NICE-Orsus Deal Sends Mixed Messages

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NICE Systems Ltd. announced Monday it will acquire the assets of Orsus, a leading vendor of physical security information management (PSIM) systems for $22 million in cash. The deal will give Israel-based NICE Systems, a supplier of video management systems that integrate analytics and audio incident management, a critical command-and-control element that can enable larger security systems integration, At the same time, however, the relatively low purchase price raises questions on the short-term market outlook for PSIM.

Founded in 1999, Orsus, also based in Israel, is privately-held. The company's mainstay product is Situator, a high-end PSIM system designed to bring together information from various security systems--video surveillance, access control, fire and life safety, and others--and present it in a coherent way so security staff can accurately evaluate a situation and respond quickly and correctly.
 
"Today we operate in audio and video," said Chris Wooten, president of NICE Systems' Security Division. "NICE is strong in video surveillance and linking access control to video." Orsus's Situator "connects the dots" among other security systems, sitting on top of the ecosystem and linking them through a common IP framework, Wooten said. Through the Orsus Situator, NICE's VMS products can be tied to existing VMS systems from other vendors that users might already have in place.

NICE Systems will package the Situator with its Inform software. In addition to providing management of video surveillance systems, Inform features an analytics component as well as as tools that can match audio communications for an incident with video from the same incident, which can be helpful in forensic review. The Situator also will be sold separately, leveraging the library of 150 interfaces Orsus has developed for other security systems, Wooten said.

The Orsus Situator fits in well with NICE's products and its primary markets, which are transportation, infrastructure and education, the same verticals that right now are showing the most interest in PSIM. In addition, Orsus has made a number of high profile sales. Its customers include Virginia Port Authority, Port of Houston Authority, American Electric Power, the U.S. National Guard and South Africa's Transnet Freight Rail.

However, the relatively low purchase price--$22 million--may lead to questions as to whether PSIM will be as central and dominant a platform as Orsus and its competitors, which include CNL, Proximex and Vidsys, have claimed. While NICE clearly sees value in Orsus, the low price "puts into question if PSIM is transformative," said John Honovich, an industry consultant and publisher of IPVideoMarket.info. "It's not a game-changing solution."

Honovich suspects that available private capital is peaking for PSIM companies, which are not returning revenues at levels that had been expected. While Wooten sees NICE Systems, with $630 million in annual revenues, as having the resources to invest in the further development of the Orsus technology, he is not as pessimistic about PSIM's potential, short- or long-term. "We think that it's the future," he said.

At the same time, as we've noted here, vendors of both video management software and access control systems have been looking to extend command-and-control across enterprise security. Indeed, with the Situator system in its toolbelt, NICE Systems will looks much like OnSSI, which has brought together video management, analytics, command-and-control, and off-the-shelf software and is marketing it all together as a PSIM-equivalent solution. This, plus the NICE-Orsus tie-up, may increase the perception that PSIM requires a video element. It may also fuel speculation about additonal acquisitions. A PSIM player, which provides a literal window into IP-based security systems, could give an immediate shot in the arm to a  legacy camera/DVR/NVR supplier stuck in a proprietary silo. All the moreso if it can be acquired at a low price. 


NICE Systems Ltd. announced Monday it will acquire the assets of Orsus, a leading vendor of physical security information management (PSIM) systems for $22 million in cash. The deal will give Israel-based NICE Systems, a supplier of video management systems that integrate analytics and audio incident management, a critical command-and-control element that can enable larger security systems integration, At the same time, however, the relatively low purchase price raises questions on the short-term market outlook for PSIM.

Founded in 1999, Orsus, also based in Israel, is privately-held. The company's mainstay product is Situator, a high-end PSIM system designed to bring together information from various security systems--video surveillance, access control, fire and life safety, and others--and present it in a coherent way so security staff can accurately evaluate a situation and respond quickly and correctly.
 
"Today we operate in audio and video," said Chris Wooten, president of NICE Systems' Security Division. "NICE is strong in video surveillance and linking access control to video." Orsus's Situator "connects the dots" among other security systems, sitting on top of the ecosystem and linking them through a common IP framework, Wooten said. Through the Orsus Situator, NICE's VMS products can be tied to existing VMS systems from other vendors that users might already have in place.

NICE Systems will package the Situator with its Inform software. In addition to providing management of video surveillance systems, Inform features an analytics component as well as as tools that can match audio communications for an incident with video from the same incident, which can be helpful in forensic review. The Situator also will be sold separately, leveraging the library of 150 interfaces Orsus has developed for other security systems, Wooten said.

The Orsus Situator fits in well with NICE's products and its primary markets, which are transportation, infrastructure and education, the same verticals that right now are showing the most interest in PSIM. In addition, Orsus has made a number of high profile sales. Its customers include Virginia Port Authority, Port of Houston Authority, American Electric Power, the U.S. National Guard and South Africa's Transnet Freight Rail.

However, the relatively low purchase price--$22 million--may lead to questions as to whether PSIM will be as central and dominant a platform as Orsus and its competitors, which include CNL, Proximex and Vidsys, have claimed. While NICE clearly sees value in Orsus, the low price "puts into question if PSIM is transformative," said John Honovich, an industry consultant and publisher of IPVideoMarket.info. "It's not a game-changing solution."

Honovich suspects that available private capital is peaking for PSIM companies, which are not returning revenues at levels that had been expected. While Wooten sees NICE Systems, with $630 million in annual revenues, as having the resources to invest in the further development of the Orsus technology, he is not as pessimistic about PSIM's potential, short- or long-term. "We think that it's the future," he said.

At the same time, as we've noted here, vendors of both video management software and access control systems have been looking to extend command-and-control across enterprise security. Indeed, with the Situator system in its toolbelt, NICE Systems will looks much like OnSSI, which has brought together video management, analytics, command-and-control, and off-the-shelf software and is marketing it all together as a PSIM-equivalent solution. This, plus the NICE-Orsus tie-up, may increase the perception that PSIM requires a video element. It may also fuel speculation about additonal acquisitions. A PSIM player, which provides a literal window into IP-based security systems, could give an immediate shot in the arm to a  legacy camera/DVR/NVR supplier stuck in a proprietary silo. All the moreso if it can be acquired at a low price. 


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