Axis, Business Model Innovation and CCTV

Changing the CCTV Game

On the 21st of september 2009, Axis Communications announced that any company may develop downloadable applications for its cameras and video encoders.

Axis is the largest manufacturer of digital, IP based surveillance cameras in the world.

The company (and its stock, prior to the financial turmoil) has been growing rapidly over the last years as a consequence of the ongoing shift from analogue to IP-based CCTV.

”Our favourite year is still 1984”

The company hasn’t lost its sense of humour since it was founded in 1984.

Anyway, why does a company open up its products for application development by other players?

The reason is simple: the value of buying an Axis camera increases if others create software that can be bought along with it.

Consider Facebook.

There are thousands of applications that have been developed for Facebook. Needless to say, this makes Facebook much more attractive than for instance Myspace.

Consider the IPhone.

Anyone may develop software for it, which means that consumers will be willing to pay more for an IPhone, simply because it gives you more value.

You create more value for your customers, and it won’t cost you anything.

That’s business model innovation.

You change the way value is created, without changing the product itself.

Moreover, this may benefit the video analytics area, which has been subject to a lot of hype over the last years, without really meeting these expectations.

This event can also be regarded as yet another illustration of the profound changes that are currently going on in the video surveillance industry.

Surveillance is becoming an IT issue and it’s no coincidence that Axis is doing something similar as Facebook and Apple.

As the technology is changing, so does the very business logic of the industry.

And those who do not change will be left behind.

Image attributions

Christian Sandström is a PhD student at Chalmers University of Technology in Gothenburg, Sweden. He writes and speaks about disruptive innovation and technological change. www.christiansandstrom.org christian.sandstrom at chalmers.se

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Axis, Business Model Innovation and CCTV

by Chris Sandström on Sep 25, 2009

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