2010 Spring Surveillance Trends

Author: John Honovich, Published on Apr 01, 2010

Emerging from ISC West, a number of clear trends will likely impact purchasing decisions over the next 12 months. In this premium report, we examine the 6 key factors, including positive and negative trends

Poll: Which trend will have the most impact on video surveillance purchases in 2009?

  • Megapixel Cameras: 58%
  • Hybrid DVRs: 20%
  • Video Analytics: 9%
  • Intelligent/Advanced Storage: 7%
  • Other: 6%

[With 100 responses, poll is now closed. Poll is not scientific.]

Positive Trends

  • Widespread hybrid DVR product releases shifts video recording purchases
  • Widespread H.264 megapixel camera product releases shifts camera purchases
  • Lenel/OnSSI, Arecont's Price Cuts and Avigilon's open IP support impact competitive positioning of camera / video management vendors
Negative Trends
  • Lack of innovation in video analytics signals worse short term future
  • Over hype of high end storage (Pivot3, Intransa, TimeSight) will result in disappointment
  • Over hype of PSIM will result in disappointment

Definition of Emerging Trends

Our focus is what products or technologies will have the biggest short term impact (1 -2 years), not what will revolutionize the industry in the long term. The goal of this is to help industry professionals identify what products or companies are most worthy of immediate consideration for purchasing or partnership.

Determining what is Hype vs. Real

While manufacturers spend heavily on hype, the most powerful emerging trends are almost always driven by rapid product advancements. Since the trade press amplifies vendor pronouncements, vendor marketing dollars easily and repeatedly distorts positioning in favor of companies marketing heavily. Unless those pronouncements are accompanied by major advances in technological capability or reductions in cost, the likelihood is high for disappointment.

Real trends consist of technological advances adopted by numerous vendors making it easy and inexpensive to deploy the new technology.

Example: Contrasting Megapixel to Video Analytics

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5 years ago, video analytics was viewed as far more exciting than megapixel cameras. However, it's clear now that megapixel is far more important and widely used in video surveillance than video analytics. Why was video analytics the hot product then? Answer: Because that's where the VC money was. Startups had tens of millions to spend on sales and marketing and they successfully used this to generate hype. However, when you contrast the technological progress, megapixel's advances have been dramatic where video analytics has not changed substantially. Because of that, camera vendors are all rushing out megapixel products now.

With this approach, let's examine the key trends:

Trend 1:  Widespread hybrid DVR product releases shifts video recording purchases

Hybrid DVRs offer a less expensive migration to IP video. We have been previously discussed advantages of hybrid systems and how hybrid systems are helping DVRs make a comeback

What ISC West and the last few months showed is that many manufacturers are releasing hybrid products. The traditional valid objection to hybrid DVRs is great concept but limited product offerings. This is clearly rapidly changing with a number of recent announcements:

Not only are the number of options increasing but the price point is also decreasing. By the end of this year, there will be many options on the market for 16 channel hybrid DVRs for dealers to purchase at $3,000 USD or less.

This will help incumbent manufacturers somewhat but also newer entrants of DVR appliance manufacturers who have concentrated on hybrid from the beginning. As hybrid DVRs become more available, expect software only providers to be pressured to provide a hybrid offering of their own.

Trend 2: Widespread H.264 megapixel camera product releases shifts camera purchases

For the last year or two, megapixel has become an increasingly popular (and fast growing option) for security buyers. We recently recommended megapixel as a key product offerings for success during the recession. Two key issues for megapixel cameras have been (1) limited manufacturer offerings and (2) the costs of using inefficient MJPEG for recording (H.264 cuts storage costs compared to MJPEG).

ISC West continues the explosion of new megapixel product offerings available, almost all now being developed using H.264 including:

With so many options now available, it will become significantly easier for existing deployments to use megapixel. Plus, megapixel and hybrid DVRs will reinforce the benefits of each other as they can be combined together in existing systems.

Trend 3: Competitive positioning of camera / video management vendors shifting

I see 3 new announcements from ISC West having a short term impact on the industry: Avigilon's support of 3rd party cameras, Arecont's dropping prices and Lenel OEMing OnSSI.

