This is the 3rd post in a series about the three paths a customer can take when trying to deploy video throughout their company: Build, Buy or Subscribe.

This post will address the 2nd path – Buying a video system.  This path is by far the most prevelant path chosen by customers, hands down.  The reasons the overwhelming majority of customers choose this path are pretty straight-forward: first, per my previous post on Building, not that many companies can really do this; and second, in a bit of foreshadowing to the next post, Subscribing is an option that companies have really only recently had available to them – although the emergence of MVaaS is changing this.

Buying a video system is a pretty straight-forward thing to contemplate.  You find a video provider (could be a local electrician, a mom and pop video provider, a big name like ADT, an integrator like Red Hawk, or any number of others)  A sales rep comes to your location, scopes out the project with you and quotes the install and equipment prices for you.  Once you commit, they’ll do the installation and get you all set up.  Service after the initial installation varies depending on the provider and what you paid for – many are happy to provide service contracts for long periods of time.

What doesn’t change is that you now own the system, much like you’d own a home entertainment system or a computer that your purchased for your home.  You are covered by a warranty and you always have a technical support line that you can call if you have problems.  Having said that, it is squarely your responsibility to ensure your system is working.  You have also locked yourself into the current version of the technology - even if you bought bleeding edge technology, something new is going to come out in a few quarters that will be an improvement over what you’ve purchased (which is why I hate buying PCs!)

So other than it being the only realistic choice for the last few decades, why would a company choose this path?  I’ll ignore the case where the company didn’t know that they had an alternative.  Assume a company knows it can Buy or Subscribe – why would they want to buy?

They like to own things. This type of company is a lot like the one I mentioned in the last post that loves technology in that this often a philosophical view that can’t be changed.  The big difference is that this category often has a lot more fact or logic based rationale for wanting to own.  Maybe they have a bunch of cash and don’t like to pay over time, preferring to get a discount for upfront payment.  Maybe they are concerned about security or proprietary information and like to run their own gear.  While the underlying concerns may not be based on accurate information (security can actually be more tight in a Subscribe model than it is in a Buy model – topic for later post), the concerns are real for the customer and often lead them to choose Buy.

They can (or at least think they can) manage the deployment.  This is really two buckets of customers.  The first have enough IT experience and resources to be able to effectively support the deployment and management of the video systems.  They can manage the distribution of client software to hundreds of laptops and computers and can manage all of the access (which users can access which systems for what purposes) without issue.  Some video systems are easier to manage than others so maybe the one that they have chosen doesn’t place undue burdens on them or their company uses it infrequently enought that it doesn’t matter anyway.  The second bucket of customers can’t say with confidence that all of this is true – but they either believe they can manage or have no idea yet how difficult it will be so don’t factor this into their decision.

There are likely hundreds of other reasons why people Buy – it is the de facto standard in the world of video.  In tomorrow’s post I’ll tell you why I think this is about to change.

In a previous post, I made the statement that there are three paths a customer can take when trying to deploy video throughout their company: Build, Buy or Subscribe.  The question is, what would drive a customer to choose one of these paths over the others.

In this post, I’ll give you my take on why a company would choose to build their own video solution, buying their own cameras, intalling their own service and maybe even building their own DVRs.

From my experience in the marketplace over the past few years, there are a couple of different cases where customes have decided to build it themselves.  If you fit one of these cases, maybe you should consider building a video system yourself.

You aren’t going to use it. You may think I’m being snide, but I’m not.  If you don’t plan on actually using your video system and you are really only looking to put up cameras as an insurance policy in case something terrible happens, then you can probably get by with a homegrown, quick and dirty system.  Go buy a couple cameras from Best Buy or another electronics store, use your existing PC and find some IP camera software somewhere, hang the cameras, pull the cable and you are good to go.  You get the added benefit of potentially detering bad activiity by having the cameras up there at all.  Since you are never really using the system you don’t care about remote access, about ease of use, about features or return on investment (because you know you won’t get one)  It is only an insurance policy and you are good with that.  Just make sure it is on all the time (See Michael Wilson’s post on checking the children)

