October 23, 2009
Even though the exhibitor list had thinned substantially from prior years, it was hard to give up on attending SUPERCOMM 2009 after more than a decade of making the rounds. I guess it’s like any conference, if you come away with one or two decent opportunities to pursue then it was a worthwhile trip. We achieved that, so mission accomplished.
Yet we did ask ourselves afterwards whether this conference has a raison d’etre. The exhibitor list is something that seems to have been in flux for the past five years. CEOs no longer view it to be worthwhile being there for more than a day; kind of like us. If you pick the wrong one, you’ll miss that meeting. I guess most of the people we met were there on the chance they would encounter someone that be helpful to triggering a business opportunity. That’s why we should be there, but the show seems to be reaching a point where more of us are asking ourselves why we are there. An industry as substantial as the global telecom business should command more of your time, and send you home with more than a couple of leads.
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Posted by Kevin C. Slocum, Managing Director, kslocum@gtadvisors.com
October 2, 2009
One of the interesting companies we visited at ASIS 2009 was applying technology to the age-old problem of personnel tracking. SEER Technology’s NAViSEER uses GPS technology to determine the location of a small device to very high accuracy, typically within a couple meters or so. In addition, integrated dead reckoning hardware allows the NAViSEER to determine location in areas that are denied GPS access, such as indoors, or in tunnels, caves and mines. The NAViSEER weighs only a few ounces and is designed to be worn on the belt. SEER Technology has designed this device to plug into existing radio communications systems, allowing precise location to be continuously transmitted, so the wearer’s location can be constantly monitored by commanders and/or rescuers.
NAViSEER personal tracking unit
SEER executives that spoke with us at ASIS said there was keen interest in their products from several categories of customers, ranging from mining to law enforcement and first responders, to aid rescue efforts in the event of on-site disasters such as a cave-in, injury or building collapse. In addition, the military would like to use such devices for “Blue” (friendly) force tracking in battle. The NAViSEER enables commanders to instantly determine the location of all of their personnel and modify their actions to take the best advantage of their force deployment or focus a rescue effort.
SEER’s business prospects are very impressive. Earlier this year SEER announced its first major contract to provide NAViSEER and AccuSense (a chemical detection device) hardware to International Golden Group (IGG), a Middle Eastern defense contractor. The contract is reportedly worth $150 million and calls for the delivery of products over the next 5 years. The executives we spoke described a number of additional opportunities that they were working on, each representing potential multi-million dollar business for them.
Although we did not see technology similar the NAViSEER offered at ASIS, the concept of personnel locators are not new. Other technologies used to track people and assets include:
- RFID: This technology is used to track inventory at the pallet level and, as prices decline, there is promise of individual product tracking.
- Access Control: Tracking of badge swipes can record who is in a given area; using proximity (RFID) badges and ubiquitously placed sensors can significantly refine location.
- Newer Technologies: A recent article in Technology Review discusses some research results from the University of Utah that analyzed variations in radio signals from a network of IEEE 802.15.4 wireless “ZigBee” transmitters to locate moving objects to within about a meter.
Each of these potential alternatives requires the pre-installation of a sensor network and thus has serious drawbacks in the military/mining/first responder applications that SEER is currently targeting.
We see the SEER personnel tracking solution as uniquely well-suited for their focus applications. If they can take advantage of economies of scale and continue to lower the price of their products they will be able to gain access to a number of additional high-volume markets. We plan to keep an eye on this company to see how well it is able to capitalize on the many large opportunities that are appearing in front of it.
1 Comment | Technologies, Tradeshow Recaps | Tagged: Hardware, Security | Permalink
Posted by Peter Yu ptyu@gtadvisors.com
October 2, 2009
Traffic at ASIS last month in southern California seemed light to us, especially on Monday before lunch and Wednesday, the last day of the show. We attribute the thin crowds to a few circumstances:
- The State of the Economy – We heard from many executives at the show that companies were sending many fewer attendees.
- Competing Conference – The Facilities Decision Conference and BICSI Fall Conference, concurrently held in Las Vegas, siphoned off a number of potential attendees from ASIS.
- Monday Start – Because they wished to maintain their weekend time as their own, the Monday start date caused many attendees to use all or part of the first day of the exposition for travel.
We did see traffic increase noticeably by mid-afternoon on the first day, supporting the Monday start hypothesis and attendance seemed to be fairly healthy on Tuesday but was exceedingly light on Wednesday, when it appeared many companies decided to pack up early and leave. We also noticed some empty booths and a larger-than-normal number of coffee break stations placed where exhibitor booths would normally reside.
Despite the perception of low attendance, we heard a decent amount of optimism from the executives we spoke to. For example, it was repeatedly pointed out that those who were in attendance were decision makers, so the quality of the leads was good, even though the quantity may have fallen relative to the previous year. Additionally, many executives mentioned that the U.S. government finally seemed to be back in buying mode after spending much of the first half of this year waiting in the wings.
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Posted by Peter Yu ptyu@gtadvisors.com
September 25, 2009
Some quick thoughts that have come out of our visit to the ASIS 2009 expo this week:
- Relatively light traffic on the exhibition floor, especially before 1 pm on Monday and on Wednesday.