The main criticism against Avigilion has been their historical inability to support 3rd party IP cameras. Being locked in to only Avigilon's cameras has created anxiety in some and inability to support certain projects. By releasing support for 3rd party cameras, this will significantly expand the attractiveness of Avigilon and make it a greater threat/alternate to market leaders such as Milestone and Genetec.

Arecont has always been known for its low prices and its growth has been powered by that. Now, Arecont has publicly declared that they will lower their prices more on their H.264 line. Not only will this further increase Arecont's attractiveness, expect at least some of the less strong competitors match the price decreases. While this will be bad for margins, it should be good for buyers looking to start using megapixel.

Trend 4: Lack of innovation in video analytics signals worse short term future

ISC West demonstrated very little innovation in video analytics. The only company claiming any type of major advance was BRS Labs. As I wrote in my new product review, significant risks exist with BRS Labs both in terms of their ability to deliver on their claims and their capability to work cost-effectively with existing deployments.

None of the traditional large video analytics vendors (e.g., OV, ioimage, Agent Vi, Mate, Cernium, Vidient) had significant announcements. Perhaps it should not be surprising given the fact that a majority of them had significant downsizing/ adjustments in the last year. 

Nonetheless, without new developments and advances in video analytic performance, it is difficult to see what will drive video analytics in the near future. 

For contrasting coverage see SIW's update on video analytics. They claim that "most people in the industry believe the outlook for analytics remains good" however they go on to only cite people who sell video analytics. The article does show, that outside of BRS Labs claims, there is not much new. Plus, multiple manufacturers cite lack of education as a problem. Simpler to setup, more accurate products is the only long term solution to the perceived 'education' problem. Unfortunately, the new product announcements show that such solutions are not being broadly developed and released.

While I think video analytics as a segment will survive, it is clear that the original investments in video analytics were many years too early. It is likely to take another number of years before video analytics really becomes a major force in video surveillance.

Trend 5: Over hype of high end storage (Pivot3, Intransa, TimeSight) will result in disappointment

With Pivot 3 winning best in show and TimeSight winning best video surveillance device, ISC West will grow interest around video surveillance storage.

While storage is an important element in video surveillance, storage constraints are largely being overcome by (1) rise of software only cutting down storage costs, (2) natural fall in hard drive prices and (3) the use of H.264 for megapixel cameras. Software only as a viable option is cutting down the prices and restrictions traditional DVR appliance vendors imposed on customers. This is being seen in the pricing for the newer hybrid DVRs.

Pivot3 and TimeSight were both covered in the new products review.

While Pivot3's serverless computing offering can modestly reduce costs, the benefits tend to be limited to large camera counts in a single facility. Plus this adds additional complexity of managing the VMS application as virtual slices running on Pivot3's server array. I do think large sites should consider using it but it's not close to being a game changer as a Best in Show award tends to imply.

As for TimeSight, sophisticated buyers and integrators will find it very heavy on marketing claims but light on true differentiated advantages (see the new products review).

Similarly with Intransa, the marketing spend is high for their StarterBlock small site solution but the pricing is high relative to other simpler options.

A lot of momentum right now for these companies reflects their heavy sales and marketing spend from large VC rounds. While I think storage is an important element of video surveillance, I see most users continuing to use less exciting but good enough VMS systems and commodity storage (whether DAS, NAS or SAN).

Trend 6: Over hype of PSIM will result in disappointment

PSIM is a bizarre market segment. The technology suffers from the same problems it did 5 - 10 years ago but vendors keep pushing these solutions. This week, it resulted in coverage in numerous publications: PSIM Update from ISC West (from SIW), another PSIM discussion at ISC West and SSN discussing PSIM.

The challenge, though, is that the marketing does not reflect technology improvements. While PSIM suppliers add more bells and whistles, the products remain very expensive and difficult to integrate (see the problems of PSIM). None of the announcements at ISC West resolved or changed these fundamental issues.

Ironically, what would solve these problems is broadly adopted standards but not just for IP cameras. You would need standards for DVRs, IP video software, access control, alarm monitoring, etc. Once and if you had that, PSIM systems could become very widely deployed at low costs. Until then, this is destined to remain a product for high end use while most customers get their PSIM abilities as extra functionalities from their access control systems.

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