The Hidden Costs of Video Surveillance

It is basic Accounting 101 — to maximize profits, you need to manage costs. Most project costs are pretty evident. Some are fixed, some are variable; but, you know they are there and you have accounted for them. Then there are the hidden costs — the ones that sneak into the project, catching you unaware and wreaking havoc on your margins. So how do you discover those hidden costs before it is too late?

While every security project has its own unique quirks, in IP surveillance solutions, there are generally three areas where hidden costs tend to lurk: technology, installation practices, and ongoing maintenance and support. Here are some best practices that can help you better manage these hidden costs, get the job done right the first time, meet or exceed your customer’s expectations, and keep your healthy profit margin intact.


The Hidden Costs of Bandwidth and Storage

Once you understand the customer’s requirements, designing and installing an IP video solution should be straightforward — after all, the physical installation process is incredibly similar to an analog installation. But that’s where the similarity stops. IP technology taps into a whole different knowledge base.

Bandwidth and storage requirements are probably the two most misunderstood pieces of a video surveillance project — and the ones most likely to send profits into the red zone, because, unfortunately, you cannot just type numbers into a standard equation and arrive at an accurate projection. A number of factors have to be considered.

For example, the most popular compression format for recording is H.264. It is designed to deliver a variable bit rate based on the movement in the scene. To determine the total amount of bandwidth and storage a given camera will consume, you need to accurately predict the amount of movement a given scene will introduce. Any time you introduce “predictions” into a project scope, you open up room for increasing costs. Those increases might make the difference between winning a bid, absorbing a cost overrun or even getting kicked out of an account.

To get it right the first time, you need to understand the customer’s requirements for each scene: do they need to detect, recognize or identify? How many viewers are there? Is the camera for security, operations or both?

Next, you need to analyze those scenes — the individual field-of-view from each camera — to determine normal, seasonal and emergency traffic patterns. It also helps to understand the growth potential for a given scene. For example, if your customer currently requires 14 days of storage but then hires 50 new people over the course of the year, do you think they will understand that the increased movement in the scene caused an unplanned rise in data, which led to their video recordings to be overwritten after only nine days?

The difference between light traffic and high traffic can be as great as 1-2 Mbps, which can quickly add up. Imagine losing evidence of a critical event because the server reached capacity before the data retention timeframe discussed during system design. Who do you think they will blame? That is why it is critical to educate yourself and your customers on the true impact of scene movement on bandwidth and storage consumption.

One way to make bandwidth more predictable is to use a feature called Constant Bit Rate. As its name implies, this feature creates a consistent bit rate for a camera often at the expense of image quality or situational awareness. It does this by either increasing the compression on the image (decreasing quality) or decreasing the frame rate (decreases situational awareness). Either result often falls outside the requirements set by your customer.

To avoid the hidden cost of recordings, follow good design practices and take the time to truly understand the needs of the customer in relation to the areas they need to secure. To protect your margins, it might also be a good idea to factor an additional 5-10 percent overhead for each camera into your initial proposal. 


The Hidden Costs of Service

Integrators who truly understand the installation requirements and how to marry the right resources to the given task will have a competitive edge in the bidding process. Those who do not have a firm grasp on the best way to marshal resources can lose their shirts.

In the installation phase of IP surveillance projects, four separate tasks need to occur: physical cabling, mounting the cameras, configuring the network, and, finally, configuring the cameras and recording software. Each task requires a certain level of expertise that, in many cases, comes with a significant difference in hourly rates.

For example, the difference in average salary between someone who has attained their Registered Communication Distribution Designer (RCDD) for structured cabling practices and a Certified Service Technician (CST from the Electronic Security Association) can be as much as $50,000 annually. So it is important to assign those resources to the right tasks to keep your hourly rates competitive.  

Skimping on the initial groundwork can also greatly increase the overall lifecycle cost of the project, especially for post-installation support. For instance, suppose you decide not to bother employing structured cabling practices that call for certifying each cable drop. Chances are you might run into crosstalk, a situation where noise is introduced into the line impacting transmission. This could cause anomalies in the video such as dropped frames or, worst, entirely preventing video from streaming. So you would end up going back to troubleshoot a problem that could have been prevented by doing it right the first time.

Proper network configuration is another essential task that increases in importance as projects scale to the enterprise level. For perspective, 802.1x is an authentication protocol that validates and then provides network access to edge devices. If you are installing cameras outside of the building, 802.1x would provide port-level security for those network drops, which would prevent unauthorized devices from connecting to the network. Enabling 802.1x on a network camera is as simple as checking a tick box in the HTML interface. But that is only part of the total solution — you still need to configure network switches and a Radius server, which are entirely different activities that require a high level of expertise and knowledge of networking. I wouldn’t necessarily assign a Cisco Certified Network Administrator (CCNA) to configure the cameras themselves, but a CCNA would be appropriate for configuring the network. Matching resources properly from the onset ensures that the task is done right the first time and at a cost commensurate with the skills needed to perform it.


The Hidden Costs of Maintenance and Support

Maintenance and support is another hidden cost that can rear its ugly head for years to come. This is nothing new to integrators, but a lack of knowledge and proper partnerships with new IP technologies can really exacerbate the situation.

Maintenance and support is more costly than people think. When all factors are taken into consideration, it can average between 30-50 percent of the original investment. The cost of a truck roll to deliver onsite support post-sale is a figure that most integrators understand all too well. Preventing truck rolls requires the right combination of quality support and quality products with a low failure rate and high mean time between failures (MTBF).

Let’s face it: Products fail. If the product is defective, working with a manufacturer who can expedite delivery of a replacement — overnight if needed — is a great metric for judging their value as a partner. Product reliability and a manufacturer’s ability to support that product through warranty replacement are essential.

Troubleshooting is another area were hidden costs can skyrocket. The good news is that you can do diagnostics remotely in IP surveillance installations, provided the customer grants you network access. So it behooves you to develop a trusted relationship with your client. It will keep excessive truck rolls from eating into your profits.


James Marcella has been a technologist in the security and IT industries for more than 18 years. He is currently the Director of Technical Services for Axis Communications. To request more info about Axis, please visit