Creating innovative technologies that transform the world are not the sole prerogative of large corporations. In Japan, there are numerous cases of these technologies being developed by small and medium corporations and start-up companies.
Technologies don't change the world merely by existing. They tie into problems faced by society, and, in solving them, create new problems. These new problems are, once again, solved by new technologies. As this process is reiterated, profound changes occur. In other words, for technologies to change the world, it is vital that they be matched to applications where their potential can be realized.
In this series, we call the matching of technologies and problems "real-world implementation," and we explore the future of business that will be shaped by company efforts to drive transformation using state-of-the-art technologies. In the first article of the series, we look at Safie Inc., which supplies the Safie cloud-based video recording system.
Safie was established in 2014 with the aim of meeting the need to easily check video taken by network cameras installed in offices and other facilities, anytime, anywhere. In 2017, it entered a capital and business partnership with ORIX, and ever since it has been expanding its market share, primarily in the construction and real estate fields. It currently supplies a total of 129,000 billed cameras (as of June 30, 2021, according to Safie) and boasts a 47.5% market share in Japan*.
We talked with Ryuhei Sadoshima, Safie's Representative Director and CEO and Tomiyasu Suzuki, Head of Corporate Sales Section II at ORIX Corporation about what is behind Safie's tremendous growth, the company's business strategy, and its future objectives.
* Techno Systems Research Co., Ltd. "Study of the Network Camera Cloud-based Video Recording Service Market"
Three key points that make it easy to rapidly deploy large-scale cloud-based video recording services
Q: To start with, please tell us what kind of company Safie is.
Sadoshima: Safie develops and operates cloud-based video recording services. The Safie service makes it easy to check video recorded in the cloud from your own computer or smartphone, any time you want. We offer a wide range of products, including Safie PRO, which is for use in stores and offices; Safie GO, for use in work sites; and Safie Pocket, which offers exceptional portability.
I believe we have three main strengths: low cost, high image quality, and high security. The quality of our security is our biggest features. Our cameras cannot be directly externally accessed. Instead, recording data is saved in the cloud, and the communication routes between the cameras and the cloud, and between the cloud data and the devices used to view it, are protected by the latest encryption technology to prevent incidents such as data leaks.
We have received particular praise for our high security, and our service is being used in a growing number of fields, including not only site management for retail, distribution, building management, and construction sites, but also recently local governments and other governmental agencies. Verification studies are also underway of using the service in traffic volume studies and for real-time monitoring of the conditions in disaster sites and shelters.
The company's birth and its collaboration with ORIX, the driving force behind its market share growth
Q: What is the reason for your company's focus on cloud-based video recording services?
Sadoshima: Before founding Safie, I worked at a company in the Sony Group, developing the market for the algorithms used in image processing technologies. While I worked there, and, in particular, from 2010 onwards, I came to strongly believe that technology companies that failed to leverage AI would be left behind.
AI was essential to providing higher quality services. Leveraging AI requires a tremendous amount of data. In other words, companies with big data would emerge victorious. That was the way I saw things. So, given that, I thought that an efficient way to acquire large amounts of data would be to create some sort of platform service.
At around the same time, I happened to be planning to install security cameras in my home. I was surprised to see that 0.3 megapixel analog cameras were still the industry standard. I also checked out network cameras, but they carried their own security risks, and I didn't feel comfortable using them.
I put this together with what I had been thinking about creating a platform and thought "I wonder if image processing technologies could be leveraged to create smart cameras that would be easy for anyone to use. I consulted with engineers Moriaki Shimozaki and Kazuma Morimoto, Safie's co-founders, and they said, "No problem." In 2014, the three of us left the company we had been working for to found Safie.
Q: What led to the partnership with ORIX?
Sadoshima: I think it was about one year after we'd founded Safie. We were still working in a 14 square meter office, with our desks lined up side by side. That's when Mr. Suzuki came to us.
Suzuki: At the time, an investor I knew introduced me to several "up-and-coming venture companies." One of those was Safie.
