Cost was, far and away, the number #1 cited problem in going to IP cameras / video. We asked over 100 integrators to name the "3 biggest problems / barriers" they found, allowing them to name whatever they wanted. Over and over, the top one entered was cost.
Here's how the answers roughly broke down:
Some of the color provided included:
"Price Price Price" listing it for all 3 reasons
"The only reason is cost"
"Cheap prices of analog system is attractive for many customers"
"Although IP cameras are coming down in cost, analogue is still much less expensive generally."
"Expense of having to replace legacy head end equipment such as analog DVRs or making an investment to a pure VMS system."
Indeed, most people simply listed just a single word - 'cost' or 'price'.
By contrast, the overwhelmingly top cited benefit was megapixel / high pixel count.
On the positive side for IP cameras, unlike a few years ago, there is no doubt that it is 'better' than analog. Higher pixel counts, panoramic imaging, edge recording, far improved low light performance, the wealth of form factors and manufacturers to choose from all make IP cameras the clear choice for high end surveillance.
On the negative side, it is clear that especially at the lower end of the market, that analog suppliers, typically newer Asian based entrants, are successfully selling extremely low cost analog kits (e.g., 4 cameras and a recorder for $400 or $500, or a 16 channel DVR in that same range).
For us, these survey results help identify areas where we can better focus our resources in identifying low cost offerings. For suppliers, this should help reaffirm the importance of developing new products that bring down overall cost.
systems should be sold on solutions and not price... with that being said it comes down to qualifying potential customers on the benefits of megapixel vs analog, this is the responsibility of the dealer...
Keefe, that is one area that I think IPVM can help - more in-depth analysis of entry level quality analog system vs MP/IP one. We did a DVR vs VMS comparison 2 years ago that showed how good one entry level DVR had become but we can certainly do more.
When installers say that cost is an issue with IP Video they actually say 'i do not understand how to make money on other things as on HW'.
The reality is that when IP manufacturer x lower his price to whatever the installer will probably not give this back to his client. Am I right?
Most installers have to start accepting that the days of making your money on HW are gone. And that's in essence where they complain about. Its not price what they name the '#1 IP Camera Problem' its 'not understanding' ip video.
There are so many great possibilities with all these connected security devices, with all that data coming out of devices. Think about what mobile will do to security or the cloud, That are the new business models.
Most IP Cams have a reasonable price when you take in consideration all the stuff that is build in, and what you can do with a device like that.
The new reality is here and it will be here faster as many of us expect. Start focussing on 'services' 'data', not on the cam pricing or your HW costs. A good exercise is stop thinking about 'the picture'. We all know that we can get xxx Megapixel. but what do we see in that picture, whats the story. And what sort of services I can build around that.
Its not about the picture anymore but about the data and information in that picture, how to share this info with the right people and the story around that picture.
"Most IP Cams have a reasonable price when you take in consideration all the stuff that is build in, and what you can do with a device like that."
Perhaps, but how does all that extra stuff tie into a customer's value proposition?
To leverage something as simple as video/cash register synchronization requires us to upgrade cameras, VMS, cabling (RG6U to Cat5e or better), cash registers (from stand alone to integrated), and back office integration (otherwise where does all that front-end integration go?). Pretty soon the cost is perhaps around $50K or so.
Where is the value added to a Mom and Pop establishment that grosses well under $1M/yr?
It would be nice to see value-added use cases called out more clearly. For example, we're frequently discussing technical and surveillance market issues, but compelling business cases for surveillance are discussed much less frequently. Perhaps it's just assumed that surveillance will sell? Obviously at some level that is true, but this does not assure that it justifies the price premium of IP upgrade and holistic system integration, particularly for cases in which the customer already has an adequately functional analog system.
One might answer that IP upgrade is becoming less of a price premium, although that sidesteps the question of the surveillance business case.
For example, I found Michael Ladegaard-Pedersen's post here very very interesting. It would be interesting to see follow up details hypothesizing what such surveillance/business process matches might look like. Without getting specific to a particular customer, one wonders what sort of generalizations might be relevant across various types of businesses?
