Note

6:02PM May 19, 2022

Speakers:

Keywords:

vikon

product

cameras

bit

market

customers

people

business

continue

partners

year

integrators

hardware

features

driven

build

strategy

offering

icon

brand

So I think so I met Mark on the phone a couple of weeks ago. So we found some interest again and Vikon. And John Honda vich mentioned to me that that Mark was a West Point grad like me. And so I was able to reach out to him informally and just kind of explain a little bit about it. I know he's quite familiar with it, or at least our company.

But then I asked I said, Hey, I really would be nice if we could get something on the record and who would be the right person for that? And obviously, he suggested that you would be best suited to speak but you know, kind of before we get going, I wanted to kind of ask, you know, is there anything about ipvm That you're unknown or like who you are and what we do I would be very amenable just to kind of explaining us in our in our business a little bit better before we get going.

With your site and the news, you're providing information you provide, really speaking, I think some of your reporting, actually to be quite helpful in some of the analysis you do.

Generally.

Great. Yeah. And so you know, for us, I think what we're looking to do today is just I'll probably ask a couple of high level questions about Python and, you know, just get a better understanding of where you guys are at and then I know Shawn, might have a little bit more technical questions associated with DMS and, you know, some of the business segments that you guys focus on so on that note, you know, I obviously, you know, Vikon to my understanding is a subsidiary or a has a relationship with contracts, which obviously, I understand you're the CEO of both companies. But do you think you can kind of explain the relationship between the two companies in your role in both organizations?

Sure. So the company I'm the CEO, and we, over the years have owned, acquired or built in house, various businesses. Or recently primarily hardware and software companies.

Think sometime in 2018, acquired by Icahn sitting with a stake and ended up acquiring the rest of it. We saw an opportunity with Vikon you know, both financial and just where the industry was headed to a reboot a brand may be struggling and found we had some hard times so. So we saw a unique opportunity from that perspective, and we liked the business, the type of business it was, that's kind of what motivated us so so so when we made that investment or a that acquisition, I stepped in as a CEO of this company.

Thank you. And then my understanding is that, at least as of right now, Vikon represents the majority of contracts revenue can can you kind of explain the revenue dynamic? That's what I'm pleased to confer? Yeah, it's about half. A couple of contracts is about seven different brands. Before five of them are startup startup ease.

The two of them are more mature businesses, one of them icon represents revenue, some taxes revenues, about 40 to 45 million annually. Icon is about half maybe a little bit depending on the year, a little bit more. Okay. And then we'll have a couple of follow ups about about revenue later.

So just just high level when you when you look at bicon. He kind of talked about like doing a reboot, upon acquisition was kind of having a hard time. I mean, obviously, things have evolved since but 2018 Can you kind of describe how you envision icons current go to market strategy and how that fits? With your target customer?

Yes.

icon, isn't it end to end solutions provider? You know, obviously in the market, you have folks in the cameras opening BMS.

Vikon.

The core product is malarious, which is the video management system. You know, homegrown product, and so that product was built, you know, with intuitive design in mind, you know, an open architecture, topology, a lot of things that, I guess, weren't around back when they could see the product when the product was so but really, in terms of how we see ourselves.

It starts with a VMFS. But we really want to continue to be an end to end solution. So that means offering cameras, storage hardware, and the BMS as a one stop shop. To work on how we think about our offering, and continuing to build our technology platform, you know, to drive that that value proposition.

Is there is there like a deal size that you really target that you're best suited for? Me talking about 1000s of cameras, hundreds of cameras or smaller?

Yeah, I'd say we're probably

you know, we're not in that you know, the 16 channel.

Under that's not our sweet spot. I'd say you know, we're probably in the average deal size for us is probably about $50,000. You know, we do projects much larger than that.

