How U.S. IP video companies fit into the world market

[Editor's note: John Honovich publishes this and other information on network video at IPVideoMarket.info.]

The US has few leaders and none of the largest companies in IP video. This, despite the fact that, according to a recent study, there are disproportionately more US IP Video companies than the rest of the world. Moreover, US companies receive much greater VC funding than their global counterparts plus the US considers itself the center of global technological innovation.

So what's going on here – are US IP Video companies inferior?

Addressing this raises the fundamental question of what makes a strong IP video company. What characteristics, processes or strategies enhances success in the marketplace? If we can understand this, perhaps we can better select products to deploy and companies for partnering.

The Leaders in IP Video

Amongst companies focused on IP video, based on revenue (as well as general reputation), Axis, Milestone, Genetec and Mobotix are the top 4. Axis is the largest IP camera company. Mobotix is the largest megapixel company (see the megapixel comparison). Milestone and Genetec are the top 2 IP video surveillance software companies (see the VMS comparison). None of them are from the US.

In video analytics, most would agree that it is ioimage and ObjectVideo. However, ioimage's product performance is more highly respected than ObjectVideo's in my frequent discussions with both video analytic competitors and integrators. Plus, ObjectVideo, a US company, required over $50M USD in funding, significantly greater than ioimage.

In budget IP video, Asian companies dominate with ACTi and Vivotek as the leaders.

In the next tier, there are 4 US IP video companies that I hear frequently praised – Arecont Vision, Exacq, IQinVision and OnSSI. Interestingly, all of these are fairly low-key companies with no to minimal VC backing.

My Theory on IP Video Success

IP Video is not revolutionary. While a solid improvement over DVRs and analog video surveillance, it is in an incremental advancement that requires integration and cooperation with traditional players and products.

Specifically, almost all customers require IP video to be integrated with existing video surveillance systems. This significantly limits the growth potential of IP video companies. As such, IP video demands a slower, steadier, more operationally inclined approach that works over a decade or more.

On the contrary, the US technology industry excels the most with massive disruptions – Companies that dramatically and rapidly overturn an industry. Think Google vs library indexes, Craigslist v Newspaper Ads, Ebay vs Flea Marts, Amazon vs book stores, etc. In the biggest US successes, the old ways are crushed, old skills and relationships become worthless. Massive growth and large funding is needed to drive these efforts quickly.

Company Examples

Look at Axis and Milestone. They started out as consultancies and grew slowly over many years to get to their current positions. Genetec was another steady but slow grower, OEMing to many manufacturers for years before developing their own brand. Even some of the most respected US companies like Exacq and IQinVision took many years of steady development run by traditional security executives. All of these companies took long periods of time for development, took minimal investment and focused on mainstream, achievable products.

By contrast, look at the US IP video companies that have already failed: Covi, Vistascape, SteelBox. Each had $20M USD in funding (or more). Covi wanted to revolutionize HD viewing (in 2004). Vistascape was going to revolutionize monitoring of critical infrastructure. Steelbox was going to build the biggest and most powerful NVR. All of them burned out fairly spectacularly.

The big initiatives of these companies are not exceptions. US companies go big:

• ObjectVideo wants their video analytics in every device. 


• Cernium is going after enterprise video analytics and now the home market. 


• 3VR aims to be Google for video surveillance. 


• VideoIQ is building an all in one camera, video analytic appliance and DVR. 


• Vidsys wants to solve the problem that Vistascape and Ortega failed at

Questions

Going big can produce huge victories when a market supports it. The question (and I think the European and Asian companies show this) is will the video surveillance market support such big efforts? Or will the US companies, in their desire to revolutionize the industry wind up being inferior to the slow and steady global companies?