No ROI For PSIM

Author: John Honovich, Published on Nov 29, 2012

PSIM is not a bad thing. It just has no ROI. Now, that is not unique as many security solutions offer fuzzy value, at best, but it does shape how PSIM is sold and adopted. In this note, we examine the benefits and limitations of PSIM impacted by the non existent ROI.

Unfortunately, PSIM vendors generally are delusional:

"As most vendors are quick to point out though, the immediate ROI realized by the implementation of PSIM software through increased efficiencies can be enough to get the C-Suite to sign off on the purchase."

And yet after a decade, the PSIM market is still nearly negligible and the vendors tiny (seconded by IMS).

No ROI

The problem is weak ROI and certainly no 'immediate' ROI.

ROI, or Return of Investment, demands that the amount of revenue/cash/savings generated clearly exceeds the amount of costs (see our ROI tutorial).

While PSIM clearly has 'value', it is extremely rare that the value of PSIM is greater than its cost.

When you look at the benefits of PSIM, it can improve security operations and speed up response but it does not do anything that clearly delivers specific and quantitative returns:

  • It is highly unlikely that a PSIM will reduce manpower even if it makes users somewhat more efficient.
  • It does not replace or eliminate other equipment. Indeed, it is the opposite, as one typically needs to add more equipment and software for PSIM in addition to everything else that is already in place.
  • It does not alarm against crimes or threats in progress. That job remains with the intrusion detection or analytics systems that PSIM depends on for inputs.

Since PSIM is not reducing manpower nor equipment nor stopping crimes, it is incredibly challenging to justify on a hard, financial basis.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

Plus since it is a large expense that nearly no security department has historical budgeted, allocating funds is quite difficult (save for gifts grants).

Benefits Do Exist

However, PSIM does offer benefits to some security users. It is just that they tend to be 'soft' benefits. One vendor does have a very reasonable list of PSIM actual benefits. They include:

  • Migrating between vendors while managing both old and new from the same interface. While this is a clear benefit, how much is this worth? You could certainly 'get by' with switching from one app to the next but a PSIM is better. Is it X dollars better or $500,000 better? That is hard to justify.
  • Seeing all security information on a single interface can be useful in understanding threats but even PSIM vendors acknowledge that this is typically for the small percentage of users with "command and control centers that need to monitor thousands of sensor feeds." What is it worth? It's better but how can you justify that it is Y dollars better?
  • Consistent response by automating Standard Operating Procedures into the PSIM. While this may simplify things, unless an organization has a history of systematic and ongoing errors, justifying quantitative value on this is hard.
  • Managing security equipment from acquired companies. This is similar to the migration point above and suffers from the same issues. Additionally, the percentage of companies that this applies to is low.
  • Reduced training costs: PSIM vendors believe instead of learning how to use an access control management interface, VMS interface, etc., one can just learn the PSIM interface. However, the savings are not going to be that significant, especially compared to PSIM's high price tag. Plus, while users might primarily use a PSIM interface, they tend to be simplistic and will still require the use of the subsystem interfaces for many operations.
  • Operational management improvements: While PSIM vendors talk about how they can improve operations, like alerting on camera failures, most of these claims can are easily done by existing, far lower cost systems in place.

Certainly benefits do exist, especially for really big organizations that are migrating large systems, acquiring sizeable companies, managing response of guard teams against real time intrusions, etc. Yet even for them, the ROI will be fuzzy. However, the money allocated to security in such organizations often can cover the high PSIM price tag.

Postscript: PSIM Excuses

IMS has a great laundry list of excuses for PSIM's poor growth. Let's break them down:

  • "Limited awareness identified as the greatest inhibitor of market growth." This is the classic, "No, you're wonderful, everyone else is just missing it" excuse. Contrast this to our integrator survey statistics, that showed overwhelming integrator awareness, just simply dissatisfaction with the value proposition.
  • "Confusion over the definition of PSIM" Many are confused about HD vs megapixel but since the value is clear, the growth is strong.
  • "A lack of new entrants in the market." That's because growth is disappointing, profits are fairly non existent.
  • "High barrier to entry" Ironically, it is the opposite. There are dozens of little PSIM providers around the world, who grow small software development businesses into PSIM applications (e.g., a local government organization pays the local company for custom integration of a few security systems and then they package it for others). The problem is not getting in, it's scaling up to the mass market, which no PSIM provider has truly achieved.

