What are you looking at? Seriously. What are you looking at with all those video surveillance systems? A parking lot? A customer? A close-up of what's stuffed in the customer's jacket? A warren of cubicles? Rows of blackjack tables? That guy loitering across the street? That employee punching his buddy's time card? Fifteen thousand intermodal shipping containers? One priceless painting? The lobby? The service entrance? Hollywood Boulevard? Widgets on an assembly line? Fire? Traffic? A pack of dingoes ranging near your plant at night? The heat signature of a pack of dingoes ranging near your plant at night? The produce aisle? National monuments? School grounds? The reservoir? Cash tills? Anything that moves?Actually, we already know. You, intrepid security professionals, are looking at all of that and more. As a tool (and as a cultural phenomenon), video surveillance is in rapid ascent. We've become a nation of conspicuous consumers of surveillance technology: buying cameras, putting them wherever we can, pointing them at whatever we can, and then buying newer cameras. Cheaper ones, higher-resolution ones, tinier ones, digital ones with fantastic gadgetry attached to clever new applications.The new applications are propelling a surveillance tsunami. If you can look at customers, why not let marketing count them? If you're watching cash tills, why not let HR train new cashiers with that video? If you can see all those shipping containers, why not pass those pictures to logistics? Software tools that do all this have launched video surveillance, catapulting cameras into the corporation and society at large. It all sounds like a dark echo of the late '90s escalation of the Internet and the dizzy dotcom boom. The only difference is that the optimism of the late '90s, the feeling that anything was possible, has been replaced with the post-9\/11 fear that anything's possible. And while optimism evaporates over time, fear takes root; so it's unlikely this surveillance bubble, like the dotcom one, will burst. Joe Freeman, a security industry consultant and president and CEO of J.P. Freeman, predicts that the video surveillance market will expand this year by 17 percent (three times the Labor Department's GDP growth estimate). Freeman and other observers expect sales of newer surveillance technologies, such as networked video and emerging IP-based video, will rise at even faster rates.But there are lessons to remember from that previous era. Certainly one lesson that holds true is that the faster a new technology is deployed, the less intelligent that deployment seems to be. So watch out for places where decision-makers are camera-happy but not necessarily camera-smart. Amidst the rush to get the latest, most powerful surveillance tools, CSOs need to apply some knowledge, structure and direction, else they run the risk of building up inefficient, ineffective surveillance systems."We've created our own problems," says consultant Sandra Jones, who specializes in video technology and security services. "We've done a great thing by making cameras cheaper and better. And because of that, they've proliferated. But that's also a trap." The challenge is not what you can do; you can do almost anything, Jones says. "The challenge is how well you do it," she says. "How do you make surveillance useful? So that you're not asked in five years, or whenever the surveillance system fails you: Why did we spend all this money again?"It's the CSO's job to get in front of this before, not after, buying into the surveillance hype. To help, we've scanned the hallways and perimeters of the field. Here's what we see.1 Take It Easy with New Technologies Despite all of the mad growth in new video technology, CSOs are getting conflicting advice on how to deploy it. That's because while the newer technologies (networked and IP-based video surveillance) are on the rise, they still split the market roughly 50\/50 with the old-guard, standalone closed circuit TV (CCTV) systems, according to Freeman. Video surveillance is in that awkward moment of its life that the music industry was in around the early '90s when cassettes and CDs sold equally, even though everyone knew that, eventually, the superior CD would drive cassettes into extinction. Just as digital video will surely wipe out CCTV. It's still early for CSOs to know exactly how to proceed, says Dave Kent, CSO of biotech company Genzyme. "Not a lot of people are tuned to [IP-video surveillance's] versatility yet, but it's inevitable," Kent says. Still, no one knows precisely when that inevitability becomes reality. Because of that uncertainty, CSOs are getting conflicting advice. Darryl Marshall, a technology systems integrator who deployed digital video surveillance system for Dreams, a bed and mattress retail chain in Great Britain, observes, "The old CCTV guys tend to downplay the current viability of digital and networked IP-video, while the digital guys hype you into buying too much, or something that's not ready, or something that doesn't fit into your environment." Thus, CSOs are caught in a pickle, between getting less than they could and more than they need, a dilemma complicated by the fact that surveillance technology is progressing over three phases:Phase 1: Standalone CCTV systems. Relative dinosaurs, but sturdy and simple. They will fade as surely as typewriters did.Phase 2: Hybrid