State of the Market: Video Surveillance 2018
The video surveillance market is still strong, and replete with opportunity
Jake Parker says SIA is keeping its eye on several developments that could affect the market, including the federal market for video surveillance. “Obviously there’s a lot of equipment deployed out there securing federal buildings and facilities and military bases and things like that,” Parker says. What the government does with regard to that equipment and technology could have a large impact on the market.
One such thing Parker says could soon have an impact is the Defense Authorization Bill that was recently enacted, and that carried with it the Modernizing Government Technology Act (signed into law Dec. 12, 2017). This is legislation that Parker says has been talked about in the tech community over the past year: “It’s really aimed at replacing these legacy IT systems that we’ve heard some stories about in the government, and it has allowed some agencies to use extra money that they don’t spend on other accounts and dedicate it to IT modernization, and also creates a fund for federalized IT modernization under GSA.”
The bill provides two mechanisms to accomplish the modernization; one allows agencies to create working capital funds, which they can put extra money into at the end of fiscal years. There should be at least some funding available in that for sure,” Parker says. The other broader modernization fund authorizes $500 million.
Parker says he is talking with people in Congress and in government agencies over the next several months to better understand the effect this bill will have. “The way that’s defined, it includes literally all Federal Information Systems as eligible projects, so it definitely includes access control but also video surveillance and intrusion detection systems — anything under security and surveillance — as eligible for that modernization funding.”
Parker says SIA’s hope is that they can help explain the need for modernization to those making decisions and says he will have a better handle on what this might mean for the industry in early 2018.
All Aboard the Cyber Train
Cyber security is something that the industry must either get on board with or suffer the consequences, many of which are seen all too often splashed across the headlines of major news outlets. This means entering a space that some security integrators might not feel comfortable in because it means changing their approach and educating themselves and their customers.
It is, however, a necessity in what Perry Levine, director of strategic alliances, BCDVideo, Buffalo Grove, Ill., calls the new norm. “Having actionable information available anytime, anywhere and on any device, presents a unique security challenge — the omnipresent risk of a cyber-attack. The need to increase cyber security awareness and provide educational resources to security integrators on best practices and cyber security standards has never been more important.”
Levine says it is critical for security integrators to become familiar with the latest IT security standards and practices while constantly updating the cyber security processes of the video surveillance solutions to provide protection from the ever-evolving threats. He says, “Organizations such as the Security Industry Association and the PSA Security Network have developed guidelines and educational programs on the latest cyber security best practices.”
Rick Tampier at Red Hawk Fire & Security, agrees. “It’s up to our industry to focus more clearly on securing the vulnerabilities that exist while stressing to end users the need to take the proactive measures of implementing traditional access control, intrusion detection and visitor management systems, thus creating layers of security to guard against security risks.”
Up until very recently, cyber security in all aspects of security has been largely overlooked, says Ben Powell, sales and engineering manager, Strategic Security Solutions, Raleigh, N.C. “Our clients are moving toward the model of having their integrators manage the cyber security for all the devices installed on their network, removing the client’s IT group responsibility for managing the devices,” Powell says. “This is a big change for us and has meant that we have to develop a better understanding of the issues and how we can go about supporting such changes and the costs involved — perhaps reshaping how we go to service agreements in the future.”
While recognition is definitely increasing, there is still a long way to go and some who take it more seriously than others. “The reality is that among some of our partners and integrators and everybody there are varying degrees of folks out there that try to take it more seriously than others,” says Tony Varco at Convergint Technologies, who adds that it’s important to take more of a holistic, end-to-end look at cyber. “From the manufacturers to the consultants to the integrators to the end users, I think we all play a role in creating a cyber security solution.”
There is a real concern however, about customers who, despite the headlines and media attention cyber is getting — and even the negative press specific manufacturers are getting — still want products from these manufacturers because they are cheap, says Hank Monaco at Johnson Controls. “That seems like it is not being taken seriously.”
