Disqus - Latest Comments for Sikyur

Re: ASIS Show Review

Severin Sorensen, CPP — Mon, 10 Sep 2012 22:40:01 -0000

The case, Marchese v Milestone.
http://news.priorsmart.com/...

Re: ASIS Show Review

Severin Sorensen, CPP — Mon, 10 Sep 2012 22:36:08 -0000

John, your picture of the Marchese patent photo tells the story of the maturing of this market and my takeaway from the show. The May 2012 Marchese v Milestone patent infringement lawsuit is significant and strategic. They are they next OV of patent enforcement. The VMS case lodged by Joe Marchese in Michigan courts will not go away without a great legal fight or vendor capitulation. Marchese was smart to document his early ip where others tilled without thinking strategically about their forays into the market. Perhaps only Axis, IndigoVision, VideoJet (Bosch), and the failed Eyecast (Nice Vision) can show prior art. There are also some defense contractors formerly operating in the black that could possible show prior art. However for most early adopters they must be concerned. It's time to pull out all the history books and trade craft notes as this one proves to be ugly. Perhaps a Cisco or Microsoft might buy the patents and finally commoditize the vms market. My hunch is that we are only seeing the tip of the vns ip iceberg.

Re: Top 10 Surveillance Myths Debunked

Severin Sorensen, CPP — Wed, 06 Jul 2011 18:47:33 -0000

Myth: 80% Analytics is Good Enough.Fitness for a purpose is the key; 80% accuracy might be good enough for some applications, but for most applications that require reduction of manpower to be cost effective, analytics still pull up short. The human being is still more valuable at detection. Here are a few examples:A security director at a national banking retailer reported to me that until analytics are 98% accurate, they cannot replace the bank teller as the means of providing positive identification of the individual presenting themselves at the teller window. A security manager at a multi-billion dollar construction site reported to me that the false alarm rates of the video analytics were so bad that they could not replace the police and guards posted about the perimeter of the site, hence they saw very little value of the analytics as a labor saving device.Where analytics has been successful is in primitive applications (where other sources of detection are available) and in highly controlled settings (such as on a conveyor belt or routine activity environment). I think it is possible that the reported 80% level of accuracy is still too high, as highly dynamic environments produce routinely produce results that are lower than this level, and hence not too useful to provide reliable detection or replace manpower requirements -- two stated goals of analytics.

Re: ObjectVideo Expands Patent Infringement Claims

Severin Sorensen, CPP — Tue, 17 May 2011 11:14:25 -0000

John, I share Derek's disgust presented above.

In my view, OV is a collasal commercial failure that received far too much venture capital monies for the lackluster performance they provided within the industry. They are a feature wrapped up to look like a business. But regardless of their financial or software performance, when does having the best marketing substitute for being first to market with commercial ideas? I find it amazing that OV ever received the patents for technologies already in wide use in the market. These technologies were presented by OV were preceded by prior art used in machine vision and national security applications implemented by commercial interests long before OV purported first use of the technology. It is ridiculous.

As Derek so ably point out, this is nothing more than patent trolls and opportunitists emerging in an aging market, who have otherwise failed to show a marketable value for their products or technologies now focusing on obtaining financial success by other means. It is disgusting, and for my part, I hope the targets of the OV suit challenge these patents vigorously and do not individually crater to the demands of the OV legal team. It is nothing short of extortion by legal means.

For my part, I was recently approached by a well financed legal team with a request by them to explore a relationship to represent their client in this suit; I had some initial interest as I think this is an important issue to resolve thoughtfully and critically for the industry; so imagine my surprise when the attorney's revealed that their client was OV and they wanted me to consider representing them as part of their expert witness team; absolutely not was my reply, and I told them that I thought their claims were baseless, the patents should never have been granted to do prior art, and I had no interest in representing them on this issue.

There will undoubtedly be others who will take the money and represent OV, but it will not be me.

I like Derek will keep watching and observing this tortuous drama unfold....

Re: ADT Sued: Remote Monitoring Patent Lawsuit

Severin Sorensen, CPP — Tue, 03 May 2011 01:20:54 -0000

Bill, thank you and bravo! I absolutely appreciate your contribution to this thread; what a treasure of historical knowledge you shared. In my brief narration of the industry, I was aware of some military spec and alarm applications in the mid 1980s but chose not reference them, and you are correct they too should be referenced. However, I was not aware of your detailed contributions, and they are excellent, and they most certainly should be referenced in the written history. Michael Oakshot, the famed British historian once said, 'the past is the past, but the history is what's written.' I am afraid, that the history on video surveillance is not written, and it will be up to many like yourself, and other pioneers to come forward with their inventions, prior art, and set the record straight.

