Exclusive: Milestone CEO Discusses Market Growth, Strategic Acquisitions and Tech Innovation

The Skinny

• Robust Financial Growth: In 2024, Milestone achieved approximately $280 million in net revenue, an 18.7% increase from the previous year, doubling its net revenue since 2020. 
• Strategic Acquisitions: The acquisitions of Arcules and BriefCam have enhanced Milestone's capabilities in cloud-based video solutions and AI-driven analytics, positioning the company for future expansion in these areas. ​
• Cloud and AI Focus: Milestone is expanding its offerings to include both full cloud and hybrid models, acknowledging the gradual adoption of cloud solutions in the security sector and the enduring relevance of on-premise systems.

Milestone Systems marked 2024 as a transformative year, achieving significant revenue growth and expanding its footprint in cloud-based and AI-driven video analytics, according to its newly released annual report. CEO Thomas Jensen shared insights into the company’s strong financial performance, strategic acquisitions and outlook for 2025 in an exclusive interview with SecurityInfoWatch.

Strong Financial Performance Amid Market Changes

Milestone reported 2024 net revenue increased to approximately $280 million (DKK 2 billion) from $238 million (DKK 1.7 billion) the prior year, reflecting a robust 18.7% increase. This represents a 100% increase in net revenue since 2020. Operating earnings (EBIT) reached $15 million (DKK 106.8 million).

According to Jensen, the company’s ability to outpace market growth was driven by strong performance in its core video management system (VMS) business, particularly from on-premises solutions, and was further enhanced by strategic acquisitions.

“We once again presented above-average market growth in our core business areas, particularly in video management systems,” Jensen said. “The acquisitions of Arcules and BriefCam strengthened our position in cloud-based video solutions and AI-driven analytics, positioning us well for future expansion.”

Milestone experienced strong performance in the Americas, particularly in the United States, where its traditional business saw 11% year-over-year growth, excluding the impact of acquisitions. Jensen attributed this success to increasing adoption in the federal government sector and broader business-to-business markets.

“We saw very strong growth in our federal and local government business and across the board in the U.S.,” Jensen noted. “We also faced challenges in regions like Latin America, where economic conditions remained difficult, and in APAC, where market fluctuations impacted growth. However, we’re seeing improvement in those areas in 2025.”

Strategic Acquisitions and Cloud Expansion

Jensen, who had a diverse background in IT and telecommunications prior to joining Milestone, highlighted the parallels between cloud adoption in these industries and the security sector. He noted that while cloud transformation has been a topic of discussion for several years, its full potential is yet to be realized.

“Cloud will likely become the dominant segment in video management, but it will not completely replace on-premise solutions,” Jensen explained. “With Arcules, we now offer a full cloud as well as a hybrid model that allows customers to use cloud where it makes sense while maintaining on-prem systems where necessary.”

Reflecting on his experience, Jensen emphasized the gradual nature of cloud adoption, citing incubation periods of 12 to 18 years in other industries. “We see the cloud market growing between 20 to 40% year over year, but from a very low base,” he said. Despite this growth, critical enterprise and law enforcement users are not yet ready to fully transition their security infrastructure to the cloud.

Milestone’s acquisition of Arcules is a strategic move to address this evolving market. Jensen described Arcules as a complementary product that enables both pure cloud and hybrid solutions, combining on-premise and cloud models. “For us, Arcules provides the ability to offer hybrid solutions, catering to both large facilities and scattered branches,” he said.

The acquisition of BriefCam further strengthens Milestone’s portfolio. Jensen highlighted BriefCam’s capabilities in pattern recognition and biometrics, both in live and forensic applications. “Integrating it into our portfolio allows us to enhance our analytics capabilities while maintaining our open-platform approach,” he said.

IT Integrators Entering the Security Space

Jensen’s previous tenures in the IT and telecommunications industries have provided him a unique perspective on how IT integrators are increasingly entering the physical security space. He noted that modern video security systems are now high-tech solutions powered by networking, 5G and large-scale data center deployments — areas where IT integrators already have expertise.

