Panelists, this month, discuss: “The Future of Video Technology.”
Susan Brady : IP-based video is undeniably the technology of the future for video surveillance. How long do you think it will take for IP-based video systems to make a major impact in the market?
James Whitcomb, CTO, Video Insight: Each day users find new benefits of video surveillance. IP technology enables a diverse set of users access to live and recorded video from all over an organization. Popular culture from TV dramas to news programs has removed many of the privacy concerns that have hindered video's growth. The quality of the IP camera image and the ease of use from the software applications will power dramatic growth over the next 5 years.
Frank DeFina, President, Panasonic System Solutions Company: IP-based systems are already making a significant impact on the video surveillance market in several applications, with the market moving towards a networked platform more rapidly than most expected as systems are developed, replaced or expanded. Much of the current transition is migratory, however, where systems are being designed with IP cameras routed to analog processing devices such as matrix switchers and DVRs; and conversely, where legacy systems devices such as analog cameras are being networked with video servers; and being controlled through software-centric systems and recorded to NVRs.
The integrated hybrid system approach is a very cost-effective way for users to move toward a network platform. How long the process takes before analog systems are overtaken by IP systems is speculative as the market ultimately dictates product lifecycles based on demand.
Gareth McClean, Director of Research and Development for Tyco Fire & Security's American Dynamics Video and CCTV: The transition to IP video will be slow at first but will accelerate as standards evolve and are adopted by the equipment manufacturers to allow interoperability between different vendors' equipment. At the moment the lack of standards coupled with higher total-cost-of-ownership are limiting the deployments. The higher cost of ownership being based on higher equipment costs, the investment necessary in a suitable network infrastructure and the costs associated with supporting the network and its associated equipment. There are also a number of technical limitations surrounding network bandwidth and latency which can lead to poor quality video images and time delays in controlling dome/PTZ cameras; all of which can lead to a poor user experience when compared to a current generation analog digital video recording system.
What does all of this mean? The transition to IP video will happen but it could take another three to five years before it becomes mainstream to small and medium sized businesses. That said there are organizations which can benefit from the technology now.
Frank Abram, Vice President/General Manager, Security Products Division,
Sanyo Fisher Company: There is more than one answer to this question based on how one defines IP systems. My experience has been the definition can encompass many different things depending on your perspective. In the truest sense, IP systems, consisting of IP cameras, NVRs and/or some other form of enterprise recording system being processed from end to end on a networked platform are already impacting the market. As well, the larger IP based systems such as those found in casinos are expected to integrate with other related network security and business operation systems.
Systems of this magnitude are just starting to gain traction as new hardware and software products with large camera capacities have recently become available and are making their way to market. You also need to consider the implementation of hybrid systems that combine existing analog devices with network products; where full featured DVRs with on-board switching capabilities can function as the primary hub for analog based cameras within the system. This may entail the largest segment of IP product installations to date. In any case, the transition to a networked platform is in full swing. We anticipate this trend to continue and be the norm in several years.
Mariann McDonagh, Vice President of Global Marketing, Verint Systems, Inc: IP-based video management technology has already made a significant impact on the market. We'll see its influence grow exponentially over the next few years as intelligent video analytics helps bring video systems into alignment with corporate priorities. Video is an untapped source of valuable enterprise data and video analytics transforms that data into actionable intelligence that organizations can use to enhance security and make better decisions about operational efficiency.
Scott Schafer, PELCO Sr. VP of North American Sales & Marketing: I think they are making a major impact right now. A number of customers are already using IP video technology to improve or change their business. There are a number of systems integrators already conversant on the systems and the processes and services around them.
JP Forest , Director of Security Solutions, Avigilon: We are seeing that IP-based video systems are already making a major impact in certain niche markets that require centralized management of geographically distributed sites. For the market as a whole, however, many people have been sitting on the fence regarding IP-based solutions because, to date, they did not offer additional benefits in terms of image quality when compared to analog systems. We expect that over the next two years the market will come to understand that IP-based solutions can offer both dramatically better image quality as well as centralized management of geographically distributed sites. As a result 24 months from now the majority of systems being sold will have an IP component.
