In a presentation at the beginning of this year by Fredrick Nillson GM of Axis Communications he remarked that: “In a tough economy it becomes even more important to evaluate the partners you work with. Do you want to invest in a long-standing partner, or one who runs the risk of not being around in a year or two? Is there a chance the particular division you work with could close down? Long-term partnerships are a major strength of the security industry. Don’t lose that perspective, especially when times are tough.” – Wise words from a company that pays particular attention to cultivating alliances and spends much senior management time in scouring the world to find the right partners. But whilst the ownership and longevity of the partner is important the vital issue is that all the partners win.
Over the last 4 years we have been charting the incidence of alliance and partnership arrangements in the physical security business. We should point out that our sample does not represent the total population but we are convinced it is of sufficient size to confirm the changing trends driving alliance and the importance that both large and small companies are giving to it in order to develop more business opportunities and increase market share.
In the 3 years from 2008 to 2010 the number of alliance arrangements recorded by us doubled from 45 in 2008 to 91 in 2010 and in 2011 it just topped 100, whilst the most rapid growth was in 2009 when the number increased by 75%. For the first 6 months of this year the number of alliances is down by 40% on the same period of 2011 but this smaller number looks more significant in what it could deliver and now involves multiple players joining together.
Particularly in 2008, the vast majority of these arrangements related to partners coming together to make their products automatically communicate and work together. This could be similar products such as cameras or different horizontal layers in a system such as video management and analytical software. A majority of these related to the video surveillance business and a significant proportion of these involved companies joining such programs as the Milestone software platform. As there is not yet a common communications standard, such alliances are vital if best of breed products are to be given a chance to flourish. The other alternative to alliance is to manufacture a complete portfolio of products that have been designed to work together and this is what the major suppliers have been doing for many years; using their own proprietary communications protocol. This method is no longer acceptable to most end users.
End users are demanding full plug and play devices and seamless integration with other control infrastructures including convergence with the business enterprise. Alliance needs to go one step further and extend the digital link to enable end to end communication, so that all the information and data can be brought together seamlessly providing an automatic integrated solution.
Interoperability may no longer be enough. Vendors of IP based surveillance cameras and video management systems are upping the ante on integration certification. They are providing integrators and users with documented validation of more comprehensive functional integrity between their respective platforms. As IP drives more user interest in assembling best of breed solutions, and as standards from groups such as the ONVIF and PSIA are incorporated into commercial products, vendors will find they need a stronger differentiator beyond basic plug and play.
In the last 12 months we have identified more alliance arrangements between manufacturers and system integrators, working together to provide a solution for a particular vertical market and sharing the development and promotion costs.
IT Network design and install companies are crossing the boundary between IT and Physical Security to offer a complete solution but are in many cases doing this through collaboration and alliance with physical security suppliers. Very noticeable of late has been the identity validation suppliers move to integrate with access control. Their preference appears to be to go the whole way and acquire an access control manufacturer.
A visit to IFSEC this year revealed a number of booths showing how Business Intelligence can be gained through IP Video Surveillance systems brought together through partnerships. Two companies Axis and Panasonic had excellent displays showing how in particular vertical markets they had used video streams to provide business intelligence. In both case the concept was instigated by the camera manufacturer as a means to increase sales, but they have worked with other suppliers of surveillance products and access control systems to produce a seamless solution that fitted the needs of the end user. In addition they have worked with system installers and distributors not only to orchestrate the marketing sales strategy but identify new applications where they can add value for the end user.
The trends show that Alliance has moved from just joining different manufacturer’s products together to providing a total solution between all the stakeholders and is driven by what the end user needs in order to deliver real benefits over and above improving the security performance. So if you want to compete with the top camera manufacturers you not only need to be up there close on performance but driving innovation in providing solutions that deliver more value add and a quicker return on the investment for the buyer.
In March this year Tomorrow Venture backed video surveillance start-up Prism SkyLabs, a cloud-based service that allows business owners to bring video feeds online, capture images from these feeds and share this data with consumers and the public, announcing integration with Google+, YouTube and Picasa. This looks like a more oblique but interesting extension of alliance / integration; making it possible for much smaller operations to enjoy the same benefits for a lower cost.
Most business premises, stores and restaurants have surveillance videos running 24-hours a day and unless there is a theft or another crime, this massive amount of surveillance video is unused. This start-up allows a business to download free software that detects cameras or video on a network, and showcases a number of images of the space to the business. Similar to the way you can pull images from videos using video editing software, Prism Skylabs pulls relevant images of your establishment and builds insightful visualizations from these photos, while protecting customer privacy.
More opportunities to work together with new partners will happen in vertical markets not as yet recognised as important domains for Security such as Smart Grid / Remote Transformer sites, Solar and Wind Farms, and Fire Detection. Alliances will almost certainly play a more important role in the future and it would be surprising if the more successful partnerships do not ultimately lead to merger or acquisition.