I have been selling and installing IP camera systems since 2005. We are a commercial systems integrator specializing in the healthcare, education, government, and industrial manufacturing markets. For me my general observation has been this, my large customers with deeper pockets clearly prefer IP VMS systems. For my smaller and medium size customers I often propose an IP and an analog solution and unless their needs determine that they need megapixel resolutions, 9 out of 10 times they choose the analog solution and cite cost as the reason for their decision, and it is not because they do see the potential benefits of IP. The fact is most small and medium sized business make decisions based more on cost as compared to my larger customer who makes decisions based more on capability and quality.
I have a client with very deep pocket and I was able to convince him to go for Sony MP cameras, but it wasn't easy. Price is definitely the #1 factor, next for me is the complexity as it involves the client's network in which everything that goes wrong with it I get to be blamed. Their internet access became unstable thereafter and they blamed me, actually accusing me of tampering with their network. They ended up hiring an IT firm to take over their home-based network.
We buy a FullHD Vandalproof Dome for 120 Dollar and sell it for 649 Dollar regular price and often we make a discount about 20%. It is only a little bit more expensive than analoge but it is easy to show the client the diffrence and he will mostly go FullHD. I would never buy from Axis, or Mobotix or another company who think I buy with 30% Reseller Discount :-) We make that to get money and I think the money has be won over the products too. Because if the client already spend alot of money for the procucts, he is not willed to pay alot for the work too. I try to do all with IP, but we still keep some nessesary cameras and DVR`s on stock. If you think my prices are crazy, I am in Switzerland ;-)
@Ronald: sure it's "cheaper" and "easier" up front to use an existing network, but as you found out, that caused other problems in the long haul. Building your own network is almost universally recommended for all but the smallest systems, and when you really think about it, it's not necessarily any more complicated than running analog: you wire direct from the camera to the head-end, with the only functional difference being, you're plugging into a switch instead of directly into a DVR.
What I find amusing, really, are the ones who balk at the cost and say that higher resolution is meaningless... yet they'll be the first to push a D1-capable system over one that only does CIF, and go on at length about the greater detail, etc. So wait, higher resolution is good, but only up to D1? Beyond that it means nothing? Riiiiight.
Yes, IP is more expensive, but it delivers more quality video. In a system, not all cameras need to be high definition or megapixel. For me, the best approach is to start with a hybrid system (some IP cameras, only where needed; all others analog). Infrastructure should always be a structured cabling system, so the user can migrate from analog to IP easily in the future.
Usually the problem is installers,integrators don't account for the amount of time it takes to properly set up the VMS side of the process.
analog is easier, faster, have less problems in the programming, and the networks side of the house.
Since we are accepting D1, CIF as a good picture, analog is a great system. I prefer IP/Mp, VMS systems. Reality is the universal problem is not cost, but technical ability to integrate properly. It takes a lot of time to set up, program, calibrate, install good IP systems. This factor drives up the cost
Not everyone has the background to complete the process.
Other issue as listed above is infrastructure and no one want to share their network. But like you explained above, Running your own, solves this issue. So in conclusion to this statement the real industry problem is not cost but technical aptitude
Jaime: that's exactly what we're doing these days: everything is cabled Cat5e and USUALLY terminated into patchbays, which allows any run to be used for analog or IP, and easily switched over.
We also use a unit that combines multi-channel balun and power supply in one rackmount box, so there's no need to mess around with splitting out wires for analog: just unplug the patch cable from the VPS box, and plug it into the switch, then swap the camera over. The camera gets a matching RJ45 balun with power pass-thru so there's no re-termination necessary at that end either.
The last big job involved a good quarter of the runs terminating in a remote closet, since runs directly to the main closet would have been over the 100m max for ethernet... the IP cameras terminate in a switch that then has a fiber link to the main closet; the VPS box in the remote closet allows uplink to another in the main closet using one Cat5e for four cameras, making the entire thing very modular.
This, for me at least, is a great benefit of IP cameras: you usually can home-run everything, but you don't have to; you have more options.
