How Strong is VSaaS ROI Really?

Author: John Honovich, Published on Nov 16, 2010

The physical security industry has gone cloud crazy. The cloud is now viewed as a panacea for both declining dealer margins and the cost of managing on-site security. Are we on the verge of a new world where RMR surges and security floats to the cloud?

Key to this is the return of investment (ROI) that cloud based physical security delivers. For security users, is the cloud cheaper, better or otherwise financially more attractive?

In the video surveillance market, cloud based solutions, generally referred to as Video Surveillance as a Service (VSaaS) are getting significant attention. Indeed, we are tracking over 25 VSaaS providers already.

As these providers step up their marketing pushes, claims of great advances are being made. Recently, Axis made an ROI pitch for their AVHS service and Cernium pitched the business case of their Archerfish offering. We are quite familiar with both offerings as we have completed and published in-depth test reports on each - see our Axis AVHS test results and Archerfish test results.

What Do You Think?

Our Skepticism

We are skeptical about the overall ROI and the specific business cases made by vendors. Two key reasons:

  • Monthly subscription fees add up quickly and can easily be far more expensive than 'regular' surveillance systems.
  • Bandwidth constraints limit VSaaS systems and drive up costs

The business cases made by vendors often assume poor or inferior alternatives that artificially improve their case. For instance, one vendor claims up to a 50% ROI while we calculate a -70% ROI. Inside the Pro section, we break down vendor ROIs and examine what financial drivers are helping and hindering the adoption of VSaaS.

*** ******** ******** ******** *** **** ***** *****. *** ***** is *** ****** ** * ******* *** **** ********* ****** margins *** *** **** ** ******** **-**** ********. *** ** on *** ***** ** * *** ***** ***** *** ****** and ******** ****** ** *** *****?

*** ** **** ** *** ****** ** ********** (***) **** cloud ***** ******** ******** ********. *** ******** *****, ** *** cloud *******, ****** ** ********* *********** **** **********?

** *** ***** ************ ******, ***** ***** *********, ********* ******** to ** ***** ************ ** * ******* (*****) *** ******* significant *********. ******, ** *********** **** ** ***** ****************.

** ***** ********* **** ** ***** ********* ******, ****** ** great ******** *** ***** ****. ********, **** **** ***** ***** *** ***** **** ********** ******* ******* *********** **** ** ***** ********** ********. ** *** ***** ******** **** **** ********* ** ** have ********* *** ********* **-***** **** ******* ** **** - see ******* **** **** ******************** **** *******.

What ** *** *****?

Our **********

** *** ********* ***** *** ******* *** *** *** ******** business ***** **** ** *******. *** *** *******:

  • ******* ************ **** *** ** ******* *** *** ****** ** far **** ********* **** '*******' ************ *******.
  • ********* *********** ***** ***** ******* *** ***** ** *****

*** ******** ***** **** ** ******* ***** ****** **** ** inferior ************ **** ************ ******* ***** ****. *** ********, *** vendor ****** ** ** * **% *** ***** ** ********* a -**% ***. ****** *** *** *******, ** ***** **** vendor **** *** ******* **** ********* ******* *** ******* *** hindering *** ******** ** *****.

[***************]

Critiquing *** **** **** *** ******

**** ** ******** ***** ***** ******** ********* ***-**% ******* * * **** ****** *** * * ****** **** solution. ****'* *** ***** **** ***** *** ******** **** ******* comparing * *** ** **** *****:

*** ***** *** ********* *** ******** ******* *** ****** *****. At *** *** ** **** *, **** ***** ****** ***** saving ******** **** *****. ****** **** ** **** *, ****** video ***** * *** ******* *** **** ****** **** *** need ** ** ******. *******, ** ***** * *** *, the ****** ***** ****** ***** **** ******* ** *** ******* subscription ****.

Choice ** **** *****

*** ***** *********** (** ******) ****** ** *** **** ***** to ******* *** ********* ******. **** ******* * ***** *** in *** ****** **** **** ****** **** *** *** ***** to ** ******** (*** ****** ****** *** *** *** *** in **** *).

** **** ***** **** ****** *, * ** * *****, the ****** ***** ******** ***** **** **** ****. *** ******* are **********, ********** * *** **** ***** ** ***** *** the *********** ****** **** ********* *** *** ** ****.

Timing ** *** ***********

**** ******* **** *** *** ***** ** ** ******** ***** just * ***** ** *******. **'********* ***** **** *********** ** *** ******** *****. *** ********* ** **** *+ ***** ********* ** **** to ******* **** ******** *********** ** **** ******, ***** ********, etc.

**** **** ******* ****** *********** ******* *********** *** *** **** ($400 *** **** *** "******** ***** *** ****, ********* **** drive ******, **** ****** *** ****-*****/****-******* ***********").

**** ******* ***********, *** *** ****** **** ** ***** *-* years ****** **** **** *******. ********* **** ********** ***** ****** the **** **** *******.

DVR **** **********

**** ******* $*,*** **** *** * * ******* ***, ***** in **** *** *** *** ** ***** ****, **** ** that **** ******** ************ ****. ** *** *** ****** **** than $*,*** *** * * ******* ***, **'* *** *** much. ******, * ******* ***** *** ** *** ** $***. Even * '**** *****' * ******* **** **** ***** (**** the ******-***) ****** ******** **** $*,***.

******** *** *** **** ********** ** **** ****** *** **** business ****.

**'* *** **** ****. *** ***** ****** *** *** ******** or *** ***** **** *** ******* ******* *** $*,*** ****** costs. *** ********, * **** ** *** $*** *** * channels *********** *********** * * *********************.

