In a presentation he gave at the beginning of this year, Fredrik Nillson (general manager for Axis Communications in North America) remarked that: “In a tough economy it becomes even more important to evaluate the partners you work with. Do you want to invest in a long-standing partner, or one who runs the risk of not being around in a year or two? Is there a chance the particular division you work with could close down? Long-term partnerships are a major strength of the security industry. Don’t lose that perspective, especially when times are tough.”
These are wise words indeed from a company that pays particular attention to cultivating alliances and spends much senior management time in scouring the world to find the right partners.
While the ownership and longevity of the partner is important, though, the vital issue is that all the partners win.
Crunching the numbers
Over the last four years we’ve been charting the incidence of alliance and partnership arrangements in the physical security business. We should point out that our sample does not represent the total population, but we’re convinced it’s of sufficient size to confirm the changing trends driving alliances and the importance that both large and small companies are giving to them in order to develop more business opportunities and increase market share.
In the three years from 2008 to 2010 the number of alliance arrangements recorded by us doubled from 45 to reach 91 in 2010 and in 2011 it just topped 100, while the most rapid growth was in 2009 when the number increased by 75%.
For the first six months of this year the number of alliances is down by 40% on the same period of 2011, but this smaller number looks more significant in what it could deliver and now involves multiple players joining together.
Particularly in 2008, the vast majority of these arrangements related to partners joining forces to make their products automatically communicate and work together. This could be similar products such as cameras or different horizontal layers in a system like video management solutions and analytical software.
A majority of these related to the video surveillance business and a significant proportion of these involved companies joining such programs as the Milestone software platform.
As there’s not yet a common communications standard, such alliances are vital if Best of Breed products are to be given a chance to flourish.
The other alternative to an alliance is to manufacture a complete portfolio of products that have been designed to work together: this is what the major suppliers have been doing for many years and using their own proprietary communications protocol. However, this method is no longer acceptable to most end users.
Demands of the end user
End users are demanding full plug-and-play devices and seamless integration with other control infrastructures (including convergence with the business enterprise).
Alliances need to go one step further and extend the digital link to enable end-to-end communication such that all the information and data can be brought together seamlessly in providing an automatic integrated solution.
Interoperability may no longer be enough. Vendors of IP-based surveillance cameras and video management systems are ‘upping the ante’ on integration certification. They are providing integrators and end users alike with documented validation of more comprehensive functional integrity between their respective platforms.
As IP drives more end user interest in assembling Best of Breed solutions, and as standards from groups such as ONVIF and the PSIA are incorporated into commercial products, so vendors will find they need a stronger differentiator beyond basic plug-and-play.
In the last 12 months we have identified more alliance arrangements between manufacturers and system integrators, working together to provide a solution for a particular vertical market and sharing the development and promotion costs.
IT network design and installation companies are crossing the boundary between IT and physical security to offer a complete solution but are, in many cases, doing so through collaboration and alliance with physical security suppliers.
Very noticeable of late has been the identity validation suppliers move towards integration with access control. Their preference appears to be to go the whole way and acquire an access control manufacturer.
Allan McHale is director of Memoori
The Memoori Blog focuses on business intelligence, comment and insight in relation to the physical security and smart grid industries (access the dedicated web link below)
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