Canon merges Axis and Milestone

Canon is now a major player.

The move raises so many questions, that my poor feeble brain struggles to cope. Did Milestone tell Canon to go buy Axis? Did Canon realize that buying Milestone was not going to increase sales of Canon hardware? Did Canon plan on this all along?

I am not sure it makes sense for Canon to continue the “open platform” spiel. Canon can offer a very wide range of cameras and VMS as one unified solution, just like Hikvision, Avigilon and a bunch of other players. I guess that Milestone didn’t have the money/knowhow/courage to build their own cameras, and Axis didn’t have the knowhow/courage to do a proper VMS. I am told that If Milestone was to carry their own camera-line, the fear was that camera vendors would become hostile, and simply not recommend the Milestone platform (or worse, advise against it). Axis, by the same token, feared that with a proper VMS, the big, independant VMS vendors would be hostile towards them too.

Another (less dramatic) theory is that they’ve stuck to their core competency, and for Milestone it is software and for Axis it is hardware (let’s not forget they made print-servers in the past) and they had no desire to branch out.

I think it is safe to say that Axis was under some pressure from the cheaper players. Basically, good enough is good enough, and to a lot of people, price becomes the dominant factor. All the VMS’s allow you to add a camera, set it up, record the video, and when shit goes down, you can export a neat little clip for the cops (who, in some cases don’t really care about it anyways – at least in Denmark). It’s really hard to charge a premium if the free entry level stuff is simply good enough.

A tired analogy would be that you have this nail sticking out, but no hammer. You go to the store, and they have 4 different brands of hammers. One of them cost 40% more than the others, but the 3 cheaper ones will do the job just fine. Which one do you pick? If the expensive hammer comes with a 30 page manual, and probably requires one or two phone-calls to the manufacturer, how long do you think the store will keep offering that hammer to their customers?

It may very well be that all “hammers” require a lot of pain to get them up and running, but they all accomplish the same task in the end. And in many, many cases it’s a simple task at that. Record, Play and Export. Why pay extra for a hammer that also works as a screwdriver and a bottle opener, when you know that you’ll never use those features?

It remains to be seen if Canon can make the Milestone/Axis combo work in the low end segment. I am not convinced (I am a perpetual pessimist). The culture of both companies is very much “more options are better”, “advanced is good” which is in stark contrast to the products that succeed in the low end today. DropCam is truly plug and play. It’s a niche product for sure, but it just works. I think it would be easier to get Milestone/Axis to kill a puppy, than to remove a feature that just 0.1% are using.

In the high end segment, I don’t know if the Milestone/Axis combo will offer any meaningful synergy. A high end client ought to look for something that isn’t chained to one manufacturer. It’s hard to buy into the idea that Milestone will be as faithful to Panasonic cameras as they are to Axis and Canon. We saw how Tyco/Exacq decided to remove support for Avigilon cameras, and so if you are going for a truly open solution, I am not sure I would buy into the siren songs of Milestone and Axis about how “nothing will change”.

The lure of Milestone was that they were NOT married to anyone, but now that they are, that selling point is gone. The same applies to Axis. So that means that Canon placed themselves pretty squarely in the Hikvision, Dahua and Vivotek camp, and it might be profitable to Canon (it better be!), but it also means that it will be harder for Canon to capture the high end market.

Milestone is looking for “burned out consultants”, so perhaps that’s the strategy for the high end market. Consulting, highly customized solutions etc. but I think the fact that Milestone and Axis are now Canon, and not an independent vendor may be a hurdle that is not easily overcome.

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