VMS vs VSaaS

The future of video surveillance recording is likely to be a contest between VMS and VSaaS. While VMS software is today's mainstream choice for new surveillance projects, VSaaS is widely viewed as the 'next big thing.' Understanding the two and their differences is critical to making surveillance decisions. This is even more critical as the overlap between the two is significant.

The Basic Acronyms / Definition

Let's start from the very basics:

• VMS stands for Video Management Software
• VSaaS stands for Video Surveillance as a Service

The former relates to software while the later relates to a service. However, this is likely to still be confusing as both VMS and VSaaS use software even if the later uses it as part of a service.

One clear distinction is that VMS is generally defined as 'traditional' software that you install on your own PC/server while VSaaS runs on a service provider's system. Indeed, VSaaS comes from SaaS, the buzz word du jour of cloud computing.

The Providers

Who makes or offers VMS / VSaaS raises interesting questions. Typically when someone mentions VMS, names like Genetec, Milestone, etc comes to mind (note: see our directory of VMS offerings tested). By contrast, a whole different set of companies are generally suggested when VSaaS is discussed - Axis's AVHS being the most well known but with dozens of other new entrants (see our directory of VSaaS providers).

The Questions

However, because both groups are providing software, real questions exist about the differences between the two:

• What functionalities does VSaaS have that VMS lacks?
• What functionalities does VMS have that VSaaS lacks?
• Could a VMS provider like Milestone, become a VSaaS provider?
• Could a VSaaS provider, become a VMS provider?
• What is the future of VMS providers vs VSaaS?

• Can you use a VMS, like Milestone, as VSaaS? In other words, is Milestone VSsaS?

You could use Milestone (Enterprise or Corporate) VMS as a VSaaS but it would be missing a number of critical elements common to VSaaS. Indeed, a few companies claim to be using Milestone's VMS as a VSaaS but this is strange (see our review of DVTel's VSaaS that has a similarly abnormal approach).

How to Use a VMS as VSaaS

You could use most enterprise VMS software offerings as a VSaaS solution. Let's walk through how it would be done and what it would lack:

• The service provider would install VMS software on a centralized server presumably at a data center. You would minimally want to use large scale versions of VMS software that support multiple recorders, network attached storage and enterprise management.
• IP cameras and or encoders would be installed locally as normal.
• A VPN between the local site and the data center or alternative remote networking access would be established.
• An admin would configure the VMS software in the data center to connect to the remote IP cameras and encoders.
• Customers would be provided an IP address for a central server to connect to (in the data center) or a domain name and access credentials.
• The provider would assign access rights for certain cameras to specific customers as many customer's cameras would be managed on the single VMS installation.
• The provider would track monthly usage and bill customers.

At some level, this is a real VSaaS but an inefficient one. It has some important advantages over most VSaaS offerings but a number of fundamental limitations.

What functionalities does VSaaS have that VMS lacks?

VSaaS systems typically have a number of functionalities that most VMS systems lack:

• Plug n Play IP camera connections: VSaaS systems generally support a way for IP cameras to automatically 'phone home' to the VSaaS provider without an on-site technician doing any network configuration to the camera nor VMS system. This greatly simplifies installation - a key element for VSaaS systems targeting home and SMB users.
• Public Web Access: By design, VSaaS systems allow users to access video from a public website without having to setup, know or enter any local networking information (such as IP addresses). This makes it much easier for users to see their video from wherever they are (and not just within their facilities).
• Multi-tenancy: VSaaS systems are designed to manage cameras from a variety of users simultaneously. Separate accounts are created for each end user with restricted access to that user's cameras. VMS systems generally assume the VMS software is being used only by a single organization. With a VMS, you could manually create different users and restrict specific cameras to those users but it is a more manual and error-prone process.
• Billing: VSaaS systems are set up to bill on a subscription / monthly basis and are typically integrate with a billing system for ongoing charges. VMS systems generally are not as VMS licenses are generally a one time purchase with an option for upgrades / maintenance charges.
• Off-Site Storage: Most VSaaS systems include or require off-site storage managed by the service provider. Most VMS systems are designed for local storage only with options for remote archiving to one's own storage arrays but not to a cloud storage offering.

What functionalities do VMSes have that VSaaS lacks?

VMS systems are far more sophisticated than VSaaS offerings. Most VSaaS systems are little more than simple front end for watching live and calling up specific time frames of recorded video. This is not an inherent difference but it certainly reflects the far greater maturity of VMS systems vs VSaaS. Here are a number of common advantages for VMS systems:

• 3rd party camera support: VMS systems tend to have far greater options in 3rd party camera support.
• 3rd party systems integration: VMS systems regularly integrate with dozens of access control, intrusion, PoS systems, etc. Very few VSaaS systems integrate with any other systems (outside of billing).
• Analytics: Most VMS systems offer integration with video analytics. Very few VSaaSes do.
• Advanced live monitoring: Maps, multi-pane video display, multi-monitor display, alarm display, etc. are all common with VMS systems but not VSaaS.
• Advanced searching: The ability to search by time, motion, alerts, third party data, etc. is common for VMS systems. Additionally, VMS systems usually offer multi-channel exporting of video and authentication. By contrast, most VSaaS systems offer only rudimentary searching and exporting.
• Thick client support: Almost all VMS systems offer a thick client that can be installed on a PC. While the future is web and mobile apps, many people prefer thick clients as they generally provide richer functionality.