I think cost is still an issue but is becoming less of an issue. Soon it will not be an issue. Give it a couple more years and I think Analog will be pretty much dead. Alot of people disagree with that statement but it will be dead in 2 years.
What I would really like to see is the simplicity continue to improve. I look forward to the day that we no longer call IP cameras, "IP Cameras". Rather, we just refer to them as "Security Cameras" This is when you know IP cameras have finally dominated and Analog is no longer a player.
your customers home network may have become slower once you installed the system especially if you put all your cameras on the local network... for your next ip based install approach it the same way as you would an analog install, only the dvr goes on the network... so wire all your ip cameras privately into a seperate nic and then for local lan or remote wan put viewing have a second nic for that... that way not all of you cameras are streaming over the local network while they aren't being viewed that will reduce traffic on te network...
One other thing: It's not only the IP cameras high cost (compared to analog), but all the infrastructure needed: switches every 100m or the use of fiber. For long runs, this makes IP systems even more expensive. Think of some IP cameras that need to be installed in the perimeter of a factory. You would think of using fiber (but it requires a separate electrical infrastructure also), or wireless links (not very stable, and expensive).
Sean: I think that it will happen sooner than later as the current events in the world help drive the industry.
Every time you watch the news, you see more & more cameras outside, where as in the past, focus was on the inside. Sales drive cost down and to keep up with this, the companies want more innovative tactics for their share of the sales.
I personally don't like the old crappy cameras you can buy for nothing on the internet but thats whats available for a low cost.
Yeah I think it will happen sooner than 2 years to be honest, but I was being cautious.
@ Jaime: I disagree with you here. I think you have alot more flexibility with infrastructure for IP cameras. I think IP infrastructure costs are lower than analog equipment, especially when using POE. Its especially true on larger installs. We can usually get Cat5E alot cheaper than we can Siamese Cable. Most analog cameras nowadays use 12V DC and you will struggle to get a good power distribution past 200'. With POE, you can go a little over 300'. Not to mention, its alot easier to get multiple IP camera feeds over one cable than it is with analog, for those special scenarios.
Tobias, you say, "We buy a FullHD Vandalproof Dome for 120 Dollar and sell it for 649 Dollar regular price and often we make a discount about 20%" That's an incredible markup!
Sean, I do think the gap can be significantly narrowed at the low end, it primarily takes focus for manufacturers. As we have discussed before, Dahua is a good template for this. Plus traditional high end players, like Axis and Milestone, are making stronger efforts with, respectively Camera Companion and Arcus.
Sean, if you are wiring analog cameras the conventional way, you are right. But as Matt mentioned, you can use just one Cat 5E cable for video/power/data per camera, and depending on the camera consumption, you can go as far as 1,000'.
Cost is the #1 sticking point for IP. It just is. Even with free VMS software and low cost cameras (i.e. Axis M30 series), you are still fighting an uphill battle.
My sales pitches are now almost entirely about education. I walk customers through PPF, light-sensitivity, motion-blur, and WDR concepts. This takes nearly an hour. Only then do I get into implementation details. I use JVSG to create an ideal layout using MP cameras, showing them coverage and PPF throughout. I then duplicate the JVSG layout and reduce all cameras to D1 resolution. This really helps the customers understand WHY they want to spend more.
Convincing customers to set aside 1.5 to 2 hours for a pitch is never easy, but I have had more than one say the appreciated me "talking them into it". It becomes a key differentiator on two fronts: 1) I care enough to spend the time educating them. 2) I prove my competency.
It is not a 100% effective strategy. Some customers think any argument for spending even a penny more is just trickery. We lose those bids. When we win though, we have a customer that values what we bring to the table and is willingly paying a premium for competent quality work.
I always thought that once these small cut rate chinese manufacturers start making IP cameras, that is when it will change the market. And they already have started making them. Some are making them with the same exact components as what the bigger manufacturers are making them with, Aptina Imagers, TI processors, etc. But for half the cost. The web interfaces pretty much look like diareah but the image quality is great. Give them a few more months and some will have a decent product.
