Last week I wrote a post decribing how broadband service providers (BSPs) are doing much better as a channel for MVaaS than traditional security integrators.  This raises a couple of obvious questions:  what is driving the early disparity in traction and is this advantage sustainable over time?

In order to understand these two channels’ relative performance, it is necessary to reflect on the ways that MVaaS is different than traditional video solutions:

Services vs hardware model: MVaaS is a managed service that includes concepts like SaaS and service level agreement (SLAs) where traditional video systems typically follow the hardware/warranty service model.

Recurring vs upfront revenue: MVaaS revenue is earned and collected over time in monthly or annual subscription payments where traditional video is predominantly upfront revenue with equipment and install upfront and a smaller maintenance component over time.

Broader and more extensive user group:  The primary objective of MVaaS is to get video into as many hands in an organization as possible, well beyond the traditional security and loss prevention users, to maximize the ROI.  This increases both the number and diversity of the user groups.  Traditional video surveillance is typically used by security or loss prevention personnel with minimal use outside those organizations.

More complex buying decision: With a broader user group and more significant potential ROI comes a more complicated buying process.  The decision process no longer rests solely with a security or LP director.  IT, Operations and other executives are involved in the decision which changes the dynamics and can lengthen the sales cycle.

So why are BSPs ahead of security integrators as an MVaaS channel?

BSPs

• Understand managed services and can articulate the value proposition and differentiators vs traditional equipment solutions
• Are already in recurring revenue businesses and are looking to expand the services that they offer to include value added broadband applications like VoIP and video
• Have strong relationships with the CIO and can leverage that relationship into the operations group.  The CIO is an important decision maker in the MVaaS sales process and it is critical to have the trust of the IT organization
• Understand the complexities of operating large scale distributed network applications and can speak to the nuances and advantages of MVaaS
• Don’t have a legacy video offering that is at risk of cannibalization from MVaaS
• Suffer from lack of CCTV experience, but ironically this can be an advantage as they tend to focus more on value proposition and solutions selling than pushing specific camera or DVR technology

Security integrators

• Know cctv and have strong relationships with traditional video buyers in security and LP groups, but these contacts are not always able to create organizational momentum around broad deployment of video for operations and other groups
• Are intrigued by recurring revenue, but have well established financial model reliant on getting cash for upfront equipment sales
• Have material installed bases of older technology and may be reluctant to “rock the boat” with customers that continue to order traditional video solutions
• Don’t speak network and haven’t internalized technical nuances of MVaaS, making it hard to effectively communicate differentiators
• Have a dozen options and can follow path of least resistance - their sales reps may or may not buy into MVaaS, but if they can sell a traditional DVR solution with almost no effort b/c the customer is comfortable with that solution, many will not make the effort to promote MVaaS even if it is clearly a better long-term solution with a higher ROI for the customer 

BSPs have a better understanding of MVaaS, it fits their existing business model, they don’t have to worry about installed base challenges, and they are well positioned organizationally to have the right conversations so they are moving quickly.  Security integrators are still coming up to speed on the technology and they have to combat a lot of inertia both from customers and their own organizations, which is slowing down their adoption.  This explains why BSPs are the early leader.

The second question was whether this advantage is likely to be sustainable.  Here I think there is more debate.  BSPs are likely to have a single, focused video strategy that centers around MVaaS, where Security Integrators will always have 6-10 other options they can present.  BSPs are likely to be better at the service provider aspect of the business and have the inherint advantage of being able to manage both the video and the network elements together, which will give them better control over availability, but Security Integrators have the CCTV depth that customers will also require.  BSPs may be moving quickly, but Security Providers have a huge lead in existing market share and customer relationships, and could easily dominate the MVaaS market by switching some of their current customers to the new platform - the question is will they make that effort and when.

To close an already way too long post - I think that BSPs will likely continue to lead as an MVaaS channel for the foreseeable future until the leading Security Integrators commit to making some hard changes to their model and make a more concerted effort to understand and promote MVaaS where it best meets the customers’ needs.

I’ve posted before on the various channel partners that I believe are good fits for our service and for MVaaS in general.  There are a lot of potential partners that are interested in adding a recurring, managed service to their portfolio, particularly one that is differentiated and has a very measurable and powerful ROI.

Two segments in particular are (or should be) very natural channels: security integrators and broadband service providers.  When we first launched our channel efforts about a year ago, we decided to focus the bulk of our efforts on establishing partnerships with those two segments to see which one takes off faster.  We’ve gotten very good early traction with partners in both spaces and have been supporting a number of partners and pursuing a number of large opportunities with both.

Given its been a year, I thought I’d give a quick readout on how the two channels are developing.  The short answer is that broadband service providers (BSPs) are ahead by a mile.  This is great for broadband service providers, but should serve as a bit of a wake up call for the security integrators that they are going to face competition from a new segment that is much more aggressively adopting technology that will leapfrog a lot of what is in the market today.

