Not sure if you’ve been paying attention, but it appears that there are a host of players and investors that share our bullish view of the opportunity in the restaurant and retail space - despite the gloomy economy.

By my informal count, $35 million has been invested in video providers that target retail and restaurants in the first half of 2009 alone.  None of these companies are MVaaS providers (well except for us, as we are counted in that $35M figure having raised a round ourselves), but all of them are squarely focused on the value proposition of taking video beyond security and extending it into the organization.

Here’s are some examples:

• DTT - Geovision based DVR solution + operational audits focused on franchisee community - $7M
• Westec - Video and remote guard/monitoring - $20M (although big chunk of that was recap)
• Agilence - Video, exception reporting and LP consulting - $4M + undisclosed strategic investment from Schneider

I’m excited to see this activity, despite the competitive nature of these companies, for a couple of reasons.  First, it is again a sign that others (including investors willing to bet serious $) see the same opportunity that we do, which is always reassuring for our current and prospective investors.  Second, one of the biggest categories of competition we face is the “status quo” - old DVR and video technology that companies still buy that will only ever be used by a small group of people in a company for security purposes only.  The more companies that are promoting a broader value proposition, the more customers will start looking for solutions that meet these increased needs - this will be good for all of the providers that can deliver a more extensive ROI.

There might be more people competing for the same opportunities, but the number of opportunities will grow exponentially.   This is good for the space and good for us (b/c I really like our chances..)

IMS has a new report on RVMaS (Remote Video Monitoring and Surveillance).  IMS defines RVMaS as: “…network camera based solutions that allow the end user to remotely view live or recently recorded video in security and non security related applications.”

MVaaS is certainly a piece of that market which IMS claims is about $158M in annual revenue and they estimate will grow to be 3 times that in 2013.

Or perhaps, more precisely, sales of tickets to see movies on the big screen are up over 10%  according to a report from NPR.  In the last 7 years of recession since 1965, movie sales have gone up in 5 of them.

Mall Cop out grossed all comedy films of 2008.  Fast and Furious 3 had the biggest April opening sales of all time.

It makes sense.  A two hour $12 get out of the house escape from the depressing headlines of the day.  And with ticket sales up, I wonder what’s happening with popcorn sales?   Well according to Variety, it appears that concessions, where movie theaters make a lot of their money, are down by 15%.

Literally, by a little bit, and figuratively, by an order of magnitude for me.  A couple of folks from Envysion went with me to ISC West this year and personally it felt a lot smaller than in years past.

On the literal side, it actually wasn’t as much smaller as I had expected it to be from a pure attendance standpoint.  I don’t have the actual stats, maybe they will be posted somewhere, but one of my colleagues that is on their planning board told me that attendance was down 5-10% depending on whether you were talking about exhibitors or attendees.  An even less formal source (my cabbie) said that all of the trade shows were way down this year and that ISC West seemed down to he and his peers as well.  To be honest, you couldn’t really tell that much walking around the halls as it is such a big show that there were people everywhere.  While Stanley and Cisco were some big names that didn’t make it and a couple of booths were notably smaller than in years past, it didn’t seem too different as a ton of companies were represented there.

The big difference to me was how much smaller and more manageable it felt to me personally.  ISC West has a very strong place in my Envysion memory, as I went to my first one just about a month after starting the company.  I didn’t come from the security or video world, we hadn’t even started to develop the new MVaaS platform that our customers are using today, and I was still trying to figure out where we fit in the market.  My first hour at the show 3 years ago resulted in a mild coronary and early signs of an ulcer - I was completely overwhelmed at all of the different providers, almost every one of which was demoing some kind of video, many of which were touting web-based solutions.  I kept asking Rob Hagens “remind me again why we are different?”.  I left that first show a little frazzled and without a very clear understanding of where we fit.  Although I was confident in the idea and approach we were pursuing I couldn’t be sure that someone else wasn’t already doing it in the vast security and video market that I had been exposed to.

We have worked hard over the last few years to both better understand and better communicate how Envysion and MVaaS differ from what other providers are doing.  My quick two day trip to ISC West this year was evidence to me that after all of our efforts, I finally understand the industry well enough that to know exactly where we sit and why we are different.  It was this understanding that made ISC West feel a lot smaller to me than it ever has.  I understood who the majority of the players were and what they did.  I had spoken personally with or at least looked into most of the major players there.  I now knew enough about the big hardware guys and big security integrators and knew where there core focuses were.  I had a sense for a lot of the smaller players and knew who was getting traction and who wasn’t and in what type of markets.  I don’t claim to understand the industry better than anyone else, but for me it was a very different experience going to this massive conference and really being able to put everything in its place.

I’ll write another post this week on the two key takeaways I had on our major differentiators in the market that became incredibly evident to me at the show.

If you are an investor, you likely have had a tough year.  After closing at 1,427 on May 19, 2008, the S&P 500 Index has generally gone one way - down.  The closing mark for the Index on March 9th was 677.  This is a stunning 53% drop!

