Earlier this year, Hanwha Techwin America announced that Kichul (K.C.) Kim, who has worked in various sales and corporate management roles at Hanwha Corporation since 1995, would become the company’s new president for the Americas, succeeding Soon Hong Ahn, who was promoted to the head of global sales and strategic marketing at Hanwha’s headquarters in South Korea.
Kim, who began working in the U.S. in January to ensure a smooth transition into the president’s role, takes over the position at a time of transition within the company and the industry as a whole. After all, it was just three years ago that Samsung Electronics, the company’s former owner and namesake, sold its controlling interest in the firm to Hanwha Group. In the time since, the company has subsequently rebranded as Hanwha Techwin America as it seeks to create its own identity in the security industry separate from its Samsung roots.
The video surveillance industry has also experienced its own share of upheaval as product commoditization has fueled a “race to the bottom” in pricing that has started to eat away at the profit margins of integrators and manufacturers alike. We recently sat down with Kim to discuss how this and other trends have affected Hanwha Techwin America and what trends stand poised to impact the market moving forward.
Q: What’s your top priority as president of Hanwha Techwin America and how do you plan to ensure that the company remains one of the leading suppliers of video surveillance solutions in North America?
Kim: I am fortunate to build on the successes Hanwha Techwin America (HTA) enjoyed under my predecessor, Mr. Soon Hong Ahn’s, leadership. We have experienced tremendous growth due to our speed to market and commitment to developing leading-edge technology. My mission is to drive HTA’s business through continued technology development, investments, partnerships and expansion throughout the Americas.
We will continue to offer thought leadership and education to our reseller partners through certification training, technology webinars and technical whitepapers, while supporting them with a strong program that includes a five-year warranty, advance exchange and dedicated support lines with expanded hours.
We are also continuing to invest in our greatest assets: our people. We have already grown our staff significantly in the U.S. over the last year and are actively seeking to hire more qualified sales, engineering and marketing staff in 2018. Most importantly, as a global manufacturing organization, we continue to lead the industry by focusing on our core technologies including optical design, software development and SoC (system on a chip) design, while keeping an eye toward future technologies such as advanced analytics and deep learning.
Q: What do you see as some of the biggest challenges facing the market moving forward and how do you plan to address them as a company?
Kim: Cybersecurity is one of the biggest challenges our industry faces. At Hanwha Techwin, we have a large dedicated cybersecurity team, based in South Korea, whose sole focus is to ensure the safety of our customers' property and personal information. We published a whitepaper which includes best practices to strengthen device security to prevent unauthorized access and to protect end-users video surveillance systems and their overall network. We also train our systems integrators and A&E community, and have published a network hardening guide.
Commoditization is also often seen as a problem for our industry. While it often leads to lower prices, it can also force a constant flow of innovation for companies seeking to develop technology innovation, which means improved products and features for consumers.
What cybersecurity measures/programs has Hanwha taken to ensure both end-users and integrators are deploying equipment hardened against cyber-attack?
We have a team in our Korean R&D center dedicated to cybersecurity to ensure products meet our high standards and to investigate field concerns or newly discovered issues. This allows us to respond quickly, release patch fixes, and address any security vulnerabilities. Our HQ website has a dedicated landing page for cybersecurity, which includes our Security Vulnerability Disclosure Policy, as well as reports clearly documenting any vulnerabilities discovered and the corrective actions to secure the devices.
We conduct tests on our network products using one of the leading third party companies in penetration testing. We routinely monitor and diagnose our products to strengthen security and to minimize vulnerabilities while managing product passwords, protocols and algorithms.
Our best practices include: ensuring proven encryption algorithms and securing coding is used, the removal of unused services and daemons, not using backdoors, the removal of default passwords, password guessing locks, disabling unnecessary services, firmware encryption, and more. We have also updated many of our factory default settings to harden our devices even further.
We develop every part of our products ourselves – from the camera optics to our own chipsets – so we can ensure higher levels of quality control and ultimately, increased security for our customers. A core benefit for us is our Wisenet SoC (system on a chip) that we continually develop specifically for our security cameras. We are not as reliant on off-the-shelf, potentially vulnerable components and technology compared to competing vendors. We also have active education/training programs for our systems integrators and partners, and have recently launched a new Wisenet certification program which contains a focused section on cybersecurity.
Q: In an industry where margins are eroding to some extent due to increased price pressures, how do you remain competitive in each segment of the market, or is that impossible?
Kim: Our product strategy, technology and partner solution offerings are targeted toward the mid-market to large enterprise customers where margins are typically higher. The ratio of our sales is more heavily weighted toward project-based business. We focus on spec-in activity with A&Es and on driving business with customers within the education, retail, commercial, healthcare, banking and government space. This approach allows us to sell the value that our technology delivers for specific applications within these verticals such as business analytics for retail, 60 frames-per-second (fps) video for casinos, custom solutions for banking and 180-degree/360-degree video for commercial applications. So, while not impossible, we focus on maintaining margin by selling to customers who understand the value that our technology brings to their specific market application.
Q: With the name change to Hanwha, coupled with increased competition in North America, and the consolidation of some traditional power companies in the video surveillance market, how does Hanwha want to position itself among the security integration community?
Kim: Technology development, business expansion and strategic alliances/partnerships are core to our strategic direction. Our mission is to deliver technology, solutions, features and programs that drive market growth, and generate trust and loyalty among resellers and dealers. The current brand transition to Hanwha represents a tremendous opportunity for us to truly define Hanwha, and to demonstrate the value and commitment we bring to the market. Our investments in technology, people, assets and resources in North America and around the world will strengthen our organization, and will pave the way for us to become the leader in the video surveillance industry.
Our goal with the reseller community is to be recognized as a thought leader in the security industry that delivers superior technology, value and profitability. We want to be recognized as a company that has a solid track record in cybersecurity, and that is known for having sound encryption and cybersecurity policies for its devices that customers can trust.
Q: What technological innovation do you believe is going to have the biggest impact on the market in the short-term? What about further down the road?
Kim: In the short-term, we see deeper penetration of multi-sensor/multi-directional cameras within specific vertical markets including casinos, stadiums, retail and municipal surveillance. With dramatic performance improvements that the industry is not accustomed to seeing in a multi-sensor camera such as 60 fps, 150dB wide dynamic range and H.265 compression, we are able to meet specific requirements within these markets not traditionally addressed by multi-sensor technology.
Further down the road, there are technologies such as Deep Learning and Convolutional Neural Networks (CNN) that will evolve camera analytics, and make devices smarter. We will have better and more reliable object recognition, classification and tracking. The identification data will also be more descriptive.
Q: How would you characterize the health of the video surveillance industry currently and how do you see it progressing, say five to 10 years from now?
Kim: Overall, the health of our industry is good but it is currently fragmented, so we expect to see more consolidation, acquisitions and partnerships between organizations in the near term. As customers become more educated on technology and cybersecurity threats, there will be increased opportunities for innovative manufacturers. Companies that are best positioned to address security concerns, while funding innovation, will see continued growth.
In 10 years, the demand for better video analytics and audio tracking on the edge, multi-sensor cameras and AI assistance will determine who will lead and who will follow in the industry. Hanwha is well poised to continue to lead the industry with our commitment to new technologies, our in-house expertise and our desire for continued growth through strategic acquisitions.