international outlook: asia Vivotek aims to renew growth via services The Taiwanese IP video surveillance manufacturer Vivotek has been growing rapidly during the last couple of years. However, tough price competition and industry consolidation slowed down the growth in 2014. Vivotek had a better start this year and its main target now is to put more focus on services and adding value for its customers. By Henrik Söderlund Vivotek was founded in 2000, publicly listed in 2011 and has experienced 15 successful years. Headquarted in Taipei, Taiwan, Vivotek today has some 656 employees. From 2008 to 2013, the company increased its revenues from 37,3 million US dollars to 126 million dollars. But in 2014, revenues fell to 121 million and profit was halved to 11,8 million dollars. During the first six months 2015, Vivotek’s turnover was 63.5 million dollars. Small domestic market Vivotek is truly an international player with offices in USA, the Netherlands, India and Dubai. More than 95 per cent of its revenues are international. “United States is our biggest market. The whole of the Americas constitutes about 30-35 per cent of all our revenues, EMEA about 40-45 per cent and the rest is Asia”, says William Ku, Vice President, Brand Business Division, Vivotek. Vivotek’s strongest countries in Europe are France and Poland. William Ku says that Vivotek is growing fast in many Asian countries, i.e. Taiwan, China and Singapore. He stresses that growth rates are not just about prices and technology, rather about a company’s reputation on the market. “We will embrace this trend, using our cameras to capture more information and trying to interact with other devices. Then we can really understand what is happening in the field and try to provide more value added to the users.” Price competition There is no secret that big Chinese players like Hikvision and Dahua have been growing rapidly in recent years, offering surveillance cameras at lower prices than most of their competitors. This has affected the whole industry. “Last year was quite tough because we faced price competition from Chinese vendors and we had to adjust our strategy to compete with them”, says William Ku and continues: “Right now there is lot of consolidation going on. Canon acquired Axis and Milestone, Panasonic acquired Video Insight and the two biggest Chinese vendors are trying to offer everything”. What is Vivotek’s position on this maturing and increasingly competitive market? According to William Ku, it is clear. “We are the most independent and friendly camera manufacturer trying to work with all our partners together to provide a solution and try to add value to all of the value chain”, he says. Expansion of services An opportunity for Vivotek to get back to growth is to focus more on services. This is also one of Vivotek’s biggest challenges. In the beginning of 2015, the company announced the expansion of its global service hub and branches to establish local network and warranty policy on a range of its network cameras. “Because the industry is consolidating, more and more vendors will try to provide more value to their customers. We want to provide more local services to our customers – not only selling products. We also increased the cooperation and alliance with video management software (VMS) companies to leverage strength from each other. Our goal for the future is to add more value for our customers and this will encourage them to stay loyal to us”, says William Ku. He stresses there will always be tough competition and although Vivotek is competing on price, “United States is our biggest market. The whole of the Americas constitutes about 3035 per cent of all our revenues, EMEA about 40-45 per cent and the rest is Asia”, says William Ku, Vice President, Brand Business Division, Vivotek. that is not its focus. “It is just like smart phones, you do not always buy the cheapest smart phone. You will choose the one you want to use”. SaaS and IOT The Security-as-a-Service business model has become more prominent within the security industry lately and William Ku believes that an increasing number of services will be offered – not least in countries where labour costs are high, such as in the USA and in certain dedicated verticals. “The security service companies or Telecom companies will be trying to provide more services to their customers. This is happening in Europe too, although a little later than in the US. It is not always limited by the solution but rather the infrastructure”, he says. Another hyped trend is Internet of Things. “Frankly speaking the concept about IoT is the transmission between devices and problem solving. In the past, a camera has been a passive device just trying to capture what is happening. In the future, cameras will be integrated with many other sensors to provide better services like intelligent analysis and business intelligence”. He believes IoT will bring opportunities to the market and it will make it important to find good partners. “We will embrace this trend, using our cameras to capture more information and trying to interact with other devices. Then we can really understand what is happening in the field and try to provide more value added to the users”, William Ku says. Vivotek increased its spending on research and development from 6 million dollars in 2008 to 14 million dollars in 2014. Research and development remains an important part of the company. Broadening the camera portfolio and more focus on integrated solutions rather than just on products is also core to Vivotek’s strategy. Many companies have been interested in acquiring Vivotek. William Ku says there are interested companies coming to them every year. He believes the increase in acquisition activity is a result of the security industry becoming more mature. Finally, what is Vivotek’s biggest challenge? According to William Ku, it is all about looking beyond price competition. ”The biggest challenge for our company is to provide differentiated solutions and values to our customers”, he says. Security News Every Day – www. securityworldhotel.com