What trends can we expect in 2011?
City surveillance, HDcctv, cloud-based video, the Indian and Chinese markets, analytics, the move to 3D and thermal imaging... All are covered in IMS Research's forecasts for 2011, as Brian Sims reports. Wireless infrastructure has a number of things going for it right now.
First, it reduces the cost of infrastructure when compared with the traditional trenching and laying of cable which, in the current economic environment, is unsurprisingly popular.
Second, wireless infrastructure offers networking in areas of cultural significance, such as city centres and historic sites, without the need to dig up roads: in some cases, it's the only option.
Third, wireless technology can be used in temporary video surveillance installations to provide a degree of flexibility that a wired solution just cannot offer. In these days of austerity, moving cameras when and where you need them is a more attractive option than buying new ones.
Finally, the end user sector that suits wireless infrastructure best is city surveillance (municipalities), which just happens to be the fastest-growing vertical market for video surveillance.
• Growth potential for the city surveillance market
• HDcctv joins the fray in 2011
• Mist clears on cloud-based video surveillance
• VSaaS solutions and other services
• Will India's video surveillance boom be as big as China's?
• Release of foreign direct investment
• Video analytics: to security and beyond
• From HD to 3D: the hot trend
• 2011: the tipping point for network video?
• Commercial thermal surveillance market begins to heat up
• Looking into the High Definition crystal ball
Growth potential for the city surveillance market
In fact, the growth potential for the city surveillance market was highlighted recently by the announcement that HikVision, a China-based video surveillance equipment manufacturer, has been appointed general contractor on an $800 million safe city project in Chongqing, China.
In other regions, such as the Middle East, wireless infrastructure is also being used to stream video surveillance live from police vehicles to command centres. This integration between mobile and fixed locations has the potential to improve crime detection and prevention, providing more accurate intelligence to the police agencies using the technology.
What, if anything, will slow the growth of wireless video?
The main issue, according to IMS Research, is the knowledge and skill set of the systems integrators that install wireless video surveillance. However, as the opportunities continue to increase in city surveillance, more and more integrators will be 'on board' with wireless technology, and it looks set to be a major growth area in the video surveillance industry over the next couple of years.
HDcctv joins the fray in 2011
The HDcctv Alliance was formed in 2009, its core objective being to develop and manage the definition of an open standard for the transmission of high definition CCTV (HDcctv) using industry-standard coaxial cable.
HDcctv technology is built upon the HD-SDI standard pioneered in the professional broadcast market.
In terms of sales, 2010 was a muted year for HDcctv-branded products due to low product availability. However, IMS Research predicts that HDcctv will be a strong trend impacting the video surveillance market in 2011 as vendors begin to release HDcctv-compliant products.
Two key proponents of the HDcctv standard, Speco Technologies and Everfocus Electronics, have both announced that they intend to begin shipping HDcctv-certified products in early 2011.
Furthermore, the majority of the current membership of the HDcctv Alliance is comprised of OEM/ODM manufacturers, and many of these vendors expect to begin shipping HDcctv products to various video surveillance 'brands' during 2011.
While IMS Research predicts that the adoption of HDcctv-certified products will not impact the adoption of network video surveillance equipment in the short term, there's potential for it to do so in the longer term.
HDcctv products are initially forecast to gain traction in the retrofit market where coax transmission remains common. Over time, the significant OEM/ODM membership that the HDcctv Alliance has assembled could make HDcctv a viable replacement for SD analogue equipment.
Mist clears on cloud-based video surveillance
Video Surveillance as a Service (VSaaS) – or cloud-based video surveillance – was certainly a hot topic in 2010, and that interest in VSaaS turned into an increase in the number of VSaaS providers.
However, can this hype be translated into market growth during 2011?
The hype around VSaaS is not unfounded: the recurring monthly revenue business model is very attractive to telcos/ISPs, central monitoring stations and installer/integrators.
The value-add promoted by some solution providers is certainly a convincing proposition. The ability to achieve remote redundancy of video data, true ‘plug-and-play' installation, remote access to the video and a lower cost video surveillance system are all factors that will encourage this market to grow.
In 2011, certain applications of VSaaS are more likely to take off than others. The most successful will be customers with multiple sites that each require (four or less) cameras. These niche applications include mobile phone masts, chains of small retail shops, oil rigs and electricity sub-stations.
These applications all require security or monitoring, but the cost of installing hundreds (if not thousands) of traditional DVR systems across multiple sites can be reduced by having a VSaaS solution.
VSaaS solutions and other services
VSaaS has the potential to be the disruptive force needed to break into the low cameras count, DVR and analogue camera dominated video surveillance market.
In a bid to speed up this process, some service suppliers have started to offer VSaaS solutions integrated with other services. The benefit of this is that it turns the service from a simple security application, to a multiplatform service.
An increasing number of VSaaS providers offer the following services integrated with their solution: energy management, point of sale (POS), video analytics, home automation and access control.
The belief is that end users will be more likely to adopt a solution with a strong value-add, rather than just a video surveillance or security application, particularly if cost is the primary decision factor.
