CARROLLTON, Texas — Five months after GVI Security announced its partnership with LG Electronics, the video surveillance provider has shut down operations.
GVI Security offered the autoIP line of IP and analog surveillance equipment, including the razberi integrated NVR. Offering only one product line could have led to the company’s demise, according to Sandy Jones, principal of Chardon, Ohio-based Sandra Jones & Co., a consulting and business support and services provider.
“Until they brought the razberi line to the market, GVI was pretty much a single-product redistributor,” Jones tells SSI. “The challenge there is they didn’t have a product to resell. When you have 90 percent of your revenue coming from one vendor, it’s scary. When we work with clients, we recommend that they never have more than 10 percent — 20 percent at the most — of their revenue coming from one single client or vendor because you don’t know.”
Acquired by private equity firm GenNX360 for $11.6 million in 2009, GVI Security originally had a longstanding partnership with Samsung that allowed the company to market Samsung’s products as its own proprietary line. However, when Samsung Electronics sold its CCTV business to Samsung Techwin America the partnership began to weaken.
In March, GVI Security CEO Steve Walin told SSI that toward the last year of their relationship, Samsung decided it wanted to sell its own products. On Jan. 1, GVI Security ended its 11-year alliance with Samsung Techwin America, which possibly played a strong role in the company’s downfall, according to Jones.
“GVI had a great relationship with Samsung, but it’s not the first time Samsung changed the rules of the game,” she says. “When Samsung blended its divisions so there would be less confusion, they didn’t blend the divisions within the security industry, which created a terrible channel issue.”
When SSI spoke with Walin about cutting ties with Samsung, he seemed confident that LG Electronics would give the company a needed boost.
“When our relationship ended in December, people were asked, ‘How is GVI going to replace Samsung.’ The answer is LG. GVI is alive and well, so now it’s game on,” Walin said.
And while many in the industry were looking forward to seeing what products would result from the new partnership, it took too long for GVI to release new wares. In an industry where there are numerous manufacturers offering similar products, that can prove to be problematic, Jones says.
“If you have nothing to sell and integrators have installation jobs, they’re going to find an alternative, and they have,” she says. “Obviously there was a product that wasn’t originally designed for the security market, and bringing it up to speed took too long. It’s unfortunate because LG is another good brand. But it needed to be immediate and it wasn’t.”
Calls to GVI Security CEO Steve Walin were not returned at press time.
Ashley Willis is associate editor for SECURITY SALES & INTEGRATION magazine. She can be reached at (310) 533-2419.