I remember looking at the video and being surprised at how good the video quality was. When I talked with them about it, they discussed their vision of "creating the future through video." They had a clear vision for the future, solid technical strengths, and passion, so I just knew that they would be one of Japan's leading companies in the near future.
I wanted to support the company, so I proposed using Safie in the properties managed by Daikyo Astage, which manages condominiums across Japan. Daikyo Astage's history stretches back over five decades. It became part of the ORIX Group in 2005, and in 2019 became a wholly-owned ORIX subsidiary. As of March 31, 2021, it manages roughly 8,000 properties nationwide.
Sadoshima: At first, when Mr. Suzuki told me that Daikyo was going to use Safie to put 50,000 security cameras in the cloud, I thought that he had a flair for the outrageous. (laughs) I wondered if it would even be possible to suddenly take on such a massive project.
However, Mr. Suzuki spurred me on, saying “I know you can do it.” Ever since, he’s been offering us his full support. When we were exhibiting at a trade show in Fukuoka, he sent one of his staff to help out, and they were even more excited about handing out fliers than our own employees. (laughs) It made me so happy knowing that they really had our backs. It made me want to do even more business with Mr. Suzuki in the future.
In the end, we spent two years newly developing cameras for use in condominium management, and began deploying them from 2017. Through the project, we also established connections with telecommunications providers that handled the optic fiber installation work and security companies that provided security in condominiums. We now have capital and business partnerships with those companies.
Looking back, this project was a huge turning point for us. Over the next ten years, we plan to replace all 50,000 of those cameras.
Q: So the collaboration with ORIX was a successful experience for you.
Sadoshima: That's right. For example, in the construction industry, there is a need to be able to remotely check on construction progress status and site conditions when a disaster occurs. However, because of the difficulty involved in deploying these kinds of systems, they were seldom used. Likewise, for restaurant chains there were security costs and the costs of transportation when managers went to stores. Safie can solve all of these issues and more.
Mr. Suzuki would elicit these kinds of issues from people in the field and work together with us to think of ways to solve them. He has been a great help.
Suzuki: Once I can figure out a way to get clients to discuss their issues, Mr. Sadoshima proposes solutions with high technical levels, so it’s a very rewarding experience for me, as well. (laughs) Mr. Sadoshima himself is a top salesman.
Sadoshima: No, when it comes to sales I'm just an amateur. And it's not just sales. When Mr. Suzuki's superior talked to me about the business logic that "in the game Othello, you need to secure the corners first," it was like the scales fell from my eyes. Since then, we've adopted a strategy of entering business partnerships with major companies in each field, such as devices (manufacturing), communications networks (infrastructure construction), security, and leasing (finance).
Furthermore, we needed to rapidly increase the number of units we shipped, which involves inventory risks. To reduce those inventory risks and ensure that capital procurement went smoothly, ORIX developed a "sell and lease back" approach in which ORIX buys the equipment and then Safie leases it from ORIX, loaning it to customers. Initially, we had talked about setting up a leasing system in-house, but in order to focus on our strengths as a software manufacture, we decided to collaborate with ORIX.
We receive extensive support in every aspect of our business.
Q: Last, what are your objectives for the future?
Sadoshima: We want to become the world's top provider of video platforms. Video platforms started with security cameras, but in the future they will help save labor, helping make decision-making convenient and easy, and improving society itself. We would like to expand the scope to encompass as much as it can.
Suzuki: For example, in the real estate field, they say that in the near future entire buildings will be digital. It's not beyond the realm of possibility for Safie cameras to become a standard fixture, serving as the "eyes" of buildings.
We want to continue to offer our full support to Mr. Sadoshima, who left a major corporation to dedicate himself to creating a new industry. Let’s make our great vision a reality together.
Sadoshima: Yes, please. (laughs) There are whole new vistas before us that we have yet to imagine, and I’d love to explore them with you, Mr. Suzuki.
