The Resolution Revolution Will Be Televised
Last week I had the chance to chat with Paul Bodell, VP of sales and marketing, IQinVision, which makes high-definition network cameras. One of the key things Bodell mentioned was that a year and a half ago IQinVision was a niche company with a few targeted products, but its growth in the IP video market has “exploded.” With IQinVision’s sales growing 100% each of the last three years, he said those numbers are even higher than what they had originally projected for their investors.
Bodell pointed to what IQinVision likes to call “The Resolution Revolution” as to why IP video and digital megapixel cameras are impacting the market. Contrary to what some may say, the screen resolution on IP video is passing by analog video. Bodell added, “There’s no substitute for resolution and it’s resolution that [analog video dealers] can’t deliver today.”
One item of particular concern to security dealers is the fact that IQinvision does 85% of its camera business with “IT guys,” and only 15% with security dealers. When I asked Bodell about this discrepancy, he said that IQinvision is moving to close that gap and perhaps the ratio will be 70-30 next year. “We do have some fast-growing security integrators,” he explained, ”but by and large what we’re seeing right now is a lot of the companies we’re dealing with are hybrid (IT and security).” He also gave a sobering prediction, “By 2008 or 2009 there will be no differentiation between an IT and a security dealer. Security will be a subset of what the IT integration company does.”
So what’s your take? Will analog video hang on strong for another 5+ years? What about the idea of the security dealer becoming a subset of the IT integration company?
-Greg
I think a careful examination of the underlying economics is important to this analysis.
I think the major driver behind the growth in megapixel cameras is how fast the prices have declined in the last few years. The MSRP on megapixel cameras is now under $750 whereas not too long ago it was double that or more.
To the extent that megapixel cameras achieve cost parity with color analog cameras, the rate of change to megapixel will be high (like it was from b&w to color as the cost differential for color declined).
As for the claim that security dealers become a subset of IT integration companies, I don’t get it. ADT, Siemens, JCI, etc. have lots of money and they can train/hire people with IT skills. Beyond the reality that electronic systems (where they have a strong advantage in) will be around for years to come, they have the motivation and relationships to evolve.