- Several executives mentioned that U.S. Government money was finally starting to flow in the second half of this year.
- We heard rumors that GE Security may be split up in order to sell it.
- Schneider has completed its assimilation of TAC and has changed its name; the Pelco brand apparently still carries enough market value for Schneider that it is remaining distinct.
- SCM Microsystems, which acquired Hirsch Electronics at the end of last year, announced on Monday an agreement to acquire Bluehill ID an investing firm specializing in RFID technology. In the combination, SCM shareholders will own 60% of the surviving entity.
- Although many have said that video surveillance has had a rough time, several booths in that segment appeared quite busy at the show.
- Several companies, such as ShotSpotter, SEER Technology and AOptix, brought sophisticated technologies to bear on some age-old problems and seemed to be on the cusp of significant business. We’ll have to keep tabs on them to see how they live up to their initial promise.
In an interesting anecdote, K&G Spectrum, told us about a potential customer who wanted to track animals and was very concerned about any possible harmful effects of millimeter wave radiation. The executive who spoke to us mentioned that other customers wishing to detect humans never had such concerns.
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Posted by Peter Yu ptyu@gtadvisors.com
May 5, 2009
We continue with our observations from ISC-West. Part I appears here. Part II appears here.
Of the executives who spoke to us, those working in software-intensive businesses seemed to have the brightest outlook. This circumstance makes sense to us; software is a key to flexibility and enables systems to be upgraded with little capital investment. Executives at companies offering software for video surveillance such as BRS Labs, Genetec and Vidient Systems all mentioned seeing strong demand despite the recession.
There were also a number of companies including Avigilon, ImmerVision, SightLogix and VideoIQ offering camera solutions having a combination of front-end processing and/or video analytics. The additional capability afforded by software in these products made them more cost-effective for customers; some of the benefits to users were: decreasing the number of cameras required to cover an area of interest, improving detection alarm events and limiting the system bandwidth required by ever-increasingly high resolution sensors.
Two other software companies that we found interesting were AlertEnterprise and TimeSight Systems. AlertEnterprises offers a solution that integrates physical and logical security domains to identify enterprise-wide risks which might not be captured by standalone systems. AlertEnterprise enables companies to maximize the utility of existing security systems by looking at all available data across the enterprise, resulting in significantly increased likelihood of threat event detection. TimeSight uses a proprietary compression algorithm that takes advantage of the limited shelf life of surveillance video by providing a solution enabling companies to continually re-compress digital data. With successive compressions decreasing the memory required to store a segment of surveillance video, TimeSight enables a company to lower its memory usage as needs change over time and the resulting savings can be very substantial. TimeSight claims up to 90 percent reduction in cost versus existing video archival methods.
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Posted by Peter Yu ptyu@gtadvisors.com
April 24, 2009
We continue with our observations from ISC-West. Part I appears here.
Despite the obvious effects of the economic downturn, the atmosphere was not solely represented by predictions of doom and gloom. On the contrary, we encountered a significant amount of optimism from executives who spoke to us at ISC-West. Among the reasons for hope that we found coming out of our visits were:
- - Is There Light Ahead? – Several executives mentioned that the early 2009 was bad, with many customers canceling or delaying orders in January and February, but they were noticing a significant uptick in their businesses in March. It may be that a combination of pent-up demand from months of waiting on the wings, coupled with the recent mini-rally of the stock market, has encouraged companies to poke their heads out of their bunkers and take a look around.
- - The Right People Were At the Show – We spoke to a number of people who said that visitors to their booths were of a higher quality than usual. Because companies limited the number of attendees, people at the show trended more toward decision makers. Many people told us that they were getting a greater number of good leads.
- - Government Markets Holding Their Own – Government programs have been among the most stable sector of the economy in recent times and the stimulus spending had many executives optimistic about the future of this sector. We heard the opinion that long-discussed initiatives might finally obtain funding and existing programs could be expanded. A large number of security-focused proposals had already been through long planning stages and are “shovel ready”.
- - Many Foreign Markets Are Relatively Strong – Although sales in Western Europe seemed to be flagging, foreign markets, particularly Asia, appeared to be stronger. This situation echoes a sentiment we heard at another conference earlier this year. We also heard of significant opportunities in Eastern Europe and the Middle East.
- - Interest Continues for Industry Consolidation – Many executives view acquisitions of businesses and technologies as a key part of their strategies that will enable them to maximize their companies’ growths, when the country eventually moves out of the current recessionary period. We spoke with top executives at one large public company who attended the show who reiterated their desire to continue to grow in security and life safety. They have already made several acquisitions in this area and are seeking more companies to add to their portfolio.
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Posted by Peter Yu ptyu@gtadvisors.com
April 23, 2009
We made our annual trip to Las Vegas at the beginning of the month to attend the ISC-West security exposition. We’ll be posting some observations from the show on the site over the next several days.
