Will IP Video Software Become Free?By John Honovich, Published May 30, 2010, 08:00pm EDT
In the past, video management was quite expensive. Now, increasingly, it is becoming free.
Just a few years ago, it was commonplace for a 16 channel DVR to cost $10,000 USD. Today, many manufacturers give the software for free and allow you to use it with regular PCs and cheap consumer storage, totaling $2,000.
The trend of free IP Video Surveillance software is global with companies as diverse as ACTi, Cisco, IndigoVision, Mobotix and Vicon offering substantial (or unlimited) free IP video software licenses.
However, this is still the minority and almost all of these manufacturers limit the free software for use with their own cameras. As such, the value of using free IP video software is debated today.
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- Read the analysis at the end of the report (same as in webinar video, simply written out)
The issue is not about the value of IP Video. Many things offer value but are offered for free.
The issue is where companies can provide IP Video software for free and make a profit. This can be done profitably whenver the cost of the producing a product is free (like generating copies of software) and the cost of distributing is very low (like using the Internet).
Many industries demonstrate this trend of moving to free products supported by third party revenue. add on services or premium offerings. They include database management systems, Operating Systems and media.
In the next 5 years, it is possible and likely that there will be a MySQL equvalent emerge in IP video software. There are a number of key drivers making this happen:
- Whereas, in the past, 'normal' PCs were insufficient for video surveillance, now any PC from an electronic's store can handle dozens of cameras.
- IP cameras are eliminating the need for any special hardware to encode video in the PC.
- These two forces are making DIY video surveillance servers a reality.
- IP camera vendors realize this and are offering free IP video software to accelerate the growth of their products.
- The sales and marketing costs will be extremely low (contrast to the massive investment that today's companies spend on shows, direct sales forces, etc.)
- Market share will grow likely as the free cost makes it easy for buyers to start with this software with little risk.
- As use of the free software expands, 3rd party manufacturers (like camera suppliers, access control systems, etc.) will have an incentive to support free software to drive the growth of their own products.
Now, the free software will not be as good as the paid premium software, especially in the beginning. The gap will be significant, especially in advanced features.
However, the free software will be good enough for a large section of the lower end. Plus, since IP video software is not innovating very quickly, the free software will reduce the gap a little more each year.
It's likely that this comes from a current free IP video software offering adding 3rd party camera support or a new entrant offering an open source version.
It's not clear who will do. It is pretty certain that it will not be today's premium market leaders. They are growing too quickly and making too much money to risk their position by giving software away for free.
The expansion of free IP video software will take time. The process for IP video software to go completely mainstream may take 10 years or more. However, each year, the free software will push upmarket as it matches features of the premium offerings.
Premium paid offerings can still do well. We see 3 areas:
- Advanced features that cater to specific verticals
- Packaging or providing appliances that simplify installation and setup
- Providing managed video where you are paid not for the software but for the ability to manage and maintain the video solution
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