EMC's Entry to the VSaaS MarketBy John Honovich, Published on Aug 14, 2011
Over the last 2 years, interest in VSaaS has risen significantly yet most of the providers have been startups and small companies. Now, EMC, a giant storage provider with nearly $20 Billion annual revenue, is launching its own VSaaS service. In this note, we examine the structure, pricing and positioning of EMC's offering examining if EMC can overcome the problems holding back many of today's current VSaaS providers.
To start, a few key points about EMC's solution:
- The total package consists of EMC's implementation of Axis' AVHS, integrated with their Atmos cloud storage platform.
- The user interface to EMC's VSaaS has been customized beyond that of the typical Axis' AVHS interface, although it is unknown to what level.
- Local storage at client sites can be served by the Iomega StorCenter NAS appliance at each site, reducing bandwidth and remote storage needs.
- EMC has targeted large national integrators with this offering, providing accounts to these integrators at wholesale pricing, who will resell the service to end users.
- With many of these integrators providing in-house central station monitoring, EMC has integrated AVHS with the central station monitoring software used by some, allowing video from the could service to be used for alarm verification.
- Unlike many VSaaS providers, EMC meets SAS 70 and ISO 27001 standards. Readers may remember Axis' controversial claim that these must be met for hosted video implementations and our analysis and counterpoint.
- Expected end user pricing is between $10 and $15 per camera per month, in line with other offerings.
- With 25% market share in direct-attached storage, and nearly 30% in network storage, EMC certainly has an experience advantage over other vendors.
Competitive Analysis of EMC's Offering
We examined the VSaaS market about a year ago, citing a number of issues prohibiting widespread adoption which still exist today: concerns about storage and bandwidth, network security, and pricing all were major issues. EMC, being the giant that it is in the storage industry, mitigates some of these concerns. Few, if any, competitive offerings could boast the sheer numbers of installations. This is likely to ease concerns over reliability and security which end users may have with VSaaS in general. Additionally, adherance to SAS 70, ISO 27001, and RSA Encryption standards puts EMC ahead of most of the market.
One complaint in reviewing various hosted video services was the user interface. Since it is normally web-based and made to work across browser versions, it's usually simplistic, and limited to simple views of a few cameras. This makes live operation and archiver viewing often cumbersone, and not as feature-rich as full-blown client software. Integration of VSaaS video to third-party systems are also unheard-of. According to our contact, EMC says that they are capable of customizing the interface of their hosted service beyond that of the standard AVHS. How much of this customization has been finished and how much is planned is unknown, though if forced to guess, we would assume little to none in the time period the service has been available.
Another complaint, and perhaps the greatest, about VSaaS is pricing. In our research we found that $10-20 per camera per month was typical for most VSaaS providers. This number is subject to change depending on the storage duration required, and number of cameras. EMC's offering reportedly will price out at the same level. Our concern remains that this pricing is simply too high for many users. With even low-end DVR's costing $300 featuring remote access and even iPhone clients these days, $400-700 per year for a hosted service seems a difficult sell. Customers desiring a few HD cameras may find hosted services more attractive, since low-cost DVR's can't provide greater than standard resolution.
Overall, while EMC offering VSaaS is more attractive them some lesser-known providers, thanks to their brand and experience, we feel they will face many of the same challenges of other providers until pricing drops to more reasonable levels.