Keep it or can it?
Twenty years ago, obsolescence was not a major issue in the security industry.
Technologies changed little from one year to the next, and end users did not expect to replace equipment for a long time. Today, the replacement cycle for many kinds of equipment is rapidly getting shorter. Still, end users will always look for ways to extend the life of their systems.
John L. Moss, CEO at Framingham, Mass.-based S2 Security, sees the life cycle of security equipment as dividing into three categories. Hardware can have a lifetime of about 25 years, he says, while access control and other administrative systems manufactured during the last 30 years have a lifetime in the 10-to-15-year range. During that time, an end user may replace the computer but won’t replace the software or the field panels that operate the electric locks.
Finally, he says, video equipment has a lifespan similar to IT equipment: thus, a video recorder has a three-to-five-year life, while cameras have the same or slightly longer lifespans.
Moss does not believe the trend to falling prices has, in itself, shortened the lifespan of cameras. Lower prices are not driving the consumption as much as the increase in their technological capability. “The fact that the price is coming down on cameras makes them more accessible and means there are more video systems being sold,” he says. “But if you own cameras, you won’t necessarily replace them because new ones are available that cost less. You might replace them because new ones are available that have significant technology enhancements over what you own and the cost also happens to be less.”
Moreover, in most corporations, he adds, there’s a minimum length of time that equipment will be kept because their acquisition is a capital purchase.
“The equipment is on the books for five to seven years. So, if you decide, after four years, you want to replace your cameras, you have to take all the depreciation you haven’t taken yet, and all the expense you haven’t absorbed yet has to be absorbed at the time you replace it. So most large companies will keep their equipment until it’s been fully depreciated.”
Although the replacement cycle for intrusion systems is about 10 years, says Peter Redfern, commercial sales leader for Mississauga, Ont.-based Tyco Integrated Fire and Security, systems are commonly installed for much longer than that.
Access control systems are more in the six-to-eight-year range, although customers are not usually faced with a forklift replacement.
“Depending on what platform a client uses, and if it’s an enterprise platform from a reputable manufacturer that’s been around a long time, you can typically upgrade your existing system rather than have a rip-and-replace situation.”
In video, Redfern says, we see the most compression of life cycle, which is due to changing quality and declining prices. He puts the lifespan of most camera systems today at five to seven years. “People are finding it’s cheaper to upgrade to newer technology, and you get better quality cameras for the same price or lower than trying to replace them. They get obsolete really quickly, depending of course on what the client needs.”
Even with the shorter lifespan, he adds, some customers may want to upgrade a little sooner to take advantage of new technology.
“They may be really active in using the systems and want to take advantage of new technology. Or maybe they want to use one camera to cover a larger space and zoom in with a pan-tilt-zoom technology, use video analytics or such.”
Andrew Elvish, VP of product management at Montreal-based Genetec, says the replacement timeline for some access control systems can be quite long — up to 20 to 25 years — because they don’t tend to wear out. The result of that longevity in access control, however, is a reduced ability to bring in new features to the systems.
“In effect, they can become frozen in time, especially if they’re proprietary access control systems. In the access control world, there are ‘forklift upgrades,’ which is an unfortunate thing to have to endure as a company. But if a proprietary access control company stops developing their system, for instance, it effectively becomes obsolete, and you either live with obsolete material or you rip it out and replace it,” he says.
“So, on the access control side, you’re looking at long timelines — but [it’s] riskier because of the proprietary nature of some of the traditional access control manufacturers.”
Jim Dearing, market analyst for security and building technologies at IHS, says one trend that will distort the replacement cycle, at least in the short term, is the impending sunset of the 2G network in the U.S. Control panels will have to be either replaced or upgraded before the shutdown, at the end of this year, or face being rendered unable to communicate with monitoring stations if they do not possess 3G or 4G capability or a PSTN backup.
“Manufacturers and dealers are working at getting the panels that are currently installed upgraded to the 3G network. Many have begun developing campaigns to capitalize on this expected surge in demand, and they’re coming up with new ways to educate their subscribers that they need to upgrade their panels.”
Another driver in the replacement cycle, Dearing says, is people moving homes. When someone moves into a home that already has an intrusion alarm panel, it’s fairly common for the monitoring company to offer them a new or better panel at a lower price.
“Companies like ADT, for example, usually offer heavy discounts on the initial installation of a residential security offering in exchange for RMR revenues. The replacement rate is boosted as a result. This also comes into play when a customer switches to a new monitoring provider,” he says.
Dearing says some of the ways customers avoid upgrading are:
• keeping an alarm sign despite no longer possessing an actively monitored alarm;
• moving from single-family to multi-family housing; and
• setting up a DIY home security system or opting for an MSO (multi-system operator) security offering.
However long customers may want to extend equipment life, they are sometimes compelled to accept the end has come. One cause of equipment demise is failure rate, Moss says. When cameras fail beyond their warranty period, they must be replaced. One factor affecting the failure rate of cameras is the presence of motorized components.
“A camera with PTZ controls, for example, will not last as long as a fixed camera,” he says. “The newer cameras with high megapixel ratings often come without the motorized controls because you can use digital controls to zoom into and pan around an image. I suspect those cameras will last even longer.
Equipment lifespan is also influenced by environmental conditions, Elvish of Genetec says. The longevity of sensors, for example, whether they’re camera sensors, door sensors or heat/cooling sensors, will be affected in varying degrees depending on where they’re located. Outdoor cameras, like automated licence plate recognition cameras, tend not to last as long as indoor cameras.
“Indoor cameras can last quite a long time. That’s why we see legacy analogue equipment still being viable and people saying, ‘We still have these analogue cameras. We bought them 10 years ago, 12 years ago, and they’re working just fine. Why would we replace them until we really need to?’”
One strategy customers use to avoid full upgrading is hybrid appliances, Moss says. During the move from digital video recorders to network video recorders, manufacturers built hybrid recorders, which accepted analogue cameras alongside IP cameras. While hybrid recorders were popular a few years ago, he adds, not many people buy them today.
Sometimes, he says, people buy the security software only, thus replacing their own computing platforms. Alternatively, they may be able to keep the system and just replace the hardware by taking advantage of obsolescence programs offered by some companies.
“When systems begin to become obsolete, we offer a lower-cost upgrade. So manufacturers will offer a program that makes it cost effective to do replacements, and people don’t have to face the forklift upgrade,” he says.
Redfern says equipment lifespan is often extended because most major manufacturers, especially of enterprise-level systems, are making products that are backward compatible.
“Many of the new platforms coming out have the ability to interface with, or be a direct upgrade from, the previous generation. Companies are cognizant that, when people make a substantial investment in an access control system, for example, they don’t want to be ripping it out and replacing it every six, eight or 10 years. The backward compatibility is very important, to the large clients in particular.”
Overall, Dearing says, replacement cycles are getting shorter. But then, security companies are offering so much more in equipment and features than they did 20 years ago.
“And, now that they’re using things like LCD screens on smart home panels, the life cycle is obviously much shorter. It’s like your television,” he says.
“Five years ago, what did your television look like? Completely different. It’s all helping to speed up the replacement cycle.”
Linda Johnson is a freelance writer based in Toronto.