I have to compare this with the flat screen TV industry. When flat screens first came out, they were ridiculously expensive and resolution was so so. Then they started coming down in price to where they were very affordable and the image quality was great as well. And while they were still more expensive than the tube TV's, the price difference was so minimal compared to the quality difference that you get. And now you dont really see tube TV's being sold anymore. This is where I see analog going, IMO. For those people needing no latency, SDI or some other technology will be the choice.
we only quote cameras systems megapixel... my thought are so strong towards mp i believe it sends a clouded message to our potential customers if we were to show them analog only as an option for price based sale...
What helps us close the deal on Megapixel is we will show them 2 cameras in the same type of field of view. The first one is from a 700 TVL analog camera and I explain to them that this is the highest resolution you will ever get from analog. Then I show them a 1080p image and they usually get blown away and the thought of buying analog quickly diminishes. Also, when I am showing them this, I make sure to show them through the remote viewing software as opposed to the actual monitor that is attached to the DVR. Because through the remote viewing software, you are seeing the analog cameras encoded video which looks worse than the live uncompressed video on the monitor that is attached to the DVR. Because really, its the encoded video thats the most important because thats what you are going to see on playback anyways.
@Steve, I think it would be particularly useful if the platforms were otherwise the same (i.e., here's brand x - analog option and brand x mp option, the other features are basically identical). But if it was too different manufacturers, it could get confusing as it might be hard to understand what you get (or lose) respectively.
Keefe, thanks for bringing that up. See our survey results on leasing video surveillance systems. In general, leasing in surveillance is far far less common and desired than the intrusion business. That said, our results show that what little take for leasing occurs in surveillance typically happens for smaller sized businesses. Indeed, the VSaaS suppliers are hoping that monthly fees for hosted IP video will help. I am not optimistic about that, simply because if what a customer really wants is low cost, a few hundred dollar DVR is almost always much cheaper than VSaaS fees for even the first year (e.g., VSaaS ROI examined).
I have to echo Sean's comment above - easiest sale I ever made (and I'm really just a tech, NOT a salesman) was when we were in the middle of one of our first MP installs using 1.3MP cameras, and I'd taken some screenshots of the views... when I stopped by another customer's site, I pulled the pictures up just to show him, "this is what we're working with now." I wasn't intending to make a "pitch", but he took one glance and said, "I want that." And we promptly added three IQ511s to his site.
No, it's not 100% effective... but a lot of people will just glaze over when you start throwing lots of numbers and calculations and statistics at them. Images in this case, really are worth 1000 words.
At the end of the day, everyone knows that image quality is what matters and not every location requires megapixel. So a mixture of analog & megapixel will provide the best value to the customer. This then requires a tight interoperability between all of the equipment and a VMS that connects everything together. [EDITOR DELETED: sentence removed was shallow and obviously promotional.]
Wanchai, that's an interesting point about what locations need megapixel. As a rule of thumb, I recommend that if someone needs a FoV wider than 10 feet, that megapixel will have clear benefits (based on PPF estimates). At 10 feet wide, with SD, that's 64ppf, getting to the level where facial details start getting fuzzy even in ideal lighting conditions.
The problem is most locations want to cover FoVs wider than 10 feet. Most spaces are fairly big - 20+ feet wide FoVs are typically common. Those clearly benefit from megapixel.
If everyone adhered to the rule of FoV > 10 feet = buy megapixel, then analog would be dead years ago. Yet analog products are still flying off the shelves due to partly the higher price of IP.
So in the real world, the equation becomes how much does the customer values that particular area and whether the additional costs are justified.
Obviously, having this mixture of analog and IP equipments will be difficult for the integrators to install and to find a suitable VMS. I gues that is where integrators show their value compared to a pre-packaged box from Walmart.
I have to agree John, its still flying off the shelves. Atleast for us and a few other colleagues in this industry that I talk to that are much bigger than us. It contributes to 2 main things in my opinion:
#2) confusion about IP
For example, we have a few customers, where cost is obviously an issue. They want the cheapest thing. Their thinking is, we can get twice as many analog cameras as IP for the same price. I think that crowd will change over soon.