digital-analog systems. Sometimes networked, they use black-box digital video recorders (DVRs, essentially TiVo boxes). Represents the transition between old and newsuch as those word processors that came after typewriters, but before PC programs. Phase 3: Fully digital, networked IP-based surveillance. Here, video surveillance is just another node on the IT network. Cameras have IP addresses, controlled centrally with any number of software applications on top of the raw visual data.Freeman's market research shows CSOs are certain that they want to move off standalone closed circuit TV but unsure they're ready to move on to what they're being told is the more powerful, more dynamic future of video surveillancefully digital systems. So they network their DVRs to get a few benefits of the new technology without a real commitment. They add some digital systems, while keeping CCTV with DVR. They're milking their old investments.Sheila Bramlitt, director of corporate security for First Horizon National, reflects the overall ambivalence of many CSOs toward uprooting their CCTV entirely for IP-video surveillance. Banks such as Bramlitt'swhich has hundreds of locations in 30 states, including small branches and ATM vestibulescan demonstrate dramatic savings by going digital and centrally controlling and monitoring surveillance. Yet Bramlitt hasn't entirely abandoned her old CCTV systems as she inserts new digital surveillance systems, conducting full risk assessments along the way. "The digital surveillance is very appealing, and we've bought into some of thatwithout being paralyzed by the hype," she says. "We want to let someone else be the guinea pig. We're in a transition."2 Newer Systems CanPack Some Punch Usually, deep in the core of any technology's hype, there exists some legitimate generative spark. For example: Done right, it really can improve business. With IP digital video surveillance, the potential is undeniable.Here are two simple examples.Pedro Ramos, director of loss prevention for Pathmark Stores, identified a problem universal to grocery stores and for which he had statistics: Most inventory shrinkshoplifting, employee theft and damaged goodsoccurs at the point of sale. So he installed digital video that links to the cash registers at all of his stores. "I can look at the [the digital archive of the] register tape, pick out any item on that tape and be taken to the archived video of that moment in that transaction." This allows quicker response to incidents and deters theft. Recurring problems (such as a cashier who repeatedly mishandles egg cartons during scanning) can be identified and ameliorated quickly. "Almost immediately," says Ramos, "we've seen a significant decline in shrink."Sheng Guo's story is even more dramatic. Guo is CTO of the New York State Unified Court Systemmore than 200 courthouses wherein lawyers, litigants, criminal defendants and ordinary citizens intermingle every day. Public safety is, understandably, a huge concern. But Guo's facilities each had their own CCTV systems, rules and procedures.Guo decided to shift to a digital, IP-based network and centralize control in New York City (although each site will still be able to monitor its own system). He's phasing this in now. In the first phase of the installation, Guo says, he saved at least a half-million dollars on deployment costs over CCTV. "For software, we saved a quarter-million because it's all open IT systems now, so we did development in-house," Guo says. "Hardware we didn't calculate, but we know we saved. I mean, the monitoring station is, what, basically a PC."Not only that: Ethernet connections allow cameras to get their power over the same cable that they use to transmit their data. That was another huge savings, Guo says, because in some of the city courthouses, his group is just a tenant. "If you needed to get power outlets to new cameras, you're talking about three different agencies and months for approval."3 Justify the Costs of Those New CamerasGuo is on the front edge of the digital video surveillance trend. He would be considered one of the guinea pigs that Bramlitt said she is waiting on to test the technology for her. But even Guo is careful with what he chooses to deploy. The New York courts have installed some motion detection, and Guo says he has tested some infrared cameras for low-light spots, but he offers some caveats: "We test first and start simple, where there are well-defined parameters, like restricted space where any movement would be suspicious."Pathmark's Ramos is more conservative. He hesitates to endorse the IP-based digital video hype. His system is, in fact, a hybrid (such as those of Bramlitt and Genzyme's Kent). Pathmark combines digital and analog, and even uses some tape storage. It's on the cusp of a phase 3 system, but not quite there. Why? "The cost to convert over fully isn't quite where we need it," he says.He's not just guessing either. Ramos demanded and is getting an average of about 13.5 percent ROI from his video surveillance upgrade. And, under the right conditions, some of his stores will recoup costs in less than two years, some in under one. "We need a six-month time frame for video storage, and I can't cost-justify a fully digital system with that requirement yet," Ramos says. (Like others in this story, Ramos declined to share specific surveillance investment figures.)Ramos's