Johnston: Security integrators are very good at low-voltage wiring - installing cameras and other equipment - but very few have the expertise to do both the security installation and network infrastructure. Many have chosen to partner with IT vendors to complete the network piece; some outsource it directly to a customer's internal IT department. This approach also allows them to be free of the liability of the network piece of the installation.
Next page: The effect of acquisitions
With a high number of significant planned and/or completed acquisitions, mergers and product division sales across our industry (UTC/GE, DVTel/Ioimage, Bosch/Extreme, Nice/Orsus, Panasonic/Sanyo, SCM/Hirsch, March Networks/Cieffe, L-1/Bioscrypt, General Dynamics/Axsys, GVI/PacketNVR, GE/Safran, Moog/Videolarm, Orsus/Cinario), how is the future of video surveillance innovation being spurred (or stymied) by mergers and acquisitions?
Taylor: Consolidation in the crowded field of security providers will ultimately give customers better solutions at lower price points. Mergers and acquisitions are inevitable in every field as manufacturers seek to be more competitive and to expand their offerings to include complete solutions. The goal of providing innovative and productive systems that meet customer needs doesn't change when a company changes owners. If anything, it becomes more important.
Wachman: These past acquisitions and mergers are a sign that the market is continuing to mature. Organizations will continue to seek flexible, IT-friendly solutions that maximize their investments and provide lowest total cost of ownership.
Piran: The pace of mergers and acquisitions in the professional security industry is surely on the rise as companies look to increase their core competencies with related offerings and services that supplement their business model. The effect on innovation when a company changes hands varies from one to the next. We've witnessed larger companies acquire innovative smaller players and then systematically stifle their innovation. Conversely, smaller companies have thrived using additional resources available from a new owner.
Gorovici: I believe that the industry is still fragmented and we will see more of these types of mergers and acquisitions in the future. Consolidation will create growth in the industry. Rather than smaller, niche providers, companies will gather strength from each other to provide more robust solutions and services.
Kaplinsky: Acquisitions and consolidations are typical for any maturing market, and IP video is no different. Purchasers require complete and flexible solutions that can only be provided by well-established, reputable manufacturers. In the end, the players with more complete product lines and best innovators will be able to compete, and most others will disappear or will be bought out.
Fullerton: Those in the past year have not and will not affect innovation in our industry. They were caused by necessity when companies could not fund their own future growth alone. Most of the businesses driving innovation in our industry are profitable on their own or well-funded and these will continue to drive the paths they've been on in recent years, despite the crisis year of 2009 we've just come out of. Thus, innovation will continue on the same path it has for several years.