Pelco Is "Back" With A Focus On IP Video Surveillance: Hervé Fages

Pelco is making its big comeback with renewed vigor and new lines of surveillance products to set it apart from the rest

Working to Regain Momentum in a Changing Market: Most observers agree that Pelco lost momentum in the video surveillance market after the acquisition by Schneider Electric in 2007. Hervé Fages, senior vice president of Schneider Electric's video business, is looking to regain that momentum, guiding the surveillance giant in new directions as the market changes. Fages has worked at Pelco since before the acquisition by Schneider Electric. In an exclusive interview with SourceSecurity.com at ISC West 2014 in Las Vegas, Fages spoke candidly about Pelco’s recent history and strategies to carry the Clovis, Calif., supplier back to the top of its game. These include re-branding the company as an IP surveillance organization, aggressively introducing a range of camera products and providing end-to-end customer service as a key differentiator. Here are some excerpts:

SourceSecurity.com: What’s new with Pelco?

Fages: We are rebranding Pelco as IP-driven and customer focused. Today, we are an IP surveillance company – 70 percent of our sales are IP-based. We haven’t been an analog company for a couple of years now. Customer-focused is what Pelco is known for, and we lost track of that for a couple of years. We are also focusing on products. We introduced 83 new IP cameras to the market last year. Another aspect is our 360-degree single-sensor camera; by the end of this year, we will have 360 multi-sensor and 180-degree cameras for indoor dome applications. We also have a new cloud solution for the entry level, 8- to 12-camera market. We have revamped all of our accessories, housings, fiber-optic, IP fiber-optic, etc.

Fages: They want to be supported, and we still support them, but the growth area is in IP. We still have a range of 5,000 products in our portfolio, and our analog products are still part of the portfolio for people who want to replace equipment. It’s not an area where we are focusing. Analog products are becoming extremely commoditized. If people want an analog product today, they can buy it at a price that we are not interested in competing with.

SourceSecurity.com: IP cameras are also becoming commoditized.

Fages: IP cameras are becoming commoditized faster than analog. It took about 15 years for pan-tilt-zoom (PTZ) domes to be commoditized, and IP cameras are getting commoditized after five or six years. So where is the differentiator? It’s not the cameras, but it comes down to customer service. How do you serve the customer? We are an end-to-end service provider. When you provide an end-to-end solution, you can provide more value, which fights against commoditization.

For the bottom of the market, we are going to have a service-based model with our cloud solution. It’s not about the cameras and features, it’s what service you are providing and at what price and the level of service. At the commoditized bottom of the market, we are offering the hardware and the service, and leveraging our channel to bring solutions to the market.

Pelco is putting customers back at the center of its business

SourceSecurity.com: You keep hearing that ‘Pelco is back.’

Fages: Pelco is back. I am the first one to use that language. We are acknowledging that when Pelco got acquired by Schneider Electric, like every major acquisition, we got internally focused for a period of time. And we lost track of the customer. Because of my experience with Pelco prior to the acquisition, I understand the key core value. We got lost during that transition, acquisition, merger, consolidation, synergy, all those fancy words you use during an acquisition. We lost track of the customer, the market. We paid a premium price for that.

SourceSecurity.com: A lot has changed in the last five years.

Fages: From a customer service perspective, the core value of what Pelco was known for hasn’t changed. Customers want to have someone they can talk to, a product that is reliable. If something doesn’t work, they want a company that will react, deal with the problem, will not run away. You want to get someone on the phone.

What’s changed is that the market has way more diversified competition. The market has become more aggressive – more aggressive in price, product lifecycles are shorter, innovation has to be quicker. Differentiators are becoming less and less obvious. It comes down to what service you provide to the customer, what solution you provide, how you package it, and how quickly you can innovate.

SourceSecurity.com: You hear a lot about 4K and Ultra HD as the new development.

Fages: I think it is coming, but it takes time. You have to keep in mind, for example, there are 12- and 20-megapixel cameras on the market, and that’s fine from the camera perspective. But somebody has to deal with network, bandwidth, and recording. Right now the 4K is there from a technology point of view, but becoming mainstream in the market takes time. If you just want to capture a picture and display it, 4K is there. What will change over time are compression, how we manage bandwidth, buildings will be upgraded with more bandwidth, larger hard drives. But right now, the video capturing side is ahead, and bandwidth and recording have to catch up to be a viable solution. It’s an ecosystem.

SourceSecurity.com: There is danger of jumping in too soon?

Fages: You have to look at your application, look at your network, and how much you are willing to spend to record the video. That all has to match. The bandwidth, the recording, the capturing of the video, displaying the video. When you combine all that, is it a viable solution for you? If you don’t have the bandwidth or are not willing to spend the money to record the video for the time you need, at the end of the day, the surveillance camera by itself doesn’t mean anything.

Some customers are willing to pay a fortune for a solution. For example, we won the largest casino in the world in Macao – the Galaxy. They use 100 percent redundancy of video recording for 10,000 cameras. They record on one of our systems and use another system to record double. That customer was willing to spend the money to make it a viable solution. I can tell you most customers would never do that because it isn’t financially viable.

SourceSecurity.com: It seems 360-degree surveillance cameras are gaining momentum.

Fages: Number one, the technology has made tremendous progress, and you’re getting the picture quality you need from a technology point of view. Customers are starting to realize that indoor PTZ applications only fulfilled one part of their need. The cameras never looked at the right place at the right time, so efficiency has been a question. Reliability of mechanical parts has been a problem. Today, with 360 degree cameras, because of the resolution we have now, it may be a better indoor solution instead of a PTZ dome. Will it replace all of it? Probably not. For situational awareness, it is definitely a better technology. Now those products are taking off, and that aspect is growing very rapidly.