State of the Market: Video Surveillance
Adaptable and ever changing, the video surveillance market continues to evolve with new technology and further integration, making its outlook as strong as ever.
The video surveillance market is strong and will continue to grow. It is less a lumbering giant, though, and more an agile athlete, able to pivot and adapt — it just happens to be the largest one on the security court. Any fears of market saturation seem to shrink in the face of the cross-functional video applications, integrations, video surveillance as a service and improving technology, better cyber security, and the unquenchable thirst the world seems to have for having cameras everywhere.
In the U.S., a robust economy and increased awareness of the need for security have fueled the growth in this industry segment, so much so that some security integrators are finding their biggest challenge is learning how to harness that growth and not let it run away with them.
Paul Garms, director of regional marketing for Bosch Security and Safety Systems Inc., Fairport, N.Y., says 2018 was one of the strongest they’ve had recently. Garms is bullish not just on video, but on security in general. “We are cautiously optimistic about 2019,” he says. “We will see how the economy develops going forward, but we have a strong project pipeline for 2019 and I think the verticals that we focus on specifically, such as critical infrastructure, retail, smart cities, and public transport systems, we see those continuing to grow this year.”
Scott Dunn, senior director, business development solution and services, Axis Communications Inc., Chelmsford, Mass., says 2018 was a great year. “We are having a very successful year,” he says about 2018, the year in which interviews for this article were done, attributing his company’s growth, in part, to its close work with the entire ecosystem of the security industry. He says Axis is also in the middle of evolving into more than just a product company, but a company with its own solutions. “We have our own services that we are starting to roll out,” he says, “so that enables us to bring value to all parts of the ecosystem instead of just saying, ‘Here’s a camera — go buy it.’ So I think that’s been a key part of our success and why we are experiencing such a great year this year.”
This state of the market doesn’t seem to have taken anyone by surprise. In fact, a rather robust market is what many projected. “The video surveillance market was quite strong in 2018,” says Jeff Whitney, vice president of marketing, Arecont Vision, Glendale, Calif. Whitney says this is what they forecasted, and it is why Arecont introduced its own VMS system. “We see no indication that the global surveillance market will decrease for 2019, and are quite confident that customers will continue to invest in surveillance.”
Though with some of the aforementioned changes and factors affecting the market, such as greater video surveillance integration, increased VSaaS, a greater migration to cloud, and such, many security professionals — from manufacturers to security dealers and integrators — seem to be taking a more realistic approach and not taking a strong market for granted. Understanding the changes and pivoting with the market is crucial to thriving.
There is no denying the economy is strong, and that certainly is helping fuel the market; a decade ago, companies were learning to tighten their belts and cut costs, often only to narrowly sidestep going bankrupt. However, while occasionally some may still be tentative, companies are hiring, they’re building new facilities, they’ve got a lot more people and assets to worry about, and they’ve got some money to spend, describes Dunn.
“A good economy definitely helps,” Dunn adds. “Companies can invest, they can hire, and if they need more facilities, they need to protect those facilities. So from an external factor the economy has definitely helped. But the threats haven’t gotten any easier either. We’re getting more complex threats, so of course that is driving the need for security.”
A strong economy, though, cannot alone account for the strength of the video surveillance market. Certainly increased awareness and more knowledgeable customers (who happen to have more capital to invest in security solutions), are helping security integrators up their game in the video surveillance business.
Too Much of a Good Thing?
Steven E. Paley, president and CEO, Rapid Security Solutions, Sarasota, Fla., says that with security on everyone’s mind, he finds it hard to believe that anyone providing a decent level of service would not be growing their business in this economy. “Really for us we have to make sure the growth is controlled so that we can still provide a high level of service and have enough technicians to actually install and service the stuff,” Paley says.
With this unprecedented growth, Rapid Security, which does around 75 percent video surveillance or access control work, has had to evaluate its workforce to make sure they are not taking on too much work and overloading the system. “We’ve had to shed some clients,” Paley explains. “We look at the client and ask ourselves what is the strategic value to us of taking on this new client? Because we don’t need work just for work’s sake.”
