In this Research Note, we examine the Canon video surveillance businesses, incorporating Canon and Axis Communications hardware, Milestone video management software, Arcules cloud services and BriefCam video analytics software.  This analysis is based on the parent company investor presentations, corporate strategy conference 7^th March 2022 and Axis 2021 Annual Review and Sustainability Report.

Canon video surveillance businesses are reported under the network cameras line of business in the Imaging Business Unit. In 2021 Canon achieved 13.8% sales growth in Network Cameras & Others line of business with 2021 net sales of 220.4 billion yen (around $1.8 billion) versus 193.6 billion yen (around $1.58 billion) in 2020.

In 2021 the network camera market moved closer to its original growth path as the economy normalized. And in 2022 Canon expects the market to continue growing as component shortages gradually ease, and also due to the growing diversity in the way network cameras are being used, from surveillance to marketing, and process control in factories.  

As one of the leaders in network video, Axis Communications, based in Lund, Sweden, is the major contributor to Canon’s video surveillance business, accounting for around 70% of its revenues. With 2021 revenues of 11.7 billion SEK, Axis achieved a sales growth of 9% in local currency and a modest operating margin of just above 7%. The intention is to return to double-digit growth during 2022.

Offering products and services for video surveillance and analytics, access control, intercom and audio systems, Axis has around 4,000 employees in over 50 countries. Axis applies an indirect, go-to-market business model based on long-term close collaboration with partners in 179 countries, a global market presence with strong local ties, and continual development of products and solutions. Americas is their largest market accounting for 55% of 2021 revenues, followed by EMEA, 33% and Asia Pacific, 12%.

Milestone Systems headquartered in Brøndby, Denmark, is a provider of video management software. Milestone develops an open software platform for the use of network video technology, with scalable solutions that are proven in more than 500,000 customer sites worldwide. Founded in 1998, Milestone is a stand-alone company in the Canon Group with 934 employees and revenues of DKK 1,017 (around $150 million) in 2020.

BriefCam is an Israeli provider of video analytics software with over 100 employees. Founded in 2008 based on technology developed at the Hebrew University of Jerusalem by Prof. Shmuel Peleg, a renowned computer vision researcher, this proprietary technology, VIDEO SYNOPSIS®, can summarize hours of events into a “brief” to extract maximum value from video for safety, security and productivity.  

Arcules, based in Irvine, California, provides cloud-based VSaaS services, delivering a unified video surveillance, access control, and analytics platform, with 82 employees listed on LinkedIn. At their March 2022 Corporate Strategy conference, Canon stated that their growth strategy for the network cameras line of business was to strengthen their total solutions offering, combining network cameras with video management and video analytics software.

They also aim to expand usage beyond the security field into other vertical markets, such as the analysis of visitor behaviour in the retail sector and medical facilities or analysing production status in factories.

Canon aims to achieve annual growth of around 15% in the network cameras business, with projected revenues of 253.4 billion yen (around $2 billion) in 2022.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.