discipline is not a fluke. One would think someone such as Bill Bowens, who recently managed an upgrade to digital video surveillance at Dallas-Fort Worth International Airport, would not have to provide a rigid analysis of the need for better surveillance. Airports, after all, are central to domestic antiterrorism efforts. Yet, Bowens says, "We don't do anything because we just think we have to. There's a cost-benefit for everything."Bowens wouldn't provide many details of his system, but he did talk about some of the benefits of upgrading. Decision support data from video on whether to evacuate a terminal now can be had in 10 seconds, whereas with CCTV and tape, it might have taken minutes or more. And if Bowens manages to avoid unnecessarily evacuating a terminal just two times, the system will have paid for itself.Still, Bowens was strict in what he bought to enter the modern surveillance age. "The vendors freak out when they get to an airport," Bowens says, "because we are not 'wow' motivated. We buy what we need, and we tell them it has to run for at least 10 years." Along with Bowens, Ramos says he knows of some executives who have taken a less disciplined approach. "You know, guys in high-margin businesses who can get away with mushy ROI, they see all these gadgets. I see a lot of people getting taken in by the wow factor," he says. By wow factor, Ramos, whose business is decidedly low-margin, means not only the hardware but the advanced applicationssuch as face recognition and behavior pattern analysis. Hardly anyone, Ramos says, could possibly know whether they can cost-justify some of these new applications yet. Never mind whether they even need them. Ramos also adds that the Wowists aren't considering hidden and tangential costs that will creep up with digital systems (see "Five ROI Rules of Thumb," Page 45), such as staff retraining, bandwidth and security."Don't get me wrong, the demos are beautiful. Just consider me from Missouri," says the European-born Ramos. "Show me this stuff up and running in the real world. And show me what it really gives me. Getting video to my cell phone is really incredible; at what point do I really need that? The wow factor should come last, basically."4 The High Price of Buying into the Wow FactorWow breeds ineffectiveness; a bad technical deployment will create support costs. A lack of planning for business processes to guide alarms will spur false alarms. Over time, false alarms are ignored, increasing the risk that a real alarm will be ignored. Eventually, a real alarm is ignored, and the investment has failed. It will create inefficiencies. "What you end up with," says surveillance consultant Jones, "is a lot of wasted datavolumes and volumes of it."Wow also encourages information overload. The economics of video infrastructure allow you to put up as many cameras as you like. But how many cameras does it take to generate an unmanageable amount of visual data? And for all the gee-whiz applications being developed for digital video surveillance, Genzyme's Kent says vendors are struggling to create something far more basic: excellent digital video management to deal with information overload. Without that, he says, he would be asking for trouble by networking a global surveillance infrastructure. "First you've got the problem of centralized storage and retrieval of huge amounts of data," says Kent. "Then you've got small sites which have no way to do local recording and archiving, while making that data available at the home office. The question I'm asking vendors is: What does a global network video architecture look like?"Wow tends to mess up long-term planning as well. "The lifecycle of a video system could be seven or eight years, even a decade," says Freeman. "So you better have a good rationale for everything you're doing. If you haven't thought through your investment and in six months, a new smart camera comes out that's startlingly more efficient at a reasonable price, what do you do? Do you go to the CFO and CEO and say, Our rationale has changed? You can do that. Of course, you might look stupid doing that."After all, CEOs and CFOs "got fed up with this bad investment cycle thing before," says Bob Degen, senior vice president of corporate security for First Data, recalling the post-boom write-offs on technology. "They have a natural aversion to that kind of thing after the tech era."5 Get to the CIO Right NowYou had better hope IT has learned its lessons from that era. In fact, you had better talk to the CIO. Here are two reasons why: One, many of the new generation of video surveillance vendors are going to them, not you, to sell this stuff. "CSOs are not always driving this purchase," says Daved Levine, a surveillance systems integrator. Vendors target IT because there's more familiarity with technology, and probably more receptiveness to upgrading it too.Two, trying to make video surveillance part of the IT network will obviously require heavy participation from IT. Says Levine, "If you try to deploy digital video surveillance without the full support of IT, you're done." Pathmark's Ramos underscores that: "Get IT involved; get them to help you build an ROI model; get them to help develop the best system for your needs."It's not surprising then that Ramos and every other CSO we spoke with who had dabbled in upgrading their video surveillance claimed