A new report from IMS Research is predicting that that the global VSaaS market could exceed $1 billion by 2014.
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With increasing demand for hosted surveillance solutions, IMS Research is predicting that the world market for video surveillance-as-a service (VSaaS) could exceed $1 billion by 2014.
According to the 2012 edition of the UK-based research firm's VSaaS report, the market was worth over $500 million in 2011, which represented a 25 percent jump from the previous year.
IMS Market Analyst Sam Grinter attributes this growth to increasing demand for VSaaS offerings from both consumers and businesses, as well a rise in the number of companies that have entered the hosted video market.
"Growth in the VSaaS market is a result of increasing demand from consumer, small-to-medium businesses, and government end users," Grinter explained. "Also, an increasing number of entrants to the market has accelerated growth of service development, marketing presence, and is also creating a more competitive environment. All of which means that VSaaS is set to grow significantly faster for 2012 onwards."
According to Fredrik Nilsson, general manager of Axis Communications, the growth drivers for VSaaS are generally the same as they are for IP video, which are the desire to have better image quality, better scalability, and a more attractive total cost of ownership.
Despite the extraordinary growth that is forecast for the market over the next several years, the report does note several factors that could hinder the adoption of hosted surveillance solutions including price and advancements in remote monitoring technology offered through DVRs, NVRs and video management systems.
"The infrastructure cost required to provide a VSaaS solution remains relatively expensive, with monthly camera subscriptions costing between $5 and $30 depending on the level of service and the inclusion of hardware. While this sounds inexpensive compared to the initial capital expenditure for a DVR, over time this will generate a considerable cost for the end user," wrote IMS in a statement. "Furthermore, some video surveillance equipment vendors offer free remote monitoring through DVRs, NVRs and video management software. This service may prompt an end-user to upgrade existing hardware or software rather than opt for a VSaaS solution."
Grinter said that VSaaS providers will need to bring costs per camera down, as well as increase return-on-investment for users if the market is going to continue to grow.
"For VSaaS to become more widely adopted, the market needs to resolve a number of barriers. For consumers and commercial users, the price per camera needs to drop significantly and installation must be simpler," he said. "Additional requirements for commercial users include new features and technologies, such as business intelligence functions, that increase the return on investment of using a VSaaS solution."
Nilsson added, however, that there are still a number of other factors that are impacting the adoption of hosted video solutions.
"Major challenges (to VSaaS adoption) would be; 1) lack of education of end-users and installers; 2) the number of offerings are still fairly few; and, 3) lack of bandwidth at remote sites, which can be alleviated by using local storage technologies such as inexpensive NAS and SD cards," Nilsson said.
For more information, visit http://imsresearch.com. IMS analysts will also be on hand later this month at ISC West.