In The Boardroom With...

Mr.  Fredrik Nilsson 
General Manager North America

SecurityStockWatch.com: Thank you for joining us today, Fredrik. Please give us an overview of your background and a brief company history.

Fredrik Nilsson: Today I serve as the general manager for Axis Communications with responsibility for the company’s operations in North America.

I also serve on the SIA (Security Industry Association) Board of Directors and Executive Committee. I also spend a considerable amount of time as an industry speaker and have appeared as a security expert in top national media outlets such as The Wall Street Journal, The New York Times, CNN, CNBC and FOX. I am also a regular contributor to major security publications and have authored the book, “Intelligent Network Video,” published by CRC Press.

I have a Master of Science from Lund Institute of Technology, in electrical engineering, and followed up with post-graduate studies in economics.

Axis Communications is an IT-focused company with a 25-year history of building business based on loyalty and partnership in the channel. In 1996, Axis invented the world’s first network camera and today is the global market leader in network video with nearly 800 employees and a presence in more than 20 countries. In 2009, the company accumulated $320M in net sales, growing by 17% year-over-year.

SecurityStockWatch.com: One will read on www.axis.com that Axis, “…is the global market leader in network video, driving the ongoing shift from analog to digital video surveillance.”   Please give us an overview of your product line.

Fredrik Nilsson: As the inventor of the network camera, we obviously believe in the power and potential of network video. Axis’ goal is to create high-quality network video products, so that we can work together with our partners to deliver the best possible security and surveillance solution for our mutual end-users. The common themes for all our products focus on superior image quality, product superiority, openness, ease-of-use and ease-of-install.

Our product line begins with network cameras, including fixed, fixed dome, and pan/tilt/zoom (PTZ), and ranges to video encoders, accessories, and software. However, due to our commitment to openness, we rely heavily on our Application Development Partners (ADPs) to deliver a variety of video management software and analytic applications to work with our products. In 2010, we expanded our portfolio to include the industry’s first true thermal network camera for professional surveillance designed as a perfect complement to a network surveillance system.

SecurityStockWatch.com: What are your key target markets and what is your perspective on the market drivers for Axis solutions at this challenging economic time?

Fredrik Nilsson: Professional-level surveillance has been important in many different industries such as retail, gaming and government, for decades. In addition to these industries, we do a lot of installation projects in the education, healthcare and transportation markets.

Today, end users are tracking every dollar. As in any economy, security professionals are very careful with money, and are focused on finding ways to do things more efficiently to fit their budgets. To work more efficiently, better image quality, scalability and lower total cost of ownership are all very important to customers.

With the rise of HDTV and megapixel technology, image detail is changing the way end-users use video for forensic evidence and business purposes. Additionally, the same area that historically was covered by two to three standard analog cameras can now be viewed using one high-resolution network camera. Finally, hosted video solutions provides the opportunity for small businesses to gain all benefits of network video with a limited capital expenditure.

Scalability of network video means that users can chose an initial deployment that fits their budget with the confidence that they can expand when more funds come available and the need arises. With network technology, the existing IP infrastructure can be leveraged to easily add additional products to their system.

Both of the above drivers feed into the third: Lower total cost of ownership. Ease-of-installation and IP technology drives down the cost of deployment, while image quality and intelligent video allow end-users to use surveillance for business and operational functions beyond security. Finally, the rise of hosted video in surveillance for smaller camera count systems is not only expanding IP surveillance into new markets, but adding a plug and click installation element for end-users.

SecurityStockWatch.com: Are there one or two success stories you’d like to talk about?

Fredrik Nilsson: Recently we issued an interesting press release depicting how an organization is now doing more with less using network video and finding additional uses for surveillance that weren’t originally intended. James River Assembly Church in Missouri is one of the largest churches in the country with more than 15,000 parishioners. They were finding it difficult to keep watch over their busy multi-campus facilities, especially given its existing multiple standalone analog video systems. They initially chose to upgrade to IP surveillance with Axis encoders and 350 new network cameras to protect its community members and their property from harm, and also to ensure church liability. However, once the system was up and running, church officials learned they could also use surveillance for operational efficiencies and time-saving measures – such as searching for specific incidents and better coordinating its security staff – and  for people counting and mapping analytics to understand attendance trends to determine the proper resources accommodate the church’s needs.

Another recent and interesting deployment came from the CBS news affiliate from Fresno, Calif. CBS47 is leveraging the HDTV-quality of Axis cameras to expand local news coverage and provide interactivity for its viewers. They installed high-resolution network cameras atop radio towers throughout the San Joaquin Valley to enhance its weather and news gathering abilities. The broadcast-quality images provided by the cameras are streamed over an Internet backbone directly to the affiliate’s Web site. Newscasters use live feeds and PTZ functionality from the cameras to give audiences up-to-the minute reports on local conditions and on-going news events. Also, by leveraging Axis’ open API, CBS47 has opened up a camera control queue for the online streams, allowing users to operate the cameras for a predetermined time and view the Valley like they’ve never seen it before. This not only increases viewer loyalty for the news station, but it also gives them a jump on the competition by being the first eyes on the scene without having to dispatch a news crew.

SecurityStockWatch.com: We understand that Axis is a major sponsor at ISC West. May we have a preview of the new products and solutions to be presented?

Fredrik Nilsson : For ISC West, our overall theme will be how network video is expanding into new markets. We’ll be releasing a handful of new products designed for better image quality and ease-of-use. These will include even more HDTV and megapixel cameras ranging from high-end to affordable. We’ll also take time at ISC to show off our new thermal network camera, which has met the market with high interest.

Finally, as we do at all the industry events, we’ll be working closely with our partners to highlight new and exciting technologies, specifically in hosted video and intelligent analytics.  You’ll definitely see some activity surrounding both our AXIS Video Hosting Platform and Camera Application Platform.

SecurityStockWatch.com: It is clear that the IP marketplace is rapidly expanding. Care to elaborate on the opportunities this presents for Axis?

Fredrik Nilsson: Because of the continued growth of IP in a tough economy, many integrators who might not have converted their focus to IP have now changed their mindset. Still, only 20% of market is IP network video, meaning much of the 80% that is still analog will convert to IP. The rapid acceptance of HDTV in surveillance due to the home entertainment market will be a big driver. Additionally, hosted video and thermal network camera technologies presents additional growth opportunity in areas where IP surveillance wasn’t the norm.

SecurityStockWatch.com: Thanks again for joining us today, Fredrik. Are there any other subjects you would like to discuss?

Fredrik Nilsson: It is interesting to see how a recession can accelerate a technology shift, while IP was not growing as quickly in 2009 as it did in previous years, it still grew by 15% or so. Looking at analog, it seems like the general consensus is that analog sales declined around 15% in 2009. This means many of those providers cut down on staff, service, R&D, etc. We believe those actions, along with the rapid development within IP video based on consumer technologies such as HDTV and H.264, will accelerated the shift to IP in 2010 and beyond.