If you foresaw this and moved appropriately, hats off to you.  For the rest of us, though, it’s been painful.

Among their benefits, stock markets, as measured by various indices, act as leading indicators of what is expected from the underlying companies.  Since the overall economy impacts business results, the market is also a measure of where investors see the economy going (not where it is now).   To this end, the U.S. market started its fall as the asset “bubble” burst, bank failures were witnessed, more were expected, and a recession seemed inevitable.  Even though the U.S. economy grew the first half of 2008, investors, and by proxy the market indices, anticipated problems ahead.

If you haven’t stopped watching, the U.S. stock markets has gone dramatically upward in the past seven trading days.  From its low, the S&P500 Index has returned 17% to investors in this very short period.  Did we hit bottom on March 9th?  Is this the start of a significant move upward?  I’m not so brazen to make this call.  But some government officials and market experts are expressing cautious optimism about the future.  The outlook seems to have improved a bit from one month ago.

We have repeatedly explained how the value proposition for MVaaS solutions improves in a tough economic environment.  Still, it would be a welcome development to see the economies of the world improve in the 2nd half, and return to growth in 2010.

Christopher Cabrera, CEO of Xactly, an on-demand sales performance management company, has an interesting opinion piece on SandHill.com.  Mr. Cabrera joins the conversation debating what SaaS is and what it isn’t, specifically as the on-demand providers compare to traditional ISV’s.  The central question, is SaaS just software?  It is worth the quick read.

For almost a year, the team at Envysion has been striving to evangelize the unique benefits of applying SaaS technology to the video surveillance market.  An initial step in the process was coining a term for the market segment.  This is where MVaaS was born.

Initially there was little proof that the term was catching on.  But we persisted, established this blog, highlighted it in our press relations, described it to customers…

Then, slowly, we started seeing it here (a competitors website) and there (a hallmark industry on-line publication).  It was taking hold!  Now it is commonplace to find it mentioned prominently by those who are well-versed in the industry, and who may have an influence on decision-makers.  Jeff Gannon compiled examples of this in his recent post.

Here’s the presentation from which Jeff Gannon found the quote from Severin Sorensen, CEO of Sikyur, a security advisory firm.  The presentation was delivered at the ASIS International Workshop on Advanced CCTV in August 2008.  It is truly exciting to see the momentum building behind this technology!

In a prior post, I asked you to ponder the “Let’s Make a Deal” problem.  For those of you who thought it through and answered correctly (without the Google-crutch), congratulations to you!  Perhaps your quick mind could make you some money at the casinos.  My simple explanation would be as follows:

You select door #1.  The probability that the car is behind this door is 33 1/3%.  When the goat is revealed behind door #3, the probability that your first choice was correct is still 33.3%.  But because one of the options has been eliminated, changing to door #2 yields a probability of 66.7%. 

If you are more like me, your ”gut” led you to the incorrect answer, and you refused to give up your original selection.  This may be due to the fact that we assume that we have a 50/50 choice left, and since our initial selection is ”in hand”, we are somewhat programmed to avoid changing.  Why do we view it as more painful to change and lose than to just lose?

A couple weeks ago, I watched the movie 21.  The film’s protagonist, Ben Campbell, is a student at MIT.  Even though MIT is filled with intelligent people, Ben stands out.  In fact, his intellectual prowess is so impressive that he is recruited by a professor to join an exclusive club.  The club’s weekend activities?  Counting cards in Las Vegas.

In one of the early scenes, the professor, played by Kevin Spacey, asks the class to consider the following question:

You are playing Let’s Make a Deal, and Monty Hall shows you three doors.  Behind one of the doors is a brand new car.  Behind the other two doors are goats.

You select door #1.

Before showing your selection, Monty reveals door #3, and there is one of the goats.

He now gives you the opportunity to change your initial selection.  In other words, do you want to stay with your initial selection (#1), or change it to door #2?

What would you do, and why?

Social networking sites are everywhere these days, from myspace and facebook to twitter and linkedin. What I find interesting is the unique culture beheld by each, even with a largely identical user community.

Even more interesting is how the social networking concept has permeated into mainstream media and business applications. Major news outlets have revamped their websites to allow self-registered users the ability to comment and share thoughts about specific news topics. Businesses have created blogs and facebook pages encouraging clients and prospects to provide feedback on products and services.

It’s the latter of these two that, if executed properly, can create a living and breathing business model that’s highly adaptable to the customer’s needs. Imagine a business application user community that is encouraged to provide feedback on how the application can better be shaped AND the business responds with seamless upgrades to the application across its entire base. Enter agile development.

That’s what we’re up to here at Envysion. Our convergence of SaaS and video surveillance has broken the mold of the point-in-time purchase model and end-of-life asset concern. We’ve taken enterprise-class software off the clients network and put it in the cloud so they can focus on their business and not worry about straining IT resources. Our application is ever-developing as we react and shape our unique video solution to our valued customers.

Feedback encouraged.