“I would be surprised if they’re not [entering the space] because first and foremost, a modern video security system is a high-tech system,” Jensen said. “They already do large-scale network data center deployments, they have the technical capability, and they understand recurring revenue models and as-a-service offerings. If I were an IT player, I would see this as an opportunity to capture increased revenue because my enterprise customers already know me.”

Jensen also pointed out that while traditional security integrators still offer specialized expertise, they must adapt quickly to avoid losing ground. “The specialization in physical security is still valuable, but it’s not enough to sit back and expect business to come by itself. IT integrators will go head-to-head with security providers, and those who don’t evolve — by adopting cloud solutions and differentiating their offerings — risk being displaced,” he explained.

Security integrators, on the other hand, have an opportunity to expand into areas traditionally dominated by IT firms, such as audio-visual solutions and network deployments. “I think you’ll see these things morphing more together,” Jensen added, signaling an industry-wide convergence of IT and security expertise.

Shifting Business Models: Subscription and Service-Based Offerings

Traditionally, Milestone has operated with a licensing-based business model, but the industry is increasingly shifting toward cloud-based video surveillance and AI-driven solutions with recurring subscription revenue. Competitors offering fully cloud-native or hybrid models may pressure Milestone to accelerate its own cloud strategy, particularly with the Arcules acquisition. While Milestone’s open-platform model is a key differentiator, some customers and partners may be drawn to competitors offering vertically integrated solutions that promise simplicity and ease of deployment.

When asked whether Milestone anticipates significant shifts in its business model, Jensen was clear that while the company remains committed to its open platform and partner-driven approach, change is on the horizon.

“Well, let’s start with what’s not changing. That’s open platform and that we are a partner-driven company. We will still sell through partners and with partners — that will be our go-to-market model going forward,” he emphasized. “I do, however, see that the market is slowly picking up on the IT market’s maturity journey as well when it comes to subscription-as-a-service models.”

Jensen encouraged integration partners to evaluate how they fit into this evolving business model carefully. “With a subscription-based model, typically there are service agreements attached, and a customer does not want to buy a five-year service agreement if they pay annually for their hardware and software subscriptions,” he explained. This shift requires integrators to rethink their revenue structures and explore how they can offer value in an as-a-service ecosystem.

While Milestone is actively preparing for the growth of subscription-based services, Jensen stressed that this transformation will be gradual.

“We are not on the bandwagon that this is going to happen tomorrow and the entire market will shift,” he noted. “But we do expect that it will outpace the growth of the rest of the market. So we are responsibly growing in that field.”

Investing in Innovation and Responsible AI

Milestone increased its research and development spending by 34%, investing 23% of its revenue into innovation. This includes enhancing its VMS solutions, refining cloud offerings and advancing AI analytics. One of its most ambitious projects, Project Hafnia, is a collaboration with NVIDIA aimed at creating an ethically sourced, privacy-compliant AI model training platform.

“Project Hafnia is about democratizing AI model training while ensuring data privacy and compliance,” Jensen stated. “We are building the world’s first anonymized and annotated visual data library to train AI models without compromising individual privacy.”

(Read more about Project Hafnia with additional insights from Jensen here.)

Strategic Priorities for 2025

Looking ahead, Milestone’s key priorities include seamlessly integrating Arcules and BriefCam, strengthening its open-platform model and expanding market penetration. Fully embedding Arcules and BriefCam into Milestone’s ecosystem remains a top priority, ensuring the company can maximize the value of these acquisitions.

At the same time, Milestone is reinforcing its open-platform strategy by renewing and refining its partnerships with leading technology providers. Jensen highlighted that Milestone is adopting a “more for fewer” approach, similar to its strategy with its reselling channel and integration partners over the past four years.

“There is a limit to how many analytics and access control partners the market needs, and we want to collaborate with the winners in the industry,” he said.

While Milestone will continue to support an open platform for all who wish to integrate and adhere to its SDK contracts, the company is prioritizing deeper collaboration with key technology partners. “We want to tighten and do closer collaboration with our top technology partners,” Jensen emphasized.

Expanding market penetration is another major focus, with India identified as a high-growth opportunity. Additionally, Jensen sees significant untapped potential in the U.S., where Milestone currently holds the second-largest market share.

“We are still only number two, so there is potential for growth also in the U.S., and it is a very important market for us,” he noted.