Genetec & Milestone vs Avigilon & Exacq

Over the past few years, the two most frequently cited names cited for professional VMS systems have been Milestone and Genetec. As two of the first pure IP recording solutions, over the past decade, they established their footfold and market strength. Now, though, Avigilon and Exacq are increasingly strong contenders in the race for VMS supremacy. In this note, we examine the competitive positioning of these four companies.

Regular readers will remember that, in our survey of integrators last year, these 4 companies secured the top 4 stops in the VMS favorite rankings.

Financial Positioning

On financial terms, Exacq and Avigilon are catching up. One of the most common criticisms of Avigilon and Exacq was that, despite their good reputations, the two companies were relatively small. For instance, in 2010, Exacq's revenue was under $20 Million while Avigilon's revenue was just over $30 Million.

Now, for 2012, Exacq is on pace for $50 million and Avigion $100 million - compounded annual growth rates of 60%+, excellent even for the high growth IP video segment. By contrast, all indicators show that Milestone and Genetec are growing at significantly lower rates and on target for revenue in the $60 Million range for 2012.

Leaving aside who is number "1" financially, the key point is that Avigilon and Exacq are very quickly catching up to companies who had 5+ years head starts on them. 

Genetec and Milestone Challenges

Both incumbent leaders have challenges that are being exposed:

• Genetec: While the company has great high end features, it continues to do little to strengthen its position in the small to mid size segment of the market (4 - 40 cameras). Indeed, from its actions, it appears to be ignoring that area as it further develops high end features for super large scale projects. This might be their best long term strategy but it certainly opens up the mid market to newer entrants.
• Milestone: Reliability and support problems are their key issues. Worse, from discussions with many Milestone integrators and Milestone's management directly, they seem to be either too oblivious or too arrogant to resolve those problems.

The combination of these two factors has clearly helped smaller, less known entrants gain ground into the VMS market.

Avigilon and Exacq Strengths

Both companies are offering VMS systems targeted at the growing IP Video mid market with offerings that are fairly light weight, easy to use and more tightly integrate with hardware. Exacq has done especially well offering VMS / NVR appliances, an area where Genetec and Milestone are both weak.

Avigilon, though, is even more disruptive, with a combination of:

• Free upgrades instead of costly long term support plans that Milestone and Genetec advocate (Exacq does as well for software only but includes 3 years for their appliances).
• Reduced cost of VMS licenses when purchasing Avigilon encoders, making analog migration especially inexpensive compared to other options. When buying a 4 channel encoder, only 1 VMS license is required to bring all four feeds into Avigilon's VMS.
• A low cost, high resolution camera line that is competitive with top options in the market - none of the other 3 offer this

Where Will This Go?

Certainly, a big part in what happens is how Genetec and Milestone respond to these growing attacks. At this point, we think the companies are well aware and strongly concerned about how Avigilon and Exacq continue to take market share.

Ideally for users, this will spur Genetec and Milestone to resolve their deficincies, improve their offerings and constrain the inroads Avigilon and Exacq are making. However, who knows? Maybe Genetec is content to focus on super large scale projects and Milestone will continue to ignore the obvious danger signs. Whatever happens, this match up will be especially interesting to watch over the next few years.