Millions of dollars, but just to get a general sense about and then can can you speak to like the number of customers that you have right now and in the in the mix in terms of, you know, in North America and overseas? Yeah, so I'd say about 80% of our business is domestic or domestic meaning in North America 20% Obviously, year to year that fluctuates a little bit, but that's, that's for Vikon specifically.

Everything good. Yeah. Great. Welcome.

And let's say you know, we do a lot of work in government, state, local, and federal business. We also do a lot of corrections. A lot of

so that's, you know, a big part of where our business is, but we also do a lot of general commercial applications as well, you know, industrial plans. You know, different types of commercial businesses.

So, it varies quite a bit.

You know, hospitals education, I mean, those are all you know, we have a good amount of diversity.

But I think our biggest biggest markets are generally the government.

That's primarily just driven by like your integrators, your partners that may be stronger in some regions, like you said, Some devices, some diversity, they're wired, you have a partner in, let's say, the Northwest, that's really good and education and so they bring you into a lot of education that maybe somebody in the southeast good interactions, is that sort of see where you, you are brought into specific markets or is there also like outside sales or even inside sales, direct marketing, pushed by Vikon.

And some of that is driven by the relationships that we have. So you're right. On that front, we are making a push internally by by having resources that are going out, for instance, and, you know, building the one that we're already in as we grow, you know, we'll continue to

kind of speaking to, you know, some of the internal, you mentioned, like inside sales, the, you know, just broadly describe, you know, the employee composition that you have like a total number and where you have headcount primarily, you think you're like an r&d heavy right now. Sales heavy understanding the composition.

Yeah. So, a little bit of nuance to that, but I think you are, we have been in sort of development mode for the last couple of years.

So it's been really important for us to have our software continue to round out the feature set to make us truly competitive at the enterprise level. And so we were missing features. I think we've closed the gap on many of them now, you know, like alarming maps and, you know, basic things that were par for the course, enterprise players.

So, you know, we've been building that and then we've also been seeing in, say, next generation solutions like Cloud to products as well as analytics driven products. So, synergy has been an ongoing investment in that.

I'd say in the US, we probably have

I don't have the exact number, but I would say it's probably around 6060.

And then we have a few folks in a UK office.

I think you turned on we have a few people globally, we have global sales team.

A few key places around the world like the Middle East for apps, meaning like their in house not like third party some in Latin America and seven Asia.

And then we have a large software development team that's based in India, and a team is probably somewhere to 80 to 100 people then Is it is it fair to say that there are 200 Plus and Vikon or is it certainly somewhere between 150 and 200. Okay.

So, you mentioned the EMS product and you said you you had to guess in house create features that would help you complete at the enterprise level keep at what point since the product launched to where you feel like it's competitive. How long did that take you to get there?

About three years, I would say I mean, I think, well, to be fair, I inherited the product, you know.

So I think the product was launched in 2014. Ugly, you know, don't say, say most of the features that we feel are competitive in one on one, I think there are a few others that are still left.

But that that'll be rolled out here. So I would say that you know, I mean when you look at it Yeah, it was it was August 2016. We actually have a report.

So, there will be you know, since go over I took over I mean in 2018 So, you know, we've been Yeah, you know, so but

yeah, so I'm sure if you haven't read some of the stuff that we've reported on where I mean, obviously we have access to some of the the hardware imports that come in from overseas.

Can you kind of speak to the OEM strategy that you have been who some of your partners are that you like? I think it's all from Taiwan or from Korea.

At least physically.

Like all you guys are partners with you had

likens camera strategy was a little bit well, obviously I'm here to arrange everything but prior to NDA, you know we had a plan to accommodate our hardware, cameras, you know, we had multiple vendors, it's very messy, and we wanted to identify a partner that consolidated you know, vendors a little bit so we could, you know, build out a strategy going forward.

Taking things that were already there as we start to change that conversation a little bit. So.

