Save or spend? Solution providers have to decide how much to invest in technical development, without going into debt. a&s finds out how manufacturers maintain an edge in innovation while ensuring the ROI is right.
Save or spend ? Solution providers have to decide how much to invest in technical development, without going into debt. a&s finds out how manufacturers maintain an edge in innovation while ensuring the ROI is right.
Product development is universally a top budget priority. While budget items such as ad spending can be cut, R&D remains untouchable.
However, hiring a team of geniuses does not come cheap. While talent should be rewarded, R&D investments take time to recoup. Some companies may focus on their most profitable solution and dedicate R&D resources toward increasing that revenue, rather than developing truly innovative products.
Making an honest buck out of a good idea is far from a crime. However, when a company depends on a flagship product that is essentially unchanged, it risks becoming obsolete. In challenging financial circumstances, the cost of development may be trumped by the need to generate ROI fast.
Security has been no exception to the global downturn. “There is a lack of innovation in biometrics,” said Ken Nosker, President of Fulcrum Biometrics. “All the copycat, me-too companies jumped in overnight and they haven't innovated anything. They got together smart technical people and copied products.”
Trade shows have trumpeted scores of new products. However, many brands introduced no-frills lineups for buyers on a budget. “While Sony continues to provide the most innovative and high-end models, we also provide entry-level and cost-friendly models to meet the needs of different customers and applications,” said Yoshikazu Hirano, GM of Security Solutions, Business and Professional Products for APAC, Sony Electronics.
Disruptive solutions are few and far between. “My perception is that there is a reduction in the number of genuinely ‘new' product launches,” said Philip Avery, cofounder and MD of Navtech Radar. “What we tend to see is mostly in the software arena, which is probably to be expected, as the security and surveillance industry continues to push towards IP.”
In a sense, product innovation is leaning toward refinement and not so much grinding to a halt. “Products are more shaped and tuned,” said Johannes Rietschel, founder and CEO of Barix. “We often use the phrase ‘evolution instead of revolution.'”
From a component perspective, Texas Instruments witnessed no slackening in R&D. “I don't see a slowdown in product launches and innovation in video surveillance,” said Cyril Clocher, Business Manager for Video Surveillance, Texas Instruments. “Customers cannot launch or innovate if they don't have components for products.”
Lens suppliers reported an uptick in network and megapixel camera launches. “It seems that many new camera manufacturers who do not have established brand names are jumping into the fray, along with large incumbents who are updating their somewhat aging product portfolios with new models and competing with the pure-play network and megapixel camera companies,” said Andrea Iniguez, VP of Business Development, Theia Technologies.
A successful company should have innovation at the heart of its business. “It should be a natural result of ambition to come up with new products that are exciting to both customers and your own people,” said Maarten Mijwaart, GM of Automatic Vehicle Identification, Nedap. “As soon as you start talking a lot about topics such as ‘innovation management,' you can be pretty sure innovation is not a natural aspect of your company culture.”