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More functionality, flexibility drives IP camera adoption

While IP video continues to take market share from analogue cameras the industry’s rapid growth rate has slowed to between five and eight per cent over the last 18 months — about half of previous estimates, according to those who watch the security industry, but customers are seeing the benefits and asking for the technology more than ever.

Speaking at the Securing New Ground conference in New York Nov. 11, market analyst Jeff Kessler said the majority of the integrators out there are going to be busy revamping older analogue systems, installing new DVR or networked systems and integrating analytics software to help security professionals make decisions in real time.

That statement seems to be true according to Canadian consultants and integrators who spoke with SP&T News.

“The swing started last spring,” says Terry Hoffman of Hoffman & Company a consulting firm based north of Toronto. “It has been slow with the challenging economy but there is no doubt that IP video products will be the favourable product of choice when considering new and retrofitted video management systems in 2010.”

Hoffman says he is currently working on 11 CCTV projects and four are large IP- based designs utilizing new and/or existing fibre ring for a dedicated security network. The other seven systems are new install, low budget jobs with fewer than 20 cameras.

An important message to deliver to end-users and integrators says Hoffman is the length of the planning cycle required and “true” full compatibility around software and control equipment in monitoring video.

 “For example, municipalities and large clients that are in the middle of a migration plan and looking at the capital requirements should think about this as not all facilities or retails stores can be completed all at once. There is a lot to consider. Full migration involves encoders, software and disk space. I have two large clients that I am working on a strategic plan for to change operations from analogue to IP across CCTV and access control,” says Hoffman.

While analogue remains less expensive to upgrade and to install and does not require more IT-savvy integrators who know how manage network technologies, Kessler noted in his annual report on the industry that “the functionality, scalability and longer-term total cost of ownership, and ultimately ROI, of IP video may very well be superior.”

“We are still installing analogue but the scale has dramatically tipped towards IP over the past year,” says Carlo Di Leo, general manager of Double Vision based in Richmond Hill, Ont. The company specializes in consulting, designing, and integrating IP-based access control and video surveillance systems.

“We make sure to educate our customers before providing any quotes and we find that the ones who take the time to listen and evaluate the information, usually end up choosing IP. I would say that 80 per cent of our business is IP (versus 50 per cent a year ago),” says Di Leo.

The MMM Group handles large security system integration projects for customers such as airports and Toronto’s Union Station. For a company like MMM Group, pure analogue video projects are rare these days, but hybrid systems are still being created as organizations make the transition.

“When it comes to just the camera, I have one airport that is currently installing analogue cameras and connecting them to IP encoders. This is a new installation that was planned to have this type of topology from the beginning. The design was done approximately one year ago and at that time was considered a standard configuration if not leading edge,” says Kevin Parisien, project manager, security & IT systems group with MMM Group in Toronto.
Since that time, Parisien says most manufactures have been promoting, and clients have been requesting, a complete IP system. In other words, IP right to the camera — no more encoders.  

“I feel encoders are starting to become a component used for migration only. A component that allows legacy systems (analogue cameras) to attached to the new IP platform.  Unless there is a specific requirement for analogue, all of my system designs are IP and slowly migrating into the HD or Megapixel realm,” he says.

Kessler’s report indicated gross margins in the IP camera business are in the mid-50 per cent range, as more functionality and flexibility versus legacy systems increase IP’s share of the overall video market.

December 1, 2009  By  Jennifer Brown

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