In mid-November in the world of acquisitions, Israel-based NICE Systems announced that it had begun the process to acquire Switzerland-based FAST Video Systems for $21 million in cash. The acquisition is expected to close in the first quarter of 2006.
This combined company will likely to prove to be a strong contender in the gaming video systems market, a place where NICE Vision (a division of NICE Systems) had already made strong in-roads with its high-end video technology and video-based analytics. According to Ian Ehrenberg, the vice president and general manager of NICE Vision in the U.S., it's a market where FAST also had seen success, in addition to a stronghold in the retail CCTV market.
Ehrenberg says the combination of the two companies has already had a positive reaction from systems integrators trained in either of the two company's products.
"FAST has some very nice encoder and decoder technology and IP-based technology solutions," said Ehrenberg. "They have the breadth of product that we can satisfy this market with. Not only do they have that encoder/decoder technology, but they also have a family of DVRs that fit well into our integrators' distribution channel, especially for those integrators looking for less customization."
He added that FAST's European market had a stronger distribution channel than NICE, with a high number of trained integrators, a fact he said that should "substantially increase our vehicle to market."
Ehrenberg added that NICE's strong suit in video analytics will parlayed into the FAST technology and that the FAST systems were good contenders for being a video capture and recording solution that could support the video analytics.
"The direction that NICE is going is towards analytics and exception reporting, and not just toward creating DVRs and creating a history of capture," Ehrenberg added. "By combining these architectures and turning it into artificial intelligence, we believe we can provide a more useful tool." He adds that the future may hold a chance to take the FAST equipment and run the NICE analytics directly off that platform.
The acquisition also brings another major player to the table. Honeywell, which was an existing partner with FAST Video Security, has been in talks with NICE about continuing that strategic partnership. The gist of the partnership -- Ehrenberg adds that the company can't speak freely on it until the acquisition concludes -- implies that because of Honeywell's offering of FAST products in the past, the door may be opened to Honeywell offering of NICE products as well.
For now, as the acquisition paperwork makes its way through the companies, NICE is still chiefly focused on developing advanced analytics, and Ehrenberg says security director-types and end-users are now starting to understand how to use these types of technology.
"The interest we've seen in the retail arena is very high," noted Ehrenberg, who added that video analytics can go much beyond traditional security concepts to create ROI for users. "We have a retailer who is using the technology to count people coming in and out of the door. The can find how many people came in and out versus how many sales there were. So if you count 1,000 people coming in the store a day and you have 500 sales, does that mean every sale accounted for two people? They can then use the video to replay through the store to follow a shopper who bought nothing and track where they went and begin to understand in what department of the store the didn't find what they were looking for and decided they weren't satisfied."
And if, as many have predicted, video analytics become as common in CCTV as smart cards are becoming in access control, then having a hardware and software-based based analytics offering just might be the ticket for big growth. That's what NICE seems to be counting on.