At the recent Axis Architect & Engineers Technology Summit, Martin Gren, co-founder and on the board of directors of Axis Communications, as well as inventor of the IP camera, proclaimed that the future of security surveillance systems is “all about the network” and not about cameras.

This is not a surprise coming from Gren, who has consistently mapped the correct future of network video and then steered his company, Axis Communications, to develop the products, partnerships and services enabling significant advances in video surveillance performance. But with the network coming strongly into play for channel companies like yours to continue to grow and serve customer needs, what exactly does his statement mean to your business?

Among the important changes in the channel that are finally driving the adoption of IP technology are the skill sets and knowledge of those that design, engineer and install security systems. For years, analog was king because that was what companies knew how to install and service. IP and Cisco-certified installers were few and far between in our market just a few years ago. That is changing now. The system integration companies that will lead in the future are those that have invested in their people as security products have become “IT-ized.”

Among the biggest logjams being removed are the architect/engineer/consultant (A/E/C) companies that design security systems. There are two major changes in this space to be aware of.

First, A/E/Cs traditionally servicing the security market are a critical part of your business eco-system. The complexity of networks requires you to work with A/E/C firms in a constructive way to both delight and protect your customers by ensuring successful projects.

Second, new firms from the IT channel and BICSI are being courted by security manufacturers on one side while being asked by their clients to provide security solutions on the other. They bring a different design relationship with them either with in-house A/E/C staff, IT architecture-centric partners or communications-centric partners (IT or BICSI).

The business pressure is on any installer who inherits a design to implement, because the brand specification, the service agreements and potential monitoring income are already assigned. The installation component becomes a commodity service offering, quickly dividing the winners and losers in the security channel. This is why it is vital your company understands network video as a game changer that will either drive or destroy your business.

If you feel that you have done a good or better job in the network video space when it comes to the hardware (cameras, storage, PoE, cabling, training) and the software (video management software, analytics, communications), then congratulations. Because you are well set to move up the ladder as we “cloud” your view of this market.

Coming Next, Now

First, it is important to recognize that 2009 was a watershed year for IP video. The recession put pressure on your customers to do more with less. And that pressure pushed IP video as the solution offering enough current functionality and future flexibility to justify its return on investment (ROI). Second, the suppliers in the IP video market are finally coming together with seamless solutions. The advent of ONVIF and PSIA to develop standards and interoperability combined with the adoption of already proven open consumer product standards (such as HDTV and H.264) are fueling IP’s value and purchase. This is why IP or network cameras grew 15 percent in 2009 sales, while analog camera sales dropped by about 15 percent. The big, long-awaited shift to IP is here, driven by the recession.

So, what’s next for your customers? Cloud computing or software-as-a-service (SaaS). It is happening now. As cloud computing and SaaS emerge as a security platform (if you offer monitoring, you are already selling cloud computing), the investment in capital and operations budgets will be less of an issue. This is another example of the IT-izing of security, but via the finance department. With a cloud-computing model, your customers can lease their security system and budget a fixed-cost/fixed-maintenance program.

SaaS allows your clients to access their software applications and data as needed or on-demand through the Internet. This shared service model reduces direct and financing costs. Your customers no longer own their security software, but subscribe to it and that moves the installation, maintenance and updating costs from the customer to the SaaS vendor. It also ensures services are the most current. Your client is paying for access to the most current software versus owning the software. And for political reasons, some CSOs like the ability to be less dependent on IT to respond to their technology needs.

The inflection point is where IP and SaaS meet. They are the enabling technologies providing exponential benefits to security programs by providing a level of functionality that meets their single greatest need today: The analysis and distribution of video images for immediate action, not their capture and storage for archiving and future review.

Every security dollar spent on technology is spent for this reason: To get the right information to the right person at the right time to make the right decision and either prevent an event from happening or respond to an event that has happened so a disaster does not become a catastrophe.

IP and “the Cloud” are moving your customers closer to this security nirvana as anything we have seen thus far. One of the interesting new services for consideration is hosted video or video surveillance as a service (VsaaS) or managed video as a service. Dollars-wise, it reduces costs by removing the need for local management or storage and replaces it with a subscription-based service.

Managed Video Services

The users do not have to be IT experts to use the system or manage it. That is done remotely by the vendor. Among the managed video services available to enterprise clients is Axis’ Video Hosting System (AVHS) which it has tested and launched with Niscayah.

John Nemerofsky, Niscayah’s corporate vice president, presented an overview on AVHS at the Axis A&E Conference. It is informative in the benefits to channel companies as a profitable service you can offer customers and the economic and functional benefits to your clients.

First, it is both customized and generic. That may sound like a puzzle, but it is not. Think of online banking. Online banking software is pretty standard these days, but it is first customized for your bank and then specific to your accounts when you log in. AVHS works the same way. Your monitoring portal is customized for your customer, who logs in to gain exclusive access to their video.

As your customer grows, the use of the cloud grows too. Unlike an owned and installed system, the functionality and flexibility of the cloud architecture is endless. The AVHS offers live views, recording, PTZ support, mobile access and event notification — all of the functions your customer is seeking to reach their security objectives.

Where is AVHS working today? It is successful in smaller organizations, or those with a smaller camera count but with multiple locations. And customers who are not at those locations full-time and seek remote access find it particularly valuable. Most exciting is that the smaller businesses finding the greatest value are those that use the system for more than just security. Business-minded security managers are using AVHS for sales and marketing applications, too. Business analytics are no longer available to only the biggest organizations.

Nemerofsky explained, “AVHS allows us to sell a video system now where we were unable to sell it before due to cost, maintenance and/or training requirements. And it creates new prospects for us such as temporary monitoring on voting day across multiple locations or at a sporting event.”

As an example of where AVHS is being used now, Nemerofsky shared how a small convenience store chain was benefiting. “The system allows management to get a snapshot of their business in the store or at the drive thru, at any time. They can set up a promotion and see if it is working remotely and at multiple sites at once or check if a delivery has arrived. They are also keeping an eye on employees by viewing cash draw security and verifying open and close times are being met,” Nemerofsky described.

“While it has not happened, if there were a crime in one of the stores, there is no DVR to steal or tape to confiscate by the criminal. The evidence is already securely stored in the cloud,” he said.

The next step, Nemerofsky noted, “Is managed video solutions with integration. Using SaaS with an intrusion detection system can provide a video clip of the alarm condition, work with retail late-to-close or early-to-open video clips and be applied to video guard tours. In the access control area, SaaS can be integrated with visual verification and identification by comparing the person entering to both a local database and a broader database housed in the cloud.”

“You can also use AVHS for fire alarms to gain situational awareness and support first responder actions,” Nemerofsky concluded.

As your customers ask you to offer innovative and proven solutions that allow them to do more with less, reduce capital expenditure and/or operational expenditure spending and help them achieve their security goals and objectives, solutions such as the Axis Hosted Video Solution, SaaS and IP technology are rising quickly to deliver greater functionality and ROI to our market.

As Martin Gren’s visionary statement attested, it really is all about the network and as hosted video growth accelerates, it is the network that provides the opportunity to build these effective and efficient solutions for your clients.