For the time being, at least, niche applications will have the greatest initial traction in the growth of the VSaaS market.
To succeed in the mass market, VSaaS providers are increasingly likely to require integration with other services such as home automation, POS or energy management. Once VSaaS can demonstrate a clean and strong value-add, the market has the potential to grow significantly.
Will India's video surveillance boom be as big as China's?
Without fear of hyperbole, the Chinese video surveillance market is phenomenal. It's the largest consumer of video surveillance equipment and one of the fastest-growing markets.
City-wide deployments of 100,000-plus cameras are not uncommon, dwarfing even the largest European or US 'enterprise' projects.
Can India, with its fast economic growth, huge population and burgeoning middle class begin to mirror its neighbour?
The Indian video surveillance market is currently one-tenth the size of the Chinese market (sitting at an estimated value of $165 million in 2010). It's growing quickly, particularly the IP segment, and is receiving Government funding.
That said, much of the growth in recent years in China has been fuelled by its Government's desire to keep a close watch over the population. It's highly unlikely that India has the political or financial motivation to deploy large scale public surveillance projects to the same degree as China, thereby reducing the potential growth of the video surveillance market.
Will this lack of politically motivated use of surveillance technology curb India's growth, or can it match China in other verticals?
Retail is one market where video surveillance typically gains traction, its use having a demonstrable ROI… but there is a problem. The Indian retail market is largely closed to foreign firms, with foreign direct investment (FDI) restricted to 51% in single-brand retail and FDI for multi-brand retail limited to cash-and-carry and wholesale operations.
Without foreign investment, development of the retail sector from farm to store will be bottlenecked in India. Over the summer in 2010, the Indian Consumer Affairs Ministry recommended that 49% FDI be allowed in multi-brand retail, with an emphasis on back-end operations such as logistics.
US President Obama echoed this message in a recent meeting in Mumbai, stressing the need for foreign investment and the mutual benefits to both Indian and American firms.
However, a decision has yet to be taken by the Indian Government, and independent observers do not expect the situation to change until some point later this year.
Release of foreign direct investment
Should FDI be realised in 2011, the trickledown effect could see spending on video surveillance equipment in retail soar in the mid to long-term.
Video surveillance spending typically follows capital investment in infrastructure projects, and India is no exception. Currently, India is a little over halfway through its eleventh five-year plan (2007-12). The five-year plan is a Government roadmap designed to improve the economy, social conditions, the environment and infrastructure.
With regard to infrastructure, a little over 5% of GDP was targeted for infrastructure spending during the tenth plan, with this rising to 7.5% in the eleventh plan. In order to sustain the targeted growth in manufacturing, agriculture and services, nearly 10% of GDP is thought to be needed during the twelfth plan.
Based on these figures, it's clear there will be sustained investment in video surveillance related to roads, airports and railways.
A sad reality of the terrorist attacks in India has been the heightened need for security and protection. In a move not dissimilar to other countries that have suffered terrorist attacks, India's Government has approved Homeland Security spending to improve the country's effectiveness when dealing with crises.
While it is difficult to assess how much budget will be made available for video surveillance, it can be assumed that, as with other nations, some funds will be earmarked for the protection of transportation hubs and critical infrastructure. This will undoubtedly prove a boon for the expanding video surveillance market. Optimistically, India has huge potential for video surveillance. Positive economic indicators and an increasing need for security are necessary conditions for an explosion in use of video surveillance.
On the flip side of that, it seems clear that the Indian tiger won't slay the Chinese dragon for some time to come.
Video analytics: to security and beyond
The video content analytics (VCA) market endured another difficult year in 2010. There were successes, with new project wins in the transportation and critical infrastructure markets, and there were failures (with a number of analytics vendors choosing to focus on other product areas, coupled with the news that Vidient had gone out of business).
VCA vendors have continued to build strong partnerships with video management software providers and security systems integrators. However, it's clear that the VCA market is far from the potential predicted a few years back, and many have found the last two years tough.
So where is the new potential for VCA?
The answer to this question lies outside of the traditional security market. Visually intelligent devices is the name used to describe the use of video analytics in market such as automotive, defence, medical, consumer and digital signage. There is great long-term potential for analytics providers to expand beyond the constraints of the security industry.
In automotive, VCA can be used to alert when the vehicle leaves a lane and monitor the driver's posture to recognise drowsiness. In digital signage, video analytics can recognise certain personal characteristics to provide a more targeted advert.
Analytics can also be used in medical applications to identify tumours and, in the consumer market, it's set to revolutionise the way we access and view TV. While the use of video analytics is still in the early stages in each of these markets, the potential for VCA vendors is unquestionable.
Indeed, IMS Research predicts that 2011 will be the year that VCA looks beyond security.
From HD to 3D: the hot trend
HD was the 'hot trend' in the video surveillance industry in 2010. Could 3D be the next hot technology trend for the video surveillance industry in 2011? In the consumer and professional broadcast space, 3D technology gained increasing acceptance and mindshare during 2010.
