Riding the wave of hosted video at ASIS 2011

One of the driving trends in the video surveillance business is a hosted video offering. While some naysayers are saying it can't happen, the reality is that it's happening a little faster than we all might have guessed.

Here at the ASIS 2011 trade show, you can find new hosted video offerings by three of the major commercial systems integration companies: ADT, Stanley and Niscayah. All three are said to be backed up by hosted storage company EMC, and are partnering with Axis Communications, which jumped into the market early with both feet.

According to Axis Communications General Manager Fredrik Nilsson, hosted video brings recurring monthly revenues to video surveillance – a market that had formerly been approached with a "sell it and forget it" model. Now, with hosted video, investors are finding great interest in the hosted video space, and Nilsson said that investors are practically throwing money at any company with vSaaS (video software as a service) in its title.

Despite the buzz, there needs to be more education, said Nilsson.

"A lot of people are still confused about it, just like things were back in the early days of IP video. It still needs to be explained to people."

Nilsson said that chief questions relate to bandwidth, cost, and security – the same initial concerns the industry experienced on the roll-out of DVRs and then later with the introduction of IP video.

Martin Gren, the co-founder of Axis and inventor of the network camera, said that scalability is also a big question mark for the trend, as companies realize the back-end systems that have to be put in place to support hosted video. Bandwidth, he said, is still a real concern in the U.S., he said, which often has lower bandwidth than in Europe. Security still is a concern, and Gren said he has even seen some solutions that use open ports.

For ADT's commercial unit, which announced its hosted video solution here at the show, there is a lot of excitement. John Kenning, North American president of the ADT commercial division, said that they like being able to offer the service to companies who can't accept new capital expenditures. By offering video surveillance as an operational expenditure (customers don't pay for the hardware up front, only as part of the monthly service fee), customers can upgrade their systems and not have to handle additional on-site hardware other than the cameras.

Kenning said the growth for hosted video appears to be exponential. "We think it is potentially a $50 million to $100 million market over the next few years," said Kenning.

ADT's Jay Hauhn, chief technology officer, said part of the exponential market potential can be realized that its possible to add even additional services (analytics, monitoring for business processes) on top of hosting the surveillance streams.

Panasonic's President Bill Taylor said the market projections might only be the tip of an iceberg, and said it was no secret that his own firm is preparing to make a play in the hosted video space. Panasonic already has hosted solutions for IP telephony, and says the overall hosted market is still in its infancy. Taylor said that many solutions are only pushing a frame or two per second into the storage cloud, and said that limits adoption. If systems could support full resolution at 7 or more frames per second, Taylor said that the service could be even more applicable to end-users, but to get there, the market still faces the bandwidth hurdle.