Jay Hauhn, Executive Director of Product Planning & Development, ADT Security Services, Inc: From what I can tell by talking to others in the industry, IP video appears to be growing at a 40% Compound Annual Growth Rate (CAGR). Analog video is single digit CAGR. In two to three years I expect IP video to have perhaps a third of the market as manufacturers drive costs out of the hardware, dealers develop the correct IT expertise, and IT departments start to understand and accept its use on “their” networks.
Brady: Since IP-based video represents only a small percentage of the video surveillance market at present, please put into perspective how your company views analog and hybrid video systems. What percentage of the market do they represent and what percentage of the market will they have in the future?
Whitcomb: Analog's quality will continue to improve with better compression technologies and faster procession, however the improvements will be limited by the underlying technology. As a percentage analog will continue to decline as IP camera prices decrease and as mega pixel camera technology proliferates. Hybrid is a convenient short term solution that works well when adding a few additional cameras to an existing system; however the benefits of IP will force most end users to simply upgrade to an all IP system.
DeFina: The IP/network category represents a growing portion of the market today, and we are seeing continued increase in IP systems applications versus analog systems. The transition is taking place, although in a migratory manner. An increasing number of system upgrades and new installs implement hybrid systems, employing some combination of IP and analog devices across different platforms. Yet, as this trend continues, it masks the actual penetration of IP-based systems due to the hybrid nature of these systems' configurations. We believe these hybrid systems are the building blocks for the IP market moving forward and expect to see the continued implementation of hybrid systems over the next couple of years.
McClean: Hybrid systems are very important to our company and existing video surveillance users. The ability to leverage the benefits of IP video, such as having a few remote cameras, while at the same time maximizing their current investment appeals to most customers. An area that is often overlooked is hybrid systems which also include analog matrix switchers.
Abram: Hybrid systems probably account for the majority of IP product placements to date. This is further evidenced by the number of hybrid products on the market: DVRs with both analog and IP inputs and cameras with both analog and IP outputs. Most systems we are seeing today– especially where large numbers of cameras are deployed – still rely on analog matrix switchers to provide the features and functionality required to manage complex signal routing, monitoring and recording assignments.
The transition to true IP systems will take several years. The latest statistics indicate network based systems comprise approximately 12% of the video surveillance market in the United States and this is projected to grow to approximately 45% by the end of 2010.
Schafer: Probably about 20 percent. Analog systems certainly have a big following. For years people have been deploying analog with a high degree of satisfaction. They know how they work. They are driving the business utility that they want out of them. There is going to be a long term market for them. As you move into the hybrid world, that is really important too because that is a way to get some of the advantages of the digital or IP system and not have to walk away from the investment of the system in place already.
Forest : We consider that currently 95% of systems being sold today are hybrid video systems because they use analog cameras on the front-end and digital recording on the back-end. This is true for the majority of IP-based systems as well as all systems that use analog cameras recording on a DVR. Hybrid video systems will represent at least half of the install base for the next two years.
Hauhn: IP remains a very small share of the video market because its adoption will be a typical technology transition. It started with analog and moved to hybrid systems driven by the DVR craze of a few years ago. Early adopters started using the latest hybrid systems which consist of limited number of IP video streams. As cost of IP cameras come down, use will accelerate and consequently the market share will start to grow quickly.
Brady: In what markets is IP video making the greatest inroads? How can dealers capitalize on selling IP to these clients?
Whitcomb: IP video will make the greatest inroads in industries with existing network infrastructure, e.g., schools, hospitals. VoIP has completely changed the cost structure of phone systems and IP is doing the same thing in video surveillance.
DeFina: We have identified a number of “power zones” that reflect markets and areas of application where we see the greatest IP video growth potential. Specific power zones include education, mass transit, building management/operations and healthcare. Additionally, the IT sector continues to be a significant area of interest as convergence connects infrastructure networks and video surveillance. Dealers have tremendous opportunities to expand their businesses by cultivating these new market opportunities with IP-based video solutions. To do so, dealers need to stay attuned to the latest technologies available to them—most specifically network technologies—so they have the tools on-hand to provide their customers with security solutions that deliver performance, value and low cost of ownership over time. As the industry continues to move toward IP-based systems, dealers need to be moving in the same direction.
McClean: At the moment, IP is best suited to small numbers of cameras which are located remotely such as the far side of a parking lot or cameras deployed on freeways or in a remote office. Here the benefits of leveraging an existing network such as the Internet or wireless technologies such as cellular LAN's outweigh other options on cost. IP also allows for higher resolution video.
