There has been quite a bit of debate on the challenges of POS-Video integration, but today I read an article on what’s required to translate integration to business results. Point being that effective integration is tough but once you integrate there are some additional things required to translate the opportunity to real dollars. Can I get an Amen? Here is the link, it’s a quick read. Overall, some good points in there. I’d add a couple expansions/modifications.

#1 on the list of to-do’s is to ensure that the video provider offers text overlay. I’d suggest that what you really want is effective time synchronization and ability to see full receipts next to & together with the appropriate video. I’m actually not a huge fan of obstructing the video and picture with transactional data. What you want is effective synchronization and visibility. An additional challenge is that overlay with some providers is an indicator that the really don’t have the data – meaning the customer can’t leverage/manipulate data (more on value of this shortly) and/or that the camera-overlay text is hard coded so you can’t view the video with out it and you can’t switch to different camera angles with the same data viewed. Probably easy to see the challenges here.

#2 on the list is to ensure you get ‘abnormal event alerting’. I completely agree that you need exception alerting but what about reporting as well? Customers benefit tremendously from being able to do ad hoc and pre-determined reporting across POS data and then pulling up video from any of the transactions that make up those reports. It can provide the ‘second layer of the onion’ that goes beyond a warning signal and validates if there is really a problem.

In the close the author also suggest that customers ‘work with an experienced integrator who can ensure your system is properly functioning, provide technical support and can remotely monitor the system to ensure it is fully functional.’ So buy in other words buy a hardware solution and then pay a 3rd party to watch after it…as you might guess I’d suggest the logical alternative is to get a managed video provider who does both. A good managed video service provider will not only perform the integration but also will monitor your solution to make sure its working and train you to ensure it delivers the value you need.

Lastly, a customer should consider not only POS system integration but selecting a video platform that will integrate to other business systems. How about Access Control? Or Alarming? Intrusion Detection? Similar value from video integration can be realized in these areas.

All that said, I agree that the moral of the story here is that integration is just step 1. To unlock the value there some additional components a customer needs…and managed video as a service seems to fit the bill well.

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!

Envysion & Zayo are hosting an open house and you are invited!

To celebrate our respective moves into new headquarters Envysion and Zayo are hosting an open house on Thursday, May 20 from 3:30 – 6:30pm.

We’ll have demo’s of the Envysion application, tours of our new facility and we’ll even have Louisville’s Mayor Sisk on hand for a ribbon cutting at 4:30.

There will be refreshments and hors d’œuvres served. Your family is welcome.

So if you happen to be in Colorado on Thursday the 20th, swing by. Hopefully we’ll see you there

So one of the big new issues on the SaaS market is, how to integrate cloud to cloud?  Or to cut some of the jargon, how do you integrate your applications you use every day when they are hosted by different companies?

Hosted customer relationship management, hosting billing, hosted POS system, Hosted Video and Hosted Access control seem to make sense.   But there’s not a single provider (nor perhaps should there be) for all these services.

If you want to use them all, and use them together, can you?  The answer is only through writing your own solution and/or hiring someone to write them for you.  And that’s only possible if the hosted system has some way for you to import and export data from the system.  Without that, integration is not really possible.

But not to worry!  While integration between applications can be a daunting task, the cloud really doesn’t make this any more difficult.  In fact, integrating clouds might be easier that a traditional integration of Enterprise deployed systems.  As each service or cloud application integrates, the integration between those services can be shared across all their common customers.

So when it comes to managed video, what is the most valuable or popular service that should be integrated?

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Top line growth is paramount to business start-ups, and this is no different for us.  Our focus on attracting new customers has not changed.  What has changed is how this growth is measured.

In the past, we would tout the Contract Value of the customers we had signed in a given month.  But as illustrated in the previous post, this number can be misleading.

Therefore, the primary metric for our Company (other than cash) is Committed Monthly Recurring Revenue (CMRR).

CMRR is the total of all monthly recurring revenue, net of expected churn during the next six months.  The metric includes revenue that has been installed and is being recognized, as well as revenue that has yet to install but has been committed to by a customer.

In retail, the Point of Sale (POS) system is one of the most important and useful data system for their entire business. Being able to interface this with video is obviously extremely valuable.  But it isn’t exactly easy to get value without a relatively deep integration.

Beware that a lot of vendor’s POS integration is simply a text overlay on top of video. I suppose that counts for something, but that does not make the POS data searchable or reportable. Without being searchable and reportable, the resulting “deluge” of data makes POS integration not very useful

Another difficulty is that the POS market is very fragmented. Radiant and Micros seems to be among the dominant vendors in quick service retail, but collectively still only hold a small percentage of the market for quick service retail. Other retail segments use entirely different POS vendors. Even within a particular POS vendor, there are often several versions of their products, including simply different versions of code that change the data they output.

Further, each customer often will customize their implementation of their POS in ways that require at least some customization if you want to do reporting. With rich capabilities in one’s video system to interface with POS, adapting to these customizations is not a major ordeal.

In addition, there are a few technical details like

1. time synchronization between the POS system and the Video system,

2. updates to IP addresses, firewalls, network routing and so on between the video and POS systems

3. software upgrades on the POS system and the video system and maintaining compatibility.

