The July issue of SSI includes a far-reaching roundtable on the subject of video surveillance innovation featuring experts from eight industry-leading manufacturers. My discussions with each participant was more indepth than the confines of print would allow so here is another in a series of extended offerings. I encourage you to review each of them and compare and contrast how each subject views security video innovation, its ramifications, and innovation in general. Up this installment: Pierre Racz, President and CEO, Genetec.
The word “innovation” gets used and abused a lot; what does it really mean to you?
Racz: Nineteen years ago, three years before the beginning of Genetec, intuition led us to think that point to point networks that were characteristic of telecom architectures of the day, were the wrong way to go for video. We were unsuccessful in convincing the larger companies and partners with whom we were architecting video networks of the day that this was the case. The way to go was point-to-multipoint architectures based on multicasting on the Internet protocol, and not switched circuit networks, loved by the telcos. We were undaunted by the fact that the video compression technology of the day H.261 was expensive and suffered from relatively poor picture quality as compared to analog broadcast quality. We were unconvincing to the influential analog video engineers at the time — who told us this would never catch on. We were convinced that Moore’s Law would smooth all that out. And that was the key insight. For us, the analog NTSC and PAL standards were ancient low-pass filters on image resolution. And we were naively sure that IP high-resolution digital cameras would be manufactured and adopted much faster than they actually were. When presenting to customers, they would often ask, “Where is the analog switching matrix”? To which we would answer, “The network IS the matrix.” Innovation for us is the belief that there exists a better mouse trap — and we stubbornly search for it.
What other ingredients are required for an innovative technology or product to make a real impact in the marketplace? Where do ingenuity and marketing savvy intersect?
Racz: Genetec was lucky in another respect: we met quality partners who helped fill our initial gap in business knowledge, brought us to markets we would have been unable to reach ourselves, and enthusiastically promoted out innovations. Marketplace success depends on having a shared vision between us — as technology creators, our integrators and channel partners who deliver the technology and our customers.
How can a supplier avoid innovation giving way to commoditization? How can margins be maintained such that profits can help sustain further R&D?
Racz: It is impossible to prevent the commoditization of a good idea. Imitators will invariably spring up. We have adopted two strategies to deal with this inevitability: the first is to more efficiently deliver this technology to the market; the second is to invent new technologies that the market will require tomorrow. In his book, “The Road Ahead,” Bill Gates predicted that the internet will eliminate middle men that don’t have any value-add. It’s no big secret that to maintain margins, you must demonstrate a clear value-add. Our clear value-add is our innovations in technology and delivery mechanisms from the manufacturer through the channels to the end user.
What are the three latest and greatest innovations you have seen in the video surveillance space and what do you like about them so much?
Racz: First, the cloud is an exciting new delivery mechanism for video surveillance software allowing us to deliver features previously only available to critical infrastructure projects to the small and midsize business market. Our hybrid approach allows our enterprise customers to benefit from as much of the cloud elasticity as they see fit. Second, it’s no longer the case that we have to convince somebody that IP video provides higher resolution and better video quality than analog. Furthermore, the adoption of IP video has enabled organizations to share multimedia information across departments and between different organizations and agencies. This availability of multimedia sparks ideas in the nonsecurity parts of organizations on how to gain operational efficiency. This opens the door for new and previously unimagined products and features. Lastly, a trend in the software industry as a whole is a shift away from desktops to mobile productivity platforms. The security industry is no exception. This shift requires fresh thinking in software design, network topologies, and device optimizations. For creative engineers, this is very exciting.
More specifically, which innovations hold the greatest upside and why?
Racz: Technology has evolved to the point that people expect software to improve their lives. Information technology is as pervasive as the power grid. It’s always on; it’s always there; and it’s convenient. This has changed the expectation of how this technology is delivered to the consumer — and at what cost. Residential and small business users are being relieved of the need to manage, configure and maintain servers, perform backups and deal with infrastructure-based technical problems. At the industrial level, we are pulling back from the strategy of offshoring our IT needs for dealing with IT personnel shortages. The cloud allows IT directors to bring back in-house the activities core to their business, and benefit from economies of scale available in data centers to manage commodity actives such as server maintenance, software upgrades, patch deployments and backups. Furthermore, they are freed of the infrastructure burden of managing floor space, cooling, and power redundancy. This brings affordable disaster recovery planning and management to smaller organizations.
Can you identify three particular vertical markets that represent the greatest growth potential for innovative video surveillance solutions and why?
Racz: Citywide surveillance is one. Genetec has delivered many citywide solutions in small and large metro areas but what is new and exciting is how the use of technology in this sector has evolved. This vertical is under constant budget pressure; however this opens up opportunities to use technology to deliver the same level of services with fewer resources. Small and medium businesses is another area. Genetec is excited to deliver solutions to what we deem as an underserved area of the market which includes smaller chain retail franchises, individual store locations, small schools, daycare and kindergartens. We feel this market sector is underserved, as they are presently unable to benefit from business level features in security solutions. Retail is the last one. Police expect retail to manage a larger part of the law enforcement activities surrounding crimes that do not involve crimes against person. Providing this security is an additional expense that hits squarely the bottom line. Retailers are constantly turning to IP video surveillance systems to minimize the cost and effort and maximize the efficiency of conducting these activities. Being able to react quickly and in real-time is key to curbing criminal activities perpetrated against retailers. While video surveillance has been in use for long time, the need to reduce loss and shrinkage will drive an ongoing shift to IP in order to improve security. Among the most sophisticated users of the technology, retailers are unifying their VMS, access control and LPR while also leveraging their security data to improve operations in new and exciting ways, including using video to understand what displays are getting more attention to help them in their merchandising efforts.
What are one or two other video surveillance innovations you see holding potential but are unsure whether it will be realized or not?
Racz: Video surveillance for business intelligence. While the value proposition of using video surveillance investment to mine data to improve marketing and operational efficiency is powerful, the need for highly performing hardware and analytics is a significant challenge in order to run such analysis. And facial recognition. While the demand for accurate and reliable facial recognition capabilities is beyond question, fielding such analytics in real-life applications becomes a large challenge What are one or two video surveillance innovations that failed to catch on and to what do you attribute their failings? Racz: Proprietary IP video surveillance. This did not catch on due to a closed API making it nonextensible; being locked into one manufacturer so that the customer could not take advantage of other, more innovative camera or hardware manufacturers; and the end user ‘locked in’ to one supplier so as not being able to grow or extend beyond the scope of the supplier. Also, specialized or proprietary video codecs. They did not catch on due to having no standardized cohesive format; locking to each user or deployment; and being difficult for third-party companies to integrate.
How will the trend toward standards, open platforms and interoperability affect innovating video surveillance solutions?
Racz: Genetec builds an open-architecture IP video management system that scales up and out to federate multiple systems. We could not have done this without relying on user-specified standards such as the IP protocol suite of standards. The video interoperability standards are only on their first steps in becoming truly useful standards. Given enough time, truly useful user-specified standards will eventually emerge.
What are three to five recommendations or tips you would offer an installing security dealer or integrator looking to become entrenched and grow their video surveillance business?
Racz: Hire a workforce with IT skills and familiarity with IT approach and methodologies. Implement an apprentice program, pairing young computer enthusiasts with older physical-security-savvy engineers. Select two to three specific vertical niche markets and excel in just those areas. Focus on core verticals to specialize and develop competitive advantage when pitching and bidding out jobs. Focus on knowledge acquisition and development including ongoing training — IT and manufacturer-specific training. Why? Because the environment and technology innovations are constantly changing so integrators need to stay up to speed. If the integrator and support team don’t keep up — they will lose out to other vendors who do.