Indeed, I suggest the preparation of a Wiki on Video Surveillance -- something that contains the history, pedigree of prior art, and gives some praise to the many that pioneered this industry, and something that can hold up to the many eyes that will challenge the assumptions in the bright of day. I think it is a worthy project, and my hunch is that it will be prepared by the defense teams seeking to cast off the claims of originality of the patent in contest.

On this note, many years ago (meaning in 1988-89) I was volunteering time as an economist for a non-profit looking at space commercialization and the economic impact of science policy goals after Sputnik. In my research, I came across a Fairchild Industries innovation pedigree chart showing the many, many companies that were involved in innovation, and the subsequent spin-offs by the companies and cross pollinated employees who started new companies, or joined other firms; it took an "Ancestry.com" pedigree type software just to track the changes and movements of the people and firms. It is my hunch that before the law suits are settled in this case, I think you will see similar pedigrees of prior art, and even then the linkages must be proven; again, it sounds like the lawyers and expert witnesses will be the real winners here.

Again, Bill, I thank you for your contribution to this history thread; and John, I thank you for putting up a forum where dialog's like this can be heard; this debate is no where close to being settled; we have likely not even finished the beginning of the first chapter in this intellectual property issue. When it all comes out, I would suggest that in this field, because of the security nature of the technology, there was additional technology in commercial use for government or military applications that was deliberately not patented because of the cold war and nation-states desiring to keep a technical edge on their friends and foes.

This will indeed be an interesting thread to read over time.

Re: ADT Sued: Remote Monitoring Patent Lawsuit

Severin Sorensen, CPP — Fri, 29 Apr 2011 19:11:02 -0000

John, thanks for posting the news story. My first reaction on reading the headline was, patent trolls, oh joy.

On reading through the documents, here are my preliminary thoughts on the issue, and why specifically I think the patent referenced in the case is non-defensible, and I provide herein a comment on the museum of available historic 'prior art' that may be explored further to unravel the alleged claims of the suits.

In my view, had a proper industry survey of business practices and monitoring been conducted, the patent would never have been granted; there was widespread use of remote video monitoring technology globally (UK and USA) from a central station construct performing remote video monitoring using central station operations, servers, etc as described long before this patent was granted.

In the early days of remote video monitoring (meaning late 1980s to mid-1990s), technologies were quite new, most were limited to POTS and ISDN communications, and many operators used their internally produced tradecraft to get a superior market advantage without patenting and exposing their intellectual property knowledge to the broader market. When Axis Communications released its video server in the mid 1990s, it led to disruptive creation by many developers that accessed the tools provided by Axis to create a new IP video industry. There were many un-patented inventions released commercially, and this fact should be sufficient to protect any from the claims of the patent suit. There is just too much prior art out there in the manufacturers, integrators, and central station operations to give any credence to this claim.

Truly the early operators in security related video used in central station server transaction events were Dedicated Micros (DM) and Vision Fire and Security (with their AdPro line) and they had server based systems operating globally long before these claims were made. After these early entrants, came Axis Communications that introduced their video server in 1996. The Axis strategy was to get developers to adopt their technology so very early on SDK type tools were introduced for free or low cost to developers to adopt this technology. Some of the early users of these SDK tools and camera servers were the defunct Eyecast (that went bankrupt in 2001, and interestingly re-constituted by one of the original founders only recently), NICE Eye (that was abandoned by NICE Systems when it was determined not to add sufficient returns to the manufacturer focus of their main product line) wherein the developers spun off, came to the US and founded DVTel, and many other creative individuals operated during this time, all preceding the claims made by the patent holder. And there were many others creating video server solutions that predate the claims including Indigo and VideoJet (later acquired by Bosch).

Further, in terms of classical video monitoring and surveillance systems networking using servers specifically referenced in the patent, even the popular SureView Systems Immix software used in many central stations today in the US and abroad for monitoring video has its roots in its parent "Farsight" surveillance, founded by Andy Bromley, who along with his brother Paul, had similar inventions that long proceeded the patent origination date. The Bromley's developed what would become the modern "interactive" monitoring solution using commercially available technology from Axis, Sony, DM, AdPro, Redwall (Optix) and many others.

Consequently, given the above, finding prior should be no problem for the defenders of these claims. Consequently, the only ones who will make money on this patent scare are the attorneys, and of course a few expert witnesses :) The ones to loose money will be the poor defendants forced to prepare defenses for their claims. It is always possible that one or more of the listed firms will crater and sign a settlement release rather than litigate, but I think it is highly unlikely as there is just too much readily available prior art.