With the recession hanging over everyone, we were concerned about how well attended the show would be. In fact, there were many signs that companies were trying to limit expenses at the show. Several executives told us they were saving money this year by significantly limiting the number of people they were sending to Las Vegas. We heard from an employee of Reed Expositions that attendance was down about 10 percent from 2008 and many people at the show noted that Cisco Systems, a company that usually had a major presence at ISC-West, had pulled out from the event altogether.
Overall, there were fewer exhibitors and attendees at the show and we noted that the booths tended to be smaller, were less splashy and reflected the more sober tone of the current business environment. Despite the drop in attendance, Reed’s event organizers were able to keep up appearances, in part by moving many Asian companies, which had for the past couple of years occupied a lower level of the Sands Center, up to the main floor. This tactic resulted in a mostly full exhibition floor with good traffic throughout much of the show.
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Posted by Peter Yu ptyu@gtadvisors.com
April 1, 2009
You might argue if there were no more IPOs, it would be great for Greenwich Technology Advisors’ business, but I would disagree. By and large it is a better class of companies that manage to meet the moving target hurdles that face IPO candidates. When they go public, they tend to carry higher valuation than other public comparable companies at least until the first time they stub their toe on a quarterly earnings report.
The answer to the question posed in the title of this post is; they already have. It nonetheless seemed to be a thought on the mind of many executives we spoke to last week at OFC/NFOEC 2009 last week. I suppose with stocks performing the way they have in the last year it is no wonder, but I will throw out a few thoughts anyway.
There is a lot of stimulus being thrown at the economy both here and abroad. Ultimately that is apt to produce a recovery and even inflation given that the central bankers never seem to put the brakes on at the right time. We have been through a very long period of declining interest rates and we may now be experiencing the last straw in that trend before a long term reversal driven by a higher level of global demand for almost all commodities in periods of growth.
That creates concern for many investors, but it could lead to a period of above average opportunity to higher growth companies such as those addressing emerging technologies. The last decade has not been such a period, but in higher inflation periods investors often turn to technology as one of the few investment arenas where they might be able to perform well on an inflation adjusted basis.
This prospect prevents me from spending a moment worrying about whether IPOs will become a common exit event for venture capitalist again. I think they will and would be more focused on making certain the companies in my venture portfolio were well positioned for the opportunities that are apt to be blooming a year or two from now.
1 Comment | Technologies, Thinking About M&A?, Topics on Our Mind, Tradeshow Recaps | Tagged: Alternative Energy, Energy Storage, Imaging, M&A, Optical Components, Security, Sensors, Software & IT Services, Solar Energy, Telecom, Thermal Imaging | Permalink
Posted by Kevin C. Slocum, Managing Director, kslocum@gtadvisors.com
March 31, 2009
On paper, this year’s optical communications show compared well against recent shows (468 companies versus 512 in 2008); in person it was less positive; low attendance, cancellations and a dour tone among the exhibitors. But it was far from the distressed/depressed environment we feared. Perhaps because our focus was on established private companies, as opposed to the stock-market humbled public ones, there was a bit more resilience and optimism on display. Some observations:
- - “Flat would be good” achieved mantra status.
- - Companies entered the current slowdown leaner, less inventory and more profitable than five years ago, this offers more runway and less second-guessing of corporate direction.
- - Telecom is no-longer the be-all of existence for many of the companies at OFC/NFOEC, and the less severe decline in military, medical or commercial markets is helping to buffer the impact of a slower telecom market.
- - A thinned herd. The declining supplier base as a result of creative destruction and consolidation means that survivors are getting a better sense of remaining opportunities, sooner, and this fosters confidence the market will pick up later this year. Taken another way, acknowledgement of dependencies up and down the food chain is finally creating a more cohesive market.
- - Perspectives on M&A are changing. More so than ever, an exit in this area will best be accomplished by M&A rather than IPO. Successful companies are acknowledging this by turning their attention to reverse IPOs, mergers among equals or are signaling a willingness to accept of stock in transactions. Whether changing attitudes, when put to the test, result in an uptick in M&A remains to be seen.
It is difficult to leave OFC without a sense of greater maturity and resolve amongst the attendees.
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Posted by Dennis Gallagher dgallagher@gtadvisors.com
February 4, 2009
In the aftermath of a disappointing holiday retail season and consumer confidence plunging to all-time lows, we attended the National Retail Federation (NRF) Expo in New York City to hear how the software vendors that sell to retailers are doing.
While vendors on the Expo floor estimated attendance was down anywhere from 15% to 60% (“official” NRF estimates were flat), most vendors we spoke with indicated those who did show up had more purpose than in years past. A CEO from a large ERP/SCM vendor said he had more CIO meetings than ever and his schedule was booked solid prior to arriving. Optimism over prospective customer meetings is one thing, actual sales is another.
There is little doubting Q4 was challenging for these vendors: sales cycles lengthened, new approval steps were added by customers and certainly projects were cut. However, many vendors indicated that deals that slipped out of the fourth quarter have in fact closed in January. Does this mean normalcy will suddenly return? Probably not, but it does portend a thawing of sorts for targeted projects with high/quick payback that leverage existing systems. We may have some thoughts on those products and companies in future posts.
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Posted by David Mahoney dmahoney@gtadvisors.com
