How does Cisco Video Surveillance affect me?
For 2 years now, speculation has been high on Cisco's video surveillance play. The Harrah's announcement magnifies this fear and excitement.
To help assess the impact, this article reviews Cisco's video surveillance products, positioning and pricing, analyzes their impact on the industry and concludes with recommendations to security managers, IT and security integrators.
Overview
Cisco will be a minor force in video surveillance primarily selling video surveillance solutions into existing Cisco accounts.
Cisco cannot be dominant because their core strengths and product strategy are poor solutions to the key challenges of video surveillance. However, their product offering will be sufficient for large footprint facilities. Given their strong channel relationships and this fit, they will have some success (Harrahs is a nice example of this).
The two key reasons for this are:
- Cisco's solution to the live video monitoring problem is fundamentally wrong.
- Unlike routing or IP telephony, video surveillance does not play to Cisco's strengths
Both of these reasons will be examined in depth following a review of Cisco's products, positioning and pricing.
Background:
I started my career as a network engineer, working for a large Cisco VAR specializing in early IP telephony and Video over IP projects. I also held 3 Cisco certifications. As such, not only do I have a professional networking background, I actually respect Cisco a lot. Please do not dismiss this as an old-school security person or electronics tech who is afraid of progress.
Cisco Products
The Cisco solution is optimized for distributing video, which is different from most NVRs/DVRs. Cisco leverages their advances in networking by optimizing the use of advance network features and functions. Moreover, they have a strong solution for accessing video at any time from any place. To read a good overview of Cisco's video surveillance solution I encourage you to read the well written recently released Cisco Video Surveillance Manager Solutions Reference Guide.
Beyond the encoding and video management features typical of video surveillance, Cisco offers advanced functionalities for live video monitoring. Cisco offers a virtual matrix solution that enables sophisticated distribution of live video from many locations to many monitoring locations. To handle bandwidth constraints that routinely arise in sending video across wide area networks, Cisco offers proxy processes that can adjust frame rate and resolution to make video. This can be very valuable in allowing remote viewers access to video without overloading the network.
Cisco offers a host of network optimizations for maximizing video surveillance performance. Two of the most important are multicasting and quality of service. Multicasting has the theoretical ability to massively reduce bandwidth loads when numerous viewers are watching the same video stream (as might happen in an emergency). Quality of service optimization can help ensure that resources are available for video so that when security video is critically needed, bandwidth is available. Nevertheless, these optimizations require network devices that support these features (like Cisco routers) and expert configuration. If you do not have routers or switches that properly support this (which is common), you will need to upgrade.
Cisco offers its own IP cameras as well as supports many of the major IP cameras and encoders on the market today.
Though Cisco supports analytics and will certainly continue to expand, this is not a deeply integrated element in the Cisco video surveillance solution.
Cisco Positioning
This solution excels with large camera counts and a strong need for live video monitoring. Not surprisingly casinos are a good fit as they can have hundreds or thousands of cameras in a facility with dozens of operators viewing live video. The solution should also be attractive to municipal video surveillance solutions where large numbers of cameras are distributed throughout a city and where multiple agencies may need emergency access to video.
By contrast, this is a very weak solution for facilities requiring smaller camera counts. Even if you were an organization with thousands of locations across the globe (fast food restaurants, retailers), the necessity of using IP cameras or encoders plus setting up servers in each location make the solution very expensive and lacking in specific strengths for these deployments.
Cisco Pricing
Cisco's pricing is significantly higher than leading alternatives, both for products and services. For instance, the Cisco 2500 IP camera is almost double the Axis 210 ($800 vs $440 online pricing). Given the complexity and sophistication of the media server and encoding products (plus my historical knowledge of Sypixx and Broadware pricing), the video management components are likely to be much more expensive than alternatives from Genetec or Milestone. Finally, the services needed to optimize the network for Cisco's strengths are likely to add significantly to the overall cost. These costs will come both from the higher rates for network engineers and the additional time needed to optimize.
In all, I would not be surprised that a Cisco solution is 25-50% more expensive than leading IP based video systems. That being said, price is not everything and the return may be worth it.
With that in mind, let's analyze Cisco's strategic fit.
Cisco's Solution to Live Video is Fundamentally Wrong
Cisco has a clear solution to live video monitoring, a key challenge in video surveillance. The solution is to ensure organizations can get access to any live video from any camera at any time by optimizing network performance and video distribution. I believe this is the right problem but the wrong solution.
