On­ward March

March Net­works boss says firm’s ab­sence from spot­light doesn’t mean its star is fad­ing

Ottawa Business Journal - - FRONT PAGE - BY DAVID SALI david@obj.ca

When March Net­works CEO Peter Strom tells peo­ple what he does for a liv­ing, the re­sponse is usu­ally not what the head of the video­surveil­lance tech­nol­ogy com­pany is hop­ing for.

“Oh, re­ally, you guys are still around?” is the re­ac­tion he of­ten hears.

But if the Ot­tawa firm’s rel­a­tively low pro­file since it was ac­quired by Chi­nese hold­ing com­pany In­fi­nova in 2012 both­ers Mr. Strom, he’s not show­ing it. He can even chuckle about the fact that a busi­ness that helps cus­tomers around the world keep a vig­i­lant eye on their op­er­a­tions has it­self be­come hid­den in plain sight, at least in the pub­lic’s mind.

“It re­ally hasn’t im­pacted us that much,” he says. “We’ve stayed fairly ac­tive, I think, from a mar­ket­ing per­spec­tive in the in­dus­try it­self.”

In fact, Mr. Strom says, much of the firm’s re­treat from the head­lines was part of a con­scious de­ci­sion to “take a break” from the rig­or­ous re­port­ing re­quire­ments re­quired of a pub­lic com­pany af­ter March went pri­vate.

March has spent much of the four years since it was ac­quired work­ing at mak­ing in­roads in other parts of the world out­side of its core mar­kets in North and Latin Amer­ica. The firm re­cently opened a sales and sup­port of­fice in Sin­ga­pore with the goal of ex­pand­ing its pres­ence in South­east Asia, an ef­fort that has been “mildly suc­cess­ful” so far, Mr. Strom says.

Last year, for ex­am­ple, March won a con­tract to sup­ply PV­comBank, one of Viet­nam’s fastest-grow­ing fi­nan­cial in­sti­tu­tions, with video-sur­veil­lance equip­ment at 115 branches across the coun­try.

“That was largely as a re­sult of us get­ting a di­rect pres­ence in the re­gion,” says Mr. Strom, adding the com­pany sees a ma­jor op­por­tu­nity be­cause many banks in South­east Asia are step­ping up ef­forts to stan­dard­ize their video­surveil­lance plat­forms.

“We do fairly well in the fi­nan­cial ser­vices, the bank­ing mar­ket and the re­tail mar­ket, and we have a num­ber of large bank­ing cus­tomers who do have op­er­a­tions or are cur­rently in­vest­ing in op­er­a­tions in that re­gion, so a lot of the

“Be­cause we now have a much big­ger pres­ence in that mar­ket, we’re able to sup­port those cus­tomers as they in­vest and grow in the China mar­ket. It cer­tainly has been a real ad­van­tage for us when we can sit down and talk to some of the lead­ing cor­po­ra­tions in the world and ba­si­cally say that we have a com­bined 1,500-1,600 em­ploy­ees in China.” – MARCH NET­WORKS CEO PETER STROM, ON THE BEN­E­FITS OF THE FIRM’S AC­QUI­SI­TION BY CHI­NESE HOLD­ING COM­PANY IN­FI­NOVA

time they’re ask­ing us if we can sup­port them in that re­gion as well.”

When In­fi­nova an­nounced in late 2011 it was plan­ning to ac­quire March for $90 mil­lion, Mr. Strom hailed the deal as a “plat­form to work to ac­cel­er­ate our growth.”

Fol­low­ing a round of lay­offs shortly af­ter the ac­qui­si­tion, March’s head­count is now back to about 270 world­wide and 155 in Ot­tawa, vir­tu­ally the same as be­fore the takeover. Rev­enues last year cracked the $100-mil­lion mark, a sim­i­lar fig­ure to what March recorded in its hey­day as a pub­licly traded com­pany.

