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Which Video Surveillance Companies are at Most Risk?
by John Honovich, IP Video Market Info posted on Dec 07, 2008 About John Contact John
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.
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.
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Topics Monitored
| Topic |
|---|
| Case Studies |
| Convergence |
| Financials |
| Hosted/Managed Video |
| IP Cameras |
| Megapixel Cameras |
| Retail |
| Standards |
| Statistics |
| Storage |
| Video Analytics |
| Video Management Systems |
| Wireless |
81 Companies Monitored
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