The live video monitoring problem will be solved by analytics -- not network optimizations making live video access easier. Since the live video monitoring problem cannot be solved by live video, Cisco is wasting huge resources trying to optimize live video. It's pulling them in the opposite direction of where the solution is emerging.
Even if you could make live video monitoring work from any camera to any location, it does not address the critical issue in security: how do you assess and identify threats? Most security organizations are uninterested in viewing lots of live video because they cannot make meaningful decisions based on it. While managing bandwidth is difficult and networks cannot easily support this type of live video viewing, this is at best a secondary concern.
While video analytics are still maturing, it is clear that only through video analytics, will the fundamental issue of live video be solved. Security managers are not so much interested in viewing live video as they are solving real time problems. To the extent they can solve real time problems through analytics, that is the ideal solution to the live video monitoring problem. It is not a matter of if analytics are the solution but simply a matter of when and how analytics become that solution.
Of course, this does not mean live video monitoring will be eliminated. Rather analytics will mitigate the need to watch as much live video. For most security uses, typical video surveillance systems can meet the live video monitoring need even in an emergency by feeding 5 to 10 streams. For the very small number of security organizations that need even more live video feeds, other cheaper and simpler solutions can be found.
Though Cisco will certainly increase support for analytics, the system clearly is burden by costs for optimizing live video and is not designed for optimizing analytics. Moreover, Cisco will have adverse incentive to optimize analytics. Competitors will be much more determined to use analytics to reduce the importance of the network than Cisco. Because of this, I believe knowledgeable customers will see the Cisco solution as lagging and failing to incorporate the key technologies driving new value.
Video Surveillance does not Play to Cisco's Strengths
Cisco is so dominant in routing and IP telephony because it is very beneficial for customers to use a single supplier for those solutions. Though you can certainly mix and match networking devices, you increase the risk of interoperability problems. Also, since Cisco provides numerous advance features beyond the standards, if you elect to take advantage of them, it's not easy to integrate with 3rd party products. So once you have 1 router from Cisco, the value of getting all of your routers from Cisco increases (there is a network effect). Similarly, with IP telephony, once you have a Cisco Call Manager, you usually get the most advanced and most reliable solution by using all Cisco phones. So while Cisco clearly offers strong solutions in these markets, what drives their dominance is that customers have strong incentives to buy the whole solution from Cisco.
In video surveillance, you do not get a lot of value from buying all your products from a single vendor. One router that has interoperability issues with other routers can become a major operational and financial problem for your network. By contrast, one camera that is not interoperable is simply an issue with that camera. Unlike routing, customers do not have strong incentives to buy only one camera type. The same point can be made for video storage. Similarly, we are seeing this trend in analytics with many analytics vendors co-existing and interfacing with different video management.
Even with video management systems (NVRs/DVRs), we are seeing command and control systems emerge to unify various DVRs and NVRs for global monitoring. This further reduces the value and importance of building a single end to end solution dominated by one vendor.
The point then is that even if Cisco was to have a strong solution, video surveillance solutions, unlike Cisco's current core markets, do not strongly motivate customers to standardize on one vendor's product.
Recommendations
While Cisco is certainly a strong overall company, it's video surveillance solution is credible but uninnovating. Like many other large companies (Bosch, Honeywell, Panasonic), they will win deals but they will not be a transformative force.
Here are my recommendations:
Security Manager
Be confident that Cisco is not transforming physical security. For most managers with existing infrastructure, the cost of migrating to Cisco would be extremely high and the incremental value would be low. Keep focusing on new and innovative companies that want to make the network less of a factor in security by using analytics. It's through analytics and focused video surveillance solutions, that you will obtain the most efficient solution and an answer to live video monitoring.
IT Integrators
Assuming that you do not want to focus in video surveillance and are primarily leveraging the breadth of the Cisco portfolio, the Cisco offering is certainly worth offering. It will leverage existing skills, relationships and your expertise in managing the networks. Nevertheless, be careful if you want to specialize in video surveillance or compete against other IP video solutions. Your offering will likely be significantly more expensive and no more innovative than your competitors.
Security Integrator
I do not believe it will be terribly profitable for you to be a sub for a Cisco VAR but it's always worth evaluating. Also, becoming a Cisco VAR requires passing an endless string for certification tests and hurdles. Even then, you will have to compete with bigger and more established VARs. In general then, I would ignore Cisco. You certainly should have an explanation for your clients and hopefully this article helps. Otherwise, stay focused on solving security problems with the many other IP video vendors.