Milestone Systems at 25: Pioneering Video Technology and Setting Industry Trends

LAS VEGAS—As Milestone Systems celebrates its 25th anniversary, we take a moment to dive into the latest advancements in video technology, uncover the driving forces behind industry trends, and explore how Milestone Systems has remained a global leader in this rapidly evolving market.

With CEO Thomas Jensen at the helm, and CTO Rahul Yadav's technical expertise, join us as we discuss their journey, successes, and vision for the future of video surveillance technology.

SSN: Gentlemen, thank you for joining me. Let me start by saying congratulations on your 25th anniversary. In the technology world, that’s quite an accomplishment. Can you speak to what that means to have reached that milestone? Pardon the pun.

Thomas Jensen: Thank you, and yes, it is a significant milestone. We're incredibly proud of our journey from a small four-person startup in Denmark to a 1,5 billion-kroner business in 25 years. We not only survived but helped revolutionize the security industry, transitioning from analog to digital and IP-based video technology. It's heartening to see our team grow, with some colleagues staying for the entire 25 years. This speaks to Milestone's DNA and culture.

As the industry shifts toward data-driven video technology, we believe Milestone is not only the strongest but also the most innovative company, investing heavily in innovation and R&D. Our continued focus on data-driven and insight-driven solutions will keep us at the forefront. We're excited to see what the next 25 years bring.

Rahul Yadav: By the way, we still consider ourselves a startup. I think the spirit inside the company is still that of being a new company, even though we’ve been “new” now for 25 years. There’s an entrepreneurial spirit that persists at Milestone.

SSN: That leads to my next question, what is your prediction for company and industry growth?

Thomas Jensen: In our conservative industry — both in mentality and growth — the VMS business is projected to grow at a 7-11% annual CAGR for the next five years. We believe this is too modest. As an industry, we haven't effectively communicated our value in today's safety-conscious communities, there is still a lot of potential. Additionally, with more than 50 players in the video management market, we anticipate considerable market consolidation in the coming years. Milestone Systems experienced double-digit growth last year, and we expect the same this year. We are confident in being part of this consolidation, emerging as one of the strongest companies in the sector. And, of course, growth doesn't come for free; we've made significant investments in our technology and in our colleagues. Our annual report, released in March 2023, showcases our healthy growth that aligns with our plan.

SSN: Thank you. So, tell me about Milestone Kite, your new Cloud VMS solution.

Thomas Jensen: Definitely. In my career transitions, which included 15+ years at HP and two years at one of Europe's largest integrators, everyone embraced cloud technology, managed services, and recurring revenue subscriptions – yet at a very slow pace. But here in the security industry, people claim Milestone is late to the game. As technology professionals, we must remember that any new technology should provide customer value and be adaptable. Kite is very easy to use and very affordable, giving small- to medium-sized users such as Milestone Leadership April 2023 2 schools and retail shops the ability to quickly deploy and scale cloud systems. Kite delivers a lot of value in an easy-to-use package, and that makes it unique.

We believe on-premises solutions will persist, with customers using cloud and as-a-service options for specific use cases. Our strategy is to provide a full spectrum of solutions: on-premises, hybrid, hosted, and pure cloud. With our XProtect product, which is also available as a hosted solution on AWS, we've also established a comprehensive enterprise-level portfolio. Unlike competitors who commit to one approach or acquire successful companies, we aim to deliver the whole spectrum of offerings to cater to various customer needs.

SSN: Rahul, as CTO, what else is on the technology horizon?

Rahul Yadav: To achieve Thomas's vision for a company providing on-prem, hosted, and cloud solutions, we must modernize our architecture and products. This is crucial for various product variants, whether on-prem or cloud-based, as we need a more distributed, scalable, and loosely coupled architecture. My top priority is to modernize our technology stack and architecture while making our product even more customer centric. My experience in B2C companies has shown me the importance of customer centricity, which may not come naturally to our industry, being so product driven. As the technology landscape evolves, we must focus not only on technology but also on meeting customers' needs. We are committed to finding ways to help customers in our industry and select verticals. This is a key area of focus for us.

Thomas Jensen: To support Rahul’s thoughts, our journey has been about building a strong team and investing aggressively in our technology stack. Since 2018, we've expanded our software development centers in Sofia, Bulgaria, and Barcelona, Spain, to stay at the forefront of development and to attract top talent. By spinning out our research department, we ensure a forward-thinking technology roadmap that drives differentiation.

We're focused on becoming more data-driven and are exploring analytics from two perspectives. First, we offer customers add-on analytics to unlock immense value in various sectors, including traffic management, healthcare, hospitality, and law enforcement. Second, we aim to derive insights from our vast video knowledge to inspire customers for new use cases beyond security.

SSN: I was at the Axis press breakfast this morning, and they discussed partnerships. Talk about the importance of partnerships for Milestone.

Thomas Jensen: At Milestone Systems, partnership lies at the heart of our approach, both technologically and commercially. As an open platform, our philosophy is to excel in our field while recognizing that we cannot do everything alone. Our comprehensive approach involves connecting the right products, providing customers with freedom of choice, and working closely with select partners for tested, reliable solutions – that include analytics, sensors, access control, and license plate recognition.

The partnership model also extends to our selling partners, including integrators, installers, and large consulting firms involved in configuring, for instance, building management systems. This approach ensures a best-of-breed perspective, maintaining our commitment to excellence rather than being the lowest common denominator. Our focus on an open platform allows us to offer customers stability, reliability, security, and the valued freedom of choice.

SSN: Tell me a bit about your involvement with responsible data and legislation.

Thomas Jensen: Open platform video technology is not merely a product but a powerful tool that enables individuals and organizations to make well-informed decisions for optimal business results. By integrating video technology, companies can achieve enhanced safety, continuous security, and heightened operational efficiency. Nevertheless, we must not overlook the immense responsibility that accompanies such innovations.

While acknowledging the positive impact video technology can have, we must also remain vigilant in identifying and mitigating potential negative ramifications on society and its citizens. The misuse of this technology can result in discriminatory data collection and intrusive surveillance practices. Milestone Leadership April 2023 3 To address these concerns, we have introduced initiatives that provide guidelines for customers, governments, and societies to implement our technology ethically and without discrimination. We continually scrutinize our software development, partner sales, and customer usage to uphold responsible practices.

Engaging with lawmakers is crucial as we collaborate to regulate the industry and ensure technology serves society effectively. As a responsible CEO, I openly advocate for increased regulation and am committed to offering assistance.

SSN: Now that you've celebrated the first 25 years, where do you see Milestone in the next 25?

Thomas Jensen: As a video software company, we will continue to focus on expanding data-driven use cases within and beyond security, rather than branching into cameras and sensors. Our mission is not only to grow and be successful but also to improve society, as we believe that doing so leads to greater profitability and responsibility. Ensuring the comfort and safety of citizens is crucial, as we aim to prevent the misuse of technology and advocate for responsible data use.

With rising global challenges, we recognize the importance of technology companies contributing to responsible technology incubation. We support legislation that upholds ethical standards, and we’re committed to engaging in conversations that encourage responsible legislation. We hope others will follow our lead.

Security Systems News Interviewed Thomas Jensen and Rahul Yadav in March during ISC West 2023.