While the growth spurt Mr. Strom talked about five years ago hasn’t kicked in yet, he be­lieves the part­ner­ship with In­fi­nova is still pay­ing div­i­dends. March has many U.S. and Euro­pean cus­tomers with op­er­a­tions in China, he ex­plains, and the com­pany had been ex­plor­ing ways to pen­e­trate that lu­cra­tive mar­ket well be­fore the ac­qui­si­tion.

“When In­fi­nova came along and we had dis­cus­sions with them … we thought it was a very good fit and very con­sis­tent with our over­all growth strat­egy,” says Mr. Strom, who joined March in 2003 and was named Ot­tawa’s CEO of the Year in 2005, shortly af­ter the firm’s IPO.

“Be­cause we now have a much big­ger pres­ence in that mar­ket, we’re able to sup­port those cus­tomers as they in­vest and grow in the China mar­ket. It cer­tainly has been a real ad­van­tage for us when we can sit down and talk to some of the lead­ing cor­po­ra­tions in the world and ba­si­cally say that we have a com­bined 1,500-1,600 em­ploy­ees in China.”

Most of March’s clients are en­ter­prise cus­tomers in the bank­ing, re­tail and trans­porta­tion sec­tors. They in­clude Wal-Mart, four of the top five Cana­dian banks, Cincin­nati-based Fifth Third Bank, the Bank of New Zealand, U.S. book­seller Barnes & No­ble, Ja­panese cloth­ing man­u­fac­turer Uniqlo and the Toronto Tran­sit Com­mis­sion.

Lo­cally, March’s sur­veil­lance tech­nol­ogy can be found at the Cana­dian

Tire Cen­tre, the Cana­dian Mu­seum of His­tory, the Cana­dian War Mu­seum and OC Transpo sta­tions.

Such lu­cra­tive clients have built March Net­works into one of the largest busi­nesses of its kind in the world. But sep­a­rat­ing it­self from the pack in a crowded field that in­cludes pow­er­house com­peti­tors with names such as Bosch, Gen­eral Elec­tric and Pana­sonic isn’t easy, Mr. Strom con­cedes.

To that end, March has spent the past few years pour­ing big money – about 7580 per cent of its to­tal R&D in­vest­ment – into de­vel­op­ing prod­ucts to com­ple­ment its video sur­veil­lance equip­ment. This in­cludes soft­ware that mon­i­tors and an­a­lyzes ATM and re­tail point-of-sale trans­ac­tions in an ef­fort to weed out fraud­sters, as well as a plat­form that lets re­tail­ers use se­cu­rity footage to bet­ter un­der­stand cus­tomer traf­fic pat­terns – for ex­am­ple, know­ing when to open up ad­di­tional check­out coun­ters.

SUB­SCRIP­TION MODEL

“We’ve kind of evolved from be­ing just a video-sur­veil­lance player to now be­ing a true vis­ual-based busi­ness in­tel­li­gence com­pany,” Mr. Strom ex­plains.

March is also pre­par­ing to launch a sub­scrip­tion-based video-sur­veil­lance ser­vice aimed at small busi­nesses. Many SMEs, par­tic­u­larly in the hos­pi­tal­ity sec­tor, are in­creas­ingly re­luc­tant to shell out thou­sands of dol­lars up front for se­cu­rity equip­ment, Mr. Strom says, mak­ing the monthly pay model an at­trac­tive op­tion.

“We think that’s go­ing to be a huge growth op­por­tu­nity for the com­pany,” he says.

Mr. Strom says it’s all part of a nev­erend­ing ef­fort to stay one step ahead of the com­pe­ti­tion.

“In tech­nol­ogy, if you stand still, you’re pretty much dead,” he says. “The chal­lenge for us is to con­tinue to be in­no­va­tive, No. 1. Sec­ondly, cus­tomer re­quire­ments are chang­ing very quickly today, and new tech­nol­ogy comes down the pipe very quickly.”

PHOTO BY MARK HOLLERON

Peter Strom.

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