Before I get into why BSPs are ahead, let me put some numbers on it to give you some context (per a motto from my Bain days, “in God we trust, everyone else bring data”).  Envysion works with partners to jointly sell to large multi-unit businesses like retail and restaurants.  We are either in pilot or the early stage of rollout with a number of large customers with our partners.  Security integrators in total have us in front of customers that control in aggregate a couple thousand sites.  Almost all of these opportunities are ones in which we had some traction on our own and either ceded control to the security integrator who was also there or introduced the integrator in an effort to “prime the channel pump”.  In contrast, our BSP partners have introduced us into customer prospects that control in aggregate more than 15,000 locations, none of which we had a prior relationship.

The quality and pace of the activity coming out of the BSP channel is orders of magnitude better than it is out of the security integrator channel.  Clearly there is a chance this could be something we are causing ourselves by supporting one channel more effectively than the other, but in this case I think it is structural.

I’ll spend some time over the weekend putting my thoughts together in a concise way on this topic and will post the key points on why I think this is happening.

The best technical standards are ones that are actually used.    And which standards are more likely to be used?  How about standards that do the following:

- Proven to work because code exists that actually implements the stands and actually works

- Consists of a collection of tools of which only a few are “must have”

- Free software available to help you implement it

- Utilizes existing, widely available and understood tools

- The specification is freely available

These all lead to practical, working systems that can be quickly implemented. Free code which actually works and does something valuable is an amazingly powerful force.  Such things often become standard without any special governing body approving them.  ie: A defacto standard.   This approach is partly why the Internet is the way it is.

The last point is pretty important.  How many websites would there be if you had to pay thousands of dollars a year for the privilege to know how to create one?

These points are so important to the Internet that all Internet standards are freely available to anyone for download and the vast majority of them have freely available open source implementations.  One of the “founding beliefs” of the Internet Engineering Task Force from David Clark is: “We believe in rough consensus and running code“.

The discussion around “Should You Use Software-Only Video Management Systems” at ipmarketvideo.info got me thinking about a feature we’ve been talking about over here at Envysion for a couple of years now, the “Downloadable NVR”.

A downloadable NVR appliance may offer a valuable mix of “software only” and appliance hardware.  Given the number of software appliances over at VMWare’s Appliance Marketplace, this is not a new idea, but perhaps one that just haven’t been done much with NVR’s/DVR’s.  Here’s one way this could be done:

- Go to a website

- Download the NVR software and burn onto a CD

- Put the CD into a PC and boot it up

- About five minutes later, the PC is now a dedicated NVR

- The NVR automatically appears in your Envysion Video Web application account

This has the value of reliability and easy of maintenance of embedded software, but without the specialized embedded hardware that locks you in to a hardware vendor.  Perhaps it’s also valuable due to the ease of obtaining the software.

What do you think?

Image via Wikipedia

Phil Wainewright has an interesting post on the progress being made with SaaS enterprise-grade ”mashups”.  

For those who are unfamiliar with the term, in technology a mashup is a combination of data from several different sources provided to the user through one integrated tool.  This is not a new concept.  But its development in the SaaS space is still in its early stages, especially as it pertain to enterprise-grade applications.

In essence, a SaaS mashup is the combination of multiple SaaS applications to provide an integrated SaaS service offering.  The benefit to the SaaS providers is obvious, as they have the opportunity to serve more customers.  More important, though, are the benefits availed to customers of SaaS mashups, including:

1. The ability to purchase solutions bundles for less than the price of the individual parts;
2. Access to multiple best-in-breed solutions, unavailable with stand alone offerings;
3. Pre-fab integration; and
4. Low implementation and support costs classically associated with SaaS.

Several questions come to mind as it related to the customers of MVaaS:

• Should a SaaS mashup offering be crafted for the QSR, fast casual dining and retail customer sets?
• Other than MVaaS, what other software offerings would be crucial to provide a compelling application bundle?  POS?  Digital Signage?  Security and Access Control?  Above store reporting?
• Are there reliable enterprise grade SaaS offerings for POS?

I am interested if our readers have knowledge of what, if anything, has been tried.  Can you think of other applications that are natural candidates for bundling with MVaaS?

This week we unveiled Envysion’s new tag line, which may not seem like a big deal to everyone, but to me, it’s a symbol of where we’re taking our positioning. 

I believe this tag line works well to underscore our mission to go beyond loss prevention and help our customers “see” improved operations, profitability, marketing and training. What clinched the decision for our CEO, Matt Steinfort, to go with this tag line is that it’s relevant for customers in numerous segments, beyond those that we have already penetrated.

For those of you who are linguistics wonks like me, “See” is an imperative verb that not only plays off of vision and video, but it also tells the reader what they will do/can aspire to with Envysion. Therefore, it’s exciting and intriguing. It also sounds simple, which mirrors the simplicity of using our application. This is about as close as you can get to playing on emotions with a B2B service.