You REALLY love technology.  This is a case that fortunately I’ve only encountered twice in my tenure in the industry.  I say fortunately b/c in my opinion this type of customer is not motivated by economics or logic as much as they have an emotional or philosophical bias to own that a service provider will struggle to change.  The clearest example of this was a well-known trendy hamburger franchise that put out an RFP for a video system for a couple hundred sites.  We were pretty excited about the opportunity until it became clear what they were doing.  They had scoped out the highest end system I had seen.  They wanted to buy everything themselves (high end Dell servers for the DVRs, top of the line Axis IP cameras, crazy amounts of storage, the whole 9 yards)  Normally I would say that all of this is a good thing for a MVaaS provider, as the value we provide is in the software and the network, not the equipment.  Unfortunately, in this case they had spent so much on this expensive gear that they had only a few hundred dollars per site left in their budget for the software.  They couldn’t find a software provider willing to provide them service with those economics so I believe they built something on their own.  (Side note: I’m not an audiophile, but this seems to me like buying the highest end speakers available and then plugging them into a do-it-yourself ham radio).  You don’t see a lot of these folks around b/c you have to have a lot of extra cash and the IT group has to have an incredible amount of discretion and control (not to mention resources) to be able to pull this off.

You have a need the market can’t address.  This sounds reasonable in theory, if the market can’t provide the functionality you think you need – just figure it out yourself and develop a solution that fits your exact needs.  Having said that, I would argue that only a few companies have the capability to actually do this.  You have to have a lot of resources and expertise to build new capabilities.  The only companies I’ve seen fit this even a little bit were really working with a service provider to get them to customize the providers solution to fit unique requirements, not really building it themselves from scratch.

If you can think of other reasons why a company should want to build their own solution, let me know.

I’m going to start a recurring weekly post to give people a sense for the nature and scope of activity that MVaaS providers are seeing.  I will keep it simple and high level, but will also try to give you explicit examples of the conversations that are happening.

MVaaS customer conversations

We hit several very positive customer milestones this past week.  The customers were primarily in the restaurant and retail spaces – these are two segments that have clearly embraced the advantages of MVaaS.  The customers ranged from QSR to casual dining on the restaurant side (I’ll do a separate post on the difference in the value proposition between these two restaurant sub-segments).  The most significant milestone on the retail side was through a channel partner and was with a retail operator that has 5,000+ locations, all of which are corporate owned (the difference between corporate and franchise owned is another topic of a future post)

The milestones themselves were all related to trials we are in or about to start with our prospects.  As MVaaS becomes a more enterprise level solution, customers are electing to put their prospective vendors and their internal organizations through pilot projects to ensure that they have tested the solution and are confident that they will receive an appropriate ROI.  Upon successful pilot, they can then roll the solution out into their locations.  Here is a sample of our progress:  We successfully completed our pilot with a large multi-brand franchisee with 100+ locations and will be installing all of the remaining locations this quarter.  We got the go ahead to begin the pilot for a national QSR brand with 600+ corporate owned locations and installed our first store in a pilot with another national brand with 500+ locations.  We also got to contract with a smaller, but well known casual dining restaurant.

MVaaS Partner Conversations

As active as we were with customers this past week, we were even more active in potential channel partner conversations.  Rather than spend a lot of time talking about all of the individual conversations, I’ll provide some context on our overall strategy and the type of partners we are speaking to.

One of the key principles of MVaaS is that it is an excellent managed services opportunity.  We believe strongly that there are several potential channel segments that are both interested and capable of selling MVaaS to their existing customer bases.  This past week was an excellent example of the breadth of the potential partners we are speaking to.  On Monday we spoke to a large telecom provider that you will definitely recognize, but that you may not have ever thought of with respect to MVaaS.  We had a joint customer call with one of our more promising near-term partners, a provider of remote guard services that is looking to expand their value proposition.  We had another conversation, discussing joint customer opportunities with the sales team of a leading managed services provider.  Our technical team met with two potential partners, one is a household name in the networking equipment space (we are looking to integrate with their products to form a combined service offering) and the other is a hosted access control company that is evaluating adding video to its service.

All in all a pretty busy week!