In the “old days” — five years ago in technology time — security and particularly CCTV were implemented using traditional architectures. If an end user wanted IP video, the integrator would connect the cameras to the IT back plane with CAT5 or CAT6 cabling, and run the images through the server to a storage unit. The customer had to pay for not only the cameras, but the server, upkeep to the server, encryption algorithms and usually an IT specialist to maintain it all.
Meanwhile, recurring monthly revenue (RMR) models on the dealer and integrator side were mostly derived from alarm monitoring, with a growing end-user interest in outsourcing access control. Video, however, required such a large storage capacity that most companies could not remotely provide that service for multiple customers.
For years, RMR has been a key driver in our industry. And the addition of hosted or managed access control to the RMR income stream has opened up a whole new realm for those dealers that offer it. It used to be that an integrator made a profit on high-end proprietary security systems, but the valuation of installing companies is more often based on their RMR — and software as a service (SaaS) has a huge role to play in the future of this industry.
A tech-savvy integrator can set up their customer’s security system and, instead of walking away with a monitoring contract and only returning for maintenance issues, actually manage all the security software by using their own servers, staff and monitoring capabilities (this includes issuing cards, maintaining databases, making changes and all the back-end support). Alternatively, the end user can be provisioned with these abilities via a web browser, for a fee. This has opened up new business opportunities as smaller end users are now able to afford higher-end access control systems and only pay a fraction of what it would cost to own and operate it themselves. Even dealers without the internal resources to offer SaaS can get in the game by outsourcing it to a central monitoring station and passing along the cost to the end user at a profit — while still saving the customer a significant amount of money.
More recently, the opportunities afforded by this type of service have become even more open-ended, thanks in large part to “the cloud.” This technology, introduced in the IT world, is revolutionizing what we can do with security, particularly video.
No longer do we have to host applications, servers and platforms in a physical location. The cloud allows us to harness the power of server farms by realizing economies of scale, for a fixed fee. Now with “virtual” servers and off-site storage facilities that can handle the large amounts of data storage that high-quality IP video requires, we can offer solutions that are much more cost effective.
What does SaaS mean for RMR opportunities now and going forward?
Now it is viable to install these cameras in an end user’s location, charge a monthly fee and save the customer from having to capitalize a significant purchase. This will lead to a much more prolific IP video model. Combine this with what we have already been able to do on the alarm monitoring and access control side and the options for add-ons and services are limited only by the imagination.
Does the customer have a security guard at night? Suggest instead a virtual guard tour service using video and charge a fee for this service. Offer a smart phone application that will allow the homeowner to check in on through their home video system while they are away. Or create a solution to allow a security manager to automatically receive streaming video from any location in the world when there is an incident. That is the power of the cloud — it stores everything virtually and pushes it out to any device you want.
The Security Industry Association (SIA) is excited about this emerging technology and the opportunities it will provide industry-wide. As manufacturers we are invested in enabling this functionality. And as an industry organization we are committed to educating the dealer/installer community on ways to capitalize on these opportunities. ISC Solutions, part of "Security Week" held in November in New York City, is a great venue for learning about new opportunities such as SaaS and cloud computing.
We are also committed to partnering with consortia such as ONVIF and PSIA on harmonized specifications as well as focusing on our own OSIPS (Open Systems Integration and Performance Standards) initiative to make the adoption of these new technologies as smooth as possible. The entire premise of SaaS and cloud computing rests on the interoperability of devices. If you look at where the world of IT and computers is heading and the increasingly plug-and-play nature of computing in general, that is where security needs to be.
What is driving cloud computing right now? Customers want it. The government wants it and is indeed mandating it. For security dealers and integrators, this is great news and will open up a new world of RMR for more and more companies in the years to come.