Breaking Standards is Good

Author: John Honovich, Published on Apr 26, 2008

Attacking proprietary systems is en vogue but it's only breaking from standards where innovation occurs. The irony is IT players entering physical security have most seriously broken standards and their breaking of standards is driving the innovation in our market.

Take Dilip Sarangan, a very bright analyst from Frost. In his recent article (http://www.frost.com/prod/servlet/market-insight-top.pag?docid=124399129), Dilip argues that:

"The lack of standards has hurt visionary vendors/service providers and end-users alike."

and that:

"The physical security industry has survived for the past 5 decades (since the introduction of video surveillance cameras) without standards."

1. The physical security industry had NTSC/PAL, a critical standard that provided stability and growth for the last 50 years. Of course, it's not a IT standard but it is absolutely a standard and a critical factor in the growth of the market. NTSC/PAL ensured that any camera could work with any VCR or DVR. It was only when the IT players entered that legions of proprietary codecs and formats were unleased on the market to support their IP cameras. As I will continue to argue, I think this is a good thing but we too often blame the physical security people for lack of standards.

2. The standards that Dilip and other analysts talk about where not even relevant until the last 5 - 10 years. Analysts are focused on system interoperability standards, such as APIs and SDKs, to make system integration simple and inexpensive. 10 years ago, very few physical security systems were on-line. The lack of interoperability standards is a function of the youth of these technologies. In young markets, whether it physical security today or routing in the early 90s, proprietary solutions dominate.

Proprietary solutions dominate because the total benefits of proprietary systems maximize most customer's value. Alternatively put, vendors pursue proprietary solutions and succeed with them because, at that stage, customers value the benefits of the closed elements more than they lose from the lack of standards.

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This is a widely accepted tenet in strategic marketing, most famously argued by Clayton Christensen in the Innovator's Dilemma and Innovator's Solution. You can also listen to a wonderful lecture he provided at an open source conference: (http://itc.conversationsnetwork.org/shows/detail135.html).

The problem with standards is that they restrict choice. Take IP cameras. If IP cameras agreed on standards 5 years ago, we would be locked into 10 years old technology (standards are generally adopted based on technologies in use for sometime).

Every year, IP camera companies introduce new codecs and formats. Even when they use standards like H.264 and MPEG-4, they routinely make proprietary adaptations. Why? Because the reduction in bandwidth consumption and storage provide more value than maximizing plug and play between systems. It is the right choice for most customers even though it is certainly not open.

The problems Dilip mentions in system integration are very real and are significant. In general though, they are less significant than the benefits we are gaining from innovative vendors breaking from standards to deliver novel solutions.

In the time frame that Dilip is examining, 2020, I agree with him the standards will emerge and become dominant. However, it's not because standards are good. It's because by that time, the technology in physical security will become good enough that the advantages in interoperability will be greater than the benefits that can be generated from delivering new innovations.

So I say to the visionary vendors: Keep on breaking standards, push the envelope and show us how many more problems you can solve. When you stop solving new problems, the market will adjust and force you into conforming to standards.

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