Smart Video, Smarter Business Model

Smart Video, Smarter Business Model

A trendsetter in video analytics, ObjectVideo has made its name known in virtually all verticals across the globe, thanks to its modularized technology and unique business model. CEO David McGuinness shares with A&S the secret to stay afloat and profitable even in financially difficult times.

First incepted in 1998, video analytics—known as computer vision back then — was originally developed and funded by the Defense Advanced Research Projects Agency of the US Department of Defense. Even to date, selling video analytics means addressing reliability issues and demystifying overexpectations. "We have a bullpen of PhDs working on today's and tomorrow's problems," said David McGuinness, CEO of ObjectVideo. "We are now onto our sixth and seventh generations, but we are still mindful of overselling and false expectations in the marketplace."

One example given by McGuinness was color differentiation. "The biggest challenges surrounding color analytics are light and glare. With different lighting conditions, lenses, and camera models and positions, the outcomes may change drastically as the objects of interest move along in the camera scene." There are, however, players in the market that overpromise, resulting in more end users asking for the impossible. "We can do it, but not consistently with 90-percent confidence. As the leader in intelligent video, we need to clear the 'dust' created by our competition, and that means substantial investment in training and education."

The company has, therefore, implemented a unique OEM model since 2005, to be more cost-competitive. "What we're offering is an 'intelligent ingredient' that makes others' products smarter and more valuable. Through this approach, we've essentially simplified delivery of video analytics for system integrators and hardware manufacturers. Be it a camera, encoder, router or storage device, our intelligent ingredient ensures interoperability and is suitable for any physical security information management application, thus lowering the overall TCO."

Targeting Asia
In the midst of the credit crisis, ObjectVideo is still operating ahead of plan, including ongoing R&D initiatives funded by various agencies. "We pay attention to our sales in terms of vertical and geographical diversity, and we're increasingly focusing on activities in Asia," said McGuinness, listing the primary reason being the vast number of projects for ObjectVideo's OEMs. Beyond critical infrastructure, there is also growing demand in retail, banking and gaming. "Video analytics enables business intelligence to be more accessible, and that is ROI."

Another reason is the enormous manufacturing base in the region. "We now have more than a dozen OEM partners based in the region, and they're essentially our sales force."

Reading Tea Leaves
When prompted for an industry forecast, McGuinness remained cautiously optimistic. "While the video analytics market is in fact growing, we expect consolidation and attrition in the industry due to the economic and financial conditions." With Texas Instruments and Intel pushing down computing cost and the company's unique business model and flexible licensing structure, pricing has come down considerably to only hundreds of dollars per channel. "Reliability will always be important, and we'll continue to educate users to let them know that it simply means striking the right balance between security and system sensitivity."

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