In this exclusive interview, Joon Jun, President of the Global Business Division and Senior Executive VP of IDIS, discusses the rationale behind the deal and how both companies can mutually benefit from it.
Last month, IDIS
announced the completion of its Costar acquisition, one of the most important M&A deals in security this year. IDIS, which already OEMs more than half of Costar products, will now be able to further expand in the US market, offering end-to-end, NDAA-compliant solutions to Costar’s network of distributors and systems integrators. In this exclusive interview, Joon Jun, President of the Global Business Division and Senior Executive VP of IDIS, discusses the rationale behind the deal and how both companies can mutually benefit from it.
asmag.com: What’s the value proposition for this acquisition? How does the deal benefit both companies?
Jun: Costar has a well-established sales channel that will benefit from IDIS’ proven, NDAA-compliant and over 60 percent made Korean technology. Costar’s revenue is approximately US$54 million that comes from a network of over 100 distributors and 1,000 systems integrators across the U.S. The company also has a portfolio of blue-chip customers including Apple, Walmart, Microsoft, Citibank, and the well-known and respected pharmacy retail chain CVS.
Joon Jun, President of Global Business
Division and Senior EVP, IDIS
There are many mutual benefits for both IDIS and Costar that will result from this acquisition. Customers will be able to buy Costar and IDIS solutions from either company as the sales teams merge, providing customers with coast-to-coast U.S. and Canadian coverage.
At the same time, demand is continuing to increase for end-to-end solutions, and Costar’s sales channel will benefit from IDIS’ proven one-stop-shop model, offering everything systems integrators need to rapidly design and implement a complete video surveillance and deep learning analytics solution. In addition, IDIS technology offers integrators profit protection benefits in terms of a single point of contact for pre-sales, sales, and technical support with the assurance of seamless connectivity, ensuring projects are delivered on time and budget.
Costar has many end-user customers that need to upgrade to NDAA-compliant technology without any links to untrustworthy governments or supply chains. And that’s exactly what IDIS can offer for businesses large and small, with the assurance of high-quality, South Korean manufacturing in our Smart Factory.
asmag.com: Which U.S. vertical markets is Costar strong in, and how can IDIS leverage this strength to its advantage?
Jun: Costar’s rugged and high-definition cameras are designed for the most critical, sensitive environments, such as border security and transportation – specifically intelligent traffic (ITS), maritime ports, airports, and railways. This will help IDIS expand in the critical national infrastructure space, while entering new markets in the U.S.
By more than doubling the size of the current IDIS America sales force, this will allow for a deeper focus on specific vertical markets, potentially increasing market share.
And we’re well-positioned with compelling reference sites domestically and in other parts of Asia to support this strategy, such as project success with highly sensitive military sites and city-wide surveillance applications in South Korea, and high-risk borders and upgrades across rail networks in India.
In addition, end-users are now savvier and want to understand the value and operational efficiency that video upgrades with AI can deliver, while at the same time frustrated by conventional annual ongoing VMS software agreements and device connection fees. Specifying an end-to-end solution will help system integrators easily build compelling business cases based on lower operating expenditure and ultimately lower lifecycle costs, and support heads of security to get the upgrade budgets.
asmag.com: What makes Costar a good target for acquisition instead of other brands? Is it because Costar is already an ODM client of IDIS? How does incorporating Costar into IDIS’s brand portfolio further benefit IDIS?
Jun: IDIS and Costar have a long-term existing ODM relationship with around 90 percent of Costar HD Video already made by IDIS. So, there were already strong ties between the two companies, that also include strategic synergies including focus sectors. Costar will allow us to expand the IDIS lineup of cameras with models including multi-heads and bi-directionals which are becoming more important in some applications to ensure the accuracy of AI-powered analytics.
Costar’s multi-head cameras will complement IDIS’ line up, particularly in the retail and hospitality sectors, to provide wide angle and field of view and enable operators able to zoom in on multiple areas of interest. These cameras will give customers the best choice between IDIS’ award-winning fisheyes and PTZs. At the same time, multi-heads are becoming popular in several sectors such as retail where both Costar and IDIS have a strong footprint. Each camera sensor can be positioned and configured to monitor and analyze specific areas and enable cost-effective business intelligence from a single camera, while supporting security teams to detect and verify threats, and respond more quickly.
Both company’s products also seamlessly connect as an end-to-end solution following the development of a new IDIS Lite protocol, meaning that integrators will immediately benefit from plug-and-play and seamless connectivity.
asmag.com: It’s been said that the acquisition signaled IDIS’s intention to emulate the success of Hanwha Vision. Do you agree with this notion? Does emulating the success of Hanwha serve as a catalyst for this acquisition?
Jun: IDIS is focused on its own strategy and has a diversified portfolio with many synergies that are not often well-known outside of Southeast Asia and IDIS’ largest network of partners. Our long-term growth strategy is to distinguish IDIS from other technology companies and continue to focus core strengths, in terms of both the company and our product and technology. These include delivering end-to-end video solutions that offer an industry-best low total cost of ownership. Our products are designed, developed, and manufactured in South Korea, delivering high-performance and quality backed by extended warranties that have become synonymous with Korean tech. We also make sure that our software is easy to use and comes with fair and transparent pricing structures to reduce customers’ operating expenditure.
And since I joined IDIS in 2014, we haven’t focused heavily on quarterly or annual profits or even a five-year strategy, which is typical for most technology companies, particularly those that are publicly listed. The IDIS philosophy is about building a long-term future for generations to come and making the world a safer place.
asmag.com: Does IDIS have future acquisition plans, both in the U.S. and other parts of the world?
Jun: If it makes sense to support our future growth plans, then IDIS is certainly bullish when it comes to making acquisitions. IDIS recently acquired LinkGenesis to increase our software development and testing resources for IDIS Powertel.
IDP, a leading manufacturer of ID card printers also owned by IDIS Holdings, bought a stake in printing technology vendor, Bixolon. The company offers a range of innovative of RFID, POS, ticket, and label printing solutions, which will enable us to expand our offerings into focus sectors, including the retail, hospitality, manufacturing, logistics and cannabis sectors.
In the immediate term, I’m focused on supporting a smooth amalgamation of IDIS and Costar sales and management teams near Dallas, Texas so that we can build out our NDAA-compliant and end-to-end video solutions to support a wider range and geographical spread of customers across the U.S. In 2024, we’ll also be looking to make the extended range of Costar cameras available to other regions including Asia, Europe, and the Middle East.