Recently, IMS Research has observed a number of examples of 3D technology beginning to penetrate the video surveillance market. At the ASIS International 2010 trade show, a small number of vendors were exhibiting 3D video surveillance products.
Beyond the 'pizazz', though, are there any benefits in applying 3D in video surveillance?
The key benefit that 3D offers to the security industry is depth perception. The extra dimension of depth could pave the way for more accurate and more advanced analytics algorithms.
One prime example is the distinction between flat and non-flat objects: confusion between shadows and solid bodies could be significantly reduced via the introduction of a depth dimension.
IMS Research doesn't believe that 3D technology will gain mass acceptance among vendors or end users in the security industry in 2011. The high price of 3D displays, the high cost of cameras, the initial lack of vendor support and technological conservatism inherent within the security industry will all be limiting factors. That said, it's believed that 2011 will herald the start of a trend towards 3D in video surveillance.
It's expected that increasing numbers of manufacturers will begin to experiment with 3D, and begin to plan 3D into their technology roadmaps.
2011: the tipping point for network video?
As 2011 begins, the video surveillance industry doesn't show any signs of being any less compelling than it was five years ago.
Technology innovation continues a pace, and the structure of the industry continues to evolve with M&A activity on the increase.
The questions asked most often are: ‘When will this market tip? When are sales of network video surveillance products going to outstrip sales of analogue video surveillance products?
The answers very much depend on where you are and what you do. At a global level, the tipping point isn't forecast to happen until 2015. However, this picture changes as you drill down: the tipping point is 2013 in the Americas and 2012 in the EMEA region.
Peeling back the layers still further can be even more revealing. The Middle East market has already tipped, and the Russian market is forecast to tip in 2011. Globally, the airport, port and utilities sectors are all forecast to tip in 2012, but education is the real leader, with the tipping point having already occurred this year. The real laggards are the retail, commercial and banking and finance sectors.
For those regions and verticals that are yet to tip, what can be done to speed up the transition?
Education remains key – both in terms of customers and systems integrators. Despite being a mature technology, customers and systems integrators in some industries are still not fully embracing network video surveillance. Customers are worried about system reliability and cost. Systems integrators are concerned about the expense and time needed for retraining.
Vendors can help systems integrators with education and training costs, and they can also allay customers' concerns about system reliability by demonstrating the numerous successful IP video surveillance deployments.
Cost will always be a critical factor for some customers, but lowering equipment prices and alternative business models (such as VSaaS) will help IP video surveillance penetrate the wider market, and move closer to that tipping point.
Commercial thermal surveillance market begins to heat up
The use of thermal security cameras in surveillance applications is not a new phenomenon. Historically, thermal cameras have been deployed in high security buildings, for border protection projects and to protect critical infrastructures such as nuclear power plants, prisons, airports and pipelines.
To date, thermal cameras used in these applications have been costly and beyond the reach of most security customers.
'Affordable' thermal security cameras are a new phenomenon. Innovations in uncooled sensor technology have led to a significant reduction in the cost of producing thermal cameras, and paved the way for video surveillance equipment vendors to include thermal cameras in their equipment portfolios.
In 2010, Axis Communications released a low cost network thermal surveillance camera while a number of other established video surveillance vendors also released or announced the intention to release low cost thermal surveillance cameras aimed at the commercial market. This trend is predicated to continue during 2011.
Established vendors of video surveillance equipment have been able to leverage existing sales channels and relationships to stimulate new demand for thermal surveillance solutions. This strategy has proven successful for new vendors of thermal video surveillance cameras, and enabled them to avoid direct competition with existing incumbent vendors.
The commercial thermal security camera market is predicted to continue to expand rapidly in 2011 as an increasing number of vendors begin to offer 'affordable' thermal cameras to existing customer bases.
Looking beyond 2011, it's anticipated that the prices of commercial thermal cameras could quickly reduce due to increasing economies of scale and advancements in lens technology that reduce the current dependence on germanium: a significant cost element in the production of thermal cameras.
Looking into the High Definition crystal ball
2010 may have been HD ready, but how fast did the network video surveillance market move towards higher resolution cameras?
2010 certainly saw significant growth in the number of HD and megapixel network security cameras shipped. However, standard definition network camera shipments still outsold their higher resolution counterparts at a factor of four to one.
In IMS Research's report ‘World Market for CCTV and Video Surveillance Equipment: 2010 Edition', HD and megapixel cameras are forecast to represent nearly 30% of network security camera shipments in 2011.
Going forward, IMS Research forecasts an increasing proportion of high resolution security cameras will be HD rather than megapixel types.
The requirement for high resolution cameras is increasing, and HD has emerged as the resolution sweet sort.
HD offers increased resolution but not to the extreme level where the cost of storage and bandwidth becomes unmanageable. Furthermore, the preference for HD in the consumer electronics space has driven the demand for HD in the video surveillance market.
At what point will the tipping point occur when a larger number of HD network security cameras are sold than standard definition network cameras? IMS Research forecasts that, by 2015, over 60% of network security cameras shipped will be HD and megapixel resolution.