Value of Managed Video (MVaaS) for Video Surveillance

By John Honovich, Published Sep 03, 2008, 04:24pm EDT

Managed video is poised to experience similar growth and impact that IP video surveillance software has achieved over the past 5 - 10 years. As such, despite it being relatively unknown, smart video surveillance professionals should start understanding and tracking the developments of managed video now so that they can be at the forefront of the next evolution of video surveillance.

What is Managed Video?

Have you used GMail or Yahoo Mail? Amazon? Ebay? Have you read an entry on Wikipedia? 10-15 years ago, none of these services existed.  If you wanted email you would have to install a client on your PC. If you wanted an encyclopedia you would have to get a CD from Microsoft.

These are examples of a broad trend of applications moving away from your PC and into the web. Also called Software as a Service, most technology thought leaders believe this is the next major movement including the ultimate force that will eventually topple Microsoft's desktop supremacy.

These services offer a host of benefits including lower operating costs and simpler IT management. Read an overview for more specific benefits of software as a service [link no longer available].

So Managed Video or Managed Video as a Service (MVasS) is adopting this service model to video surveillance. Instead of deploying and managing video software and servers at your locations, this is managed at the service provider's data center.

Where is Managed Video Today?

A pure managed video solution with no servers at any customer site is not economical today. Eliminating DVRs or NVRs on site, while being attractive conceptually is blocked by issues in centralized video recording.  Vendors have been trying this approach but market uptake has been minimal and such vendors are struggling.

The optimal solution for managed video today is building a data center to manage customer's video systems but to deploy appliances at each customer site for local recording.  While this is not a pure approach, it is providing an initial foothold for managed video to expand.

Who are the major players?

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Envysion is the largest player in this small space.  They have the most funding (over $12 M USD), the most announced customer wins, the most vocal presence on the web.  Connexed [link no longer available] is another provider focused solely on managed video. VideoProtein [link no longer available] and ipConfigure [link no longer available] are publicly promoting managed video services.  Two other widely known vendors have privately discussed plans with me to release such services in the next 6 months.

Nonetheless, the space is still very young and the economics of bandwidth are a big impact on how the space evolves.

Why I believe Envysion is the market leader?

I view Envysion as the market leader because they are building a foothold in an undeserved segment - Quick Serve Restaurants (if you need background, read my original review on Envysion). With this foothold, they can gradually and continuously move upmarket and displace incumbents.  (For those interested in strategic marketing, this is a classic disruptive innovation / crossing the chasm strategy.)

With the success in Quick Serve Restaurants, Envysion is developing unique skills in the video surveillance industry like how to run big data centers, manage tens of thousands of remote systems, provide secure and simple access to web based video, etc. Paradoxically, these are not important skills for IP video surveillance software but critical ones for managed video.  Their business models are also different, with managed video providers focused on subscriptions versus licensing for software vendors.

Now, the big IP video software companies do not care about Quick Serve Restaurants.  They are too busy going after new city wide deployments, big box retailers, school systems, etc. I do not fault them for that because that is where the money is today. Today, big companies and the government will generally be too concerned about security implications and advanced features that Envysion lacks to really consider managed video.

How will this market segment evolve?

Over time, bandwidth will become cheaper and companies like Envysion will enhance their features and functionalities. As this happens, more and more customers will find managed video to be more attractive than hosting their own systems (cheaper costs, less setup and admin hassle, etc). It will not happen all at once or on a given date but just like IP video surveillance software went from strange niche product to the choice of Fortune 500 companies, the same path is likely to hold for managed video.

Now, it is going to take time.  I think it could take 5 or 10 years for Envysion (or whoever is the ultimate leader) to reach the same levels as IP video surveillance software is today. But as managed video matures, it will be a very significant threat to software providers and a very appealing alternative to security customers.

The fundamentals are there. It's simply a matter of maturation and the general progression of computing that is driving all technology businesses.

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