Within the industry we are all pretty much agreed that IP CCTV will inevitably be the future of CCTV security systems. In fact in reality its not going to be CCTV at all. Closed circuit television meant just that! a group of cameras completely isolated from the outside world with recorded images only able to be viewed by the privileged few within an organisation. We all know this is changing, the reason for this, more than anything else, is connectivity.
Connectivity.
We are in a world where any one who has connectivity to the Internet, given the right security rights, can access any IP device anywhere in the world. CCTV installers have pushed this hard as a benefit. Using DVR’s connected to the Internet, they have sold the concept of how an MD can be on his boat in Spain and still watch his staff as if he was sat in his own office.
Great sizzle when it comes to a selling point but in reality we suspect it is a rarely used feature.
Future revenue streams.
However we are at a cross roads that means CCTV installers are going to have to think extremely hard about future revenue streams. The reasons are simple. CCTV and security is no longer their baby. It falls into the domain of the big IT integrators who are quickly beginning to realize that they can start to step on the toes of the security industry and bring surveillance into the world of IT. So why the sea change? Well this goes back to connectivity and software solutions.
We have touched before on the site about how CCTV software with a server will inevitably be the way forward for recording images and we know IP cameras are quickly reducing in price to the point where they will soon be cheaper than analogue. We also know that IP has far greater functionality at the camera end. So any new system will almost certainly be specified to go down the IP route. This will mean CCTV hardware in the form of analogue cameras and DVRs will suddenly find its self very much surplus to requirements and this leads us to the next point.
NVR ,the remote recording solution.
Remote recording. Why would any customer want a box, with lots of cables going into the back of it (that can go wrong) sat in the corner of their room recording images when they can simply route the recording to a data centre and access them at any time at their leisure ? Add to this the fact that some data centres are now realizing that they could suddenly host millions of IP streams and charge for the privilege we now have the concept of repeat business year on year with very few overheads.
Now lets take this a step further, say for another competitive yearly fee the data centre as part of its service offers to manage the customers CCTV system including routing alarms to its own monitoring company. We suddenly see a major shift in the favour of IT integrators over security companies. Lets add one more little earner into the fray. The connectivity needs to be monitored and secure. By providing a secure broadband connection into the customers premises and of course charging for this broadband service we see more year on year repeat revenue, an excellent business plan.
Data centres.
So how can these data centres centres secure the business? Well this depends on the business plan, but one very frightening point that CCTV installers may wish to note is that they may start giving hosting and recording away for free!! Certainly for smaller security systems, this brings them connections for even the smaller CCTV installations and allows them to either make money on the broadband connection or charge a licence for each camera from the second year onwards. This will put DVR manufacturers out in the cold almost overnight.
So back to the original question …how do traditional installers adjust and make money in this new world of IP CCTV?
External CCTV installations.
Well of course external CCTV systems are still quite specialized. You need to design this properly with sensor detection and also need some kind of interface to prevent indiscriminate alarms swamping the central station. It also seems improbable to expect an IT engineer used to office environments to start using cherry pickers to clean or change external cameras mounted in difficult positions. Also running cables externally often needs civil works and a level of expertise that can only come with years of experience. However the profits available in this area are dwarfed by the concept of ongoing revenue that could be produced by remote recording. Something else that needs to be seriously considered is that installation companies will not be able to survive in their current form without the profit provided by hardware supply and servicing. So something is going to have to give and this has to be the concepts of how they currently generate their revenue and how they train engineers and operate their sales department. In addition they will need to form alliances with unfamiliar partners in the world of ITC.
So when will installers get to grips with this new world, well at present it is the big software houses such as Cisco and Milestone who have marked out their plans, it just waits to be seen if others will have the vision to follow into the world of IP CCTV.
Possible future revenue streams.
Secure broadband.
remote recording
remote management
remote monitoring
remote software supply upgrade and support
licence fees
IT supply and support
IP camera supply.
Site visits and maintenance
Camera installations
Repeat revenue is the key to survive.
Many of the the above reduce the need for a large support team out on the road and therefore the reduction in many of the overheads that are restricting profits within the CCTV installing industry today.
Time for a rethink?……………… yes probably………………