So, I mean, we identified top view and we really liked your product, we think they're great. So they're the vendor that we've been working with, you know, we found that relationship to be really great. So so far more customer you know, considering bicon right now and I I go in and make a deal with you for you know, say 200 Camera appointment building icon would be provided me talk to you, and then I would obviously have pythons, you know, proprietary in house means.

And then kind of like a follow up with this, you know, I understand and debate me on this too, is that, you know, some of the particularly in the Middle East there might be a little bit more sensitive to brand.

Can you kind of speak to Vikon and is there a brand strategy that you have in terms of how you want to position bicon in the marketplace?

In terms of what, in terms of what capacity? It sounds like, there's that question and with respect to something. Yeah, so I'm using the Middle East as an example. We're perhaps customers might be a little bit more brand sensitive.

I would say even in the United States, you know, there are brands that are considering premium and there are brands that maybe more low end on the spectrum understanding, you know, like, dynamic as it exists in the market. Is it something that you care about one and then to if you do, where do you think Python fits in that spectrum and how does that matter to a brand strategy that you bring?

Yeah, so I think the brand strategy and positioning perspective, I mean, we're certainly going to be the cheapest option, and that's how long we're going for, you know, in terms of like competing, or one of those folks, I'd say we're probably somewhere in the middle and I think that's kind of we are trying to position ourselves. So TCO is is an important part of life to us. I've been in customer for a little you know, throughout the the ownership of our product.

And so I would say we're probably you know, below the line milestone axis price points and about the sort of value the real value brands so, I think, you know, but ultimately we want to be known for reliability, durability, quality, and providing good value for our clients.

We think about I think dependability is going to be the thing that continue to be pushing forward.

And

I think that's probably the most important follow up on that because I've had this discussion multiple times with Vivatech. Where they fall in that same type of strategy where you know, like you said, maybe not a vigil on milestone, certainly not looking to cut the bottom out of everything. What do you think are the biggest challenges that sort of fit that middle range where you have to get integrators on board and find it and is that a feet on the street problem? Is it a maybe for the last as you mentioned, six years, some downturn of the brand and people's awareness of it in like, what do you do to solve some of those challenges?

I think it's about consistency. So, you know, I think

dentistry obviously like makes a huge difference, right? I mean, if you raise $80 million, like ricotta and you hire everybody, I mean, I think you can even make a lot of noise, but ultimately, your product has to deliver.

Commenting on that, but I just mean in the general sense that certainly can make a massive difference. But I think the context of

you know how to get spread the word in this segment of the morning, get to see the quality of what you're delivering and I think people talk you know, the integrators talk.

You know, the veteran selling your product, they go to another you know, they find new jobs and they go they think the parents with them and so I saw I think the extent that you can drive growth and so forth, just it's really about maintaining that and then continuing to ensure that you're providing value

with each sale and that, you know, you're I mean, the market is constantly changing, you know, changes in the economics, obviously, with the shift to vsaas. I mean, you know, new entrants coming into the market, so you have to constantly be evaluating, how are you my writing or my kind of value and is that message being received by your customer? So, I think there's a, you know, one silver bullet

in, run up for contact, because that's, maybe you could share people insights. They have generally come in and corrupted from a technology standpoint with Dr. vsaas, but also from a marketing point, having all that money to spend, you know, 1000s of or despite hundreds of inside sales people beat the street for them.

You're battling against them, you know, some of the new disruptors while also make some of those mortgage, smaller legacy companies, even a Honeywell. So how do you sort of see both of those challenges? Which one do you think is actually maybe you're leaning more towards, you know, going down that path?

Competing is easy in any industry.

But ultimately, it starts by servicing your really well understanding what their needs are getting to do right. And and to move where the balls going right or where the puck is going. So as they say, you know, you can rest on your laurels from Africa. And I think kata has brought

a very unique perspective and good fruit with their technology approach and I think there's a lot of credence to sort of the, you know, the technology chosen.

I would say that the markets going to go towards really long term. I mean, obviously for a robust applications there.