The #2 Reason is another reason why some of our customers wont switch over. Some of our biggest customers still are all hard-core analog. Its what they are used to and how they built their business. Cost is not an issue. They are still buying Speco analog cameras that cost more than what we can sell them 2MP IP cameras for. These is frustrating to me because they are missing out. But they are just too nervous to make the jump and just dont want to deal with the networking hassle.
I look forward to the day that i no longer have to carry analog.
Sean, I was speaking about the market as a whole. Obviously, within a market, individual supplier performance will vary. Look at DM, they are doing horribly but they are clearly an outlier on the negative side. Overall, though, analog sales are declining in the US.
One interesting 'subplot' I think is that suppliers like yourself are stealing share away from the traditional 'higher end' CCTV vendors. IP has done strongest there and those suppliers have been forced to shift harder to IP (whether they wanted to or not).
Btw, I agree about the example of customers with existing infrastructures. Beyond being nervous, many have a big investment in existing platforms and are reluctant to make major changes. Plus since surveillance systems frequently last 7 - 10 years, it takes time, regardless of how good or bad newer technology is.
LOL, don't take my words for it, ask some of the major surveillance distributors about their sales numbers.
I find it hilarious that I have to justify analog sales numbers on an IP forum, especialy when I'm actually in charge of the IP product lines at my company. It is just as frustrating for me that people are still buying analog.
The view of our comany is that people will continue to buy analog, all we can do is provide a seemless transition to IP by broadening our product lines, so whenever they are ready to move forward, they can come back to us.
Wanchai, look at your own company's (Everfocus) revenue numbers for the past 4 years - flat, right? That's not a sign that 'analog is flying off the shelf' If it was truly flying, I would expect to see growth, no? Presumably, your IP has been growing in that time, masking the decline in analog. Yes/no?
Actually, I later told my client to go ahead and disconnect everything related to the IP cameras and alarm system and to keep only his wireless devices. The problem did not go away, proving the problem had nothing to do with me. To this day, he hasn't told me what the IT company found as being the problem. I'm left in the dark. I suspect wireless interference somewhere, possibly with one of the routers I installed.
>Building your own network is almost universally recommended for all but the smallest systems,<
Do you mean to connect the IP cameras to their own dedicated router?
Growth does not equate flying off the shelf. Everfocus sales may still be the same but you do not know that IP is increasing at the expense of of analog. You do not know every details of their financial situation to come to that conclusion.
HD-SDI will overtake analog and replace it. Cameras are equal now, just waiting for DVRs to do the same. There i said it. I am a HD-SDI supporter.
I completely agree with your thought basis on "Education" The hard part as you mentioned is getting an audiance for 1.5 - 2 hours. I think that much undivided time by any potential is to much. You will lose them after 30 - 45minutes to information overload.
PPF - WDR - Resolution - Compression etc can be conveyed in 30 minutes give or take depending on your audiance. If they are engaged, an hour. If there are IT people in the room who have decision influence (and there usually is ) best to have your ducks in a row. Most of us who sell/install IP based video (native) know enough by now. If you dont - keep coming it gets better. (not directed at you James)
I do love the A/B comparisons using JVSG. Good idea....... I will lead with that. Thats an attention grabber right from the get go.
@Ronald: "I suspect wireless interference somewhere, possibly with one of the routers I installed."
Wireless interference should only affect wirelessly-connected devices, though... it shouldn't have any effect on hardwired devices (unless their path goes via a wireless bridge somewhere).
>Building your own network is almost universally recommended for all but the smallest systems,<
Do you mean to connect the IP cameras to their own dedicated router?
I mean IP cameras should generally have their own dedicated network. I wouldn't normally use a router for that, as they don't usually support a lot of LAN bandwidth... plus, most of them are four ports, and four IP cameras should not cause a significant hit on most LANs.
If I was putting a number of IP cams in, say, an office building, I'd put them all on their own switch, along with the DVR/NVR. IF the client wanted it accessible from their LAN or the internet, I'd then connect that switch into their network.
This way, the camera traffic will have no effect on their network, or any of their switches/routers - it's all contained within your dedicated infrastructure. The only traffic their system would see from it would be client connections to the DVR.
