1. Vicon – a UK perspective
Richard Allen-Miles
Sales Director

2. Vicon Industries Ltd
This is the part of the world that we look after. From a demographic point of view, Europe is not disimilar to the USA with about the same land mass and around 400 million people. Politically and economically though its very different, with 27 different countries ( each of course with their own government, regulations etc), 23 different languages and 16 different currencies.
Whilst looking around the web for this image, I found something which may be more familiar to all of you....

3. Vicon Industries Ltd
This is a map of Europe viewed from an American perspective – something I pulled from a Washington Post article. I have to say, there are worrying levels of accuracy in this

4. Vicon Industries Ltd
The headqaurters of our operation is based in Portsmouth, on the South coast of Britain, and this facility is the main administrative and logistical centre for the EMEA business. We also have resident sales and support people in most of the major EMEA markets, with offices in Belgium, Germany, Spain, France and Italy.
I am Bret’s opposite number within Vicon Europe, and I’m going to talk to you today about what we’re doing in particular in the UK market

5. Vicon - a UK perspective
And what I’ll be talking ot you all about today are the similarities and differences between what we’re doing ‘over there’ compared to ‘over here’.
For those of you unfamiliar with the UK, we don't all dress like this (pic 1), act like this (pic2), and we don't all drink this ( pic 3).

6. Vicon in the UK UK CCTV market Vicon UK History Vicon today
Vicon tomorrow
We’re going to look at the characteristics of the UK CCTV market, how Vicon has operated within it, where we are today and what we’re doing today and tomorrow to make sure we have a profitable future.

7. Vicon in the UK – UK CCTV market
Growth drivers since early 90’s:
Public space
Commercial
Health
Education
Retail
Cultural
Nominal growth from inception in late 60s until early 90s
Now 2nd largest CCTV market in the world, second only to the US
Why has this small island evolved into such a big security marketplace?
Huge growth caused by huge government spending on town centre/urban cctv schemes – this was an important influence as it was ALL analogue technology, usually using fibre optic transmission on long distances, and this has had an effect on the pace and style of technology change in the UK market.
Growth also built on high levels of construction activity in office, health & education sectors. Some growth from fund management investments in shopping & retail centres
All those areas now in decline so industry is contracting
Cultural acceptance of surveillance – est. 4.5 million cameras in the UK – we seem to be quite happy to be surrounded by cameras.
Huge legacy analogue infrastructure, but in many ways the exponential growth has caused problems because it wasn’t accompanied by any controls on the development of the industry. Consequently…..

8. Vicon in the UK – UK CCTV market
Unregulated
No barriers to entry
No licensing
Open to low-priced competition
Price sensitive
All the major players are here – from Vicon / Pelco at top end to HikVision & far east.
This has also had a positive effect on growth, but has created a ‘price first’ approach
Hard to ignore the influence of Norbain – Norbain are a CCTV distributor and have 50% market share of supply of CCTV to integrators. They are our biggest competitor in the UK. Their total sales peaked at $210 million in 2008 and their own brand line, Vista, is statistically the UK’s biggest-selling CCTV brand with peak sales of $36 million. defined service levels but have acted as the industry's bank. Hard to ignore their effect on growth, and on today’s market size
Vicon doesn’t have the same degree of ‘presence’ in the UK

9. Vicon in the UK – UK CCTV market
2008 market peak at $ 1880m
Decline in 2009 & 2010
Expected to return to growth in 2011
Serviceable market for Vicon estimated at $300m p.a.
2 - No hard data on size of contraction but estimated at between 30 – 50% - huge!
3 - Some of recovery driven by Olympics 2012 – enhanced need for security in public spaces
So where will growth come – what are the technology drivers going forward?.....
( be careful with SAM)

10. Vicon in the UK – UK CCTV market
IP growth suppressed by scale of analogue legacy
Strong growth predicted in hybrid sector
IP growing in significance
IP now dominant on new specifications
Analogue still prevalent in areas where picture quality & lack of latency are key requirements
So how has Vicon fitted into all this?.....