Abram: We have seen an influx of activity for IP cameras in several markets where video surveillance has always been considered, but not implemented for various reasons—primarily because of the cost factor. A perfect example is the education market; a market that employs networks on a rather extensive basis for other than security purposes. As they look to implement video surveillance systems—many from the ground up—they are seeking cost-efficient and versatile means of monitoring their facilities. The timing for IP cameras is perfect in this growing market.
Casinos are perfectly primed for IP camera networks despite the control and switching issues they need to address. As both new and existing casinos continue to get larger, the need to move and reassign cameras becomes essential, and ideally suited for networked cameras. This coupled with the progressive prospective casinos have regarding technology, is resulting in early acceptance of network based systems.
McDonagh: Verint sees promise in a number of vertical markets, especially retail, transit and critical infrastructure. Each industry has its unique security needs and drivers for IP-video adoption and dealers must understand the security policies of organizations in these markets and build solutions that help to support and automate them.
Retail organizations are leveraging IP-video and analytics to reduce fraud and shrinkage while improving enterprise performance. Transit and critical infrastructure organizations are focused on proactive threat prevention and more effective response and investigation following a security event. But these markets share a common challenge: how to make sense of the vast amounts of video they capture.
Schafer: Education is number one because schools are not afraid of the change as much. There are also some new moneys. They are taking advantage of new budgets and opportunities around the budgets. For dealers in education or any market, you better be able to go in with a proven system that you know works. If you are using a network, you have to make sure the network architecture will support what you want to do. Dealers have to be more aware and knowledgeable about networks and be able to service them if something goes wrong.
Forest : IP systems are making inroads in applications where better image quality is required or where geographically distributed sites need to be centrally managed. Sectors that are looking for the better image quality that fully digital IP-based systems offer are public safety, banks, retail stores and law enforcement, as well as all sectors with critical assets and infrastructure to protect. Sectors looking to centrally manage remote sites include banks and retail stores.
Hauhn: Transportation and education (university and college level) appear to be the early users of the technology. These facilities are typically spread out over large areas and are well suited to the use of IP cameras and the use of the Internet to move video. Dealers need good vertical market expertise/experts that know those industries and how to sell into them. The dealer must be able to prove to the end user that their installation and service expertise is current with the technology.
Brady: Education is key from both a dealer and end user perspective. What areas do dealers need to be educated on and how should they address their customers on the benefits of IP-based systems?
Whitcomb: Existing network infrastructure is a big advantage but it requires extensive IT knowledge of a wide range of networking products. Dealers will recommend that the security system needs to be on its own network, but customers will want to leverage existing investments and force the dealer to install IP in very complex networking environments. A dealer needs to understand how to assign IP address schemes including subnet masks, packet forwarding, DNS and multi-casting.
DeFina: For dealers to position the benefits of networked security systems beyond the intrinsic qualities networks themselves offer, they first need to understand the needs of their customers on an installation by installation basis. The configuration versatility offered by networked systems allows them to be implemented on many different levels, as well as in hybrid form as previously discussed. Some customers may require analog processing devices like matrix switchers, or remote control management software, based on their facility layout or satellite locations. The variables from customer to customer need to be the deciding factors when evaluating and recommending system solutions. To help dealers understand both the benefits of IP-based systems and the technologies in use, Panasonic provides in-depth training on these subjects through the P-Tech Security Training University . Once dealers feel more comfortable in understanding new technologies, they will be more apt to find additional application opportunities.
McClean: There are a number of benefits and disadvantages for using IP devices which mean dealers need to know when they should and should not recommend IP cameras. Factors such as network type (LANs/WANs, Unicast/Multicast etc.) play an important factor as well as the customers need to support any legacy devices. Other important areas are the selection of the correct camera to match the customer's requirements (lens, resolution, sensitivity, dynamic range etc.), specification of storage and redundancy options.
Abram: Video surveillance and security dealers need to readjust their thinking. The reason can be summed up in one, slightly overused term: convergence. The relationship between video surveillance, security and information technology (IT) has quickly changed the nature of our business. Sanyo is convinced our current dealer partners will be extremely successful in this new market as it is our belief their video surveillance and security expertise adds a significant value to the new convergence business models. However, it is imperative to learn the new technologies and nuances of the IT market so they can recommend the best “security” solutions on a facility by facility basis. This expertise is what built this industry years ago and will remain its foundation for years to come.