From a consultants point of view who works in the higher end market, I would not recommend anything but IP cameras and the minimum is HD 720p. Once the client sees the difference in image quality, they see value in spending the extra money. Most of the clients I work with approach me because they are unhappy with the fact they have difficulty identfying target objects with the resolution an analogue camera can be recorded at. This is particularly true in shopping malls where wide angled views are gernally used. The benefit of the 16:9 aspect ratio, higher resolution image and greater dynamic range a HD camera delivers is also attractive. In regard to low light sensitivity they are getting close to matching similar market level analogue cameras if not exceeding in some of the demonstrations I have witnessed.
As we have seen in the CCTV market, as the uptake of technology increases the prices come down so I expect HD resolution camera prices will drop in the near future.
The other cost involved in converting to IP is the backbone network. In this area there is an opportunity for the property owner to invest in a multi platform supporting optic fibre backbone which can then be used to carry other services such as Building Control, Lighting Control, Audio systems, etc.
The best way to justify Analogue v IP is the aspect ratio acheived. With Analogue you will get 4:3 and would be displayed as 'Stretched' or 'Bordered' on LCD monitors, which looks pretty bad. IP systems give you an aspect ratio of 16:9 perfectly fitting standard wide screen monitors which gives a clear and crisp image. Basically you get 25% more image with IP being 16:9 than analogue at 4:3 not too mention the extra pixels and abilty to digitaly enhance the image clearly for investigation. Chalk and Cheese don't you think?
I don't see how the aspect ratio would do anything for the number of pixels in the image. I have a 3MP camera that has a 4:3 aspect ratio, that does not mean that your 1080P 2MP camera has clearer or crisper images.
On the contrary, our analog business is growing while our IP business is staying stagnent. We have no idea why because the picture quality of our new products are great. We even went as far as stocking network products (AF PoE switches, cat 5e cables, EoC tranceivers and soon SFP fiber tranceivers) so that the installer can buy the complete solution that has been tested to work together. Now that you've conducted this research, I guess it is still the costs.
The true reason our revenue has been flat is because the analog units have become much cheaper over the years due to Chinese competition. However, the number of units sold has been a pretty steady growth. This of course also causes our gross profit to decline.
Wanchai, thanks for the feedback. In the last 4 years, IP cameras sales have increased tremendously both in terms of units and volume. For example, here's Axis financials for the same time period as Everfocus's. That's 80% total growth and ~$300 million increase in dollar terms. They are not alone - think about how much bigger are IP centric companies are in that time frame (and it's not as if IP camera average prices are increasing).
To the extent there's a problem with Everfocus in IP, it's an Everfocus issue. You can't be suggesting the market in general has not vastly increased its adoption of IP in the last 4 years?
@Tim: the aspect ratio debate has been done to death. It's pointless. Not all HD cameras are 16:9, for starters. Second, for every argument that 16:9 gives you more horizontal pixels, there's a matching argument that 4:3 gives you more vertical pixels. Some scenes are better suited to wider aspects, some aren't. It's circular and meaningless.
@Sean: re cheaper SDI: Great, that means he-whose-product-shall-not-be-named will become insufferable. (Okay, MORE insufferable...) If he still has access to read this discussion, I bet he's losing his mind not being allowed to post.
@John, @Tim: I still maintain the ideal camera sensor, whether for CCTV, still, or video cameras, would be round. Lenses project a round image, and anything less than a round sensor is losing SOMETHING from it. Capturing the ENTIRE image would allow the user to crop it any damn way he sees fit.
I am not arguing that IP has not been growing, in fact I'm not arguing at all. I'm simply stating the fact that people are still buying analog. Hundreds of DVRs are leaving our warehouses daily and we are not shipping to China.
So in order to present the best value for customers who has limited budgets, buy analog for the less important areas and megapixel for the critical ones. The installer will then have to find a way to make everything work together.
One day, the customer will see the difference and decide to upgrade. As a manufacturer, all we can do is provide a full suite of products from analog, HD and IP that all work well together and is less painful for the installers to upgrade. Hopefully that translates to savings for the customer.
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