11. Vicon in the UK – History
c 30 year presence
Steady, profitable growth
Traditional territory-based sales model
Low level of marketing & PR
So, we’ve looked at some data on the UK market what about Vicon in the UK?.
Traditional trade sales numbers enhanced by sporadic large-scale successes like the largest police force in the UK, the London police otherwise known as the Metropolitan Police Force. WE deal directly with them and build specialised witness interview recording systems for them. We also have a direct relationship with one of the UK’s largest shopping Malls, the Bullring in Birmingham
Our traditional trade-sales model though needed work – these are some typical responses we got in a recent survey amongst the UK security integrators…

12. Vicon in the UK – History
‘old-fashioned’
‘wedded to analogue technology’
‘sleeping giant’
‘not keeping pace with technology change’
‘use them when we have to’
This may sound odd given that we’ve been in the industry here for 30 years
We had to change two things – to raise Vicon’s profile so we’re seen as being a mainstream player once again – ‘part of the furniture’ as it were – and to make people think of Vicon as a player in the IP & high tech part of the market
We also looked at the way Vicon was addressing its market….

13. Vicon in the UK – History
End Users
Consultants
Main Contractors
M&E Contractors
If we use an example of a new hospital being built, the end user is the government health department (since most of our hospitals and public, not private). They would appoint a large construction company to build it. Typically in the UK the construction company will only want to put up the steel and concrete and will appoint a specialist ‘mechanical and electrical’ (M&E)contractor to handle all of the electrical works – power, lighting, building controls, and security. It is the M&E contractor who awards the security contract to the integrator.
Most of what we were doing was aimed at the area below the dotted line in this graphic. We were, in effect, right at the end of the food chain and had to get very lucky for orders to fall all the way through the supply chain and still be available to , and winnable by, Vicon.
We changed this a year or so ago, so I guess you could say that this diagram would now look like this….
Integrators / Installers
Vicon

14. Vicon in the UK – Today
Client
Main Contractor
Contractor
M&E
Security Contractor
Distributor
Consultants/
Architects
Vicon
Vicon now reaches to all the key levels of the supply chain. In many respects, the installer is almost marginalised
It has more precision, but no focus. We cant possibly do this everywhere, so where do we apply this model?

15. Vicon in the UK – Today Vertical Market Focus Police & Custodial
Education
Utilities
Infrastructure
Focus on markets which have highest density of people who need or value what we do well and/or where Vicon has strong referenecability and where there are current levels of construction activity.
Allows development of ‘niche’ products
Manage each vertical from top to bottom – better approach than the traditional ‘specification’ guy who walks away once a spec is written. Our BMs manage each project, walk alongside it, all the way through to project award
Marketing activity reflects this – targeting end user shows in each market

16. Vicon in the UK – Today 4-strand strategy
Develop opportunities high up supply chain
Leverage Vertical markets
Maximise trade sales
Reconnect with end users
Today I have one guy specifically employed to engage with the top level – the construction companies and the M&E contractors. WE just signed a deal with one of the biggest so be their sole CCTV supplier – like all construction industry, their margins are uncder pressure and they’re looking for any way they can find to enhance their bottom line. What we said to them was ‘hey – instead of buying your CCTV through integrators why not buy direct from the manufacturer – take out the installers margin in effect – and just have someone fit it for you?’.
We added in some extra sweeteners like us taking design responsibility
This company spent $6 million on CCTV last year so we’re very excited about this potential
I have another guy looking after the police and custodial markets – getting us designed in to prisons, etc and staying beside the specification managing it all the way down the food chain we looked at earlier.
And I have two guys with territories looking after our integrator business.
This final bullet point is key to how we’re preparing for the future….

17. Vicon in the UK – Tomorrow
End User focus
Reconnect
Re-establish relationships
Prepare ground for professional service charging
With the benefit of hindsight, what single thing would I do differently if I could re-run Vicon’s 30 –year presence in the UK? Stay closer to our end users. Quite rightly, we saw our relationships with the integrators as being the most important ones and we didn’t proactively develop end user relationships. Just think – if we’d been close enough to those end users so that when they upgraded from multiplexers to DVRs, from PTZs to domes, from DVRs to hybrids and NVRS, and from analogue to IP we would be selling 10 times what we do now.
So we’re going to fix that. We’re calling this process ‘reconnection’.
Each of the UK sales team has been given a database of significant known Vicon end users in their territories or vertical markets and has been tasked with getting in to see these users. We are offering a free ‘health check’ to all Vicon users and expect this to achieve
Several things….

18. Vicon in the UK – Tomorrow
We have a number of objectives for this:
Get up to date contacts for each site
Get up to date data on the decision chain for each site/user
Get up to date data on what equipment is still installed on site.
Improve relationship and minimise ability of maintenance company to switch sell against Vicon
Minimise risk of Vicon losing sites when users change their maintenance company
KEY ONE – we are preparing the ground for direct commercial relationships with our users and for creating revenue streams from those relationships.
Does have Challenges though….
Needs tech support and sales teams to work closely – support database has previously been seen as a support product not a sales one
Can antagonise some installers