A recent article in the Economist observed both how most of QSR has recently weathered the economic storm while at the same time calling on them for additional innovation and change. Mostly the article spoke to menu changes – like the dollar menus we’ve all seen advertised by all the big players and now dominate their innovation. Dollar menus have been effective in retaining customers and perhaps even getting some new customers through ‘trade downs’ from other establishments they would have frequented. But the dark side of the dollar menu is margin risk. They are razor thin and some franchisees are even objecting and trying to fight corporate efforts to go dollar. Thinking about innovation at QSR then reminded me of a conversation we had with a CIO of a QSR concept who was attending NRF-LP. He said that QSR in general typically lagged retail (and many segments) in technology innovation. He gave a laundry list of reasons but a key one was limited IT staff and capability to assess and implement innovative technology solutions.

Call me crazy but it would seem that a great opportunity to innovate and perhaps de-risk some of the margin challenges presented by growing dollar menus is Managed Video. Managed Video as a Service targets operations and profit improvement and provides a rapid payback with no strain on IT and little to no overhead. We’ve delivered with a large (and growing) set of customers and can provide historical proof and pilot demonstration for new customers of 10-15% profit improvement.  Matter of fact just today we ran the numbers for a customer who is adopting our solution and predictably the results came in at 10%+ profit improvement. While I’d argue 10% profit improvement and under six month payback is always a good answer it seems to be even better when combined with the current dollar menu craze.  A one, two punch of innovation to drive revenue and sustain margin.

You had me at hello!

Zoosk is (apparently) an online dating service that just surpassed Match.com in total traffic recently.  Their advertising is funny but over the top (you’ll likely only find it late night on 2nd tier cable stations) and definitely not safe for watching with, oh,  just about anyone I can think of in my life.  On the surface, there isn’t a lot that we have in common with them.  They are a consumer play, they are a freemium service, and well… they make money by helping singles hook up, I mean find lasting lifelong relationships.

Despite the differences we may have, we do have one very important thing in common and it is on this front that I aspire to be like them.  Zoosk, like Envysion, is a Software as a Service provider.  I had the pleasure of listening to their co-CEO , Alex Mehr, last week talk about their business.  One of the coolest things he shared was how they run their software development shop and test the various capabilities and functions that they offer to their customers. 

They run two distinct instances of their application at all times (an A and B instance).  They push new functionality and make changes to both instances every day or every other day.  When they want to try something new, they come up with their two best ideas, implement one version on the A instance and one version on the B instance, measure the results, and then kill the loser – putting the winning idea on both platforms.

I thought we were advanced with our service where we push new capabilities and try new features every two weeks.  These guys are leveraging the benefits of SaaS to a degree that I hadn’t even contemplated before.  Poor Rob Hagens – I am now going to be badgering him on why we can’t do releases more frequently, try more things, and react even faster to customer requirements!

Now, before you get all spun up pointing out that Zoosk is a consumer play and their user requirements are not anything like the traditional security focused video surveillance users that have effectively used the same basic video functionality for the past 10 years and so why do you need to change functionality or react to customer requirements when they don’t ever change… remember, our largest customer has over 1,300 users but only 3 people in loss prevention/security.  1,297 of them had never used video before and are using it for things that even they didn’t know they would want to do before they tried our service.  That is just one customer.  Expand that to the entire emerging market MVaaS is creating and you have a whole bunch of new users and requirements happening very quickly.  The winners in this space will be those that can react quickly and get customers what they want.  Two week iterations on a single instance of the platform may be enough to maintain our lead today, but if the MVaaS market continues to grow as it has been, it may not be enough down the road.

Get ready Rob – I may ask you to spend some time checking out Zoosk as a business expense!

Last week marked my 4th trip to one of the largest security conferences in the U.S., ISC West.  I’ve posted before about the evolution of my trips there and how I’m much more comfortable now wandering the vast sea of video and security providers than I was when I first got into this space.

We never exhibit at the show as it is way to big and doesn’t put us in front of the key decision makers in our target segments.  Having said that, we always go commando and wander the halls talking to potential technology partners and generally staying abreast of who’s doing what.  I spent a full day there last week doing just that.  My general takeaway was again that I think the industry is rather broadly and consistently missing the big picture.

ISC West is a great place for big and small providers alike to exhibit their wares, showing off their latest and greatest technologies.  The show floor is overwhelming with all of the video monitors, HD cameras, video analytics demos, and other cool technologies.  The majority of product announcements are around the latest version of someone’s DVR, their camera, their software or their storage capacity.  You can see the highest resolution megapixel cameras that are available, you can find someone with a crazy amount of storage, you can get a demo of some intriguing analytic capabilities or watch the same guy from last year build a video wall on the coolest touch screen projector you’ll ever see.  Lots and lots of new technology – bright and shiny things.