In closing, some time ago I prepared an analysis on the genealogy tree of invention in the IP video market, and it is truly an incestuous cacophony of inventors, engineers, and imitators, that pioneered this industry; so perhaps it is time to widely publish this history of this industry and give credit to the true inventors of this industry we now call remote video surveillance.

For my part, I strongly believe that patents, copyrights, and protecting intellectual property are essential to protect capital enterprise and reward inventors; however in this instance, it appears that the patents referenced in the suit should never have been rewarded as the inventions were neither unique, original, or first of breed.

Regards,

Severin Sorensen, CPP
Sikyur LLC

Re: Debating Axis's IP vs Analog Cost Comparison

Severin Sorensen, CPP — Thu, 16 Dec 2010 12:10:44 -0000

John,

On reviewing this thread, it is clear that the Axis marketing department failed to live up to the high reputation and standards of their company, and their industry-leading company reputation was blemished by this incident, when the marketing department attempted to pass off as serious market research some insular data examining only a finite set of specifications for an installation where their horse race was fixed so that Axis' horse finished first. You (at IPVideoMarket.info) have called them out on this, and have bagged and tagged them. In fairness, you also mention that they are not alone, Toshiba and others have been known to report similar results.

But this incident should be a wake-up call for all manufacturers [not just Axis] -- the industry is watching, manufacturing research and spec sheets need to be closed reviewed for puffery. We have entered a new era of accountability by the industry (including sites like your IpVideoMarket.info), and the liability attorneys are sharpening their swords to go after false-claims, and beware, it is happening already. In an unrelated case, meaning Not-Related to Axis, I learned in October 2010 of a major case in Texas where a security consultant relied on the manufacturer marketing materials to specify a project, wherein the end-user client was left with something less than advertised by the manufacturer, and in this difficult economic environment, the end-user client sued for recovery of financial damages both the security consultant and the manufacturer over the non-performing solution.

The Australian's have a phrase, "there are horses for courses" and I think this applies to the IP v analog debate. I would like to see a serious 3rd party study of installations by size and type across a cross-section of industries; I really don't care who pays for the study, so long as the research is unbiased, the methods are declared, and the results are reproducible by others (confirming the unbiased nature of the technical approach).

I think at an intuitive level there is a point where the value of a standards based IP solution such as Axis trumps a non-standards based solution, and also where IP beats analog, but one cannot categorically say one is better than another as the security assessment findings and requirements document for a specific location should define the solution set. Further, as your readers/bloggers have pointed out, there are many less expensive IP solutions heading to the market that will further cannibalize market share of the hegemons. I also liked the comment of the reviewer in this thread that spoke of Google/Android and Apple I-products targeting core parts of the market. Whether anyone inside our industry gets this -- the technology leaders outside of security are placing laser sharp focus on the security industry, and I anticipate some reordering of the deck chairs when we in five years look back at this disruptive era. I personally can't wait to get my hands on the new Ipad with camera -- as I think this singular device will disruptive to the industry.

Regards,

Severin Sorensen, CPP
Sikyur LLC

Re: OnSSI Goes on the Offensive

Severin Sorensen, CPP — Wed, 01 Sep 2010 16:28:36 -0000

One of the great values that I see in John's IPVideoMarket.info is it is a "no bull shit" zone; thank goodness somebody is doing this. There is too much industry propaganda, confusing spec sheets, and over-reaching marketing statements of manufacturing system capabilities (such as my favorite -- "my XYZ Digitial Recorder can record HD video, for 5 years, and save data at 30 FPS" -- it may do all of these things individually, but likely not without some serious engineering and technology infrastructure at the same time; and this is why I think that John has been so successful with his website. Identifying and defining technology nuances is one of the great contributions that John has provided a forum here at IPVM.

Humor definitely has its place, and it might be a good idea to have a section on the IPVideoMarket.info website for most comical installation stories, worst camera installed, most ridiculous manufacturer literature claims, and we would all share many laughs.

Additionally, I particularly liked the original funny animation of the $12 camera that can see in total darkness, get license plates etc; we have all been there, that is real world experience repeated too many times; for my part, I laughed so hard that I cried; the video went viral and I received it from some of my friends (thanks Steve O.). The animation seemed to poke fun of all of us in the industry, and our clients, and there is little risk anybody took it seriously; it was all tongue in check, and should win a SAMMY!

However, I agree with John, this latest video however is pure propaganda camouflaged as humor; and it may cause more confusion than light. Good humor plays on our common experiences and conventions, and that is why it is universally funny. However, the latest video sought to teach us new information, that was not entirely true, and seemed in my view to fall short. I agree that humor is a great way to teach, and if the makers want a viral video, then it needs a serious makeover.