This streamlined philosophy is a result of a bad experience that Paley calls “breaking the machine” when his company took on bigger and bigger projects for which they were not prepared staff-wise to handle in early 2018. “We’ve cleaned up the mess, so to speak, but I think we learned a lesson about growth this year. If resources were unlimited it would be one thing. … We just have to be careful about how we grow out in the future.”
An important piece of the puzzle is getting the right people in place to meet the challenges of this market. That’s easier said than done, according to many integrators. Bill Hogan, president and CEO, owner, D/A Central, Oak Park, Mich., says the market for talent is the key challenge. “It is far more important than competition and technology. Finding talent is a full-time job, and the second part of it is ongoing training. Every employee wants a career path and not just a job. We are finding great success with bringing in new people with little experience and giving them an opportunity to grow.”
A Market in Flux
In addition to the growing pains and the struggle to fill positions with good, qualified people, security integrators are finding that the video surveillance market isn’t the same as it was 10 years ago.
“It used to be once upon a time we dealt a lot more on the hardware side of life,” says Joey Rao-Russell, president and CEO, Kimberlite Corp., a Sonitrol franchise, Fresno, Calif. “Now there’s this whole other software piece — whether it’s intrusion, access control, any of it — where security-as-a-service is becoming probably the largest trend that makes it a lot more interactive perhaps than it used to be.”
Rao-Russell says that while video was part of 44 percent of Kimberlite’s sales last year, many of those sales included interactive services with video and access control together or video and intrusion together.
Tim Baker, global marketing director for commercial security, Honeywell Security and Fire, Melville, N.Y., agrees that although the economy is having an impact, it is affecting video less so than in some other businesses, such as fire alarm. Baker says it is integrated solutions in general that are helping to grow video. (For more about the increasing uses of video, see “Video Wears Many Hats,” on page 40.) “Instead of just asking for video solutions from integrators,” Baker says, “customers are asking, ‘Are there other ways that I can get video validation of alarms?’ as an example.”
Something that is facilitating this change, Baker says, is hardware and software that are advancing to the point that they can bring together a range of different systems along with enabling technologies such as artificial intelligence (AI). Baker says with that type of thinking added to the existing building space, “We are uniquely positioned and can help our integrators grow by providing end users with multiple paths to upgrade — whether that means starting with access control or video or intrusion and then leveraging existing infrastructure, whether it’s IP or coaxial in nature, and using that existing infrastructure as a means to then upgrade to the latest technology and combining security systems with the latest third-party technology like artificial intelligence or deep learning and solve a different range of challenges for our customers.”
Rather than seeing security industry growth as something that happens in greenfield environments, Baker says more and more integrators are able to focus on existing spaces and then use those as an opportunity to have a conversation about how to integrate not just video, but video along with access control, with intrusion, with other building management systems. “It is a really good path to growth with our integrators,” he adds.
Baker says that whether it is using video in the security space for intrusion detection or in place of motion sensors or for access management for a second set of credentials, or if it is using video for outside security use cases such as space optimization or people counting, “it is coming closer to realizing the video camera as the ultimate edge device in the security system.”
Even though the general perception is that cameras are well-saturated in an existing infrastructure, Baker maintains there is still an opportunity to drive more value out of those cameras by using them for these additional use cases. “So that could be, for an integrator, selling analytics licenses or being able to upgrade that camera to be able to provide the level of fidelity needed to use that camera as a sensor in a different use case. That can definitely be a path to RMR, especially when you talk about being able to tie analytics licenses on a per-camera, per-channel basis.”
As end users are more aware of the possibilities, they are crying out for solutions that actually solve specific problems, says Bill Hobbs, senior vice president of sales, 3xLOGIC, Westminster, Colo. “Providing an end user a picture or video of the event long after the damage is done does not solve the problem,” Hobbs describes. “End users are becoming more sophisticated buyers as the control of security solutions moves from the basement to the IT team. The effect of this migration has been and continues to be an end user who is asking better questions and wants products that do not burden.”
