Utilize the Cloud to Take Surveillance Sales to the Stratosphere
Lockdown prompts resellers and end users to take a fresh look at Cloud video surveillance, analytics, APIs, integrations and the continual delivery of services.
It was off the table. For much of the past year we couldn’t travel, dine out or work in the office. Working remotely gave business owners a new perspective on how their businesses functioned — or didn’t function. Suddenly, office video surveillance systems weren’t just for crime prevention or forensic investigation of incidents.
Stuck at home, the average business owner now wanted to use their video surveillance system to check in at work several times a day. Many didn’t like what they saw. Their security cameras and DVRs just weren’t very good. The systems weren’t flexible, easy to use or reliable. The pandemic put security systems to the test, and frankly, many flunked
Fed up, end users turned to their resellers for help. The result? Over the past year, more resellers are saying now is the time to move to Cloud.
Health concerns, lockdowns and new work-from-home arrangements prompted our industry and our end-user customers to reconsider VSaaS (video surveillance as a service). They looked at how VSaaS and cybersecurity improvements are continuously delivered and how analytics can optimize business operations, and they revisited ways to do standard integrations, such as connecting video and access control.
They also discovered new ways to customize systems, such as using body cameras in a retail or healthcare setting and Cloud-based sensors.
Like their alarm industry brethren, resellers are increasingly finding the subscription model attractive from both a technology and a financial management perspective. Security resellers’ migration to Cloud took off in 2020 and shows no signs of slowing in 2021.
Pandemic a Catalyst for Cloud
Video surveillance industry analyst Josh Woodhouse in February launched Novaira Insights, a market research provider covering video surveillance, physical security and the Internet of things (IoT). Novaira’s first report includes a lot of insight into VSaaS. He calls the pandemic a “catalyst for people considering Cloud and managed services solutions.”
Businesses started to look at upgrading to Cloud as soon as their need for remote access and maintenance of their video increased, brought on suddenly by the pandemic response.
While it’s obviously possible to upgrade to a new non-Cloud system, Woodhouse notes that Cloud “can be futureproof and flexible. If I’m a business owner and I’m going to upgrade, maybe now is the time to consider using more Cloud in my architecture. In North America, that’s the dynamic that seems to have gone on.”
These actions are part of an ongoing trend in an industry shift toward greater Cloud adoption and, therefore, more recurring revenues. The preliminary findings of Novaira Insights’ “The World Market for Video Surveillance Hardware and Software – 2021 edition” estimates “in the Americas’ market, the total video surveillance hardware and software market declined 2.8% in terms of revenues in 2020 from 2019.” (Novaira’s figure excludes thermal body temperature monitoring solutions.)
However, there is a big split between video surveillance hardware and software. For several years, software revenues have been growing at a faster rate than hardware revenues. Despite the overall economic decline in all industries, including security, Woodhouse noted that, “software and managed services was a standout area of growth last year and overall grew 8.8% in terms of revenues from 2019 to 2020.”
The business model for true Cloud is subscription. Once considered a barrier for resellers and end users, resistance has dissipated as subscription has become the norm across most industries. We pay for our smartphones, broadband and cable by subscription; and our business systems like ERPs, CRMs and email are all Cloud-based subscription services.
Subscription cost is determined by the features included and we’re accustomed to being able to add or delete features without a technician visiting our home or office. The convenience and cost effectiveness of subscription for resellers and end users was illuminated in 2020.
During the height of the pandemic as business hours changed, stores started to restrict the number of people allowed in at one time, and businesses like fitness centers, which were generally busy from 5 a.m. to 10 p.m., were suddenly empty.
As a result, business owners wanted to alter their security systems — turn off some cameras, add retention capacity for other cameras or add people counting analytics, for example. An onsite visit is necessary to make these kinds of changes to a traditional on-premises system.
Onsite visits are always expensive. During lockdown they were especially difficult to schedule. For those with Cloud video surveillance, making changes is a simple and inexpensive task.
Remote Access, Simpler Installs & Service
Problems with remote video access spurred the wake-up call for end users during the pandemic. So why is remote access problematic for traditional systems? Because remote access is not architected into them.
When remote video access is added as an afterthought, the streaming is often choppy and the image quality is poor. Browser incompatibility adds additional headaches. And since encryption is rare in these systems, there are additional risks.
With Cloud-based systems, remote access is built in and video access and streaming are smooth. Web browsers are supported, and mobile apps are common. Some providers include encryption at rest as well as encryption in transit.
