Winners Losers Fall 2014By John Honovich, Published on Oct 13, 2014
We are all losers, IPVM included.
And that is bad news for all. Broad innovation spurs overall demand. Much like a rising tide lifts all boats, this situation makes navigation tougher for all and many more likely to sink.
Overall market growth has already been declining and this year's releases ensures further downward pressure in 2015.
In this report, we review who is winning and losing among a number of notable manufacturers, including:
- Vicon / IQinVision
Also, we review how well recent new products that garnered the most initial interest are doing now, including:
- Axis access control
- Axis Camera Companion
- FLIR super low cost thermal
- Genetec Stratocast
- Milestone Arcus
- The Security Robot
Avigilon had, relatively speaking, one of the best fall release offerings. The most notable was the new Avigilon analytic cameras, which offers a much broader portfolio at significantly lower prices than VideoIQ, who even with its limitations, was the 'favorite' analytic. Their other announcement were NVRs with integrated PoE, an OEM of Dynacolor, also available to competitors like Milestone, OnSSI and Exacq, through Razberi. However, by selling it direct, they can more aggressively sell it and more directly support it.
The big downside of Avigilon is its falling stock price, both reflecting internal management issues and likely causing more, if they cannot right their problems.
Axis was clearly the most disappointing manufacturer.
They have ~$100 million R&D budget, more than the revenue of most of their competitors. And with that they released a card reader, mobile apps, a Dell OEMed NVR and a (super) PTZ accessory. Though certainly better than their average competitor, it is not commensurable to their overall market standing and spend.
In particular, Axis position at the low end of the market continues to deteriorate based on Axis lack of new releases in this space and the aggressive expansion of their key Chinese competitors (i.e., Dahua and Hikvision).
After a few years where Bosch went from practically nothing in IP cameras to become a strong competitor, Bosch major new releases have been minimal (most notably the super low light 5MP we tested earlier this year).
The 4K camera(s) Bosch first announced 18 months ago are evidently finally now coming to market after a near historic long delay.
Dahua' HD-CVI has been the most impactful new product release of the past year. Its super low cost, simplicity and true HD quality makes it the most meaningful potential 'game changer' in the market.
Dahua's weakness remains on the marketing side, which can be a critical failure. Their OEMs tend to be low end and without much professional market pull (e.g., IC Realtime and Q-See). Their biggest brand partnership is with FLIR who has strong brand but are new entrants into conventional surveillance.
Dahua's ASIS showing reaffirmed their marketing concerns. Only one available Dahua employee spoke fluent English but he knew very little about the product. The others, who did know more, were hard to understand in English. Dahua's lack of a real international presence will be a big barrier in expanding to more dealers.
More than a year after Tyco acuiring them, Exacq continues to pump out their regular incremental enhancements at a similar rate / pace. Their most recent release is 6.4, which continues to add more enterprise features like Video Push and multi location archiving. These are not novel or unique but help them to continue to close the gap against Genetec and Milestone.
Genetec's 'big' announcement was IP telephony integration, which is clearly a useful feature for larger systems but of limited overall appeal. However, this does help Genetec incrementally in its ongoing evolution to being a PSIM 'unified' system.
Hikvision's biggest new release is HD-TVI, which is their analog HD offering and competitor to Dahua HD-CVI. Their key strength is a well established International sales and support team (opposite of Dahua). IPVM is testing HD-TVI currently and will have analysis / results later this month.
In the past 6 months, Milestone got acquired by a huge company / lagging IP camera competitor, had their CSMO quit for a company falling apart, and then released a DVR as their major offering for the fall.
A weakened Milestone is bad for the industry. Even though they tended to be fast copiers of Genetec releases, Milestone's historic aggressiveness in matching Genetec features with better marketing and lower prices, helped spur the rest of the market to follow.
Pelco's new releases this fall were PTZ and encoders, relatively niche areas. However, earlier in 2014, Pelco did release an arry of cameras.
The big push inside and out of Pelco appears to be customer service, which if they can execute successfully, could be quite useful, especially in an era of increasingly product 'un-differentiation'.
Pivot3 amazingly continues to get funding, with another ~$12 million earlier this year, despite their limited overall traction. This fall, they released a virtual video surveillance viewing solution which is a repurposing of their VDI solution for the IT market that has limited application in security.
On the plus side, they are still in business, which is more than can be said for their direct competitor Intransa, who silently went bankrupt and has now morphed into a video monitoring service provider.
