Should You Use Software-Only Video Management Systems?

Author: John Honovich, Published on Oct 30, 2008

Software only has lots of the momentum. But should you use software only? While DVR/NVR appliances are increasingly viewed as antiquated, over 80% of end users still chose traditional appliances over software only.  Are those buyers wrong?

Here are the key advantages of software only:

  • Lower costs and more flexible for large camera counts (32+) within a high speed LAN (1Gb/s+)
  • Lower costs for all IP camera deployments

However, appliances have advantages for certain scenarios:
  • Less expensive for low camera counts (16 and under)
  • Simpler and cheaper setup for Distributed stores/branches (e.g., bank branches, restaurants, convenience stores, small box retailers)
  • Lower costs for Analog camera deployments

I project users choosing software only video management systems will increase from approximately 20% today to 50% in 2013.  However, a large segment of the industry will continue to use appliances as they provide better value for key applications.  I project that the use of appliances will only be eliminated when managed video matures.  However, managed video may not become dominant until the end of the next decade (i.e., 2020).


The most important elements in evaluating software only are:
  • Appliance vendor profiteering has made software only very attractive
  • IT does not require software only but they object to appliance vendor profiteering
  • Appliance offerings are improving, making the choice more competitive
  • Software ony setup is complex and time consuming (relative to appliances)
  • Software only generally requires the use of encoders to support analog cameras
  • Appliances do not block 3rd party software integration
  • For the next 5 years, appliances will be very attractive to almost 50% of the market
  • In the far future, software only will dominante with managed video

Appliance Vendor Profiteering

DVR vendors, as a whole, have screwed their customers for years with the sales of appliances.  The markups on hardware that manufacturs applied and then the further markups that the dealer applied resulted in $1500 USD PCs being sold for $12,000 USD. Now, of course, this includes the software licenses to manage the video but even with that factored in, if you built this yourself, you could literally cut the cost in half.  Even today, you see this with the major brands like Intellex where an extra 1.2 GBs of on-board storage costs an extra $2,000 - $,3000 more (when the cost is only 1/10 the price).

For deployments with a few hundred cameras, software only could reduce the cost by $50,000 to $100,000 USD.

Fundamentally, I do not believe appliances are bad. However, appliance vendors have tended to control their customers, giving customers incentive to move to software only vendors whose business model was more favorable.

IT Does Not Require Software Only

IT uses appliances all the time - router, switches, firewalls, cameras, video conferencing units, video encoders, etc., etc.  I do not believe IT fundamentally objects to appliances - what they were objecting to was the high cost, poor security and the poor design of DVR/NVR appliances.  Many DVR appliances in the past 5 years were simply software loaded on no-name hardware and marked up dramatically. 

Appliance Offerings Are Improving

Numerous DVR/NVR appliance manufacturers (especially newer entrants) realized these problems and set to fix them.  For instance:
  • March Network's appliances run on Linux, are puprosed built computers for video surveillance (e.g., built in battery back up, docking station for easy maintenance, etc.). They were also sold at significantly lower cost than traditional DVRs and ideal for 16 cameras or under.
  • Steelbox apliances are optimized for very large scale deployments (1000s of cameras).  Individual appliances can support up to 500 cameras at a cost of less than $70 per camera (hardware and software included). Read my review of Steelbox to learn more.
Because software only has been so successful, appliance vendors have to respond or face being wiped out. While some appliance vendors will fail, as a segment, the survivors will sell much more reliable products at much lower costs.

Software Only Setup is Time Consuming and Complex

DVR/NVR appliances are almost plug and play. Even if you know little or nothing about PC internals, OS setup or IP networking, you can set up an appliance in very little time and with very little trouble.

Despite being plug and play, appliances are rigorously tested and optimized to work for the specifications set.  A team of QA engineers constantly performs hundreds of tests to find any hardware incompatabilities or issues in scalability or load.

With software only, the on-site integrator needs to handle all of this by themselves.  This is not meant to be a scare tactic.  If you are a strong IT technician, you should be able to do this with moderate tuning and training.  However, this is a significantly most costly and risky process then using appliances.

Indeed, why do you imagine Cisco sells router appliance rather than simply router software?  Appliances do reduce risk and labor to do on-site optimization.

By contrast software only setup requires IT expertise.

Software Only Requires Encoders for Analog Cameras

If you are only using IP cameras, then this is not an issue.  And in the far future, when almost everyone is using IP cameras, this point does not apply.  However, today, when 80%+ of the cameras are analog, this is a significant issue of cost and complexity.

Encoders are more expensive than using built-in encoding cards that are part of the DVR appliance.  On a per channel basis, using external encoders with software only costs $200 - $400 USD.  By contrast, that cost is usually only $50 - $100 USD for built-in encoding cards.

Moreover, appliances need to be configured separately, assigned IP addresses and are another device that may fail.

As such, end users should be cautious about deploying encoders and factor in the extra cost and complexity of these devices.

Appliances Do Not Block 3rd Party Integation

A widely spread fear is that DVR/NVR appliances block integration with 3rd party systems (like access control or intrusion detection).

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

For 3rd party integration, there is absolutely no technical difference between applainces and software only offerings.  One can just as easily use an API from an appliance as from software only.

The 'truth' in this fear is that a lot of appliance manufacturers have attempted to control and lock in their customers to only the 3rd party devices the appliance manufacturer favored (usually other devices made by the manufacturer).

End users should absolutely check vendors on this element but they should be scared into thinking that appliances do not support 3rd party software.

