Buy or lease?
It will be interesting to see whether users will have to purchase video systems outright, if leasing will be an option or if other remuneration models will come into play. It is likely that we will see a mix based on user requirements. These customized offerings will open up other market segments that did without video surveillance in the past due to the costs involved. Cost-effective leasing models, probably in connection with hosted video, are sure to make video security an attractive option for private users in the future. Where it goes from here heavily depends on manufacturer offerings and prices.
Where will growth come from?
Today, most video security systems are in operation in retail stores. With innovative improvements to network cameras and their range of applications, this technology will be interesting for many other industries and markets. I expect high growth rates in a number of different areas, including public security. Looking at current developments and ongoing discussions, it is safe to assume that video is set to become standard in public areas, airports, train stations and other places where large numbers of people are present. In terms of image quality for video surveillance in public spaces, it is likely that we will see legislation in place by 2020 that will ensure minimum image resolution standards. A minimum resolution of one megapixel would be appropriate in order to guarantee that the images can be used to prosecute offenders. Other growth industries include transportation, healthcare and education. Private users are also increasingly seen as customers.
The most important sales regions
Europe and the U.S. will remain the core markets for video systems. The markets are already saturated, however, the technological conversion from analog to digital systems by 2020 will continue to bring high turnover. India and China with their huge population base and high growth rates will be the key drivers in the Asian market. A high level of demand for digital video systems can also be expected in regions with strong broadband infrastructure growth. Fiber optics is a keyword here. I think research firm RNCOS' prediction of annual growth of 14 percent through 2017 is absolutely realistic.
It's impossible to say, however, it is clear that users will definitely benefit from the technical innovations and new options, be it higher image quality, mobile solutions or other analysis options. From a manufacturer's point-of-view, one thing is certain: Customer requirements are key. Surveillance solution providers must orient themselves toward customer requirements and not the other way around. Success in the market requires providers to face a number of challenges that need to be taken into account in the company's corporate strategy. They have to deliver technological solutions that can fulfill current and future requirements, making it necessary to continuously reinvent the company. This requires a balance between the synergies and uniqueness of the products. Manufacturers need a portfolio that has an attractive mix of "bestsellers" for the majority of applications and innovative "high-end" solutions that will gradually develop into bestsellers. At the same time, it is important to strike the right balance between price and product features. Corporate success requires technological developments as well as continuous growth, both in terms of market shares and an international presence. To this end, it is crucial to retain control over all of the key processes and new structures that come hand-in-hand with growth. This is the means to an end: The goal is to be competitive in the future.
About the author: Dr. Magnus Ekerot has been chief sales officer (CSO) of Mobotix AG since January 1, 2011. He previously served as general manager at Beijer Electronics AB in Sweden, a publicly listed manufacturer of HMI (Human Machine Interface) displays. In addition, Dr. Ekerot has years of experience in the network camera field, including five years as managing director at Axis Communications, where he was responsible for the German-speaking regions, the Netherlands and Eastern Europe.