Eye on Hosted Video: A Q&A with Axis, EMC and Siemens

What will we see for real-world adoption in 2011 and what is the business model?

Atteberry: The video hosting supplier, integrator and end users are the key stakeholders in hosted video. The video hosting provider (VHP) provides software development expertise and the technology behind the hosted capabilities. The integrator, also known as the video service provider (VSP), is responsible for understanding the technology and delivering customized solutions. When they work together, both the providers and the end users share benefits.

Nilsson: What kind of benefits?

Atteberry: Both the video hosting provider and the integrator benefit by providing a solution that meets the end user's business and security needs -- i.e. they have a successful business model. The end user benefits by having the capability to centrally manage their entire video system as well as utilize cost-saving, remote services from the integrator.

Snow: We like to look at the integrators generally as the service provider. They sell, install and service the product to the end user. In some cases the hosting provider and service provider could be the same company, or the hosting provider could be an unseen force. As Phil alluded to, the major benefit to both these provider roles is increased RMR (recurring monthly revenue). RMR provides a buffer to revenue when the economy slows and is therefore coveted by the hosting provider and service provider alike. RMR models benefit the end user as well because they can transition from a CAPEX model (capital expenditures) to OPEX model (operational expenditures) and reduce the total cost of ownership.

Nilsson: Are the cost savings benefits the only reasons more security personal and business owners are considering hosted video?

Snow: Saying "cost savings" may be a bit of an oversimplification. Specifically, there are four reasons why end users are considering and turning to hosted video. One is to move capital expenses into operational expenses -- allowing end users to better budget their expenses. The second reason is to reduce the total cost of ownership; the third reason is to increase flexibility and elasticity with an ability to add or subtract additional cameras without additional hardware. Finally, the fourth reason is to create the ability to change surveillance requirements without having to replace installed systems.

If new laws or regulations require additional camera coverage or retention times, hosted video solutions can easily adapt to these changing requirements usually within hours and without the requirement for new hardware.

Atteberry: Another driving force that is not often discussed is the lack of IT resources for small to medium-sized businesses, as well as the need to access and manage multiple, geographically dispersed locations. This solution eliminates a lot of the capital costs and provides a consistent application for their security protocols across multiple locations.

Nilsson: Yes, often people don't immediately consider lack of resources as a function of cost, but streamlining operations through outsourcing certainly is a way to improve the budget sheet. Are there specific vertical markets that contact you more frequently, or is hosted video interest typically tied to company size as Phil mentioned?

Atteberry: The application of hosted video crosses multiple vertical markets as more of a horizontal offering. We witnessed early adoption by the retail market when hosted video was in its infancy, but today it has spanned many verticals including manufacturing and higher education to name a few. It has the ability to bring considerable value to small and medium businesses, as well as large enterprise class customers.

Snow: The core market is smaller camera counts -- between 4 and 10 as the cap today. Businesses where smaller camera counts are required and there are a number of sites geographically dispersed are ideal candidates. Those are your franchises, gas stations, banks, et cetera. There is also the use case for larger deployments where only a few of the cameras are hosted, such as for remote or home offices, or covert cameras.

Nilsson: So we can probably agree that many of the initial customers of hosted video will be business owners -- not security directors. What should these end users be aware of that might not be a second-nature question?