Hogan says he is optimistic about the growth of the market going into 2019, but he adds, “I am cautious about our vigilance in keeping ahead of technology. Commoditization of new technology seems to be happening overnight. If we are not pushing the technology window, we are at risk of being left behind.”
And so the question becomes, can the security integrator evolve at the same rate that the video surveillance market evolves?
Evolving Integrators for an Evolving Industry
As end users become more savvy, they are challenging integrators to mix-and-match the best of their technologies from a host of different manufacturers to effectively solve problems for them. (For more about interoperability issues with video surveillance devices, see “You Keep Using That Word…” on page 38.)
Security integrators will find it more difficult to find all aspects of a complete solution from a single source and will need to be adept in knowing which third-party provider has the right analytics package to power the solutions that may already come from several manufacturers. “Having integrators that are able to do that level of deep customization and integration is key,” Baker says. “It is definitely something that we are seeing asked for more and more, or we’re seeing integrators having to upsell that value.”
Ken Francis, president, Eagle Eye Networks, Austin, Texas, concurs, adding that a great deal of Eagle Eye Networks’ lead activity is being generated by end users searching for a cloud/subscription system that alleviates their management of the day-to-day operational aspects of their video surveillance system.
Fortunately, organizations are rising to the challenge and offering security integrators the support and education they need to be better qualified to offer the complete solutions customers are demanding. Bosch, for instance, has a new offering now for on-site support for installations. “We will actually send people out from Bosch to help with larger, more complex installations,” Garms says. “So that is one of the areas where we are creating an offering to help integrators who may not have that trained install force. I think the other piece is training. We are doing more and more online training courses, making sure we offer enough online and hands-on training across the board for integrators.”
Garms says this approach can help, but with high turnover and the difficulty some integrators are having hiring installers and technicians proficient in all aspects of networking and connected applications, in addition to the traditional video surveillance and security-related devices and services, offering support and training alone is not enough. Garms says that training and ease-of-installation go hand-in-hand: “The easier we can make it to install, the less training they need.”
Unfortunately, Hogan says, technology often comes to market that is left under-utilized: new features are not activated, training is lacking, and the result is far less impactful than the promise. “Configuring and training is a value-add for the systems integrator to show off the new technology,” he explains. “Once you have shown end users how to utilize the new features, they love the enhancements. Unfortunately, I see many end users still using an old interface, seemingly unaware of how the system can help them do their job.” This is where educated and knowledgeable security integrators can really differentiate themselves and help their customers see the value the integrators have brought to the table.
With that in mind, continuing education is needed across the country. “Many are talking about the Internet of Things,” says Bob Dolan, director of technology, Anixter Inc., Glenview, Ill., “but each of us grasp it in unique ways. As a result, different definitions and terminologies are emerging and causing confusion at all levels of the market — end users, integrators, distributors, manufacturers, consultants, architects and others.”
Thankfully, groups and individuals are seeing the need and taking steps to meet the needs. In fact, Garms described the recent launching of the Open Security and Safety Alliance (OSSA), of which Bosch is a founding member. The goal of this organization, Garms says, was to develop a framework that would set standards and specs for components not just of video but also including the operating system of the cameras, because most manufacturers have their own proprietary operating systems. “Standardizing as an industry on some things will certainly improve the speed at which we can all develop and bring third parties in to develop for us to hasten our progress toward AI and analytics and some of the other things that we want to do,” Garms describes. (For more about the OSSA, see “Alliance Designed to Foster Collaboration Innovations” on this page.)
The security/surveillance industry has ebbs and flows of challenges, Rao-Russell describes. “Right now we are in one of the more challenging times due to changes in technology and changes in how things work and trying to balance legacy versus new versus speed of change and those types of things. I still think it’s very optimistic for what we do.”
Rao-Russell sees the business more holistically — as less of a business and more of a general service provided. “It’s not just the security that we provide and the video we provide; we honestly provide peace of mind,” she says. “We get to make money protecting people. That’s a valuable thing. We’re going to change the way we do it, but it is still a valuable business. So if we do it right and if we are diligent and if we are respectful of what the customer wants, I think the sky is still a limit for our industry.”