Appliances Will Continue to Be Attractive

For branches and distributed offices (like banks, convenience stores, restaurants, small box retailers, etc) with 16 cameras or less, appliances will continue to be very attractive and the dominant choice.  The easier setup and the lower cost will be the key factors. Appliances have also come down in price and their IT Security and reliability have greatly improved.  All of this will keep appliances very strong in these segments.

Appliances Will Only Be Eliminated in the Far Future

The reality is that deploying appliances and setting up software only servers both have risks and challenges.  The ideal future is one where end users do not have to store and manage video on their sites. However, this will require a massive decrease in the cost of WAN bandwidth which will only happen over a long time period. When this does, local video management systems will start to dissapear and be replaced by large-scale data center run by customized software running in server farms.

However, that day should not affect anyone's purchases for the next few years.

Conclusion

While the uptake of software only will continue to grow for large-scale camera counts, appliances will remain an important and favored choice for distributed facilities and small camera counts.

3 reports cite this report:

Storage Manufacturers Enter NVR Market on May 14, 2010
Competition in the NVR market is heating up with a number of new options for video surveillance professionals to consider. In the last few months,...
Video Management Software Comparison on Jan 21, 2009
Compares Milestone, OnSSI, Genetec, Cisco, IndigoVision, DvTel and Verint. This 6 page report examines key strengths and weaknesses for each of...
How much does Video Surveillance Cost? on Jan 11, 2009
This report provides rough estimated prices for video surveillance products and systems including cameras, video management systems, video...

Related Reports

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...
Key Control For Access Control Tutorial on Apr 16, 2018
End users spend thousands on advanced systems to keep themselves secure, but regularly neglect one of the lest expensive yet most important aspects...
GDPR For Video Surveillance Guide on Apr 12, 2018
The European Union’s General Data Protection Regulation (GDPR) comes into force on May 25, but there is much confusion and no clear guidelines on...
Hanwha Mega ISC West Product Releases on Apr 05, 2018
While overall new product releases have been slowing over the past few years, Hanwha is releasing a slew of 6 new offerings for ISC West,...
VMS New Developments Spring 2018 (Avigilon, Exacqvision, Genetec, Hikvision, Milestone, Network Optix) on Apr 04, 2018
What's new with VMS software? In this report, we examine new features and releases for Spring 2018 to track different areas of potential...
Brivo 'Buy Now' Online Campaign on Mar 26, 2018
Brivo has a new marketing campaign running across the web: Are you ready to buy access control now? Brivo tells IPVM this is a new campaign,...
If You Have 4 Cameras, You Can Throw Them Away, If You Have 400, They Throw You Away on Jan 19, 2018
Do users care about anything but price? Do user care about cybersecurity? Do users care about trusting their supplier? These have become...
Anixter End User Sales Troubles on Oct 23, 2017
End user sales have and continue to be a major problem for Anixter's physical security business. Every year, according to various Anixter people,...
Buy From B&H, Ship Direct From ADI on Oct 16, 2017
B&H, one of the largest online sellers of video surveillance equipment to end users, regularly purchases their video surveillance equipment...
Universal HD Analog Encoder Tested (DW Compressor) on Jul 06, 2017
Digital Watchdog has released the Compressor HD, a "universal" HD analog encoder, with support for AHD, CVI, TVI and SD analog cameras. We tested...

Most Recent Industry Reports

IFSEC Show Report Day 2 Report on Jun 20, 2018
IPVM is live from London reporting on the IFSEC show. The Chinese have taken over the UK, centered on Hikvision, flanked by Dahua, Huawei and a...
Mobotix Releases 'Move' Into 21st Century on Jun 20, 2018
For years, Mobotix stood resolutely against, well, every other manufacturer, selling it as a virtue: MOBOTIX equipment is designed with no...
Cybersecurity Startup VDOO Disclosing 10 Manufacturer Vulnerabilities Starting With Axis And Foscam on Jun 20, 2018
Cybersecurity startup VDOO has uncovered significant vulnerabilities in Axis cameras along with many others not yet disclosed. In this report, we...
July 2018 IP Networking Course on Jun 19, 2018
The last chance to save $50 on registration is this Thursday, June 21st. Register now and save. This is the only networking course designed...
Axis Guardian - Cloud VMS And Alarm Monitoring - Released on Jun 19, 2018
Axis has struggled to deliver a cloud-based managed service video platform. Video service providers have utilized AVHS for over a decade, and have...
IPVM Vulnerability Scanner Released on Jun 18, 2018
IPVM is proud to announce video surveillance's first and only cybersecurity vulnerability scanner. This tool allows quickly and simply...
Hikvision Corrects False Cybersecurity Announcement on Jun 18, 2018
Hikvision has corrected a false cybersecurity announcement that claimed a British government-sponsored program endorsed the cybersecurity of...
The Dumb Ones: PSA's Bozeman On Cybersecurity on Jun 15, 2018
The smart ones are the hundred people who flew to Denver and spent $500+ on a 1.5-day conference featuring Dahua as a 'cyber responsible partner',...
Amazon Ring Launches $10 Monthly Professional Alarm Monitoring on Jun 15, 2018
Amazon's Ring has announced an alarm system with 24/7 professional alarm monitoring for $10 per month, a fraction of the $30+ per month traditional...
Axis Releases First New Access Controller In 5 Years (A1601) on Jun 15, 2018
It has been 5 years since Axis 2013 entry in the physical access control market, with the A1001 (IPVM test). Now, Axis has released its second...

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