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The physical and surveillance markets hold lots of potential.
With gun violence and other physical attacks on companies making headlines these days, the interest in and demand for physical security-related technology are growing. Read how the physical security market is changing and what it all means for solutions providers.
Q: What are some major trends that are currently playing out in the video surveillance business?
A: The commoditization of IP (Internet Protocol) cameras is the single greatest disruptor in the video surveillance industry right now.
Migration from analog to high cost IP cameras typically amounted to two or three times the cost of analog cameras. Not any longer. Fueled by end-user demand and greater competition—and made possible by the development of a common infrastructure and standards-based communications protocol—the prices of IP cameras have decreased significantly, and performance has improved considerably. All of this has led to phenomenal growth in the video surveillance market with an average annual growth rate of 13.1%.
The rise of artificial intelligence (AI) and IoT solutions are also having a huge impact on the physical security and surveillance market. As part of the IoT revolution, artificial intelligence video analytics have led to an expanding range of applications for video surveillance. In these applications the camera serves as a highly versatile IoT sensor, capturing data that can be observed in the visible light spectrum. Cameras and their enclosures will increasingly operate as platforms—aggregating arrays of IoT sensors and hosting distributed analytics. Unlike IoT sensors, which will probably be very specialized, with limited utility for multiple tasks or environments, cameras will act as multipurpose sensors and support numerous applications.
Q: How will commoditization and the rise of AI and analytics affect the physical security channel?
A: We’ll see security resellers being compelled to evolve from a “cost-up” contractor, business model to a value-based model. Demand for video surveillance will continue to increase in support of traditional “security-based” applications, like situational awareness, forensics and deterrence. But the trend toward commoditization will only accelerate as component prices continue to drop and competition, including self-performing end users, continues to grow. The security reseller’s “cost-up” business model will be strained, as the cost of the primary system components continues to fall.
The good news is that AI analytics and IoT/physical security technologies will create new opportunities for integrators and VARs. The new technologies will give the resellers an expanded menu of solutions that can return the end user’s investment. Solutions that can reduce the customer’s costs, improve their productivity and increase their profits will become more attractive to customers and justify margins that are based on value and ROI—as opposed to the shrinking margins resulting from competitive bids on commoditized components and labor.
Q: How does cybersecurity play into all of this?
A: In a big way. In fact, it’s the most troubling issue confronting the video surveillance industry right now—and the most discussed topic at nearly every physical security event. There are millions of IP cameras installed all over the world that lack the most basic cyber hygiene, leaving end users’ IT departments with a big problem. Which will only get worse as the population of IoT sensors joins the growing installation base of IP cameras over the next few years.
But there’s opportunity in cleaning up messes. IT VARs, armed with networking and cybersecurity expertise, will have opportunities to get involved and apply IT industry best practices to the design, deployment and lifecycle management of these systems.
In short, the physical and surveillance markets hold lots of potential. It’s definitely a specialty worth pursuing.
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