4. Security rules, concerns and issues

5. Interdepartmental issues related to resolving and keeping resolved all the above when there is a separate network provider, video provider, POS provider and IT deparment.
Once you’ve integrated however, there are big benefits to the customer.  Is all that work worth a 10-20% increase in profitability?  You bet it is.

With a good software framework, integration is quite a bit easier. It’s taken Envysion 4 years to get where we are with POS integration.  We have that framework and are continually building upon it.

A few more issues are looked at over at John Honovich’s blog.    The Retail Solutions online magazine ponders that even more integration is valuable or is perhaps wasting video intelligence?  Integration is hard, but when you have the right data and reports, it’s extremely valuable.

In my prior post, I alluded the plane crash of 1999, where JFK jr. and his passengers (his wife and sister-in-law) perished.  The NTSB concluded that the probable cause of the crash was pilot error, which was contributed to by the fact that the pilot was not instrument-rated.

Why did I bring this up?  Prior to Envysion’s launch of Envysion Video in 2007, software-as-a-service had not been introduced to the video surveillance marketplace.  We were one of the first companies to the mark.  It has taken some time to help educate the market, but we believe that the more and more companies are recognizing the unique benefits of MVaaS. 

With success has come a clearer focus on achieving our growth aspirations.  It has also caused us to reflect on what the growth may mean to current and prospective investors.  The conclusion was that the metrics we were utilizing to gauge performance were not adequate.  They served us well for a time.  But as our growth has accelerated, the metrics were not adequately presenting our financial performance.  In a sense, we risked becoming pilots without an instrument-rating.

Perhaps one of the most overlooked departments that can benefit most.

Marketing

Wikipedia opens its definition of marketing with a simple statement: Marketing is used to identify the customer, to keep the customer, and to satisfy the customer.  Envysion’s MVaaS virtually transports marketing representatives to the point of purchase. Want to know who is purchasing a new menu item or redeeming the latest promotion? Envysion’s Insight service with POS integration makes this possible. Run a report and review video focused on a specific coupon redemption and understand where to target your next round of advertising dollars. Also, gain insights on who is buying a la carte instead of combos. Are your drink and side options leaving a specific demographic in the cold?

Large national brands have advertising budgets in the millions and include everything from TV and radio to print and point-of-presence (POP) materials. Ever wonder if the POP materials shipped to several hundred locations were put up in time and in the right place to coincide with the TV, radio and local marketing strategy? Envysion allows for instant review of all sites from a single username and password through our SaaS web interface.

I’ve heard from those who were alive in 1963 that they will always remember where they were when they received news that JFK was assassinated.  Since I was not born yet I can’t count myself in this group.  However, I have a similar recollection of the morning that news broke of his son’s fateful plane crash in 1999.  It certainly did not elicit the same national period of mourning, but I’m sure that it brought many of those who experienced the first trauma back to 1963.

As speculation persisted over what happened (over the period of weeks, probably), one thing stuck with me.  A primary driver of the tragedy was the fact that JFK Jr. was not qualified to fly at night.  He was not an instrument-rated pilot.  Therefore, since the flight was at night and the weather was poor, he was unable to utilize visual cues (e.g., the coastline) in guiding his pilot reactions.  And since he was not qualified to fly utilizing only his instrumentation, he became disoriented and crashed.

I am not well versed in the field of aerospace.  My knowledge begins and ends with the requirements of lift and thrust.  So the fact that the concept instrument-rated has stuck with me is curious.  And it is more so as we’ve undergone a shift of the instruments that we use to measure our performance at Envysion.

This is the second part of a post I started right after ISC West before I got distracted by customers, sales, moving our HQ into a bigger facility, etc.

A killer application is one that drives a material increase in demand for the underlying platform on which the application is based. The key phrase in there is “material increase in demand”. This is very different than an application that drives a material increase in a company’s market share – it requires that the app increase the size of the pie for the platform.

I would argue that the majority of innovation in video these days does not meet this definition. The majority of innovation that I see is focused on increasing the share the innovator has of the current market.

As an example take megapixel cameras – this is a great innovation and it will certainly lead over time to megapixel camera providers taking share from lower resolution analog and IP cameras. However, does it increase the fundamental demand for cameras or video? It is not clear to me that it does. Businesses that used to buy lower quality cameras will now buy higher quality cameras. Maybe the revenue per camera goes up, but this will be offset by potentially lower camera counts as users cover areas with fewer, but higher quality cameras.

As another example take DVR and VMS innovations. There are ample examples of DVRs and video management systems that continue to improve, adding new bells and whistles and continually driving down the price/performance curve. With these new capabilities existing security and loss prevention folks can be more effective at what they have been doing for the last couple of decades. All of this is great for the industry and great for the vendors as they compete for share, but I’ve seen very little of it that will fundamentally increase the underlying demand for video.

The solutions with “killer app” potential in the video world are those that create demand for video in people or businesses that aren’t using video today or that cause existing users of video to require an order of magnitude more video than they use today.

Given the high bar in this definition – increasing the size of the overall market – only time, and not a marketing guy or company exec, will tell us whether there were any “killer apps” at ISC West last month, but I sure don’t think I saw one.