We often get asked if we license our video analytics technology to other companies, so they can embed it into their products.

We have chosen not to license, which often raises the question: Why not?

There are actually quite a few reasons, but here are some of the most important:

  1. The licensing approach to selling technology works well in mature markets with a lot of consolidation. This is what you find in the Telco and IT Networking markets, where one or two vendors dominate market segments. But this is just not true in the Security Market. There are boatloads of vendors, and even the largest generally have less than 20% market share. Most are a lot smaller. So, you have to license a lot of vendors before you command any significant share of the market. Some companies, for example, have licensed 30-40 companies or more, which sounds like a lot, but they still represent a tiny fraction of the total products shipped.
  2. Licensing only works well when the technology is ready for widespread use and when it is ready for rapid market acceptance. This means the technology has to be easy to use and work well. Unfortunately, all of the companies trying to license are finding that they are too early for mainstream markets. It takes too much time to calibrate and tune cameras, and even after all of this effort, they still have too many false alarms or missed detections.
  3. Every new company you license requires working with a different design to embed the technology into their products. If the technology is easily reduced to a simple chip you can plop in, then licensing makes more sense. But analytics technologies today still require a lot of design support – almost as much as designing new products. On top of this, analytics are still rapidly improving, which means that major improvements could force major redesigns.
  4. If the technology is a real simple add-on feature that everyone wants to use, then licensing works. But the problem with licensing video analytics is that you end up with camera and DVR companies selling products that they can’t completely support and don’t fully understand. When the technology they are licensing is far more intelligent and complicated than the rest of the product, it makes a real mess of a problem for integrators and end users. You can’t get answers and can’t get problems fixed when you need them. The closer you are to the people developing the core analytics algorithms, the better your support will be.
  5. The biggest issue of all, however, is that we never believed that “detection” was the only thing that mattered with video analytics. Analytics can make the whole video system smarter, and solve key issues, such as bandwidth and storage. It is not just about detection. This is a radical new idea that we felt needed to be demonstrated first.

In other words, the power of analytics to make your cameras smarter, to control bandwidth and improve storage quality, along with many other benefits, are just as valuable as the ability to detect intruders early to prevent crimes before they happen.

But that’s a whole new product idea, not just an add-in technology.

The other vision we had was to sell intelligent IP cameras for about the same price as dumb IP cameras. Wouldn’t everyone want the smart camera instead? This makes it an easy choice to start using analytics when it doesn’t cost any more, and solves your bandwidth and storage problems. Isn’t this what the market wants? But camera manufacturers paying license fees to add in analytics will always have to charge more to cover their added costs. So, the licensing approach makes it harder to reach to ultimate goal.

That’s some of the reasons we haven’t licensed our technology.