The global economic downturn is apparently having no major effect on the market for IP video surveillance cameras and other equipment, as sales remain strong worldwide. Meanwhile, the technology continues to evolve, and the emergence of high-definition (HD) video and megapixel resolution are among the more prominent trends in video surveillance.
The worldwide market for video surveillance equipment grew more than 10 percent in 2010 compared with the year before, according to a report released in July 2011 by U.K.-based firm IMS Research. The report, "The World Market for CCTV and Video Surveillance Equipment," says the growth was mainly driven by sales of IP-based network video surveillance equipment. IMS forecasts that the global network security camera market will exceed $4 billion in 2015.
While the global analog video surveillance equipment market was relatively depressed in 2010, the network video surveillance market grew almost three times as fast as the total market last year, by more than 30 percent, says Gary Wong, senior research analyst for video surveillance and video content at IMS.
Two key factors contributing to the decline of the analog market are that many large enterprises are transitioning to IP-based systems, and that price competition and commoditization in the middle and low tiers of the analog surveillance market are increasing, IMS says.
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Network video surveillance growth continues to be bolstered by stimulus-funded projects and by the increasing penetration of higher-value network video surveillance products, such as HD cameras, the firm says. It predicts that the growth of the IP market and the decline of the analog market will lead to a transition by 2014, with network video overtaking analog in sales.
Moving to IP
The traditional providers of video surveillance equipment were slow to embrace and promote IP products in years past, Wong says. "However, these companies have now begun to quickly develop their portfolios of IP surveillance products and [are] gaining market share," he says. He expects the move to IP to continue over the next three to five years.
"Axis [Communications] and the IP revolution have changed the face of the old CCTV industry," says Joe Freeman, a security industry consultant and president and CEO of J.P. Freeman. "We were Axis' consultants in their early growth phase, an unknown up against big names, and now they're the leader" of the network video market.
Because Axis "comes out of the IT culture, not security, [it's] forcing traditional leaders to copy [its] lead in many respects," Freeman says. "Axis is more attuned to selling through IT distributors operating at lower margins than security distributors," so users can choose among multiple suppliers. Axis also offers some hand-holding, Freeman says, which helps security managers pick the best system for them and understand all its features.
One thing that's pushing buyers toward network surveillance is the emergence of open standards for IP cameras, created by two industry groups formed in 2008: the Open Network Video Interface Forum (ONVIF) and the Physical Security Interoperability Alliance (PSIA).
ONVIF includes vendors such as Axis, Bosch, Canon, Sony, Cisco and Panasonic. Late last year, the group announced its ONVIF Core Specification 2.0, which covers video storage devices, video analytics engines, cameras and encoders.
PSIA's members include Honeywell, IBM, Stanley Security Solutions, Samsung and Texas Instruments. In March, PSIA unveiled the final pieces of its security suite of specifications, and several vendors demonstrated products that use PSIA specifications.
"Open standards like ONVIF and PSIA create a level of interoperability" between systems that had been proprietary, Wong says. "These standards should make it easier for more manufacturers to access the video surveillance market."
For organizations using video surveillance cameras, the availability of IP-based systems has helped bolster security.
The Hillsborough County Sheriff's Office (HCSO) in Tampa, Fla., two years ago began a move to all IP surveillance cameras, and to date has installed about 350 IP cameras from Axis, says Craig McEntyre, manager of the business support bureau and project management office at HCSO.
By the end of this year, HCSO expects to have more than 600 IP surveillance cameras in use, McEntyre says, and it will purchase as many as 2,000 over the next three to five years.
The majority of the cameras HCSO uses today are analog—only about 20 percent of its cameras are IP-based. But that ratio will shift as the organization migrates to IP and phases out its older analog cameras.
HCSO's foray into IP-based surveillance began when it used a Justice Department grant to buy 20 cameras for law enforcement investigation, monitoring activity and emergencies in high-crime areas.
After an RFP process, the sheriff's office awarded a contract to Site Secure, a systems integration firm, and Avrio RMS, a surveillance integrator with municipal surveillance expertise. They developed a wireless surveillance system that funneled video data back to district headquarters without expensive cabling.
Later, HCSO replaced a set aging of analog surveillance cameras with IP cameras in four of its district office buildings, and it's now using IP cameras in sections of two of the jails it operates, as well as in a vehicle storage lot.
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It has also deployed cameras in several rooms that are used to interview crime suspects, where the archived video footage is usable as evidence in court.
In implementing IP cameras, HCSO was able to leverage its existing network, which supports voice and data communications. McEntyre says the network has sufficient bandwidth to handle the various types of traffic simultaneously without degrading quality.
One of the key benefits of IP is that it provides improved video. "The quality of the images is way better than what we saw with analog," McEntyre says. Because the cameras are on a network, HCSO can manage them remotely.
Another benefit is the ability to easily conduct detailed searches of archival video. "When we view back video we can set bookmarks, so we can go straight through [to particular content] instead of taking hours to go through a recording," McEntyre says. HCSO has centralized storage for IP video in its data center. The organization is using a combined server and storage platform from Pivot3 called CloudBanks to store captured video images and host the video management system software.
The scalable nature of the Pivot3 system ensures it can handle the demands of incoming video streams and support growing volumes of video data.
HCSO needs to capture surveillance data at all times, and the Pivot3 platform provides application failover to prevent the loss of captured video, McEntyre says.
