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Summer 2008
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IP Video Surveillance: A Market Worth Watching

Strong demand, accessible technology and high profit margins: What's not to like about IPVS?

by Alan S. Horowitz

These days, with school safety a high-profile concern, opportunities for solution providers abound. Security may be an issue in hallways, stairwells, bus drop-off and pick-up areas, parking lots, loading docks and playing fields, as well the exterior of the building. IP video surveillance (IPVS) can handle all of these and more.

As an example, a 2,000-student New York high school recently purchased a 20-camera starter installation, which covered the cafeteria and athletic areas. The solution, with a budget of $55,000, was profitable on its own and created the potential for much more business, says Michael S. Blumenson, president of Digital Surveillance Solutions, an IPVS solution provider. Two additional phases are awaiting funding, one budgeted at $60,000 and another at $80,000 to $90,000.

Such situations are commonplace with IPVS.An initial project can be "an entrée to customers who will increase their business with you," says Blumenson. "They will want to do starter projects, test the technology.” And then they order more.

Why IPVS Solutions?
  • PROS: Hot market, mature technology, competitive differentiation
  • CONS: The learning curve
  • BOTTOM LINE: A profitbooster for security providers


A Prime Opportunity

Demand is growing for IPVS solutions to monitor areas of buildings and their surroundings. "Wherever there are concerns about surveillance and security, people are installing IP-based cameras," notes Joe Melfi, technical marketing engineer at D-Link Systems. Cost containment is another factor driving demand: It's cheaper to use an IPVS system than to employ a small army of security guards. IPVS also offers advantages over analog video, such as easier installation and the ability to leverage existing infrastructure.

Blumenson's big market for IPVS is education, which gets an assist from local government. His home state of New York, for example, reimburses schools up to $2,000 per camera. This means schools do not necessarily have to go to their local taxpayers, hat-in-hand, to fund a security system. To make it easier for schools to commit, Blumenson charges $2,000 per camera.

Besides education, other prime markets include government and retail, and solution providers have successfully sold IPVS for parking lots, stadiums, car dealerships, manufacturing facilities, hospitals and more.Heartland Technology Solutions, for instance, has installed systems as small as two cameras aimed at the cash drawers of a fast-food restaurant, and as large as a 30-plus camera network at a rural hospital. Giant retailer Target recently replaced thousands of analog video cameras with IPVS units, so it's clear that IPVS offers opportunities from the very small to the enormous.

The Do's and Don'ts of IPVS
If you have your sights on the IPVS market, here are some basic dos and don’ts that you’ll need to be aware of:

DO   Ensure that signs are posted that indicate the area is under surveillance, and if the area is monitored by audio Why Get Involved? recording, specifically state so.
DON'T
  Set up surveillance in an unethical manner (e.g., in private areas such as bathrooms).
DO
  Check local rules and regulations that govern the use of surveillance systems.
DON'T
  Overlook the correct configuration settings once the system is installed.
DO
  Make sure your IPVS solutions are scalable.
DON'T
  Forget about the opportunity to design protocols and procedures for your clients to use their system optimally.
DO
  Be sure to offer your clients the training they need to get the most out of their IPVS system.

A Prime Opportunity
As noted, a small IPVS system can lead to additional business -- but that's only one reason to enter this market. Other advantages include:

  • " Stickiness" with customers
  • High profit margins
  • Competitive differentiation

Arlin Sorensen, CEO and president of Heartland, sees IPVS as a "strategic tool that allows us to go deeper with our customers." It's also highly profitable because "there is less competition and the customer can't shop and compare as easily," he says.Adds Blumenson: "Any integrator who knows what he is doing with this technology should be able to charge enough to generate good margins."

IPVS also can separate a solution provider from the competition."This is not a commodity solution," says Chris Squier, technology solutions engineer at Ingram Micro. "If you are a security solution provider, you can use it to differentiate yourself."

In addition, the technology is relatively user friendly and accessible. IPVS systems are "easy to put anywhere," says Melfi of D-Link Systems.Unlike analog systems, IPVS uses standard CAT 5 cable, requires little electrical power (via Power over Ethernet), involves cameras that are small, and runs on networks that may already exist. Some cameras now support 3rd Generation Partnership Project (3GPP), which allows users to view a camera's images from their cell phones. Surveillance doesn't get much easier than that.

As the technology becomes more sophisticated, new opportunities arise. Video analytics allow an IPVS system to detect motion and send an alert to security personnel, but the system can also send an alert when an object, such as a suitcase, is left behind at an airport. Another use is counting the number of customers walking past an end-cap display in a retail store. Such statistics can help retailers set fees for vendors purchasing end-cap placement.

Getting Started
Not surprisingly, IPVS involves a learning curve. Cameras, lenses, placement and lighting all must be mastered. Local zoning can also be an issue with camera placement. But many aspects of an installation are familiar to network resellers, such as the Ethernet network, servers, PCs, storage and the software.

And it is a forgiving technology, notes Squier, in that you can tweak it as you go. Sorensen of Heartland found this to be true when he installed the hospital system, which was required to store 30 days of video images. At 30 frames per second, which was the initial rate of video capture, the system filled the storage too quickly. By cutting the capture rate in half, he was able to store 30 days of video without adding capacity, while still providing adequate image quality.

If you're not familiar with video systems, you have two options. One is to partner with an integrator experienced with video. Or you can build your own IPVS technical bench. Squier recommends starting slowly, developing your business and, over time, bringing the skill sets you need in-house. Sorenson hired an employee who, having worked at a casino, had deep expertise in video. Hiring him, he says, was "a very good decision on our part."

Solution providers can also bone up on IPVS through Ingram Micro, which offers regular solutions training and rich pre-sales and technical support. Ingram Micro's customers can access general information at www.ingrammicro.com/ipsurveillance, or by calling the Security Help Desk at (800) 445-5066, ext. 76102.

Whichever strategy you use, don't ignore the IPVS market. Its growth rate is high, its potential for add-on business is impressive, and its profit margins are likely to make it worth your while.

 

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