April 3, 2012 -- "The trend 10 years ago was DVRs," said Tyco Integrated Security's Chief Technology Officer Jay Hauhn, at his booth on the 2012 ISC West tradeshow floor. "If you were at this show maybe 8 or 10 years ago, there were over 400 companies that had DVRs, but now that trend has shaken out. Then five years ago, the trend was IP video, and that continues today. Now the new trend is the cloud and managed services for not only access control but also video surveillance."
"There were a couple card access companies that really showed this industry how to do cloud and managed services and how to make money at it. It's a great financial play for the customers [to hand off the hardware and services], and it generates RMR for the integrators. It turned card access into a managed service, and it's had great success. Now the industry is trying to figure out how to do it in video. Companies offering video storage in the cloud are getting their foot in the door."
But Hauhn said it's not all downwind sailing yet.
"My personal opinion is that replacing DVRs or NVRs with the cloud is still a challenge, primarily due to bandwidth. On a campus or in a facility on the LAN, the bandwidth is fine because you may have gigabit ethernet, but when you try to get that video off the campus is when you struggle [due to limited bandwidth over telecom infrastructure]. However, compression is getting better as we are picking up [compression] standards from the cable industry.
ADT's commercial security unit (now renamed as Tyco Integrated Security (TIS) in advance of Tyco's splitting up ADT's residential and commercial divisions – see related story) is already offering this type of solution, but Hauhn admits that it's still early and solution providers are in a mode to figure out the best practices to really offer hosted video solutions. Wearing his CTO hat, he said that many of the offerings seen on the show floor are maturing but are not fully mature yet. Nonetheless, he credited companies for getting the solutions out the door so that they can be tested and refined in the real world, and admitted that TIS is still refining its own hosted service offerings.
With the services models like his and ones from competitors improving each year, it's really that hold-up of bandwidth that will allow the service to take off. Improved telecom infrastructure that brings fiber to that "last mile" – connecting directly to an organization's LAN – will be the change that allows hosted/managed video to take off. Don't expect that to be overnight, he said, since it will take time with real physical work like digging trenches and laying cable and reworking telecom infrastructure, but as that infrastructure improves, the hosted video market will be set to boom.