This report examines the key events that shaped video surveillance in 2011 and the top trends we expect to see in 2012. Plus, Group PRO members can download a copy of the full 248 page 2012 Video Surveillance Guide.
2011 Top Events and Revelations
Let's start with how the industry changed in 2011 (compare to our 2011 predictions / Guide released in December 2010):
IP Camera Growth
We anticipated strong and broad growth in IP cameras. The industry delivered. 2011 was a banner year for IP cameras in the video surveillance with both newer entrants and incumbents experiencing strong growth. Overall, the growth rate for IP cameras is likely to be over 30% for 2011.
Old Dogs vs. New Dogs
Last year, we noted that IP upstart companies were rapidly gaining ground on CCTV incumbents and asked in 2011 whether the incumbents would stop the upstarts or if we would see a changing of the guard.
2011 was clearly a changing of the guard year. The top-growing IP upstarts continued to deliver very strong growth while the analog incumbents keep on trading new IP sales for lost analog business. At the same time, none of the IP upstarts were bought out by the analog incumbents - another sign of incumbent weakness.
The companies that surveillance integrators now most respect are overwhelmingly new IP upstarts - integrator 'favorite' VMS and IP camera results show this. Not only is it a matter of respect but also in terms of sheer power. As one manufacturer recently remarked to me, "Axis is the new Pelco."
IP Camera Standards
2011 was the first year that IP camera standards (i.e., ONVIF) were widely available. It was certainly a rocky start with lots of interoperability problems. However, as the year progressed, integrations became more stable to the point where many VMS - camera combinations rely today on ONVIF as their primary third party integation.
2010 was the year of sharp VMS price drops. Pushed by the aggressive actions of Milestone, we expected and saw many rival VMS providers match price drops. Of course, Milestone was not done, introducing a very inexpensive mid market VMS version and now giving away mobile video surveillance for free.
The IP camera rival coalition, HDcctv, had a make or break year in 2011. Last year, we said, "Closing out 2010, product availability is low, pricing is high and recorder support is minimal." Unfortunately, this year the situation is not that much better. HDcctv might have a future somewhere and at some time but that time and place is not 2012.
Last year, we said, "It is probably impossible for video analytics to do worse in 2011 than they did in 2010." Obviously, we did not anticipate Object Video raising tens of millions for a global lawsuit campaign against industry powerhouses. That noted, outside of the still in progress lawsuit, the video analytics market was relatively stable and some of the survivors started to gain broader real world respect and confidence.
Last year we said, "We think 2011 will be a 'growing pains' year as adopters realize the hype of the technology does not match the ROI VSaaS can deliver." It certainly has, however, we underestimated the number of lemmings who now are willing to follow industry powerhouse Axis off a cliff. While there was little improvement in ROI (save for the potential of the iomega NAS integration), many desperate incumbent integrators are betting on it.
2012 Predictions / Expectations
With 2011 in perspective, here's our outlook for 2012:
Slowing IP Camera Growth Rate
We expect robust IP camera growth in 2012 but at a modestly slower rate than 2011 . This is because: (1) as IP camera sales are now becoming the majority, additional growth naturally becomes more difficult and (2) the rate of new innovative IP cameras has slowed (review our Spring 2011 new product reviews and Fall 2011 new product reviews).
The migration to IP cameras will clearly continue. We are simply reaching the beginning of the maturation stage where IP camera growth starts to converge to the overall slower video surveillance market growth rate.
Incremental Changes, Not Revolutionary Ones
In terms of new products, we expect primarily incremental enhancements - better image quality, different form factors, additional feature sets, etc. However, the Resolution Revolution with a massive shift from SD to MP products is now mostly complete. There is no major new sweeping change driving the industry.
Negative Forces Pushing Against the Surveillance Industry
Importantly, we see 2 major negatives forces that could hurt the entire surveillance industry. First, governments around the world are mostly de-emphasizing spending on anti-terrorism and military expenditures. As this continues, it will be drag on the surveillance industry who benefited greatly from the buildup over the last decade.
Secondly, if the economy falters (Europe debt crisis, China bubble, US housing/stock market), the surveillance industry will be hit hard. That was one of the clear lessons we learned from the financial fallout of 2008 - the video surveillance market is not immune to the general economy, especially as defense/terrorism spending is on the decline.
The Object Video Lawsuit Resolution
Sometime in 2012, the US ITC will provide a final decision on Object Video's complain against Bosch, Samsung and Sony. It's hard to speculate but we do believe that an inverse relationship exists between OV's success and the video analytic industry. If OV 'wins', we expect the industry to 'lose'.
This is important to watch as the next big growth area for video surveillance is video analytics (as it has ironically been for the last decade). However, we are now getting close to where the technology is viable for robust mainstream use. When that finally does happen, the impact on surveillance will be even bigger than the shift to megapixel.
The Maturation of VSaaS
2011 had a flood of companies trying out VSaaS. In 2011, companies will start realizing the difficulty of selling 4 camera surveillance systems for $100 per month. We expect to see a split in VSaaS fortunes - in the home/SMB market, inexpensive simple systems will thrive but in the professional market, VSaaS will hit a brick wall.
The 2012 Video Surveillance Guide
We are excited to release our 248 page, 2012 Video Surveillance Guide. This Guide examines the current state and future of video surveillance aggregating the best of our reviews. Inside the Pro section, Group members can request a PDF copy of the Guide to be emailed to them.
The 2012 Guide covers the business, technology and trends of the video surveillance market. For a list of the details, review the 2012 Video Surveillance Guide Table of Contents. The major sections include:
- Financial Projections and Reports
- Future Trends
- New Camera Releases
- New VMS/NVR/Storage Releases
- Integrator Survey Results on Manufacturers and Product Selection
This is a companion report to the 200 page, 2011 MidYear Video Surveillance Guide released in June 2011. Combined, these two volumes provide over 400 pages of original analysis.