The challenge, then, says Joe Gittens, director of standards, SIA, is really finding that balance between low-cost systems and secure systems. “I’m not saying that all the most cyber secure systems are the higher priced ones; however, I am saying that a lot of times the cheapest solution kind of throws caution to the wind.”
Gittens adds, “Make sure those things are being weighed and customers are being educated about the risks of having video cameras, which are basically IoT devices that can be an entryway into your enterprise network.”
Cloud Continues to Climb
The Video Surveillance as a Service (VSaaS) market is expected to grow at a considerable rate of more than 10 percent, says Tejaswini Karpe, senior research analyst, MarketsandMarkets.
In fact, Karpe says we can expect VSaaS to grow at a greater rate than the overall video surveillance market. “Major demand is derived from retail, small businesses and residential applications,” Karpe says, adding that VSaaS offers the major benefits of using any device such as laptops, mobile phones and desktop computers to remotely access the video feeds stored in the cloud.
Other benefits Karpe describes are added security and scalability. “As data is stored offsite, it is more secured and protected from accidents and thefts. Scalability is another positive aspect of VSaaS as it simply requires the addition of cameras to scale up VSaaS rather than looking for storage devices. Low cost of subscription rather than spending on the storage solutions drives the growth market for VSaaS.”
The shift is definitely happening, says Andrew Elvish of Genetec. “Maybe not at the end of 2018, but as we get closer to 2020, 2021, I think the cloud will be such a huge part of everything we’re selling in this industry, and I think we might see the industry shift because of that.”
According to Ken Francis, Eagle Eye Networks, a provider of cloud-based video surveillance solutions, his company has been bringing on 20 dealers a month. This is something people are asking for, says Francis. “The biggest trend that we see because we sell exclusively cloud is the end user telling the integrator, ‘I want a cloud system,’ and the integrator being a little skeptical and still needing a bunch of education when they call us.”
The trend, however, is undeniable. While there will always be a market for non-cloud NVRs and DVRs, Francis believes the share of cloud versus on-site is going to continue to swing toward cloud.
Compression Game Changers — The Usual Suspects
As video resolution continually improves, compression is becoming more important than ever. H.264 has been the compression standard that has allowed a lot of the mobile video usage, says Joe Gittens of the Security Industry Association (SIA).
Gittens says people in the industry have been anxiously awaiting H.265, which is the next step in compressing video files even smaller. (For more on current and future compression standards, read “Unraveling Video Compression: The Benefits and Drawbacks of H.265”.)
However, Gittens believes H.265 might be leapfrogged by some of the video standards that are being developed by companies such as Google and Amazon that really need this type of compression. “They run the YouTubes, they run Amazon Videos, they run the Netflix’s — and that’s really what’s driving the improvements,” Gittens says. “So you’re going to see those companies developing compression standards that allow this market to grow even more.”
Gittens says H.265 has already been surpassed by Google’s compression standard and Amazon’s internal compression protocol that they’re working on.
H.265 isn’t going away anytime soon, however. “H.265 will play a bigger part in 2018,” says Miguel Lazatin, product and channel marketing director, Hanwha Techwin America, who says many manufacturers downplayed the importance of H.265 because they weren’t ready, but are now beginning to incorporate it into their product plans.
Seize the Opportunities in 2018 & Beyond
Cameras are getting less and less expensive. How close they are to the bottom is up for debate, but in light of these falling prices, it is important for security integrators to offer more value-added service capabilities, higher level, enterprise-type level professional services, and really couple that with the fact that you can install a product on time and on budget, says Tony Varco of Convergint Technologies.
“Integrators in particular need to realize that they’re not just selling cameras anymore,” Varco says; “you’re selling compliance, you’re selling risk mitigation, and you’re selling solutions that create these business outcomes. To me it reeks of an opportunity to have some complementary, value-added services along the way, and I do think that also helps to prevent what’s happening in terms of the pricing side of things and this whole commoditization that’s taking place with a lot of the equipment that we work with.”
