It is sometimes interesting to get a slightly longer, historic perspective, in this ever-increasingly digital world, and Axis Communications, a Swedish IT company, represents this well.
The example concerns ‘Internet of Things’ (or IoT), a buzzword and relatively recent concept.
“IoT, to get things to function over a network, we’ve been doing for 32 years. Within Internet Security of Things, as we call it today, we give everything an IP address, be it a camera, speaker or a door locker. With our network knowledge being one of our core technologies our first innovation was to come up with a box that could connect all the printers on the market to an IBM computer,” says Magnus Zederfeldt, Regional Director South Asia Pacific.
That represents interconnection of computing devices prior to the Internet era.
“Then we invented the first digital surveillance camera 20 years ago and we have since then developed a very deep knowledge about camera technology.”
Axis Communications pioneered the networking surveillance market with the launch of the world’s first network camera in 1996. Now a global market leader in network video solutions, Axis with its extensive experience and innovative network video solutions is driving the ongoing shift from analogue to digital video surveillance. This has also opened up significantly to new and increased business, by being able to fulfil various needs in ways previously not possible.
Axis, now selling in more than 70 countries, in South Asia Pacific has around 7000 resellers, stretching all the way from New Zealand to India. Customers are in in all verticals (end-user segments) covering education, banking & finance, retail, transportation, government and industrial. Axis’ end users range from large multinational corporations to small-to-midsize enterprises.
“This region incorporates everything from Australia’s very mature market to Myanmar where we have just set up our first distribution, starting from scratch, and all countries in between. That’s also what is exciting in this region that we have this wide span,” says Magnus at the regional headquarter in Singapore.
“In per cent we are growing the most in the markets where we have entered relatively recently, like Vietnam and Philippines. But of course if you take markets like Thailand, Singapore and Australia, we are growing but from a mature market level.”
He also explains that their worldwide strategy is to be local and have local resources. So Magnus is actually their only expat out of around 2600 employees worldwide. And even his assignment is temporary: “I’m here on contract and one of my tasks is to find a local regional manager.”
“I have been here for a bit over two years, and I have worked for Axis for 8 years and 2+ of those here in charge of the region. We have opened here 20 years ago, so we have been here for fairly long and today we have 95 people in this region.”
“We want to have our own resources and expertise on the markets to support our resellers. So from the beginning we were a few in Singapore selling to distributors and resellers around all the countries. This local presence is part of our strategy to be the global market leader.”
“It’s a challenge to put two men in the Philippines, for instance, and to steer it. But we think it is worthwhile even though losing a bit of control but also getting a completely different closeness to the market.”
Axis is a value-driven and not a process-driven company at the core: “When you have many small offices in this way you cannot effectively run them in a process but one must get all to be entrepreneurs in their own respective markets. Therefore we dedicate big resources to educate our employees how Axis thinks and put up five-year plans so that everybody understands where we are heading and have a platform to base decisions on, in their daily operations.”
They send all employees to Sweden for training and within each function there are either regional or global meetings held annually.
“They meet others with the same tasks to discuss best practices, experiences and to learn. It is a way to manage the business, to understand what the expectations and the framework consist in. but also to give people the self-confidence to act on their own and take decisions,” explains Magnus.
Last year, he was also honoured to present Axis’ success at the Sweden-Southeast Asia Business Summit, where he pointed out three things:
Fist, being local: “When you are out here the expectation is that we should open offices in a lot of countries. That makes the whole difference; you are not in Europe just because you’re in Sweden, every country is different.”
Second, trust the Swedish value proposition: “I don’t agree that Swedish companies need to develop products for this market. We have it in our DNA to deliver quality and the best service. I am talking about 3-5 years, while my customers talk about two weeks. I think if we say we need 3 year warranty our engineers in Sweden design it for at least nine! If you’re not resilient to the everyday request to lower your price in this part of the region then you’re going get into problems, so it’s an everyday fight to educate your staff and your resellers giving them the confidence to sell that premium product with premium value. We ask ourselves: Are our customers really asking for cheaper products or maybe they need our help to see why they should invest in quality.”
Third, recruit people that share your values: “It’s all about people in the end. And as we talk about culture there are so many similarities between Swedish and Asian cultures in general; we are considerate and don’t necessarily like conflict. We are also fairly family-oriented so I think Swedish companies have it quite easy to make friends and relations in Asia. And be responsive! There is this confusion about this most shameful thing in the world: to be wrong. Building that self-confidence to dare to make mistakes and to learn from them, and dare to step out of the box, is a big challenge.”
Axis has come a long way with innovations and technology since around 2005 – as processors have become stronger, Internet grown faster etc. – caught up to enable the digital camera to fully be utilized and be part of further innovations.
“There are so many advantages with digitalisation. A digital camera also has a brain, so it is a very intelligent video; which is a sensor that should give an alert. But, of course, in order to create that brain one must have some image data to analyse. It’s about software, as it’s a combination of optic and sensor but also what you do with the information. The other aspect is that a digital image has much higher quality than analogue.”
Today the expectations are different. And while people equals surveillance cameras with monitoring people, Magnus says that is just a small fraction of the market.
“We listen to consumers problems, and often we have a solution we’ve already done somewhere else. So therefore our marketing today is focused on different verticals where we, instead of selling products in different categories, try to sell solutions that meet the needs and solve problems; be it shops, hotels or airports.”
It’s all about obtaining the information pro-actively from a smart sensor.
“The camera can tell the marketing department for a store where you have the most frequented spots in the store and at what times of the day so they run campaigns and set prices based on that. And if there are parts of the store where not many move they can go in and redesign the store.”
In a hotel, as another example, other needs and challenges must be met. There is often a need for cameras to protect guests without being invasive of their privacy and that can fit in perfectly with modern architecture, and deliver a detailed overview of narrow and deep areas, such as long corridors.
Axis’ innovations continue to meet such needs.
“A surveillance camera must be able to handle that the sun rises, shines straight into the lens, for instance, and also darkness. So quite advanced camera technique is required to be able to handle all kinds of situations and problem scenarios. You want to have the information you are looking for at all times.”
“The other thing is the continued development of products to fit into various environments.”
A lot of the growth in the region happens as countries invest in the increasingly networked infrastructure that forms the fabric of the modern society (monitoring of traffic and counting cars etc.), in particular when emerging economies are leapfrogging in their security infrastructure implementations of network-based surveillance.
“Anything from wireless transmissions in city surveillance to putting cameras all over the city running on power over the ethernet with no need for an electricity grid connection at every place.. There you have lots of innovation.”
The fact that Canon is today Axis’ majority owner is a strong indicator of the Swedish company’s significance, and something Magnus thinks makes good sense: “We are best-in-class worldwide on designing surveillance cameras and have all the software and technology required for those challenges. Canon are the world leader in sensors and optics so those are two central parts of the products that we do not produce ourselves, so it is a good match. It feels like a good owner to have.”