Re: VMS Competitive Comparison 2010

Severin Sorensen, CPP — Wed, 26 May 2010 21:45:03 -0000

John, is there any way to add to your future VMS assessments the number of units produced of various VMS, or as an alternate, the last date of creation, software rev, etc? I don't know if this information is readily available, but it would be a great addition. I have long advised clients to wait for a sufficient number of units to roll before purchasing new product so that they are not beta testers, or worse alpha prototype guinea pigs. Regards, Severin

Re: VMS Competitive Comparison 2010

Severin Sorensen, CPP — Wed, 26 May 2010 21:44:38 -0000

Re: VMS Competitive Comparison 2010

Severin Sorensen, CPP — Wed, 26 May 2010 16:14:48 -0000

He has a right to criticize, who has a heart to help.
Abraham Lincoln

Re: VMS Competitive Comparison 2010

Severin Sorensen, CPP — Tue, 25 May 2010 18:02:47 -0000

Mr. Abelardo A. Tous-Mulkay, I think your comment desires a reply. It should not be surprising that a king is liked in his own kingdom, and I agree with you -- this is John's site. However, these are comment boards -- and comments refine, magnify, and contribute -- or at least that is their aim. To provide some context for my remarks, John and I are friends, and we have been friends longer than IP Video Market has been a project. It is for friendship sake that I provide such respect and kindness in my prose. It is out of respect for John and the industry that I challenge John to do more. Certainly no other industry players has invested the time or interest to put out the research that John has prepared on his website for the IP video domain. Yet one must be mindful that many people read these comments and take them at face value -- all that I am suggesting is that more rigor go into the decision-making, calibration, and analysis. Furthermore, my request is consistent with previous requests and comments of mine on this site. If good is good enough -- ok; but I have always favored Goethe's maxim, "As in art, the best is good enough." That we may all do are best is my simple plea. Respectfully, Severin

Re: VMS Competitive Comparison 2010

Severin Sorensen, CPP — Tue, 25 May 2010 11:20:20 -0000

John,

I think you deserve industry applaud for your monumental efforts to provide objective data at a reasonable price to the industry. And not in any way to sully your great work efforts put into making this most recent report, sadly the results lack scientific or monetary calibration and risk leading one to make inappropriate conclusions. Indeed, I fear that your results will add more confusion than light as there are many nuances not reported or captured in your categories or report.

So while I loudly applaud your work efforts, I think your research in this instance falls short of what the industry needs which is more of a scientific PC Magazine type Tabletop Benchmarking and Shoot Out lab of VMS and equipment reports with highly calibrated measures, open published standards, and independently reproducible results.

I am by no means discouraging you from producing results, but I am merely suggesting that you have not gone far enough, and relying on your current results will not necessarily lead the integration and consultant readers of your report to make appropriate recommendations for their clients, as I believe this was a fundamental intention of your report.

A couple of specific items that illustrate my point:

1. The use of "weak" as a term fails to describe pricing adequately; perhaps cost per channel, annual licensing, or other metrics (or other measure that describes available data viewable or on recall (cost per IPS etc) could be used to more precisely describe this measure. Should a VMS be reported strong for pricing if it has few features, and moreover, should a VMS be reported weak if it has greater number of features and reliability? The imprecision of the measure of weak vs strong seems to fall far short on this category.

2. Another improvement suggestion would be to stratify the VMS report by what the VMS purports to do: enterprise, QSR, SO/HO, DIY, etc. The ranking seems underspecified with too broad of categorization with too little nuance; a large provider may have multiple versions that allow almost ala carte licensing or use of added services, but these are seemingly punished in your review (e.g., Milestone is widely used for their video wall distribution yet you rate them as "none" with only a reference that Milestone Corporate has this feature); the video wall distribution feature is a hugely important feature for the Milestone solution but need only be purchased by those that require it -- consequently labeling the solution as "none" seems to under-specify or under serve your readership on this category.

3. Some features identified as missing are not missing, but performed at different stages of the installation. For example, Milestone is a network solution and redundancy is simply created through redundant storage server configuration yet you rate it as "not supported", and this is not correct. It is a networking issue and can be backed up similarly to any other data network, and the fact that the redundancy may not be done through the VMS does not mean the data is at risk.

In closing, you have indeed made a contribution, but to state my general summation of your data in econometric terms -- the material results that you provided are necessary but insufficient to make meaningful conclusions on the VMS systems you seek to describe. It is just not good enough, and I encourage you to consider a do-over with a more rigorous rubric of measures.

Respectfully,

Severin Sorensen
Sikyur LLC

Re: No Pickup in Orders

Severin Sorensen, CPP — Thu, 20 May 2010 12:57:29 -0000

In the words of Thucydides, "the strong do what they can, the weak suffer what they must."