What you don’t see is the killer application, and this is where I think that the traditional video industry is missing the mark.  There are too many companies that view innovation only as finding the next bell and whistle for their product or making it see more detail, store more video, or do something else better than it did before.  This is important, I’m not suggesting that it isn’t valuable for the industry – there are a lot of applications that will benefit from some of the incremental and evolutionary changes that we see each year in the space.  The logic of these companies is that if they sell widgets and their widget “goes to 11″ when the competitor’s only goes to 10, they will sell more widgets than the competitor, which seems rational enough.

What they appear not to be focused on, however, is finding the killer application.  There’s a good definition of the killer app on wikipedia, which I’ll reference here as well:

“A killer application (commonly shortened to killer app), in the jargon of computer programmers and video gamers, has been used to refer to any computer program that is so necessary or desirable that it proves the core value of some larger technology, such as computer hardware like a gaming console, operating system or other software. A killer app can substantially increase sales of the platform on which it runs.”

Said differently, a killer app is something that creates so much value for customers that it can drive orders of magnitude more demand for the underlying platform on which it is running.  In our world, this would be an application that is so powerful that it actually increases the demand for video services and technologies (cameras, recorders, storage, etc.) rather than just competes for a share of the existing pie.

I’m sure that there are a tremendous number of companies that were at ISC West, were they to read this post, that would comment that this is exactly what they are trying to develop (or may already even claim to have developed).  I am certainly not in a position to judge whether a given company has or hasn’t done this, but I do have strong opinions on what you’d have to have done for this to be true.

I’ll post again tomorrow with my thoughts on what makes a killer application in the world of video surveillance.

Over the past few years, Envysion has pioneered Managed Video as a Service and changed the way large multi-location enterprises deploy and utilize video across their entire organization. One of the most powerful skills we’ve leveraged during this time is also one of the most basic – listening, We listen closely to our customers and prospects alike, inviting them to participate in our development roadmap discussions.

Not only does listening help shape our technology, but our service-oriented approach as well. Teaching our customers best practice utilization ensures that they maximize the return on investment with measurable and material results. This is a commitment we make during the sales process and one we follow through on throughout our partnership.

Over the next week, I’ll share exactly what I mean by “Video Convergence for the entire Enterprise” with real world use-case examples from several different areas within a company. Getting meaningful video into the hands of thousands of people within a single company with no strain on IT or network resources is not a trivial endeavor. MVaaS makes this possible.

I’ve had several conversations with cutsomers and industry folks about specific feature capabilities of our MVaaS solution versus traditional video solutions.  The comparisons run in two directions – comparing us to legacy video solutions (traditional DVRs) and comparing us more leading edge video solutions (advanced DVRs, with analytics, IP camera support, etc.)

The conversations typically center around some feature that the customer or channel partner is used to having (like having a CD burner), believes that they want (like video analytics), or didn’t realize was possible but now really wants (like an enterprise integration to their POS).  In every case the conversation typically culminates with the conclusion that there are 1-2 features that the customer views as absolutely critical to their business.  From the customer’s pespective, these are the must have features to be able to generate a return.  From the vendor’s perspective, these are the must have features to be able to win the business.  Killer features you might say.

Having the right set of killer features for your targeted market is then obviously pretty important.  Having them gets you a shot at new busines, it gets you included in the RFP, it gets customers excited about the near-term value you can add.  Clearly its better to have the killer features than not.

Is it the most important thing?  I don’t think so.  The problem is that killer features are an ever-changing thing.  As customer’s use of video changes and evolves, the features that are most valuable to them change as well.  As you expand the base of users of video from 10s to 100s you get new killer features from your new users.  Killer features are a moving target and always should be.

One could argue that what is most important then is a company’s ability to identify and implement new killer features over time and to roll them out to their users as quickly and efficiently as possible.  I’ve heard the argument that video is a pretty simple and well understood business and that there aren’t really that many changes that need to be made and certainly none that need to be quickly rolled out.  I think this comes from the view that video is simply a security tool for the security and LP groups.  I’m not seeing that on our side.  We have customers with over 1000 users, only a handful of which are security and LP users.  Almost all of the usage is from operators and managers on the business side and I can tell you their requirements are constantly evolving as they have never used video before and are still learning how best to make use of it.

It’s in this environment of broad-based utilization by a diverse set of users where having all the right killer features on day one isn’t the most important, being able to quickly react and deploy the right killer features is the key.

