"Additionally, they can be powered over Ethernet cable, and are very quick and easy to install and maintain. This means head-end and storage cost will be reduced, cabling costs will be reduced, and the installation and maintenance will be less expensive," he says.
According to Gary Perlin, vice president, video products, Speco Technologies, dealers have a responsibility to demonstrate for their customers a three-pronged approach to TCO - IP vs. analog vs. HDcctv - and to then let the customer decide what is in their best interests.
"The dealer can only show the facts. In the final analysis, the end user knows what is important to them and how many years they need to get out of their system," Perlin says. "More often than not, barring special circumstances, analog will still provide the lowest TCO on small- to midsize systems."
Tread Carefully Discussing ROI
Maneuvering through an ROI discussion with an end user has its own complexities that dealers will do well to prepare for and understand. Nothing less than a candid discussion about how the customer will be best served is acceptable, according to sources interviewed for this story. For instance, ROI by itself says nothing about the risk of an investment; it simply demonstrates how returns compare to costs, assuming the security solution delivers the desired results.
"It's not the dealer's place to make the ROI case. It is the dealer's role to contribute to the end user's ROI calculation," Banerjee says. "A true consultative salesperson sells whatever makes the best sense for the customer, even if it is a DVR."
The dealer must have a clear understanding of their customers' expectations from the onset, Robinson says. "For instance, they don't want to get called out to a customer site simply because the customer wants to go IP with no compelling reason," he says. "You can make the best ROI case when a customer is fairly technologically savvy and the IT department is involved. If they can leverage an existing network, that's even better."
Among the advantages of an IP video surveillance solution to discuss, future-proofing is probably the best ROI case to make to the end user, says Schwemmer. "Manufacturer support will be readily available; support for software-only solutions on hardware platforms of their choice now becomes feasible," she says. "And the ability to move gradually, to establish a migration strategy, allows the customer to see the proof of ROI throughout their implementation."
Wilson advises dealers not to oversell IP, and not to sell against analog. For those needs where IP does have an advantage, it is easy for dealers to present clear benefits. "Customers typically aren't worried about the cost of one camera versus another. They are concerned about replacing capital equipment before it has been fully depreciated," he says. "Such as having to pull their old system out and totally replace it, whether it's the entire system or the control room equipment."
Oftentimes, anecdotal success stories that focus on increased functionality and efficiencies can be used by the dealer to illustrate tangible evidence when discussing ROI, says Jeff Stout, network solutions manager, Tri-Ed Distribution.
For example, Stout recently advised a dealer that installed nine cameras at a daycare center in New York. While an analog system was estimated at around $13,000, the facility instead chose a $19,000 IP-based system. To offset the additional cost, the end user approached their clients and made a proposition: for an additional $40 per month, the facility would provide Web access to view video of their child's classroom.
The compelling case for the purchaser to go with an IP-based solution is the video system became a revenue source for the facility. Ultimately, the system allows 50 users to be logged on simultaneously. At $40 extra a month per customer, the daycare center is realizing an additional $2,000 per month.
"Every situation is different," Stout says. "If you think just a little bit outside the box, all of a sudden that system becomes a tool that the end user can use, whether it's a security tool, a training tool or a revenue source."