Only two drivers make business work - increase value or decrease cost. While PSIM has been around for a long time, the value remains very limited. If PSIM is to truly go mainstream, it will have to come at dramatically lower prices, which bodes poorly for today's crop of PSIM focused providers.

Comments : PRO Members only. Login. or Join.

Related Reports on PSIM

Prysm PSIM Profile on Mar 05, 2019
A decade ago, PSIM promised significant potential but has always suffered from significant problems. Now, a number of PSIMs have either gone out of...
Directory of Video Surveillance Startups on Jul 18, 2018
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known entity...
IFSEC 2018 Final Show Report on Jun 20, 2018
IPVM attended the IFSEC show for the first time this year. The Chinese took over the show, centered on Hikvision, flanked by Dahua, Huawei and a...
N3N "Truly Open Visualization Platform For Physical Security" Profile on May 09, 2018
A Cisco-backed startup, N3N, claims to deliver "the world’s first and only truly open visualization platform for physical security." The company...
Anixter Acquires 'PSIM Platform' Inner Range - "Heart of Our Technology Differentiation" on Apr 30, 2018
Anixter Security has made a bold move, acquiring what it calls a PSIM platform as part of a $150 million deal, with Anixter's CEO Bob...
Genetec Citigraf Big Data Platform Analyzed on Oct 26, 2017
A big industry debate is whether VMS software is now a commodity. However, Genetec believes it can charge a substantial premium for higher-end...
ASIS Show 2017 Final Report on Sep 27, 2017
ASIS is in Dallas for 2017 and this is our final show report (compare to our 2016 ASIS show report). When walking in, one is greeted with Dahua's...
CNL PSIM Profile on Sep 06, 2017
CNL has been one of the strongest advocates for PSIM, as one of the earliest entrants into the market releasing their command and control software...
Genetec Mission Control Tested on Jul 13, 2017
Genetec continues to move up market with their Mission Control, "Decision Support System", bringing PSIM-like procedures and incident management to...
Security Threat Analysis Via Twitter - Dataminr Profile on Apr 10, 2017
Increasingly, large enterprises are using Twitter's datastream as a source of threat intelligence. While Twitter is filled with the noise of...

Most Recent Industry Reports

IBM / Genetec Surveillance System Investigated Over Philippines Human Rights Abuses on Mar 22, 2019
A lengthy investigation into an IBM video surveillance project in the Philippines, raising concerns IBM helped local police conduct a bloody...
Eagle Eye Favorability Results 2019 on Mar 21, 2019
Eagle Eye has been the biggest spender in the cloud VMS market including (via their owner) acquiring Brivo for $50 million and CameraManager from...
Large Hospital Security End User Interview on Mar 21, 2019
This large single-state healthcare system consists of many hospitals, and hundreds of health parks, private practices, urgent care facilities, and...
Silicon Valley Cybersecurity Insurance Startup Coalition Profile on Mar 20, 2019
Many industry people believe cybersecurity insurance is not worth it, as the voting and debate in our Cybersecurity Insurance For Security...
Covert IP Camera Shootout - Axis, Hanwha, Hikvision, March, Vivotek on Mar 20, 2019
Covert cameras were one of the last holdout areas for analog cameras. However, in the past few years, IP / HD covert cameras have become...
Top Metrics For Ensuring Integrator Profitability - Statistics on Mar 20, 2019
How do integrators ensure the profitability of their projects? As part of our profitability study, 100+ integrators answered the following...
Avigilon Launches 'Renewed Products Program' on Mar 19, 2019
There are lots of 'pre-owned' cars but pre-owned IP cameras? While such programs are common in other industries, in video surveillance, they are...
Genetec Security Center 5.8 Tested on Mar 19, 2019
Genetec has released Version 5.8. This comes after a wait of more than a year that caused frustrations for many Genetec partners. Our previous...
Retired Mercury President Returns As Open Options President on Mar 18, 2019
Open Options experienced major changes in 2018, including being acquired by ACRE and losing its President and General Manager, John Berman who...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact