Eye on Video: Security as a Service

Software as a Service (SaaS) – also called ASP (application service provider) or cloud computing – has become so commonplace in today’s business model that we rarely give thought anymore to the underlying management of activity such as email, online banking, payroll and benefits management and even customer relationship management. SaaS has proven itself to be a reliable and secure outsourcing option for many companies that want to reduce on-site infrastructure costs, while at the same time, have ubiquitous access to information over the Internet. The number of businesses turning to hosted solutions has been steadily rising, with CRM SaaS leaders like Salesforce.com reaching $1B in revenue and posting more than a 30 percent growth in the last quarter, at a time when financial turmoil was causing most other companies’ revenue to shrink.

The escalating adoption of SaaS as a business model

What makes the business model so appealing is that it frees companies from the complexities and high cost of managing sophisticated hardware and software so they can focus on their core strengths – leveraging business intelligence and managing business processes. In a traditional on-site implementation, the IT department oversees every permutation in the application stack: the user interface, the business application, the web/application server, the database, the operating system and all the associated hardware. In a SaaS implementation, the vendor takes full responsibility for system-wide upgrades and maintenance as well as all the storage technology. By shifting the burden to SaaS vendors who are better equipped to run the applications, companies can cut capital and staff expenditures, lower maintain costs and increase system uptime because availability is contractually guaranteed. For small to mid-size business or small remote offices that lack the internal core competency to manage such complex systems, SaaS gives them a way to reap the same benefits from the latest advances as their larger counterparts.

Ever increasing bandwidth as well as tighter Internet security and greater reliability have contributed to the widespread success of SaaS in the IT world. In fact, the Internet has become so robust that nowadays businesses worldwide have come to rely on it to support their day-to-day operations. HTTPS protocol with SSL encryption and virtual private network (VPN) tunnels have enabled financial institutions, commercial enterprises as well as consumers to conduct even their most sensitive transactions over the Internet with confidence in its security. And with the migration from dial-up to cable/DSL access, bandwidth has finally reached a level commensurate with the transmission needs of high-consumption applications like IP-based video monitoring. In fact, adoption of the hosted model has become so prolific that according to the Gartner Group, an analyst firm for the IT industry, the SaaS market is growing by 22 percent a year and by 2011 will be the delivery model for 25 percent of all new software systems.

Drawbacks of early remote video monitoring services

As surveillance technology improved, customers soon wanted more than simple alarm monitoring. They demanded video verification as a reliable means to limit the number of false alarms. They wanted to see who was actually on their property and track what was happening before calling in law enforcement. This was challenging to accomplish because early remote monitoring solutions used analog cameras connected to a local DVR. Customers were locked into a fixed number of cameras (4, 8, 16, etc.), depending on the number of channels supported by the DVR. Most DVR-based video systems relied on costly leased phone lines. At the time, security was high but bandwidth was quite low. Many DVR systems compensated for the slow data transfer rate by using proprietary compression algorithms. As a result, companies couldn’t always remotely monitor their video transmissions from a standard web browser, although that has improved.

With the introduction of network cameras in the last decade, however, new ways of providing remote monitoring have opened up. Because network cameras piggyback on the same infrastructure as a company’s data communications applications, they are inherently designed for remote monitoring capabilities. Recognizing this potential, companies began launching hosted video solution as early as 1998. Most were large telecom providers, such as Telia and Telefonica, who took the opportunity to leverage the bandwidth and the customer relationships they already had in place to extend subscriber services. But what they lacked was expertise in the actual act of monitoring. So the burden fell to the customer who -- upon receiving an alert from the telco -- had to call the police themselves in case an alarm was triggered. Additionally the early solutions were difficult to install because they required that the customer understand router and port technology.

The switch to IP-based surveillance systems has revolutionized the video surveillance market, but mostly in the larger systems arena. Extremely cost -efficient for installations over 32 cameras, the enhanced video quality as well as the flexibility to scale the system one camera at a time give large companies unprecedented abilities to grow their solutions at their own pace. But for smaller operations, the price for IP technology is prohibitive because they have to absorb the cost of a local server and local video management software as well as the expense of installation and ongoing maintenance. Security as a Service offers an affordable way for those smaller companies to bridge that technology gap.

Why security as a service is catching on

With SaaS, small and mid-size companies can reap the benefits of IP-based surveillance by outsourcing much of the hardware and all of the software. Instead of maintaining the recording and monitoring station locally, companies can now limit their capital investment to just the cameras and a gateway or router to the hosted storage. The vendor provides the servers that archive the video and manages them for the business. There’s a portal to the central monitoring station that keeps an eye on the video and sends the alarm. And the customers can access the video over the web from any standard PC or handheld device equipped with a browser. The network cameras are easy to install because they plug into the network cabling infrastructure already in place. And with technology like Power over Ethernet (PoE), companies can use the same data cables to power the cameras. So not only does SaaS take complexity out of the equation for small to mid-size companies, it lowers their overall cost of ownership compared to conventional analog surveillance systems. And with greater bandwidth and better compression technology in the new H.264 standard, we should be seeing SaaS installations continue to grow in size.

The SaaS approach to surveillance offers monitoring and hosting companies a great value proposition as well. SaaS can be used to increase services to an existing subscriber base. And it can be used to gain in-roads into the largest growing sector in today’s economy – small to medium size businesses. Because the hosted model has universal appeal across vertical markets – everything from retail and fast food franchises to property management, satellite business and government offices – service providers can create a more diversified revenue stream, which is a strategic necessity in an uncertain economy.

Taking a best-of-breed approach to SaaS

Just as most IP-based solutions, Security as a Service is a best-of-breed business model. This presents ample opportunity for a wide range of vendors and service providers to work in concert to create a cost-efficient, hosted surveillance solution for a customer. Subscribers not only acquire a sophisticated, scalable network video surveillance system with superior image quality, but can budget for its operation on a predictable monthly basis.

At the center of a SaaS solution are the network camera and video encoder companies that base their products on open standards. The encoders enable customers to include their legacy analog cameras in the hosted video solution. This technology integrates with components from the server and storage providers, the network infrastructure installers, the hosted video application software developers, the hosting providers and the monitoring service companies. Because the cameras and encoders are easy to install and don’t require a great deal of maintenance on the part of the customer, the potential for providers to penetrate a plethora of vertical markets and establish a steady monthly revenue stream is enormous.

About the author: Fredrik Nilsson is General Manager of the Americas for Axis Communications and author of the book Intelligent Network Video. He is a regular expert contributor on topics of networked video surveillance systems and cameras.