The complexity of the deployment, integration, maybe that's not the right solution. But you know, from an enterprise perspective, so, but again, you know, I would say it's still early days ever caught up.

So, that remains to be seen, but a cloud first strategy is where the industry is better than people in the world once. Customers want simple deployment.

Easy to manage as few little hardware that they have to do.

So I mean, on that note, you know, this by kind of a plan, roadmap for cloud means something that you can kind of take right now in that.

So

I think for our customer base, cloud wasn't the immediate priority when we were sort of look at the set of priorities that we need to tackle over the last couple of years, I'd say becoming more of a priority now and we'll be rolling out our first

offering with respect to who will be able to you know, enable our customers to restore and you're gonna be saying sometime next year, we'll have more solutions as far as

hosted solutions and things like that. Where your, your, your environment, environment. So are you looking at when you put out storage you're looking at like a solution like wasabi or like cloud backup or retention.

I think to start that's probably the low hanging fruit and probably what you're gonna get to like onset.

This is something that Europe has developed internally. Can they can, is this something that your team has developed as a product or is it something that you're partnering or recording? We're developing it. Okay, got it.

Got it. Can we don't own data centers, so whenever any of

our BMS will enable that right.

Or is there a name for the product that you're gonna have? Or is that no, I think you know, we'll share more details as he gets.

Happy to do that.

And then I'm gonna get back to the DMS. I get one question off that didn't get one question that I wanted to, at least in the context of your product. What's good about it versus other CMS offerings on the market?

Product.

Design was really focused out the gate easy to use information available sort of on your under your main screen.

You know, the overall design aspect for it from the perspective of ease of use, so I think it starts with that you know, we've tried to take the open,

allow integration, access to the system.

We're operating as a thin client right now.

We will be rolling out a desktop client also this year. So that's also there. But, you know, I think we offer a compelling set of features, you know, all of these different features that one would expect in an enterprise platform at a very,

very value oriented price point.

And so I think, you know, that's, that's really the value proposition of the core platform, only getting more and more and more integration with LPR and access control. So, you know, we're trying to make it as as easy to use as possible on the platform. And I think that's, that's really the core.

And then I have one more question about, you know, revenue and growth. I mean, when you look at Vikon, you know, this year versus

So, kind of taking the first five months and comparing it versus a year ago. How are you looking at growth? Do you have any kind of violent trends that you carry? out how five cons trajectory is looking?

So it was saying that

20 Our fiscal year is September so sometimes my, you know, when I say 2021, it's like, you know, a little bit off, but I level the impact of COVID didn't affect as much as 2020 2021. So that's the 2021 was probably the period where we there is more pain than most a lot of folks were shut down and April but we managed to kind of ride that out. Well.

So I'd say you're looking at probably plenty for growth and sales, maybe a little bit more. And that's this year versus 2021 and driven by 2021 being COVID You know, I

went back a year before when he 20 which is representative of a mortgage Normally, I'd say probably going to be seen under 10%.

Okay, so kind of where we're tracking.

And that's good. You know, obviously, we're staring at potential, the tech recession in the face. You know, nobody has a crystal ball, but hopefully demand stays where they are. I mean, we're still excited. We have a lot of projects. So we're more of a project oriented you know, versus many folks, you know, we're doing selling volume. So

but right now, our pipeline feels robust. So we're feeling pretty good about the outlook for this year. You know, our overall top line growth. I mean, I think somewhere between five to 15% is probably what we're striving for and realistic in terms of our trajectory.

I mean, obviously, we shoot higher than that, but

based on at least approach the way we're rolling out and where we have the resources we have, obviously, I think we're looking at any moves to like a SaaS model in terms of maybe getting away from door to more of having that recurring sort of software licensing.

Yeah, I think so. I mean, we are going to present an offering to our customers, and we hope that they feel for that, you know, I think it seems like that's where the markets headed.