John, thanks for your report. I will use your report as a window to make a broader economic market comment. I am both a trained economist and a security industry professional, and here are some observations on the market.

I don't think that ADT is unique in their market assessment -- it is difficult out there selling and closing business; much more blocking and tackling needed to get jobs started.

Since the dramatic market crash following the fall of the house of Lehman Brothers in September 2008 -- there is still an overhang of delayed decision-making in the security markets. Continued cost cutting may make operations leaner, but it does not create greater top line revenue. For my own book of business, I still have large system integration projects frozen since the Sept 2008 market crash, and though I see some melting in the freeze -- requests for refreshed cost estimation -- I do not see an increase in intensity or urgency of project starts. Considering the broader market, with the exception of NYC, that is using the urgency of the recent failed Times Square Bombing attempt, I see little urgency out there to complete or put up new projects. CFOs are still micro managing the security directors budgets, and this does not seem to have let up since Sept 2008.

My greater economic market concern now however is fall 2010, particularly post election 2010 and the continuing debt crisis (not just in Europe).

I am greatly concerned that the security systems market domestically is based on light commercial demand and too dependent on federal, state and local government funding, and while the state and local governments are in trouble -- a new post November Congress will likely mean great austerity measures impacting federal spending. Therefore the security markets outlook is troubled -- as so many state and local governments are facing huge budget shortfalls. The security market is not immune from these market cycles. To the degree that there is increased terrorism or crime wave risk with continuing economic turbulence, perhaps the security markets will fair better than other markets. However, I am again sensing foreboding economic market conditions that precede the decent for the economic double-bottom, not a pull out, of recessions.

So what to do? Focus on continued consolidation (great for vulture capitalists and strategic investors looking to scoop up good people, technology, and contracts), continued cost cutting, and outsourcing for efficiency. Implement disruptive technologies with huge cost savings on hard costs in client budgets. And speaking of clients, it is time to get to know your clients much, much better and know their revenue streams and issues (as they may become yours if they go bankrupt or get a contract cancellation); focus on monthly recurring revenue from a broad book of smaller clients, and look for ways to keep more contract resources for the prime contractor team that were typically assigned to subcontractors.

My prognosis, large security integrators with strong balance sheets will fair better and some will thrive, and small and mid-size businesses will suffer post election 2010, particularly with the forecasted barrage of new federal, state, and local taxes to tax the living portions of the market.

If you are a small or mid-size company, it is time again to secure capital for continued operations during a foreseeable second leg down in this market within the next year. I hope I am wrong, but it is difficult to look at the financial market facts and make any other conclusion. This is not a time to put your head in the sand and hope that the storm blows over, rather it is a time to be strategic, purposive, lock-in your clients, preserve capital, and fiercely protect your businesses. The roller coaster is about to roll over again.

Regards,

Severin Sorensen
Sikyur LLC

Re: Video Surveillance Weekly Update May 21 2010

Severin Sorensen, CPP — Thu, 20 May 2010 11:43:08 -0000

John,

I enjoyed reading your article.

I wanted to call out attention to some sophomoric or outright foolish comments attributed to the FBI spokesman concerning their broad recommendation to lower the camera installation height. Lowering the camera heights as recommended in the video would do little than capture the back sides of employees. The video used at the Wells Fargo Teller window was a counter mount, and is not the same size, form factor, or lens typically used in the wall mount camera. It would be far more cost effective to add a camera to capture faces in the vestibule or lobby entrance, than to relocate all bank cameras.

My point here is, I found it curious that the video expert referenced felt they could not use the video from the overhead camera of the bank robber, saying they had no face in the observed shot. At issue, outside of Bank ATMs, there are very few single camera solutions, and the cameras from the collective system would be used to determine identity. The visual markers observable in the video of the hat, beard, complexion, coat, and other observable traits would be used to match video against other video in the system. Perhaps the overhead camera at the counter may not capture the full face, but a good system would focus on putting cameras a choke points in the system -- such as the entry lobby vestibule where a solid shot could be taken cost effectively of all entrants.

The UK Home Office reported long ago that the design of cctv systems installation is first and foremost the leading indicator of success; agreed, and the design includes specific recommendations for particular uses at times and places. Merely moving the location of other equipment will not necessarily lead to better results for "there are horses for courses," and not all technology is suitable for mere relocation.

Just as it is disingenuous of Hollywood to over-hype the merits of video, it is disingenuous of law enforcement to complain that existing video has no merit, especially when there were so many observable markers in the video.

Thanks for your tireless reporting on ip video market issues.

Regards,

Severin Sorensen
Sikyur LLC

Re: The End of Integrators?