After a year of significant new releases (around WiseNet III), Samsung has been relatively quiet, most notably promoting camera apps and 1280H. Like Axis camera apps limited success, we do not expect much from Samsung's offering. 1280H is an embarrassment and will not go anywhere (see test results).
At ASIS, Sony was the big manufacturer whose challenges were most discussed, following their GM's ouster and their small booth.
On the new product side, Sony remains limited, with their most notable new release a bullet camera with both integrated IR and white light, which is different, though niche.
The big challenge is: where does Sony go now? They do not have the breadth of Axis. They are quite expensive. They have many negative customer service reports.
Sony is Sony so they are not going to disappear but they are on a downward trend.
Vicon / IQinVision
On the plus side, their merger and hiring of the ex Milestone executive gives them a last chance. On the negative side, the new CEO's plan tries to mimic the Milestone / Canon which is a bad idea for Milestone and a far worse one for Vicon / IQinVision who are much further behind.
Relatively speaking, it has been a good year for the two companies who were both individually heading toward death. Now, they have a shot if the CEO can put the right plan together.
Axis access control
Axis access control is shaping up to be a channel play for Axis without significant competitive or technological differentiation. However, given Axis reach this will have an impact but not likely a major one overall.
Axis Camera Companion
Camera Companion was initially very well received as a way to eliminate NVRs / recorders. Then it got hit by a series of reliability problems plus super low cost analog HD emerged, killing Camera Companion's momentum. For now, it appears to be a niche.
FLIR low Cost Thermal
When they are finally released, FLIR's low cost thermal may have an impact. The key constrain is the very low 80 x 60 resolution of the thermal sensor but testing will be needed to ascertain how broad of an impact it will have.
Like the VSaaS market as a whole, Genetec Stratocast appears to be going nowhere. Really not much more to say as it suffers from fundamental technology constraints, not execution issues.
Acrus, like Axis Camera Companion, has been a dud so far. No major camera manufacturer has selected it.
The most potential for Arcus remains on the embedded storage side (like running it on NAS appliances, etc.) but we are not seeing / hearing much uptake for that yet.
The Security Robot
The Vigilus Robot was one of the most different new releases in the past few years. The company is still showing it and getting a little more sophisticated with their markets but have yet to give a good reason why one would use 'robotic security.' It still may find some niches but it appears we are a decade, or more, from a general purpose security robot.
4K cameras were probably the most visible new product theme at the show, especially given how little else there was being shown.
However, since this was the 4th trade show season with such promotions and still such limited availability, it appears the industry has little excitement. Of course, even worse, higher resolution 10MP cameras have been available for years without major adoption. Adding 30fps is unlikely to be the big breakthrough.
That said, once 4K cameras are broadly available, in 2015, this will be one area of new product adoption, though with limited success.
Though H.265 claims / hopes to reduce bandwidth consumption by 'up to' 50%, we appear to be far away from production surveillance support for it. Despite widespread user interest, we do not see / hear manufacturers pushing to roll it out. Key factors cited behind lack of adoption include limited chip support, high decoding processing power for 'true' / full H.265 and need for VMSes to add support.
For a decade, video analytics has remained the next big thing for surveillance and it has continued to disappoint during that time.
However, there is little trust in the community for analytics overall. Moreover, Axis has done a very poor job of supporting analytics. While Axis supports dozens of add on analytics, they have placed no real marketing effort in promoting or standing behind those offerings. Axis is critical because their marketing (and product capabilities) could build trust back up.
All the big brand Western manufacturers need analytics to work to stop price reductions and defections to Chinese manufacturers who are increasingly matching image quality performance at far lower prices.
Analog HD is a promising but dangerous innovation for the industry. On the one hand, it offers the same fundamental HD video at much lower prices and complexity. This is clearly attractive to end users. On the other, it cuts prices and across the marketing efforts that the major manufacturers have been pushing for 5 years now. Because of this, we see little motivation nor interest from incumbent Western brands to push this.
Analog HD adoption will depend how well the Chinese manufacturers can market it and if any of the major incumbents 'defect' to promoting it.
What's Next for the Industry?
We see the big two potential growth drivers being video analytics and analog HD, but both have their own challenges.
For analytics, the product(s) are still overall questionable but the business case is solid (sell better products for a premium).
For analog HD, the product(s) are straightforward but the business case is questionable (simply because incumbent manufacturers are not motivated to sell products for less money).
The short term should be challenging but what happens beyond then will be largely determined by how well video analytics and analog HD grows.