relatively disciplined the past 5 months, reducing the number of sales and the breadth of what is on sale. No...
Security Integrator IT Expertise Statistics on Dec 07, 2017
20 years ago, putting physical security systems on IP networks was just emerging. Today, almost every system is networked in some way, IP cameras...

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