Another opportunity provided by cheaper cameras is a broader audience for video. “There’s a broader audience for video applications today than there’s ever been,” says Tony Mucci of Johnson Controls, “because the cost of entry has really come down to a fair degree and there is a heightened awareness among our end users of the capabilities of video. That continuing education that all of us on the consumer side have as to the functional benefits of video and the quality of video is something that plays into this as well.”
Essentially, Mucci says, falling prices have given security integrators the ability to really offer customers a broad choice. “You can have inexpensive, very value-oriented video, and you can sacrifice the quality, or you can invest a little more and have a broader range of features and functions. And that’s a good choice for us to offer to our customers.”
Another way to get ahead in a healthy market, says Fredrik Nilsson, Axis Communications, is to invest in areas where there’s higher growth.
Axis has seized on this by getting into IP audio and IP intercom where there is very little convergence to IP at this time. “Then hopefully [we can] add value to the partners by saying, ‘We don’t only have video, we have those two, three, four other technologies they can integrate to provide more value for your customers.’”
Privacy Concerns, Coming Soon to a Continent Near You
Privacy and privacy protection is absolutely paramount in European countries, but especially in Germany and the Nordic regions, says Genetec’s Andrew Elvish.
Genetec is the only company to have received a GDPR-ready designation by EuroPriSe, which is a European privacy organization, Elvish explains. “GDPR is a very big part of our story and what we’re bringing to market. We were just recertified three months ago but it was our fourth two-year term in a row. So over the past eight years we keep going back-to-back, and we keep being the only video surveillance software out there to actually receive the EuroPriSe designation for privacy.”
Elvish says things such as privacy and cyber security are going to become a chief concern for the rest of the world very soon.
“It’s an essential thing and so many companies are already demanding it in North America where we have a much different profile of privacy and data security; we can see that this is not far off — probably in a different way, but I see that is a really big driver.”
The Outlook for Video Surveillance Data Storage in 2018
In 2017 the video surveillance community saw the emergence of video surveillance as a service (VSaaS). As predicted, we also witnessed an increase in intelligence in cameras, greater adoption of analytics, and more content aggregation. In addition, biometrics assumed increasing importance as a measure to prevent massive data breaches.
I anticipate a number of key trends to characterize the video surveillance data storage market in 2018.
- VSaaS takes off: Last year we saw service providers and customers testing the market with surveillance-as-a-service, and in 2018 we should watch for it to gain momentum and acceptance with a wider audience. As this service goes mainstream, we’ll also see devices becoming more intelligent. Think of multiple retailers in a shopping mall setting having their video surveillance system managed by their property manager.
- Increase in analytics: In 2017 neural networks, machine learning, real-time analytics, and artificial intelligence all got significant airplay. These forward-looking technologies are rapidly turning into real offerings for 2018, with implications for the security community such as more integration of a variety of sensor analytics.
- More data will be created and retained longer: Retention times aren’t shrinking, and LTO tape is increasingly viewed as a vital element in surveillance storage architectures. With more data being produced that is vulnerable to cyber attack, people are also recognizing the advantage of the air-gapped protection against ransomware that is inherent with tape.
- LTO-8 tape technology lowers the barrier to multi-tiered storage: LTO-8 doubles tape cartridge capacity from the previous generation, enabling customers to store up to 12 TB per cartridge for more cost-effective, long-term data retention. We will leverage these enhancements to deliver multi-tier solutions for persistent data growth and protection challenges in video surveillance, to offer cost-effective tiering for as little as half a petabyte of data.
The multi-tier storage architecture Quantum has articulated as an enabling technology for video surveillance is clearly seeing traction going into the New Year. There are market challenges — both political and technical — but the overall trend is one of progress. Customers have noted that storage vendor consolidation in the channel is resulting in a narrower set of resellers. The market is in a state of flux, and additional stakeholders want to use surveillance data, so educating the market on how to use these architectures to resolve these problems is increasingly important. — Contributed by Wayne Arvidson, vice president, intelligence, surveillance and security solutions, Quantum Corporation, San Jose, Calif.