Resellers of high-end security systems typically need extensive training on various systems. Installations are time consuming and can be complex. In addition to installing the operating system software, configuring routers and setting up storage servers, resellers also need to configure cameras and install application software.
A Cloud-based system, on the other hand, is considerably less complex. Resellers plug in an onsite appliance to connect cameras to the Cloud and auto-configure cameras.
Maintenance of onsite hardware and software, firmware, and configuration updates require expensive truck rolls and specially trained technicians to troubleshoot. With a Cloud system, the compute-heavy hardware and software resides in the Cloud, and the maintenance of the VMS is taken care of by the Cloud provider.
Friendlier Financing, Appealing TCO
On-premises systems require a significant capital expenditure for business owners and support and maintenance expenses can be difficult to accurately predict. Adding cameras and retention capacity is expensive. Fortunately, Cloud video surveillance’s subscription model requires a low initial capital expense and monthly operating costs are predictable.
Business owners pay a monthly fee based on the number of cameras and retention period required for each camera. They use what they need and pay for what they use. As a retail business or manufacturing facility grows or adds more locations, it’s easy to scale the video surveillance system. Scaling down, for example during seasonal slow periods, is easy as well.
The beauty of subscription for the reseller is the constant, predictable revenue stream, which adds tremendous long-term value to their business. The integrator’s and customer’s goals are aligned, with pricing based on “pay as you go for what you use.”
Resellers transitioning to a recurring monthly revenue (RMR) model is seen as inevitable, and those who made the transition prior to 2020 realized it was a good investment. For resellers that work with a true Cloud provider, the customer billing should be simple and seamless.
What factors contribute to the high cost of on-prem systems? The list is long: hardware and software installation and maintenance, router and system configuration, operating system backup, operating system security patches, remote network access, IT staff time, physical space for systems, utility costs such as electricity, training staff, software update installation, central management, redundancy, mobile apps, video backup, cybersecurity support, and multisite integration.
In contrast, the initial investment for VSaaS is low. When all costs are factored in, the ongoing
monthly costs are lower due to the economies of scale from the shared Cloud infrastructure and support.
Cybersecure and Primed for Analytics & AI
Our industry was slow to recognize the importance of cybersecurity, but it’s top of mind now thanks to high-profile cybersecurity incidents, inside and outside of our industry. True Cloud providers should be SOC-compliant and should offer continuous delivery of updates that are managed in the Cloud.
Cybersecurity is built in, ensuring cameras and camera LANS are secure. Resellers can rest assured that even a previously infected camera cannot impact other cameras or devices. All of this is done by the Cloud provider on an ongoing basis. Resellers and end-user customers do not have to install or update anything onsite.
Resellers and end users learned how standard analytics can be used in new ways during the pandemic. For example, retail establishments could use people-counting analytics to ensure social distancing or to keep an eye on occupancy levels in a facility.
Schools, healthcare facilities and businesses began to use thermal cameras with integrated analytics to do initial screening for elevated body temperature. End users found more reasons to finally integrate their video systems with access control.
Picking and choosing analytics and integrations helped businesses weather the pandemic storm. It helped them secure facilities and operate efficiently under new conditions. With data from surveillance systems, end users have important information as they figure out ways to increase profits in the post-pandemic world.
In 2021 new use cases are emerging for the commercial use of body cameras. Not just for law enforcement, resellers are now exploring how body cameras can streamline curbside pickup for retail, and ensure safety and accountability for delivery service workers and home healthcare professionals. Customers are also deriving new value from Cloud-based sensors.
In 2020, our industry saw example after example of how true Cloud systems and the subscription model can tangibly affect the day-to-day operations of retailers, restaurants, multisite businesses, schools, healthcare facilities, and more. As a result, end users and resellers will start to expect and demand open platforms and the freedom to choose or reuse their own cameras.
Our industry is modernizing rapidly. Artificial intelligence (AI) in the Cloud will continue to improve video analytics, and features such as license plate recognition will proliferate beyond parking lot applications to other commercial uses. We’re all looking forward to having the pandemic in the rearview mirror, but lessons learned during the past year will serve our industry well. And we have many reasons to be optimistic.
The API (application programming interface) economy is here, and it’s bringing our resellers and end users infinite ways to improve business operations and make the world a safer place.
Ken Francis is President of Eagle Eye Networks.
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