Hated for the last few years, DVR appliances will make a strong comeback in the next 12 - 18 months. It is clear that many providers are learning from the mistakes of the previous generation (new products are demonstrating this). Equally clear, the shifting economy will strengthen the business case for appliances and the mix of deployments that favor appliances.
Historical Problems With Appliances
To understand why appliances will become more attractive, we need to understand the historical problems that are being overcome:
- Lots of DVRs were simply no-name PCs ("white box") that did not add value
- Manufacturers and Dealers were double marking up boxes, making prices very high ($11,000 DVRs were not uncommon in 2004)
- Often the DVR was simply a windows application loaded on a no-name PC, creating major informational security issues
All of these issues made it very attractive for people to use software only.
Over the last few years, the market had a number of characteristics that made software only especially attractive:
- Growing economy enabled high staffing levels that were key in deploying software only solutions
- Lots of new construction and greenfield deployments, highly attractive to IP video / software only
- IP video was so new and so lightly used that lots of 'low hanging' fruit projects were available
How the Market Has Changed
As the economy declines sharply and IP becomes more prevalent, the market is changing in ways that make the simplicity of appliances more attractive:
- Widespread layoffs are making it much harder for companies to roll out technically complicated, 'high touch' projects like software only systems. It will increasingly become a negative to deploy encoders, manage dozens of IP address, load software, optimize OS and application settings, etc.
- Construction is declining rapidly, eliminating many projects where IP video has the strongest potential
- At 20% or so of sales, IP video is still in the minority but is already being used in many deployments where software only was ideal. So much of what's left is dominated by legacy analog systems. Analog favors applainces as the cost savings of combining encoding and recording into a single unit are substantial.
This will make today's buyers much more motivated to get solutions that are simpler to deploy and are cheaper to use with their existing analog infrastructure. DVR appliances are a better fit.
How DVR Appliances are Changing
While a lot of classic, expensive analog DVRs are still out there, the shift is fast to cheaper, more robust, IP capable DVRs.
Yes, you still have the big incumbents like Intellex
which runs on Windows, does not support IP cameras and costs a lot. I don't think the market will be switching back to that.
What's going to excel is a newer generation of products that will be significantly less expensive and much more capable of supporting IP. For instance, you have Airship
both growing aggressively in the last few years with products optimized for a converged world. These are smaller companies without the commitment to the old bad ways.
And even amongst the older generation, you have a number of companies that are pushing appliances that break the old mold. Pelco's Endura
is a strong example of appliances for large scale deployments where live video monitoring is key. Similarly, you have March Networks which will be integrating their DVR appliance
s with Cieffe's software solution. While Cieffe
may be new to American professionals, it is well respected in EMEA. The combination is likely to be very attractive of the flexibility in supporting both approaches (and will be an advantage over companies like Genetec
which only offer software).
The newer generation companies, known for their software, are not ignoring appliances either. Milestone recently released an NVR appliance
(through JVC). Given that Milestone targets the middle market (medium businesses, smaller enterprises), appliances will be key to its continued success. And, of course, Exacq, for years, has been offering a variety of hybrid DVR appliances
, making them especially attractive for companies looking to make a smooth migration to IP.
And the most attractive managed video offerings, like Envysion
, are using DVRs. Of course, it's not your old DVR. It's now Linux based and remotely managed through software in a data center. However, it does use DVRs on site to simplify deployment and reduce costs. This combination will be very powerful against software only offerings. With managed video using on-site DVRs, you get simple setup and very low maintenance by the customer. This, of course, is the opposite of the software only model which requires expert setup and self-management of the system.
Demand for low cost, low touch video management will increase and so to will supply. Layoffs and capital cutbacks will certainly continue for months if not for more than a year. Even when the economy does come, businesses obviously be more cautious and will not be able to ramp up staff right away. This shift in priorities will last for years.
At the same time, between the many new (and soon to be announced) offerings in DVR appliances, a wealth of strong options will exist for buyers.
Buyers, especially for multi-site facilities should be looking hard at these new offerings. Dealers and integrators should be investigating which of these products to carry and promote.