to have an excellent relationship with his or her CIO. At Dallas Fort-Worth Airport, Bowens managed the video surveillance upgrade from the IT department. "When I'm asked how I ended up in security," he says, "I say it invaded my world." In the case of the New York State Unified Court System, the team in charge of the surveillance project was Guo's, not the security officers from the Department of Public Safety (although the two groups did work closely throughout). But Guo smartly deferred to the security team on issues he didn't know about. First, he says, the security team determined the most vulnerable locations, determined camera positions, types of camerasstationary versus pan-tilt-zoom, indoor versus outdoorand then did a cost impact. "Then, we took that and fit it into our computing infrastructure. Without [the security team's] participation, the technology itself is not useful," he adds.What we have here with digital video surveillance is security convergenceone of the first major security purchases that not only could benefit from but absolutely requires the cooperation of the CIO and CSO. CSOs can't do this without IT's technological expertise. As much as Guo allowed the public safety team to lead the risk analysis, Bramlitt at First Horizon was ready to cede control of managing the IT requirementsnetwork bandwidth demands, server capacity, storage configurations, data securityto her CIO and CISO."We come to mutual agreements on what's adequate," she says. "There's no in-fighting. I understand their business needs; they understand my security obligations." It's almost beautiful.6 Watch These Sneak Previews and Coming Attractions The most promising development for digital video surveillance, the real wow factor, is the creation of the new applications. Until now, video surveillance was what Jones calls a "grudge spend." It was overhead for liability, crime deterrence and loss prevention. And that was it. Before Guo transformed them, the New York state courts were the physical realization of the attitude toward surveillance: Many of the over 200 courts had their own CCTV systemsbig, old, fixed cameras, hard-wired by coaxial cable into basements where a guard may or may not have been staffed to stare at the bank of cloudy gray screens.The new era of video surveillance is comparatively airy and bright, where cameras give CSOs better pictures faster, in any light or weather; where the Internet allows Guo to log on from home and check in on any of his sites; where sleek technology focuses on business growth; and where it focuses on, say, four business problems at once. Video surveillance suddenly has street cred in marketing, HR, travel services, even customer relations.Thus, when Dreams bed stores in Britain recently put its system in place, its primary function wasn't even security; it was marketing. The company is measuring foot traffic around the store. The secondary function was security. And the tertiary function was human resources, using the video for training. "That made it a pretty easy sell actually," says Marshall, who oversaw the project (which, by the way, he says was led by Dreams' IT project managers).As digital video quality improves, training rapidly gains purchase as a prime application. Ramos uses his new system to train cashiers and other store-level associates. Captured images of employees doing something well are posted as a method of positive reinforcement, and captured images of common mistakes get tacked up too, as an awareness tool.In retail industries, especially, marketing wants in on video surveillance. Consultant Jones is working with retailers to map store traffic to improve the flow of customers and increase safety. Others are using the visual data to watch inventory levels. Companies are cutting travel expenses by using the infrastructure for meetings. Or using it for OSHA-like inspections of restaurants, allowing more inspections with less travel dollars spent. Genzyme's Kent uses video for quality control by monitoring production trains.A public utility uses cameras to validate trespassing incidents. Police issue tickets and revenue increases. At the same time, costs incurred by the court system fall, because perpetrators don't challenge the visual evidence.A major transit authority watches its stations, measures footfall and traffic patterns, reconfigures stations to reduce congestion, adjusts train schedules based on the visual data, locates common loitering spots and makes them less loiterer-friendly. All of the following increase: safety, ridership and revenue.A humpyard, where train cars come off boats and trucks and are assembled into trains, repurposes its video surveillance. Now managers not only watch fence lines for trespassers and would-be thieves, but they manage the logistics of assembling the trains correctly and getting them, literally, on the right tracka job that used to involve several men in towers talking to each other and people on the ground as they looked out over their vast yards with binoculars.These applications are real. More are coming, and they are limited only by the imagination. Digital video surveillance on IP networks will take over. For better and for worse, this camera craze will flourish and develop into a surveillance nation. And then there will be a simple, precise answer to the question, What are you looking at?Everything, all the time.