We are planning to continue in will You came like a perpetual licensing model, as well or will you just a shift from perpetual subscription. We're gonna wait for both for some time and kind of see how that works.

I think

would be difficult for us. I don't have to offer a license.

You know, five years from now that for me to predict that, but I would say that, for the foreseeable future, we'll be offering some form in terms of camera hardware to talk about time, supply and in some of those challenges and and had has that you know, maybe had you look very valuate. Again, the hardware providers while making NDA out, you know, top you have other offerings that are out there.

So, we are we have stock of inventory today. We're, we're actually pretty good on that front. I think our anticipation of, you know, if you choose to, you know, jump dramatically, and then you know, you know, we have quite a bit that we are able to satisfy our customers kind of work out in our favor. So we're pretty happy with where we're at with our supply chain. Granted, there's always buyers that have some challenges. But it's been relatively minimal. And so it hasn't been forced to sort of rethink, you know, vendor relationships, to give like an example or two of like, what some of the buyers are getting a sense of, maybe something that you wouldn't expect to be you know, I challenged I think there was a few weeks period where winning games and the hard drive hard drive towards the river was like Cassie getting your house and you just needed to put it back so you know, yeah, I started to become really crazy.

On the camera front, you know, we're pretty good on that.

are two things that maybe we're short on, I think we've been able to keep healthy

see

you count. Yeah.

I don't I don't I don't right now.

I mean, I think that would give you a chance to summarize it.

In 2020. Do people cloud icon, real estate? No. How are you?

vigil on edX. And AR where servers are a hot failure.

How should people think of when?

2022 Yeah. So a you know, we're intentionally provider, you know, we are

I think sort of rely on an acrobat AI

you know, search features, you know, but, you know, we do have ambitions down that road. I think there'll be analytics certainly on our road but you know, I'm

focused on providing you a wealth

when vibrant.

Are you in the formula?

Think about it.

And so you know, actual license, you know, the cameras are vetted by us to listen to build from the ground up, we enforce the New York based tech support come to your facility.

So you know, we portal or sponsibility of value, and I got a price point that is attractive and very kind of how we like to think of ourselves and

you know, we're trying to innovate and started doing and continuing to spend a lot of getting electricals.

continuing to invest in our our course as well to around the province is really kind of how we think about us, that's where our roadmap and that means, you know, the whole industry is full of kind of where things go.

Our hope is that we can build that direction and deliver you know, it takes time and investment.

pretty fair summary. So all I had mentioned earlier to

you guys are USA last year.

And then the majority of the game, isn't that accurate.

Guys promote and then we do have

hybrid approach to but yeah, most of the team and

yeah, so I I want to just kind of like if you need to know or be aware of it.

Definitely tell us for us right now.

Answering.

I think Yeah.

I think we covered

the first time I got yours.

obviously know that.

We're not really

that's fine. I mean, speaking of rebuilding, I

think we are making inroads on what kind of things have been working

you know, continuing to build some kind of establish ourselves as a

is the first step pharmacy. Right, good and you're doing RTT

Yeah, what happened to that since we talked

now, so Luis is actually going to he's listening on this Malinda Harvard grad John doesn't like that. Like you're in the United States. He gets up so we're in so obviously when we will be in contact

when this kind of like loose, there's many people that are coming company isn't so fast to kind of people feel that way, you know, there's something comes out here and you know, who Sean is.

So, that's kind of the goal that obviously, things are products that we, you know, we like to do and you know, little things that went down in the map ever, you know, yeah, we have an economy I don't know if you guys are you know, that would be we would love your take on it.

You know, is your guys willing to entertain always looking for cameras are attached so now as somebody who does run some cameras stay Yeah.

Yeah, will be.

Like the OEM.

I don't think we've tested you or other partners.

I mean, our feature on that

you know, so but which we haven't made it much more exciting. That features was solid.

i There obviously a few other players like that it is probably most of them.

Well, hey, thank you so much.

Nice meeting you all.

Have a great day.