How Openpath Competes Against Legacy Incumbents With Decades of Market Share

How Openpath Competes Against Legacy Incumbents With Decades of Market Share

Access control wasn’t a market begging for disruption. Established players had dominated for decades. Customers seemed satisfied enough. Switching costs were high. Every signal said: stay away. In a recent episode of Category Visionaries, Scott Dorey, Co-Founder of Openpath, explained why they ignored those signals and attacked anyway—not by building better features, but by making architectural choices that created advantages incumbents couldn’t copy without destroying their existing business.

The Incumbent’s Unbeatable Advantage

Legacy access control companies had every structural advantage. Decades of customer relationships. Massive installed bases creating switching costs. Established dealer networks. Brand recognition. Financial resources. The classic wisdom says you don’t compete head-to-head with incumbents who have all these advantages unless you have something they fundamentally cannot replicate.

Scott and his team understood this. They didn’t try to out-feature the incumbents or out-market them or undercut them on price. They made a different bet entirely: that architectural decisions could create a moat deeper than any incumbent advantage.

“We wanted to build something that was inherently cloud native from day one,” Scott explains. “Everything was designed to be in the cloud, API first, mobile first.” This wasn’t incremental improvement. It was a fundamentally different approach that incumbents couldn’t match without abandoning their entire technology stack and business model.

Why Incumbents Couldn’t Follow

The genius of Openpath’s strategy was choosing a competitive axis where the incumbent’s strengths became liabilities. Legacy companies had spent decades building on-premise systems. Their entire business model, pricing structure, dealer relationships, and customer base assumed on-premise deployment.

Moving to cloud-native architecture wasn’t just a technology decision for incumbents—it would require rebuilding everything. Their pricing model based on large upfront hardware sales would need to shift to subscription. Their dealer network trained on on-premise installation would need retraining. Their existing customer base would need migration. Their revenue recognition would change. Their support model would need redesign.

The switching costs that locked customers into legacy systems also locked legacy vendors into their own architecture. Openpath could build cloud-native from scratch. Incumbents faced the classic innovator’s dilemma: cannibalizing their existing business to compete with a startup that didn’t have their revenue yet.

Mobile-First as Competitive Wedge

The decision to build iOS and Android apps from day one wasn’t about following mobile trends. It was about creating capability gaps that widened over time. Scott notes: “We built it on AWS. We built a iOS and Android app from day one.”

Legacy systems were built around badges and card readers. Mobile access was an afterthought, if it existed at all. For Openpath, mobile was the primary interface. This fundamental architectural difference created user experience gaps that were immediately visible in sales conversations.

When prospects compared systems, the difference was visceral. Legacy systems felt like software from 2005. Openpath felt like consumer apps users already loved. This UX gap wasn’t about better designers—it was about starting with mobile as the foundation rather than retrofitting it onto badge-based systems.

API-First as Distribution Advantage

Perhaps the most strategic architectural choice was API-first design. While legacy systems used proprietary protocols and limited integration options, Openpath built for connectivity from the start. “Everything was designed to be in the cloud, API first, mobile first,” Scott emphasizes.

This choice unlocked distribution channels that legacy vendors couldn’t access. Building management systems wanted to integrate with access control. Workplace management platforms needed access data. Security operations centers required API connections. Openpath could say yes to all of these. Legacy vendors had to build custom integrations or simply couldn’t connect.

The API-first approach also enabled the channel partner strategy that Scott describes: “We work a lot with systems integrators and security dealers to install and service our systems at our customers.” Partners could easily integrate Openpath into comprehensive building solutions. With legacy systems, integration was painful or impossible, making partners less enthusiastic advocates.

Competing on Speed, Not Features

The cloud-native architecture created another advantage: deployment speed. Traditional access control systems required ordering hardware, scheduling installations, configuring on-premise servers, and extensive IT involvement. The sales cycle included implementation planning that could take months.

Openpath could deploy in days or weeks instead of months. No servers to order. No on-premise infrastructure. Cloud deployment meant faster time-to-value, which shortened sales cycles and reduced implementation risk. Speed became a competitive weapon that only worked because of architectural choices.

This speed advantage compounded over time. Faster deployments meant happier customers. Happier customers meant better references. Better references meant more deals. And each successful deployment taught Openpath how to get even faster. Legacy vendors couldn’t accelerate their deployment timelines without changing their fundamental architecture.

Subscription Pricing as Market Expansion

Cloud-native architecture enabled business model innovation that opened new customer segments. Legacy systems required massive capital expenditure upfront. Customers bought servers, software licenses, and installation services before seeing any value. This pricing model excluded smaller customers and created long consideration cycles.

Openpath’s subscription model changed the economics. Lower upfront costs. Predictable monthly expenses. Easier budget approval. Faster purchasing decisions. This wasn’t just customer-friendly—it was market expansion. Customers who would never consider six-figure capital projects could easily approve five-figure annual subscriptions.

The subscription model only worked because of cloud architecture. Without on-premise hardware to sell, Openpath could price based on ongoing value rather than upfront implementation costs. The architectural decision enabled the business model innovation that enabled market expansion.

The Viral Expansion Engine

Cloud architecture created another advantage: frictionless expansion within accounts. Scott describes the pattern: “We can get into one building and then spread out virally throughout that organization to other buildings.”

With legacy on-premise systems, expanding to additional locations meant repeating the entire procurement, installation, and configuration process. Each new building was almost as much work as the first. This friction limited account expansion and capped lifetime value.

Openpath’s cloud deployment meant expanding to additional locations was simple. No new servers. No complex installations. Just add the new location to the existing cloud account. This frictionless expansion turned initial deals into enterprise-wide deployments through natural growth rather than active selling.

Enterprise Requirements as Late-Stage Advantage

As Openpath moved upmarket, their cloud-native architecture continued creating advantages. “In the last couple of years, we’ve moved much more up market. We’re going after the big buildings, big customers, enterprise, Fortune 500, 1000 type customers,” Scott shares.

Enterprise customers demanded capabilities that legacy systems struggled to provide: centralized management across hundreds of locations, real-time reporting and analytics, integration with identity management systems, seamless updates without downtime, remote management and troubleshooting. Every enterprise requirement played to Openpath’s architectural strengths.

Incumbents trying to serve enterprise customers had to retrofit cloud capabilities onto on-premise architecture. The results were predictably awkward—cloud-compatible but not cloud-native. Openpath could deliver enterprise features that felt natural because they were built into the foundation rather than bolted on top.

The Lesson for Attacking Incumbents

Openpath’s success offers a framework for competing against entrenched players. Don’t compete on their terms—compete on an axis where their strengths become weaknesses. Choose architectural differences that create compounding advantages. Make choices that are easy for startups but would require incumbents to rebuild their entire business. Build capabilities that enable business model innovation incumbents can’t match.

The key insight is that architectural decisions aren’t just product decisions—they’re strategic decisions about competitive positioning. Scott’s team understood this from day one. They didn’t build a better on-premise system. They built something fundamentally different that created advantages incumbents couldn’t replicate without abandoning what made them successful in the first place.