*** *********** ********* *** ***** ** **** **-**** ************ ** quite ***********.

Number ** ******* ****

****'* ******** ******* * *******. ** ** ******* * ******* the **** ***** ** **** *****. ***? ******* **** **** partners ****** ******* ************ **** *** ******. ** **** ********, it ******** ** $** *** ****** *** ***** (** ********* this ******** **** ****).

** *** ******** **** *** ****, ** ** ******* **** 1 ** * *******, *** **** ******* ***** ** ******* as **'* ****** ** **** ********* ** ** * * channel *** ******.

******* ******** *** **** ** **** **** ***** ** **-**** NAS **** ********** **** ***** ****** ******** **** ** ***** video ** **** *** ******** ********* ************ **** ***** ** prohibitive *** ***** **** **** **** * ** * ******* (or *** ********* *******).

Remote ****** *******

**** ******* **** **** * *********** ************ ****** **** ******** public ****** ** ********* **** **** ** ** ********. ****** generally ****** ** * *** *******, *** ** ***** *** these ********* ** ***** ******* *** *** ** *************.

*******, **** ********* *** *** ***********. **** ********* **** *** a ******* ** ******* *** **** ********** *** *** ***/***** recorder. **'* ********** * **** *** ** *** ***** ******* but **'* *** ***** ** **** ******** ** ******* **** year *** *** ***** ** *********.

** *** ******** **** *** ****, *** ********'* **** **** n **** ***** **** **** ***** *** ********** * ****** problem. **'* ******** ***** $*** ** $*** ** ***** * tech ***** *** **'* **** ** ******* ******* ***** **** that.

Summing ** *** **** ****** ***** ******** ****

**** *** ****** ** *** '****' ***** ** **-**** *********, the ****** ** ************, ****** ****** ***** ******* *** *** time ****** ** *******, *** ******** **** *** ****** ***** is ***** ****.

** ** ***** ** **** * **** *****. *** *** factor '*** ** *****' ** *** **** ******* ************ *****. With ***** ******* *****, *** ******** **** *** ****.

Turning ** *******'* ********** ******** ****

******* ******** ** *********** ******** ** **** ** *** ********* structure ** ***** ******** ** **** *********. **** **********, **** of *** **** ** ******* **** *** **** ** *************** ****(*****$***) **************** (***** $*,***). *** ********* ***** *** *** ** ***** *** (****** video ********** **** ** ****, ***** ******** ****** *** $*-$** per *****).

*********'* ******** ****, **** *** *** ** "***** * ****** *******, ****-******, remote ***** ********** ****** **** ***** ********* *** ***** *********."

Video ********* **********

***** ***** ***** ***** *******'* ********** ** *** ********* ** video ********* *** ***** *********. *** **** **** ** ***** business ****** **** ****?

********, *** **** ** **** ***** ** ****? ** ** showed ***** ****, *** ****** *** **** ********* ** ***** *** ***** exhibited ******* ***** ******. ** *** ****** ******** *****, "*** last *** ***** * *** ** ***** ** ***** ****** a *** ****** ****** ** ******** **** **. * ***** the ***** **** *** ** *** ***** *** *** * person ** ******* ** *****. * ***** *** **** * few * *** *** ** ** * *** ****. * don't **** ** *** ** *** ***** * ** *** pay ********* **** * *** ** ***** **** ** ** email *** ** ******."

******* ** ****, ** *** ********* **** ********* **** *** this ** * ***** ********* ***** ******. ***** ** ***** that ** ***** ******* *********** ********** *****, ** ****** **** users ** ********/*** **** ** ****** ***** ********** ******. ** such, ***** *** * ****** ** *** **** ************.

Cost ** *** *******

**** *** **** ****** (***** $***) *** ******* *** (***** $1000, ******** **** ***** ********* **********) *** ********* ******** ** comparable ********. *********** ******** *** **** *** ***** *** ********* (e.g. *****, *** ******** **** *******).

Remote *************

********** ******* ** **** *** ****** ******, * ******** **** often **** *** ****, ******* ******** *** ******* *** **** on-site ***** ** *********** ***** ************ *******.

Positives ** *** ********** ********

********* *** ***** ******* **** ********* *********, ** ***** *** Archerfish ***** **** * ****** ** ******** ******* **** ***** to *** ****** ** *****:

  • ******* ** **-**** (**** ***** ****** ** *** *****). *** camera ******** * ** **** (***** **** ***). *** * channel ******** ******** ******** *** **** ******. **** ******* ***** are ********** **** ** *** ***. ****** *** ******* ******* all ***** ******* **** *** ********** ********* ********. *********** **-***** camera ******* **** * ***** ******** ** ****, ** *** unique *****. ** *** ******, ** ****** **** ** ****** increasingly ******.
  • ********* **** ** ***. **** **** ********* *******, ********* ***** are **** *** (***** $** **** *** ******** *******. ******* analytics, **** **** *** ******** *****, ***** *** ** *******. Compared ** ****, **** ************ ******* *** **** *** ******* of *****.

Summing ** ***** ***

*** ***** ** ** * **** *****, *** ******* ************* fees **** ** ** *** ** ***. ** ******* ****, you **** ** ***** *** ***** ******* (**** **** **** traditional ***** ************ *******).

*****, **** ***** ********* ****** ********* *** ****** **** *** many ***** **** ***-**** *******.

*** ***** ** ****** ****** ***** ***, *** *** ***** to ** *********. ** ******* **** ***** ********* **** ******* subscription ***** ********** *** ***** *******.

***** ** ****** ** ******** *** *** *** ************ ** surveillance ***** *** ** *** ********* ** *** *** ********** nor *** ******** **** ******* ** *** *******.

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