News Opinion
OPINION: VC investments signal confidence in value of video as a BI tool

Peter Strom, March Networks

This past year, the physical security market has seen continued demand for reliable IP video surveillance products.

Marking this demand was an inflow of venture capital that drove up valuations for some new industry players to unprecedented levels. In addition to this new trend, the push toward leveraging video analytics for business intelligence (BI) and the demand for more cloud-based surveillance services continued.

Capital investment driving up valuations
The vast amount of venture capital that flowed into the industry resulted in a number of companies, especially smaller or start-up ones, being flush with cash and investment. While it will take several years to see if these investments truly pay off, these higher-than-average valuations can be taken as a positive sign, indicating investor confidence in continued industry growth as it propels into a software-as-a-service (SaaS) model. In addition, investors will likely be hoping to capitalize on advancing technology, such as computer vision and video analytics, that will produce more BI from video and eventually do it at scale in the cloud.

Advancing AI driving more sophisticated video analytics
The ongoing trend toward leveraging video analytics for BI continues, driven by advancing technology. Today’s analytics are vastly different from a decade ago, when most companies overpromised and undelivered. Technological advancement has resulted in highly accurate and reliable analytics, thanks in part to Artificial Intelligence (AI). In addition, the industry has made tremendous progress in terms of offering processing power at lower than ever costs.

In addition, surveillance manufacturers have done a good job educating end users on how video can provide valuable information that can help improve how they run their businesses. As a result, employees from departments across the organization — not just the security director — are understanding how to benefit from using surveillance video and intelligent analytics to run their daily operations.

Banks and retailers, for example, are always looking for ways to better understand their customers’ needs and improve their experiences in order to gain market share. Using video analytics to help them do so has been a natural progression that has resulted from the factors mentioned above. Both industries are using video surveillance as a business intelligence tool, rather than solely as a security and loss prevention one.

Moving toward the cloud
There are several factors that continue to drive the industry’s migration to the cloud. Perhaps most obvious is the fact that technology in general is moving toward the cloud. As a result, many organizations’ IT departments have mandates to invest in cloud-based technology, when possible. In terms of video surveillance, moving everything to the cloud rather than managing and maintaining onsite hardware is often seen as simpler, more convenient, and, depending on your hardware provider, more reliable.

Moving all surveillance video to the cloud can be an effective solution for some smaller organizations; however, other larger businesses may run into difficulties due to the often-unforeseen volume of data. Adopting a hybrid approach — such as moving only specific incidences into the cloud for longer-term storage — is often more feasible for large multi-site organizations. Improvements in compression technology, lower storage and bandwidth costs, and the rollout of 5G networks will make it easier for large enterprises to eventually transition to the cloud completely.

And as more businesses store more video in the cloud, it will lead to greater possibilities to generate intelligence with big-data analytics. As technology progresses, large-scale customers will seek the ability to apply advanced algorithms to their cloud-archived video to gain cutting-edge insight from it. In all likelihood, this will be led by a massive multi-national corporation outside of the video-surveillance industry.

Going forward, it will be interesting to see how these trends continue to impact the industry and what new technology emerges as a result. Only time will tell.

Peter Strom is the president and CEO of March Networks.