Severin Sorensen, CPP — Wed, 17 Feb 2010 00:25:25 -0000

John, I agree, the simplification of security technology offerings and commoditization of the formerly complex systems will create an environment where integrators are required less, as more feature rich solutions are bundled in the box requiring less talented personnel to install. It is a classic product life cycle dilemma, where that which was customized is made routine and every bubble head with a buck claims to be an integrator. When I compare the integration and engineering required in 1999 vs 2009, it is clear to me that the work can be done with less technical assistance as the tools are better and many solutions come technically wrapped in simplicity. I do not need to know how the engine works to drive a car, I only need to be able to read the instrument panel, and so it will be increasingly the case for security system solutions.
Regards,
Severin Sorensen, CPP
Sikyur LLC

Re: What Makes an Analyst Independent?

Severin Sorensen, CPP — Fri, 12 Feb 2010 11:09:30 -0000

John,

Thanks for your thoughtful comments. I do know you personally and professionally, and I know that you have the utmost integrity, and do your best at IpVideoMarket.info to keep far from any potential conflict of interest.

I think however there is a bigger issue here however, and that is the use of defensible, discoverable, and reported laboratory conditions and practices used to make technical conclusions. I personally don't care at all if any industry manufacturer paid to have their product evaluated, so long as the tests were definitely done by a lab, similar to what PC magazine does with their lab results; open, honest, benchmarks known to all, using instruments that are calibrated and testing methods that are known to the community. Surely UL labs provides a service that ensures that the product created is installed as recommended, reducing industry liability, and surely this is a service; this is vitally important for the fire and life safety industry. Unfortunately, there is no identifiable lab today that a security surveillance manufacturer in our industry can go to for such definitive results, therefore you have the situations that occurred with the reported analysis you describe in your original note. Quality lab work and bench testing takes money, and no manner of boot-strapping lab work can replace the value of highly credible, tested, and reproducible tests settings in controlled labs.

Regards,

Severin Sorensen
Sikyur LLC

Re: Spins Out Trax / Loss Prevention Software

Severin Sorensen, CPP — Tue, 09 Feb 2010 01:42:37 -0000

John, Call me a glass is half-full guy. I think this is a savvy market move, particularly in a tight capital market. The value of Trax was absorbed into the core March offering long ago and continues today. Consequently, leveraging the legacy intellectual property to gain more capital and partnering opportunities seems like a genius move to me. It is wise to get something for the remaining technology while there is still shelf-life particularly as what was once unique is fast becoming common place among March peers. Regards, Severin
Severin Sorensen, CPP
Sikyur LLC

Re: DvTel Acquires ioimage: High but Questionable Valuation

Severin Sorensen, CPP — Wed, 13 Jan 2010 01:28:08 -0000

John, I think the deal reflects several things not evident in the press release; (1) both DvTel and IoImage are spin-offs started by former NICE Vision employees -- much talent there and long-term roots in IP video knowledge, so there is a positive culture fit; (2) neither DvTel nor IoImage are advantaged by a low valuation, and this likely has more to do with repositioning DvTel for re-capitalization and potential take-out making; (3) I agree with an earlier poster that the IoImage earn-out is likely hockey-stick ridiculous in this market so who knows what it is worth; (4) To me this speaks more about the security market consolidating and lack of capital for go-it-alone providers -- and I expect to see more of these transactions where the strong do what they can, and the weak suffer what they must. The big question that remains to me is will DvTel be a better firm after incurring more debt in the transaction? Essentially, why would anybody choose to buy the manufacturer when they can license their software and purchase hardware so cheaply (relative to the huge goodwill that must now be posted). Furthermore, in my view it is software, not hardware, providing the key multiplier in profitability in the market. Burdening oneself with a purchase of a hardware manufacturer when the market is headed the other direction towards software -- and more precisely cloud based computing solutions -- seems shortsighted to me. If the DvTel purchase of IoImage was a firesale acquisition, well, ok, but it appears to me that the whole company is prepping for a future asset sale, rather than a core investment for the future. Just my two cents worth.

Regards,
Severin Sorensen, CPP
Sikyur LLC

Re: Video Surveillance as a Service (VSaaS) Comparison 2010

Severin Sorensen, CPP — Tue, 17 Nov 2009 15:53:51 -0000

John, as always, you have made a substantial contribution to the field with your report on SaaS video models. I was particularly appreciative of your interviews with the respective vendors giving some color analysis behind the numbers.

The presence of many vendors in the SaaS market is an indication of a market. However, new entrants into this market space seem to begger themselves with cheaper and cheaper pricing, poisoning the market for paid services, and I wonder who will be standing in the end. Motorola, AT&T, and others have dabbled in this market for several years with no visible success. The "Freemium" busienss model offering -- i.e., offering free access to individual users, and for-fee premium pricing for enhanced services -- is a proven model for other industries, but it remains to be seen if cost recovery can occur for some small capitalized companies before bankruptcy for some of these providers. Companies must harvest a market niche to survive in this market place. Clearly the higher capitalized companies are selling other services beyond their SaaS solutions.

