The January edition of SECURITY SALES & INTEGRATION includes our annual industry forecast as a cornerstone of our special 2013 Industry Forecast Issue. For the piece, I interviewed 20 of the industry’s most knowledgeable market analysts, business experts, systems integrators, manufacturer representatives and trade association directors. Some of their perspectives can be found in the magazine article, with the balance of their assessments appearing in separate Under Surveillance blog posts.
Featured in this installment: Fredrik Nilsson, General Manager, Axis Communications Inc.
What do you expect will be the biggest changes, challenges and/or opportunities as they relate to security markets?
Fredrik Nilsson: Campus-based environments like education, health care and large enterprise continue to be strong markets for IP-based video surveillance. Government and transportation customers are growing rapidly, and the sentiment in these previously all-analog markets is no longer “Why IP?,” it’s “Which IP?” And retail, one of the last strongholds of analog CCTV alongside banking, is starting to converge at a rapid pace thanks to the rise of sales and marketing analytics, encoder solutions, hosted video options and lower cost HDTV-quality and 360° IP camera options. With the retail market showing new found commitment to IP video, mid- and enterprise-sized systems in all the main vertical segments have bought into convergence. The next big opportunity for integrators to sell IP solutions is not necessarily in a specific vertical market, but in small system sizes. This less-than-16-camera market is dominated by analog. Some estimate that 95% of these solutions are analog-based. But with the rise of hosted video and the emergence of intuitive onboard storage solutions where the camera acts as the recorder, small system owners can now enjoy the quality of IP video at an attractive price. In some installations, hosted and onboard storage can be combined to create an even more powerful solution. The majority of these smaller system targets are found in the retail market, with shops, franchises, convenience stores, liquor stores and quick-serve restaurants lining every street corner. But there are also plenty of IP video opportunities to be had in the thousands of small offices, gas stations and banks around the country.
What do you envision as far the industry at large is concerned in 2013?
Nilsson: Video continues to be the dominant market within the electronic security industry thanks to the most innovation and opportunity. With a $10.5 billion market size, today video is much larger than access control. Within the video market, the technology battle wages on. Analog continues to decline while IP is getting a bigger and bigger slice of the pie. In 2013, it’s predicted that revenue of IP cameras will finally outnumber new analog ones, and the U.S. market is even ahead of worldwide trends when it comes to the shift from analog to digital. We anticipate around 25%-30% overall growth for IP video in 2013. Mid- and enterprise-sized IP systems will continue to flourish, but we’ll see the most growth opportunity of IP video in the small systems market of 16 cameras or fewer thanks to onboard storage and hosted video technology. Also, with so many IP video vendors in the market, it’s likely we’ll see consolidation of a number of vendors. In order to avoid potential product delivery and support issues, integrators should be sure to partner with vendors that have not only a well-established market presence, but also a clear plan for the future.
What are some pressing security issues and surprises we might see in 2013?
Nilsson: The lack of understanding about hosted video and what the cloud can do for the market will continue to persist, unfortunately. We live in a very conservative market, and the word “cloud” can scare some folks away. But there are so many opportunities out there for the cloud – especially with businesses and large corporations that have directives to move their data offsite – that those who don’t commit to at least learning about the technology, partnerships, and where to propose a hosted solution risk falling behind. We’ll continue to work with our large data hosting and service provider partners to educate integrators on where a hosted solution is viable, and when it’s not the right fit for a particular customer. At the end of the day, it’s all about providing options and solution flexibility. Considering a hosted video model not only presents a recurring monthly revenue opportunity, but opens the doors to multinational install sales with a few cameras at many different sites, sales and marketing data reporting opportunities, and the prospect of partnering with some of the largest IT companies in the world. The fast development of new products really is mind-blowing. Compared to the analog world where innovation happened at a snail’s pace and manufacturers have pulled R&D resources away from that market, IP video is providing previously unheard of capabilities in products each quarter. Edge-based analytics keep on getting better, and there are great development platforms on cameras today that you can run analytics apps on top of. As the market grows, the world of IT keeps getting more and more interested in video surveillance, both vendors as well as the channel. Industry education must be a critical business priority to keep up. Leverage tradeshows, colleagues in the industry and your manufacturer training departments to help you create customized educational programs that will add value to your team.
· General Industry
· Installation and Service
· Physical-IT Security Convergence
Commenting is not available in this channel entry.