Previously I have asked why the market analysts in the security sector seem to miss the point of most events. They didn’t take my comments on board, because the latest acquisition news seems to have left them in a state of shock. That can only mean that they haven’t fully grasped the way things are going in the industry!
When Canon made its move to acquire Milestone last year, a lot of people in the security sector acted somewhat shocked. At the time I remember stating that I would be more surprised if, after 25 years of marriage, Mrs Dave had finally remembered that I’m not too fond of broccoli. To be fair, what is it? It’s too flimsy to be cabbage, and too bland to be cauliflower. I suppose people like it because some expert in a white coat declared it to be a superfood. I’ll eat it, but I’d rather have something else, like kale.
Anyway, I digress. When Milestone was acquired it wasn’t a surprise if you had been looking at where the developments in the industry had been happening. The big sales numbers might well have been coming from producers in the Asian region, but they were selling huge amounts of boxes with an ever-decreasing margin. The market was dealing with products as commodities, and there’s no point in investing in a market like that!
The hardware market was – and still is – limited. Products take a long time to develop, and once they’re out it takes even longer to change or adapt them. Upgrading becomes an issue, and reacting to change is slow. Compatibility is a minefield, and market trends are driving price erosion. Why join that crowded market when the growth and development lies in open platform software?
Canon made a smart move by acquiring the market leader in a growing technology segment, and quickly placed itself in a position where it was able to leverage a wide range of technological developments which supplemented its optical hardware heritage.
When the so-called market commentators declared the move a shock, I smelled a whole bunch of something, and it wasn’t bananas!
Now the analysts are making the same noises over the Canon acquisition of Axis Communications. I dare say the business reporters will make merry over the details of the deal. All I will say is that it makes Mrs Dave’s Jimmy Choo shoes suddenly seem reasonable. What I fail to grasp is why anyone would be surprised by the acquisition, on a technological level.
Manufacturers used to differentiate their cameras from others by adding features and functions. With regard to imaging, the credible brands were pretty much at the same level. If you think about the investment in resources to create that differentiation, it was significant, but camera pricing had to be pegged to market expectations.
The sensible way to move forward is for manufacturers to exploit the capabilities of new processing options to allow a ‘platform’ approach to devices. This means enhanced functionality can be added as required, with very specific applications being available. Axis was very active in this area. Canon’s optical engineering, Milestone’s video management and Axis’ platform approach: where’s the surprise?
Right; I’m off to bribe our Kylie to eat my broccoli tonight; I won’t be shocked when it’s on the dinner plate.