I wonder also what was your decision-screen for including companies in your survey. Did you choose to exclude some companies for some reason (maturity, use, customer base, etc)? Companies I expected to see in your report, that I did not see included gotomycamera.com, Connexed, ipconfigure, ingridhome, xanboo (at&t, iN Control Security). iseevideo.net, videoprotein, etc? Any reason for their exclusion?

At any rate, thanks for your reporting. Great value. I appreciate your continued contributions to the field.

Regards,

Severin Sorensen, CPP
Sikyur LLC

Re: What Video Surveillance Company Should Cisco Buy?

Severin Sorensen, CPP — Fri, 16 Oct 2009 22:10:50 -0000

John, I am not sure that even 5x will do it, but in my view it is the fair
market value for Axis even in this market. Regards, Severin

-----------------------------------------------------------
Severin L. Sorensen, CPP
President & CEO,
Sikyur LLC
1 Research Court, Suite 450
Rockville, MD 20850
202-258-7600
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Re: What Video Surveillance Company Should Cisco Buy?

Severin Sorensen, CPP — Fri, 16 Oct 2009 07:13:26 -0000

While there are many fine companies out there -- there is only one choice for Cisco if they want to jump to the front of the line in video surveillance market: Axis communications. Axis is the only "noun" within the industry. Axis is to video surveillance what Xerox is to copiers. Developers look to "Axis compatible" as a standard similar to the use of the "Pelco D protocol" for PTZ control as an ubiquitous standard. Axis is the only manufacturer with established size, revenue, intellectual property, product mix, technology road map, and ubiquitous presence to add value to Cisco's network centric solution hardware. The question really however is will another large vendor seize Axis first – possible acquisition contenders include HP/Compaq, Assa Abloy (Swedish a plus), or a surprise contender NICE Vision -- a company focused on hardware solutions to industry problems; indeed, even IBM could re-enter the hardware side of the video surveillance market with an Axis purchase. The question really is -- would Axis ever sell? At 5x annual revenue -- likely yes.

Re: Can Remote Video Monitoring be Crowdsourced?

Severin Sorensen, CPP — Tue, 13 Oct 2009 16:38:36 -0000

Whether you call it distributed computing, home agent monitoring, or crowd sourcing, it is the same. This practice described above is not new, only advertised. We developed a similar software capability for remote video monitoring based on a large scale distributed computing model long ago, and this enabled us to abandon the limited point-to-point model back in the early 2000s. Our coordination software (that our employees called "treadmill" and we called "ticketmaster") was able to schedule, direct, control, and monitor connections and interactions with trusted monitors (employees, contractors, clients) from anywhere globally via secured VPN connection on the internet. In my view, whether you are distributing the remote monitoring work from your secured network operation center to monitors located in the shopping mall, or in proprietary central stations, contract stations, or independent contractors (who are vetted), you have the same quality control issues required to effectively supervise the remote monitoring employee. Successful remote video monitoring management models will provide laser focus to the management side of the monitoring process and will undoubtedly monitor the monitors -- meaning holding accountable those doing the work. The quality control of monitoring and management makes the difference. At the end of the day, what does it matter if I engage Joe the retired policeman in Omaha to work nights at home in front of his computer, or Elma the retired call center operator living in Lone Wolf, Oklahoma? Both are capable, have talent, and can be used successfully in a distributed monitoring model. Indeed, through software controls, I can even determine the profile of the monitor that has authority to view video, so again I say, whether it is inside your office building or across the planet, it does not matter. Management controls are what matter.

Re: Recommendations for Surveillance Startups / Investors

Severin Sorensen, CPP — Wed, 12 Aug 2009 09:31:41 -0000

Good article John.

Having started-up, built-out, and sold my remote video monitoring company to Westec in 2005, I will add a few comments to your thread.

1. Develop a compelling technology and technology development road map that is defensible; it need not be patented, but it surely needs to have secret sauce that makes your business process technologically superior to your competitors. A large part of the funding process is to demonstrate that you know the technology, the competitive landscape, and can project where you need to be at milestones in the future. This shows maturity of thinking and is critical in the decision-making process. John was spot-on when he said a weakness of surveillance start-up plans is requiring use of a particular technology; in my old start-up, we focused our creative energies on building a device agnostic monitoring solution (wherein we monitored 9 manufacturers appliances through our unified GUI). Further, we analyzed the full subroutine loop of human and machine activity in the monitoring process and we automated approximately 50 percent of the activity making immediate savings and economies of scale. Lastly, on technology, develop a strong structural technology foundation for your business building on largest case scenarios so that your business can grow into your technology plan without having to recast your technology foundation every few months or years. For instance, while we were very small, we considered that the largest potential monitoring client that we could envision would have 70,000 cameras and we started with the assumption that our technology solution must meet this requirement; this prior planning helped us as 4 generations of software later our logical database preparations were still valid saving us much time and money.

