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IBM to develop packaged security systems

IBM has restructured the way it is selling its Smart Surveillance analytics product in Canada, saying it will produce pre-packaged “cookie cutter” systems for retail, banking and public sector clients who are ready for video analytic tools, rather than sell the system independently.


March 28, 2008
By Jennifer Brown

When the tech giant first entered the physical security industry two
years ago it had dedicated sales people in Canada who were
demonstrating Smart Surveillance — then known as S3 — to large
customers including banks, retailers and school boards and courted
physical security customers with the help of technology partners such
as March Networks.

IBM says the change in the way the analytics product is being presented
to the market in Canada is more a reflection of the way the business is
maturing.

“We definitely are in the physical security business – but that now has
become part of business as usual as part of the overall portfolio of
IBM,” says Jeanne Jang, leader, IBM Global Services in New York. “There
are no longer the lone rangers out there – we’re now bringing together
the right experts from the software group the right expert from
hardware division and so forth.”

In the past, IBM would try and understand what the customer needed with the surveillance system and customize it for them.

“However, we find in this business that there are lower margins and we
need to be able to replicate things in a more consistent fashion,” says
Steve Russo, director of technology for physical security and privacy
at IBM in the U.S.

The company is also going to focus its efforts exclusively on the retail, banking and government sector.

“For 2008 we wanted to be a lot more targeted in terms of the customers
we were going after,” says Jang. “We prioritized financial services,
retail and public sector around city-wide surveillance and overall
public safety opportunities. We’re moving to this model where we have a
set of pre-packaged solutions that we can roll out to bank branches and
to retail services with minimal customization and with the majority of
the development work done in the U.S. and replicated out to the selling
teams in the geographies.”

IBM has tried to incorporate elements of business intelligence into its
surveillance strategy, especially when targeting retail customers who
have more experience using analytics to drive market data.

“One of the things we wanted to do is leverage analytics to solve not
only security, but very specific business problems both in financial
services and retail because it would be around loss prevention,” says
Jang. “Also, more and more we’re talking to chief marketing officers
about their interest in using this technology to get better customer
behaviour data.”


Jang says IBM is also focusing on what it calls a “bottom of the
basket” surveillance tool that would allow retailers to monitor items
left by consumers in the space on the bottom of a shopping cart.

A camera unit is installed at the cashier base in line with where the
“bottom of the basket” would pass through in a check out line.

“Any time the system recognizes an item it will stop the system from
closing out and ensure the cashier either accounts for the item and
gets scanned or if you have a stroller down there you can account for
it as an exception. Either way the retailer has a log for what has
happened,” says Jang.

IBM has struggled to find its way in the physical security realm, says
industry analyst Steve Hunt of Hunt Business Intelligence of Evanston,
Ill.

“What you’re witnessing is a result of turmoil internally. What they have is not necessarily a bad product though,” says Hunt.

Hunt says IBM has been struggling for a year to craft a strategy for
its Smart Surveillance System on two fronts – one is defining how the
video surveillance product fit within Global Services, if at all, he
says.

“It’s a major debate within IBM,” says Hunt.  “The other issue is what
would be the go-to-market strategy, especially in light of the
questionable and checkered success of IBM as a physical security
solutions provider over the last few years.”

Hunt referenced the shaky start the City of Chicago had with IBM’s
Smart Surveillance, but he acknowledges the project is now on track.

“There are also the jobs IBM has failed to win. With the ones they do
win it takes them a long time to find their stride. In Chicago they
found their stride and its working fine now but they experienced their
foibles. But they’re also losing bids – the great IBM is not winning
bids they ought to be winning,” he says.

 “Global services will figure it out eventually, but it’s a big ship
to, turn and in their large scale projects only a very small portion of
them include the video surveillance product.”

Hunt adds the analytics product from IBM “desperately needs complimentary technology to live up to its full potential.

“To IBM’s credit they have not gone on a buying spree without a strategy and that’s a good thing,” says Hunt.

Jang says the company’s surveillance analytics product has won over large customers around the world.

“In two years we have not only proven the technology and its ability to
work and scale, but also proven it to specific customers with huge
deals. There are two, $24-million deals in the U.S. with retailers so
that’s the kind of business we’re seeing behind these solutions. We’re
able to use technology to prove a definite ROI to our customers.”

Jang could not provide names, but says IBM has one large financial
services client in Canada and it has signed with one retailer and
hoping to sign with a second soon.


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