McDonagh: Dealers need to be able to cut through the noise in the IP-video market and recognize robust solutions that provide value, scale with the needs of the organization and leverage existing investments in security solutions. To meet these criteria, an IP-video solution must be built on open standards allowing it to interoperate with systems already in place, as well as future technologies. It must also support video analytics at the network edge, where video is captured, in order to eliminate costly hardware additions on the back-end. Finally, dealers should look for solutions .
Schafer: As we get into the more robust and IP systems we have changed training practices too. We are doing more webinars. We are doing more training here on our campus and all over the world. We have 20 locations where we do training now. Plus, we do it at the field level too. We are identifying the needs early. We've bolstered our organization to be more outbound and working early in the cycle so when systems integrators are working on projects we can go out with them throughout the process. We do demonstrations, go out on presentations and we'll also help with the configuration and pricing of the deal. We have experts in all the vertical markets like retail, government and commercial. When there is an opportunity we align our resources to meet the needs of integrators and their customers. We also have three Mobile Product Showcase RVs that travel throughout the country and in Canada .
Forest : The most important thing for dealers is to remain focused on understanding the security challenges their customers are trying to overcome. Many of the challenges their customers face, such as poor image quality or an inability to manage many cameras centrally can be well served by IP-based solutions.It is important for dealers to educate themselves on which manufactures offer complete solutions versus point solutions. Dealers have told us that working with vendors that offer complete solutions makes deployment much faster and increases overall system performance and reliability.
Hauhn: IT departments started getting involved in security decisions several years ago, before the current IP camera movement. Now more than ever dealers need to learn how to talk to their customer's IT department. It is “their” network and dealers need to demonstrate that they know about the network and enterprise level IT. They need to know the terminology and know what it means. Dealers must be able to communicate the benefits of an IP system to their customers and help them understand all that it can do in terms of helping to make them safer and more efficient.
The Next Wave of Technology in Video Surveillance
Roger Finger, Principal and Senior Consultant at systems integrator IP Pro Tech in Oregon, reveals expert tips on how to sell and implement IP video surveillance.
Q. Since IP Pro Tech is a company specializing in IP video surveillance, how do you overcome the cost argument?
A. We constantly fight the battle of analog versus digital in the customer's mind. The industry is in a state of transition right now. The DVR guys are going to come in a little bit cheaper than IP video, so we have to justify why IP systems are worth a premium price.
It's all about return on investment (ROI). This system will be in place for approximately 5-10 years. What is the likelihood that you will experience a loss during that period? When you amortize the purchase over a 5 year life cycle, the cost differences between DVR and IP video vanish and the real question becomes ‘How well is this system doing its job?'
Lately, with the megapixel cameras, we have a very dramatic talking point. We liken it to HDTV. If you were going out to buy a camera right now for personal use, what would you buy? You would buy a digital camera, of course, and with the most pixels you possibly could. Would you buy a VCR or a DVD player? Of course, you would buy the DVD.
It's the same thing with IP video surveillance systems. You can buy a DVR now, but you know you're at the tail-end of that technology lifecycle. In the long run you get better value with the IP approach because you are investing for the future.
Q. What is the best transition strategy for companies that already own DVR systems?
A. We often encounter companies that have an existing DVR system and lots of analog cameras already in place. They can switch over to IP video now by running the analog cameras through a video encoder. It's a short term strategy, but a good way to preserve the existing investment. Or, they can start small by adding megapixel cameras on high value areas like merchandise racks or bank teller lines. IP video systems scale beautifully.
Q. You seem to be a forward thinker, so what is the next big opportunity?
A. The next big opportunity will be the integration of IP video with access control. IP Pro Tech is beginning to offer these types of IP access control systems. The most obvious application is secure door entry with a remote key lock that triggers the IP video camera, either taking snapshots of people as they badge in or from a central security desk buzzing people in after monitoring that they are who they should be. This integrated solution is relevant for lots of government accounts, secure IT facilities, and educational institutions.
About IP Pro Tech
IP Pro Tech provides custom IP based CCTV solutions with the latest in IP network video technology, like high resolution megapixel and is a Certified Milestone Partner. For more information, visit www.ipProTech.com.