One functionality that high end VMS systems and VSaaS has in common is enterprise management; that is, the ability to manage and provide access to many cameras in many different locations.

Could a VSaaS provider, like Axis, become a VMS provider?

Technically, VSaaS providers could offer a VMS. We do not see this happening as VMS is a mature market segment with low growth and high barriers to entry. We expect VSaaS first providers to focus on VSaaS as this has the most upside as there are no dominant incumbents.

Axis is an exception to the VSaaS providers as Axis first had a VMS (ACS) and then introduced VSaaS (AVHS). The two are incompatible and we do not see a reason to merge the two.

Could a VMS developer, like Milestone, become a VSaaS provider?

By contrast, VMS only providers have significant motivation to move into VSaaS as VSaaS poses a threat to the future of VMS.

VMS developers have 3 fundamental options for providing VSaaS:

• Public Remote Access feature: VMS developers could upgrade their existing software to offer needed public remote access. The on-site VMS software could 'phone home' to the VMS developer. The user could then log into a hypothetical myVMSprovider.com enter credentials and access their video feeds from anywhere. This would eliminate the need to setup public IP addresses, holes in firewalls, establish VPNS, etc. while making it easy for VMS users to have VSaaS remote monitoring benefits (see an example of a DVR that has already taken this approach).
• Full VSaaS Software: VMS developers could develop a new version of their VMS designed for use by 3rd parties to setup their own VSaaS services. For instance, a hypothetical Milestone VSaaS edition, could include special features important for service providers - multi-tenancy, integrated monthly billing, plug n play camera connectivity, etc. This edition would then be sold to integrators, dealers, etc. who would incorporate such software into their own
• Full VSaaS Service: VMS developers could offer their own full VSaaS service, developing specialized VSaaS software and hosting it themselves. This would be a turnkey solution. On site cameras and optional storage arrays would then be connected to the VSaaS service run by the VMS developer. This could be offered in 2 fundamental ways: (1) the VMS developer offer their VSaaS service direct to end users (e.g., buy directly off the Milestone website) or (2) re-sell through the channel and let them brand/markup the offering.

Technically, all of these options are feasible. Politically, some options are far more dangerous to the VMS developer than others. While we expect VMS developers to move into VSaaS, the decision will be significantly impacted by business/channel issues.

Today, it is extremely rare for a VMS software provider to offer a VSaaS solution. Outside of Axis, the only other company we know providing both is ipConfigure who has an enterprise VMS software offering and a recently launched VSaaS service targeted at the lower end of the market.

What is the future of VMS vs VSaaS providers?

While today the groups have significant differences, we see VMS and VSaaS providers converging over the next 5 years.

For the VSaaS providers, here are the key advances we project:

• On site recording: To overcome bandwidth limitations and problems in scaling total number of cameras per site, VSaaS providers will increasingly add support for local, on site recording either via SD card on-board cameras or via NAS appliances (e.g. Axis iomega approach).
• Video management feature enhancement: To move upmarket, VSaaS providers will have to build out their fundamental video management functionalities.
• Price drops: Most VSaaS providers entered the market with unrealistic and uncompetitive price levels ($20+ per camera per month). By including more on site recording, VSaaS providers will be able to afford lower pricing.

With VSaaS, we see the steps as fairly straightforward and expect most to follow this path.

For the VMS providers, the decisions are much more complex. Here are the practical barriers we see impacting VMS developers moving into VSaaS:

• Core growth in the VMS market segment: VMS sales remain strong and should continue for the next few years as the migration to IP cameras continue. Because of this, VMS developers will not feel immediate pressure to offer VSaaS.
• Weak competitive threat from VSaaS providers: The VSaaS providers really do not pose a significant threat to VMS companies as their high prices, low functionalies and weak scalability per site hold them back. Until the VSaaS providers resolve this, VMS developers will not be very motivated to invest resources into fighting back, especially as they continue to grow in their core market.
• Channel Conflict: SaaS providers, in general, sell directly to end users from their websites (e.g. signing up for salesforce). VSaaS providers have mostly avoided this as the security sales channel is quite powerful. Even worse, VMS developers tend to be very loyal to their channel. Even if VMS developers offered VSaaS, the likelihood that you could sign up directly from a VMS website (like milestonesys.com/vsaas-sign-up) is very low as this would jeopardize channel relationships in their core market of VMS software sales.

We think the best technique for VMS developers to cut into the value proposiiton of VSaaS providers is to add in public remote access capabilities. The most valuable feature of VSaaS today is that it is much easier to setup remote monitoring / viewing with VSaaS than with VMS systems. VMS providers can offer the same functionality as a simple add-on/upgrade of their software at minimal ongoing cost (see example of this). That noted, no VMS provider is offering that today.