2. Develop an A level team that can manage the growth from start-up to captialization. Focus early-on on the technology and customer, ensuring not to add too many management layers before funding. A former rule of thumb in VC for start-ups was this -- "I will give you $1m in valuation for each engineer, and subtract -$500k for each MBA." This is humorous but should not be forgotten -- get the technology down pat before layering with costly management; it is likely that when you get capitalized that your funding sources will have their own ideas about adding in management. On your A team make sure that you have an operator -- one that understands financials and how to build the book and business model for VCs and private equity. What you cannot explain, you cannot sell; furthermore, what you cannot explain you do not understand, and subsequently you are likely leaving money on the table. As an example, I broke our business model down to the lowest common denominators so that I knew exactly the revenue and profitability of each unit of work effort (e.g., at KFC they make a nickel a chicken) and you should understand exactly what you make, when, how, and how to multiple the revenue.

3. Get "champion" clients that will be your beta sites, and over-service this clients to ensure that you get steller reviews; then seek to treat all new clients with the same high quality service level.

4. Know your market. I am amazed each time I speak with an entrepreneur and they think that their video surveillance application is unique. VCs and private equity see all the models. The truly unique models (that are working) are only unique for a short-while as copy-cats quickly move to follow what appears to be best practice, or market leader practice. You should know everything about your own service and your competitors service, and you should be able to explain where you thrive in the market in a defensible way; use of the typical MBA 4 quadrant box is helpful for such illustrations.

5. If you are small or undercapitalized, identify niche markets and go deep in the market to own your space; if you are well capitalized, you can offer more broad based services, but it is expensive to be all things to all people. Capturing niche markets adds value to your business and allows strategic buyers to see how you fit into their enterprise.

6. Know when to say when. There is an old adage in the VC community that there are only two times to sell a company; before you have done something (with all the upside before you), or after you haven't done something (and they send in the work out team). You must know where you sit in the heavens of the market, and this requires a realistic view of who you are, your abilities, and where your company is in the market at the given time. In my case, I had built a remote video monitoring business and was out with my book attempting to raise a 3-stage round of capital seeking only $5m in first instance so as to not dilute my owner interests. However, during the process, three investor groups entered the remote video market with $30m each in their war chests, and I had to decide if I was going to sell to one of them, or get rolled over by them. I chose to sell, and I am happy that I did.

Now I am free to hunt, prepare a new business in the monitoring markets again, with more ideas how to make the process more valuable in terms of faster, better, cheaper.

Thanks for posting the thread.

Regards,

Severin Sorensen, CPP
President & CEO
Sikyur LLC

Re: Top 5 Problems of Managed Video Surveillanca / SaaS

Severin Sorensen, CPP — Tue, 07 Jul 2009 14:40:50 -0000

John, I think your five identified weaknesses of the current SaaS video models are spot-on in the near term. This is particularly the case with the on-set of "free" as the price floor. However, for those with a 3-5 year horizon, I believe there are strong cases to be made for developing compelling "Freemium" solutions, i.e., basic free service paired with opt-in premium services, that may by their price floor beggar-thy-neighbor in terms of capitalization, innovation, and discouragement to new entrants. Several of these types of solutions are in labs and working towards making it to the street. Further, if you trend line the major obstacles you outline as 1-4, the last mile is becoming more simple to manage, man-in-the-middle outsourced technical support is mainstream and cheap (e.g., India, Philippines, and Mexico IT help desks) and auto configuration solutions are being improved rapidly; and both the client user cost-savings of inexpensive solutions (e.g., IpConfigure, etc) and the lure of amassing recurring revenue contracts should make the model attractive in the future. However, I think that the industry must amalgamate more services to become valuable and sticky to the consumer -- perhaps new entrants (like Barraduda's skunkworks initiative or other network security appliance makers) will lead the way with appliances that do more than manage video remote video -- they will manage networks and data of many types in a meta-dashboard that will provide a bridge to true IT convergence, and then sales, margins, and stickiness will cross the chasm into the land of higher sales. Remember, traditionally IT maintenance fees are several points higher than conventional security services fees, and these higher fees are possible with continued convergence. Just a few thoughts to add to your discussion board.

Regards,
Severin Sorensen
Sikyur LLC