While I recognize that a new tag line in and of itself won’t close more business, I am confident that it can rally to team around our mission.

Introducing the new Envysion web site.

Tell us what you think!

In my last post I gave some highlights of customers conversations at this past week’s NRF LP show.  I also talked to a number of current and potential channel partners for MVaaS services.   While there are a number of potential channels that weren’t represented at the show, there were a couple channel segments that were represented.

Traditional security providers

I’d like to see the marketing budgets at the companies as they are at every loss prevention and security show I have ever seen, and when they go, they bring at least a dozen people with them.  It either speaks to the amount of business that they do in this space or to an industry-wide lack of concern over expenses.  I’m guessing the former.  These companies sell video, access control, alarms, etc to the retail and restaurant providers.  They have all been around for a long long time and have deep personal relationships with the industry practioners.  They are all very familiar with video.  My general experience with this category of partner, which was consistent with the conversations at the show, is that these guys understand the market, see the value of MVaaS (particularly the recurring revenue piece) but are a little uncertain how to proceed.  Their biggest challenge is the installed base of traditional DVRs that they have in place.  They want an MVaaS solution that can work for their customers on their existing DVRs.  This speaks to the need for standards on how to communicate across vendor platforms, something the MVaaS industry really needs to tackle to take full advantage of the opportunity.

Remote Monitoring Companies

I talked to several service providers that put eyes on video for their customers.  They provide remote guard services, operational audits and just about anything that a customer would want them to watch.  Some are evolving out of the central monitoring station model and are looking to expand the breadth of their services and see MVaaS and the integration with POS and other systems as way to add more value for their customers.  Others are entering the space using offshore monitoring resources.  These guys definitely get it.  Their challenge is incorporating an MVaaS solution into the central monitoring software and systems they are already using to monitor video and alarms so that they don’t have to use their legacy systems and a separate MVaaS service.  Again, this speaks to the need to have some communication standards in the industry so that MVaaS services can be easily integrated into some of the common central station tools, such as MAS.

There were a number of other potential partner segments at the show, but I’ll cover these in a subsequent post as they aren’t traditional channel partners.

Successful Security VAR Seeks Compelling Managed Service Product; No Old School Providers Need Apply

It’s always a good day when you get an inbound call from someone that you’ve never met that is interested in exactly what you do that turns out to be a great opportunity for your business.

Yesterday was a good day. I got a call from a gentleman, “Jeff”, that has a successful security/integration firm in the Pacific Northwest. He’s run the company for the last 15 years and has a strong presence in the healthcare and multi-tenant markets. They have about 30 sales people and position themselves as a high-end VAR that provides leading edge solutions to their customers.

Jeff is looking to add a differentiated and compelling managed services element to his business. To get there, he’s doing his diligence on managed services products that are relevant in his space and came across us. (Special thanks to Joe Panettieri at MSPMentor for making the connection that put the two of us together)

We had a great initial conversation and I’m hopeful that this evolves into a strong relationship for both of us. We need to keep driving awareness of the growing MVaaS segment so that there are lot more conversations like this between potential MVaaS channels and MVaaS providers. The end customers are certainly realizing the value MVaaS provides - we as the channels and providers need to step up our efforts to reach them.

Jeff - I look forward to our next conversation!

In this final post on the various paths a customer can follow to take advantage of video, I will provide the rationale customers use when they subscribe to video from an MVaaS provider.  Here are some cases that describe companies that are choosing to Subscribe.

You are results, not technology focused.  The most common thread amongst MVaaS customers is that they are focused primarily on the business benefits of video, and are not viewing video either as a strict security application or just another hardware purchase.  Instead, these customers have identified a problem that they think they can solve by using video.  They are looking to address that problem as quickly and easily as they can, without the burden of a complex installation or significant on-going management requirements.  They don’t care about the technology itself (don’t try to pitch them on speeds and feeds) they only care about whether they can easily and broadly use video to accomplish their objectives.

You are capital constrained.  One of the financial benefits of MVaaS is that you pay for the service over time as you use it.  Many of the customers that would benefit from video are unable to afford a multi thousand dollar upfront capital investment in a good video system.  They are, however, able to afford a couple hundred dollars a month for the same capabilities.   On a side note that I’ll address later, there is a huge difference between a Subscription and a lease, although both of these address the capital constraint issue.

You want to keep up with the latest technology.  By subscribing to a service, rather than purchasing a specific generation of hardware/software, customers are able to benefit from improvements in technology without having to do a forklift upgrade or even having to manage the version control and software upgrade process.  Many customers have IT organizations that are very efficiently staffed (how’s that for a euphamism?) and don’t have the resources to manage yet another system wide deployment - subscribing eliminates much of the IT requirement while still providing the value of the service to the end users.

More and more customers are beginning to realize the benefits of Managed Video as a Service.  Our job as an MVaaS industry is to make this list of cases a lot longer and to ensure that they apply to the broadest set of customers.