Understanding Cisco's Kid

Over the last two weeks, I have spent some time with some of my colleagues debating the significance of Cisco's recent acquisition of SyPixx. My view is that Cisco's move is a major confirmation of an inevitable migration of the physical security market to the new paradigm of a network-centric architecture.

The new network paradigm could finally mean an industry open protocol and industry standards. Many in our industry have been encouraging this change for years, and some have even argued that the only way for the physical security industry to grow is to move to this plug-and-play technology. These discussions most often center on the new buzzword of "convergence". And while this word takes on different meanings for different groups, in our industry it's become almost synonymous with the move from analog technology to IP technology. Some players in the physical security industry are convinced that the entirety of physical security will move to this new paradigm and that network manufacturers will become the providers of physical security equipment.

The most obvious segment of the physical security industry to initiate the move to IP technology is in the area of video surveillance. There are major advantages in moving video to an IP infrastructure, whether it's cost of installation, or the ability for the CSO to access the cameras from a remote office, or the ability to apply "analytics" to the video data. Thus to me, Cisco's recent acquisitions of SyPixx and Scientific Atlanta are early indicators of this change.

There are some that would argue that a Cisco or another network manufacturer could not be successful in penetrating the physical security industry. They argue that the physical security industry already has established channels in its ''security integrators and dealers" which address this market. For those that argue that the physical security reseller channel would block new resellers, I like to remind them that the network industry has its own channels of distribution. The computer/networking industry calls its dealers VARs (value-added-resellers), and the VARs channel dwarfs the physical security channels we know so well in our industry.

Some asked why a Cisco or any other networking systems manufacturer would be motivated by the physical security market. I pointed out there are five major reasons for this move:

  1. The IP video market is estimated to be a minimum of $2B this coming year with an upward growth of at least 25 percent.
  2. The network industry will be able to attract a significant part of this revenue in addition to increased revenue from other network components needed for this technology. Cisco and their competitors are in the business of selling bandwidth, and as we know, streaming video uses large amounts of bandwidth and storage media.
  3. The network industry is already heavily involved in logical security. Physical security is just another step in the overall need for security at today's corporations.
  4. The network industry has proven that it can take dissimilar products and functions and effectively integrate these into a plug-and-play technology. They have proven they can take technology similar to physical security components and reduced their costs by orders of magnitude. Want proof? Just look at the costs of network appliances today.
  5. The network industry recognizes that the migration of physical security to a network-centric solution will offer major technology improvements in the area of integration and cost savings to the end user.

In short, Cisco is highly motivated to move into the physical security space.

There is, however, still major resistance which opposes the move to network-centric security. The arguments from the field are numerous but hinge mostly on the unknown and unproven. The concerns with quality and reliability still abound. Some customers are convinced the move to IP security will result in significant down time. Some argue, "My company can't even keep email up. How are they going to handle security?" Others are convinced IP video is far more expensive than analog video.

I argue that these myths imply a lack of knowledge in network technology. Today's focus for IT directors is uptime and security. These two concerns are the top concerns because they are based on business issues. Businesses today recognize the risks of down time as well as the risk to assets. The network security industry is a multi-billion dollar business aimed at mitigating the risks of down time and the vulnerability to the company's assets.

Great strides have been made in the last decade to ensure a stable and secure network, and this stability is even more reason to move security to an IP-based platform. For the naysayers who complain about IT uptime, I always point out that existing analog systems have their own down times and security breaches. Standalone DVRs and access control systems are subject to the same risks as network-based systems, including viruses and malicious attacks. Some customers recognize this and are asking IT and the IT providers for a solution for 'Total Security'. I believe, that with the acquisition of SyPixx, Cisco will begin to understand these needs and develop a solution to these customers' challenges.

In the dialog with my colleagues about what the SyPixx acquisition means, the question was asked how this would affect the physical security integrators and dealers. My feeling is that today's integrators who are in denial about the change to a network-centric industry will see a decline in business. Those integrators and dealers who recognize the new paradigm, however, have made or will make changes in the business to be part of the new revolution in physical security.

The physical security integrator/dealer should have an immediate strategy to move their business to a network-centric model. This means hiring and training network technicians and sales people who can talk the network lingo and who can understand the world not only of physical security, but also of information technology. The integrators who will survive this new paradigm are those integrators who are migrating their business, and who are essentially becoming VARs. If I were a physical security integrator today, I would begin training my people to be network certified. I would be seeking partnerships with Network providers, whether that's Cisco or Microsoft. I would begin marketing network systems and services to my existing customer base.

Cisco's purchase of SyPixx may foreshadow some big changes for our industry, but it's not the end of the world as you know it. We've been seeing this growing tide of IP-based products appear for some time, so it was only a matter of time before a major networking company like Cisco took a close look at our industry. To stay in business, you'll need to embrace this change and land that network training soon; otherwise the VARs will be knocking on your door and taking your customers because you can't service their IP-based physical security needs.

About the author: Ray Payne, CPP, is president of RPC Security in Sierra Madre, Calif. He has 25 years experience in senior management for major physical security manufacturers. In this capacity, he was responsible for product development and product management teams. In these companies, he introduced many firsts in CCTV and IP Video products applied to Physical Security applications. His work has been instrumental in the security of a number of high-profile projects, including those in the government, commercial and transportation sectors. He can be reached via email at ray@rpcsecurity.com; his website is www.rpcsecurity.com.

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