One of our big prospects offered up the following quote from Charles Darwin that I think sums up my view the best:

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Remember those images where if you “defocus” your eyes just right you can see a 3D image jumping out at you on the page?  These “stereograms”

A new imaging chip from Stanford University uses a similar principle to capture an image which includes depth information.  It sounds like they are looking at digital photography, but one can also imagine this technology trickling it’s way into surveillance video.

As I was about to deliver a SaaS overview to a large partner sales force, the SVP used this quote during his introduction of Envysion’s MVaaS technology to the team. It has stuck with me ever since and as Enysion continues to evolve, the impact of this statement gets stronger and stronger.

I’ve had the opportunity to mindshare with many of our competitive representatives who have been in the business for, in some cases, decades. I love getting the backhanded question, “Envysion, hmpfff – isn’t that some kind of web thing?” I explain our approach to the market, technology, benefits, etc… and I usually get looked at like my nose is on backwards. Following one lively debate that started with “MVaaS, that won’t work”, I was actually asked if we were hiring.

Calling MVaaS disruptive is sometimes an understatement as we are clearly seeing the fear in the traditional competition’s eyes and actions. We are disruptive because we’re not just selling boxes. We’re not just selling a service. We’re not simply trying to become a part of an LP budget. Our consultative approach becomes part of a larger organizational solution that leverages managed video to mitigate risk, improve operational efficiencies and increase profitability. We aim to become a partner, not simply a vendor.

Like so many other industries before it, security and surveillance is experiencing an IP transformation. We’ve seen what happens to companies that don’t get ahead of the curve or just hunker down and hope the fad will pass. Just open up the business section – they’re dead.

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!

There are many components to success in business, one of them being in the right place at the right time. Over the years I’ve seen this occur both through careful planning and execution as well as sheer luck. Regardless, if you happen to get caught up in the buzz around the must-have service, product or technology, the media can be you best friend.

Over the past few months, Envysion has seen an abundance of validation from leading industry and mainstream publications who are trumpeting SaaS and other disruptive managed service technologies as one of the best ways to cut costs and do more with less in today’s economic climate. To no surprise, there appears to be a correlation to funnel growth in both direct and indirect sales efforts. Following are samples from these leading publications:

“The movement to web-accessed, centrally hosted back-office software and services has gained momentum…”
 – Nation’s Restaurant News

“…the hot technology for 2009 will be anything that can save money… businesses are saving by using web-based software instead of programs installed on their computer systems.”
 – Wall Street Journal

“Disruptive technologies are expected to emerge within the video surveillance market… e.g., Managed Video as a Service”
 – Severin Sorensen, Past Chairman Physical Security Council, ASIS

“Managed services the talk of TechSec”
 – Security Systems News

MVaaS named Top 3 Emerging Technologies in Video Surveillance
 – ipVideomarket.info

When I hear talk about the virtues of “Software Only” video systems, I kinda think, huh?  Since when is a camera made of software?  I think what is really being talked about are the virtues of a multi-vendor solution as opposed to a single vendor solution.

Multivendor network video systems are a great direction and the wave of the future because they deliver more value to the customer.  They give customers more options to put together solutions which better fit their needs and better prices

Today’s IP video solutions which promote “software only” are really saying, buy your choice of cameras (mix and match for your needs) and your choice of recording hardware (PC’s made by Dell, HP, etc..), and buy your software from us.  That’s a huge leap forward from the analog video surveillance market which has really only had competition on the camera front and locked in customers to buying recording hardware from the same suppliers as the software.

What seems to be taking some time however is the increased cost of the IP cameras is worth the benefits of a multivendor recording solution. It would be great if there were some open standards DVR’s out there, but alas, they don’t seem to exist.  If and when this happens, I can see a lot of value being created for customers as very cost effective DVR’s can be sold as part of a multivendor solution.  Imagine being able to buy whatever DVR suits your needs and cost requirements and being able to link that DVR with the advanced software platforms out there today, such as Milestone, OnSSI and of course, Envysion Video.

Having worked in telecom and enterprise networks for 15 years I strongly believe multivendor networks are often the right thing for the customer.  There are so many things a network needs to deliver that to deliver the “best of breed”, multiple vendors often have to be used.  Of course, there’s the healthy pricing competition that comes along with having more than one vendor bid a solution, and continue to bid upgrades and growth of that system going forward.  As a customer and builder of network solutions, it’s no fun to be locked into a single vendor’s solution.  Price is a huge concern here when the vendor knows how much it will cost the customer to switch vendors.