Not all companies have embraced the move to IP cameras for video surveillance. Walz Group, a communications and compliance technology services provider, uses analog cameras along with IP-based digital video recorders from Nuvico. Among the key factors that the company considered when selecting its video surveillance system about a year-and-a-half ago were whether it had high-capacity digital video recording (DVR) units that could provide for at least a 90-day or longer video log and records retention.
Walz also wanted low-lux cameras that provide for fairly effective object recognition at night; high image-quality playback of the 90-day video logs and records; centralized video surveillance systems management; role-based access control features; and options for easy expansion so the company could provide video surveillance across a growing campus.
Walz executives didn't think the added capabilities of IP video and megapixel resolution, such as more detailed images, justified the higher cost of the cameras, says CISO Bart Falzarano. "With what we're trying to identify, it didn't require that we [be able to] read something on a document that someone is holding, or something that's written on a T-shirt," Falzarano says.
The firm mainly wanted to use surveillance cameras to identify personnel in or near sensitive areas or entering buildings, which could be provided effectively by less expensive analog cameras. On top of the added cost of the cameras if Walz had opted for IP, the company would need to configure a dedicated virtual LAN so video traffic would not affect data and voice traffic.
"We'd have to get involved with additional networking configuration issues," such as segregating the video traffic from voice and data to ensure the quality of all three, Falzarano says. "If you prioritize data, then you might have video quality problems," he says.
"Available bandwidth and establishing [the] proper class of service for each traffic type of voice, video and data needs to be considered when implementing a full IP video system."
One important capability of the video surveillance system Walz uses is built-in motion sensing with pre-alarm and post-alarm recording, which means the cameras are only recording when they detect movement. This conserves disk capacity, Falzarano says.
Megapixel Gains Ground
In terms of product innovation, "there has not been any significant new technology introduced in the IP surveillance cameras market in the last 12 months," Wong says. "The major ongoing technology trend is HD and megapixel resolution. Increasingly, manufacturers are beginning to transition their IP camera product lineups from standard definition to HD and megapixel resolution cameras."
For organizations that deploy IP surveillance cameras, the higher definition and megapixel resolution will mean even better image quality. "It provides end users with a more compelling reason to switch from traditional analog video to IP video," Wong says, because there will be a more significant difference in resolution.
The move to megapixel "is clearly a trend," Freeman adds. "It not only provides greater detail for identification, it opens the door for security cameras to enter non-security markets requiring observation and even automatic control."
Factories that use quality and assurance inspectors to watch products coming off the line can now convert to megapixel cameras to reduce overhead costs, Freeman says. Wong expects most IP camera manufacturers to begin to transition a large portion of their existing product lines away from standard definition to HD in the coming months. The move to HD will definitely affect IP camera pricing.
"In general, the average selling price for IP cameras has remained relatively stable over the last two years," Wong says. "The manufacturer-driven shift from standard definition to HD and megapixel resolution IP cameras will make the [average selling price] rise in developed markets in the next two [to] three years." He would not say how much he expects prices to increase.
McEntyre says HCSO has begun implementing a limited number of HD cameras, which he says can cover more area than a standard-definition camera. Because of the higher cost, however, he does not expect a huge move to HD anytime soon.
"We budget our own security from tax dollars, so we try to get the best bang for the buck wherever possible," McEntyre says.
Another technology development in the industry concerns video compression algorithms.
Wong says IMS Research has seen a strong shift toward H.264 as the preferred compression type over the last 12 months. "The increasing demand for HD and megapixel resolution cameras will drive the adoption of H.264 and H.264 SVC [scalable video coding]."
H.264 is used for technologies such as Blu-ray discs, streaming Internet video, Web software such as the Adobe Flash Player and Microsoft Silverlight, broadcast services, cable and direct-broadcast satellite TV, and real-time videoconferencing.
"The trend of course is [for] more and better algorithms," Freeman says. "The problem is that the more you ask your software to do in terms of event [identification] and classification, the greater the probability that it will not do any one function well. This would argue for a high level of concentration on just well-targeted alarm conditions, such as license plate reading and untended bags, for example, in any one software package or chip. It's not easy to do, however, since suppliers of multifunction intelligent video software have an easy sales argument against those single- or dual-function software or chips."
Freeman expects to see the emergence of new software features on IP video cameras that increase their functionality.
"The idea of onboard features is [powerful] since it lends itself to simplicity, which the security user desires as much as possible," Freeman says. "If the camera can handle vision, editing, storage, [and] even a user instruction as to which enforcement procedure to use—you've got a powerful security device. We believe that's the long-term outlook."
Another big trend that will affect the market is cloud computing. "The cloud will in many ways obviate the need for old DVRs and NVRs [network video recorders]," Freeman says.
Companies are rolling out cloud-based services. For example, Axis has a hosted video-surveillance-as-a-service (VSaaS) offering that is enabled by cloud computing. Organizations with an Axis camera and Internet access can use the service on an on-demand basis.
How can organizations make decisions about which of the emerging camera and video options is best? In addition to weighing the costs and determining how the equipment will be used, it's a good idea to keep tabs on what others are doing.
"It's important for [user organizations] to have a reliable grapevine of other users," Freeman says. They could benefit from meeting with local companies that use other systems so they can compare notes. "In the end, every user is looking for the most functional and reliable equipment."