Security 50 part 6: Companies restructure as market pressures mount

Security 50 part 6: Companies restructure as market pressures mount
The physical security industry is going through one of the most complex periods in history. The global economic slowdown and the rise of Chinese manufacturers have wreaked havoc across the markets prompting many of the traditional companies to take decisive steps towards restructuring. According to a report from IHS this year, the total value of video surveillance sales have gone down, not because of lower units shipped, but because of price erosion.
 
Security companies, on their part, are looking at several options to overcome these challenges. Some have opted to mergers and acquisitions, others to expanding their products outside their traditional zones of expertise. Certain companies have given into the lower production costs of Chinese manufacturing industry and taken the route of outsourcing manufacturing. One such company is IndigoVision.
 
“At IndigoVision we withdrew from creating new camera hardware and moved expertise in cameras to advising OEM suppliers on how to achieve the higher performance for which IndigoVision is renowned,” said Marcus Kneen, CEO of IndigoVision. “Investment was focused on a new hardware qualification facility widely praised by partners and customers. IndigoVision examined our value proposition and as a result focused engineering resource on “a software led end to end solution” with customer freedom to choose at each stage of video capture cameras, storage, video management software and integration modules.”
 
Some companies like GEUTEBRUECK have decided to focus on specific customer groups to understand and cater to their needs better.
 
“We are targeting well-selected user groups and talking to them directly about their problems and how we can provide them with solutions,” said Katharina Geutebrück, MD of the company. “When we talk about what their problem is and what solves that problem and the benefits they get out of that then we don't need to talk about products, we talk about what return on investment we can generate out of this solution.”
 
Others have resorted to mergers and acquisitions to withstand the pressure. Magal Security Systems, for instance, acquired the video management systems provider Aimetis in an attempt to expand beyond its traditional realm of expertise.
 
“In the first week of April, we announced the acquisition of Aimetis, so this brings the video into our market,” said Hagai Katz, VP of Marketing and Business Development at Magal. “So that has expanded our portfolio, but also brought us to potential new markets.” 
 
Another company that has had several acquisitions of late is FLIR Systems. Traditionally a thermal camera maker, the company has used acquisitions to grow in the visible camera spectrum, with target customers of various levels.
 
Then there are others who have been acquired by non-security companies and who aim to make use of the additional exposure to grow. MOBOTIX, which was bought over by the Japanese firm Konica Minolta, plans to leverage the latter’s expertise in printing and office management business to enter new markets.
 
It is interesting to note that most of these companies are making such moves at a time when the video surveillance market is going through certain difficulties. What they do in the coming year would be crucial, as the market readjusts to a new normal of changing business landscape. 
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