Business & Marketing
Stretching the dollar
What’s the best way to stay within a tight budget when it comes to installing new security products and systems? Just keep it simple, according to Peter Dyk with Tyco Integrated Fire & Security Canada.
May 26, 2017 By Renée Francoeur
“It’s when you come in with a long laundry list, that can get you out into some areas that are quite expensive,” says Dyk, the director of engineering and product management. “We’ve got to find products that require less labour to install. I think that’s your biggest savings. There’s a lot of market pressure and competition within the CCTV space, so if you’re going to make it with a customer, it will have to be by putting in a simpler product that takes less labour, but is still high-quality.”
HD over analogue
Seeking alternatives to IP infrastructure is one way of keeping it simple for those with tighter purse strings.
“When you start putting products into the IP infrastructure, you have all these extra requirements. But if you keep it completely separate and standalone, then you don’t have those pressures,” Dyk says. “It’s not that you can’t use IP; just don’t connect it into the network.”
Mark Espenschied, the director of marketing at Digital Watchdog (DW), elaborates, noting that “everyone needs to do more with less” in these competitive times.
“If you have an existing analogue system, like coax infrastructure, don’t think you have to abandon it to get higher resolution with an IP system,” he stresses.
He recommends snatching new ROI from the existing infrastructure by swapping in an HD recorder and HD cameras.
“A lot of people think the fastest growing segment is in IP,” Espenschied says. “It’s actually HD analogue. The reason for that is there is so much existing coax cable all over the world.”
He cites the City of London in the U.K. as an example, with its high number of surveillance cameras (the British Security Industry Authority estimated there is about one for every 11 people in the country in 2013), which are all connected by coax.
“The City of London is in no hurry to pull out millions of dollars of coaxial cable and replace it with IP cable. And so they have become the prime type of customer for HD analogue where you just replace the recorders and cameras, and then you have high-resolution over your coax,” Espenschied says. A major theatre chain in Canada, which he could not name, is also following a similar suit to gain new ROI from a previous commitment to coaxial cable.
He adds that it’s been “exciting” to see three different HD analogue standards transpire over such a short time.
“You have a lot of integrators who are comfortable working with coax and their selling point has always been the same, and that is: there’s nothing safer than one cable from one camera to one recorder. No one’s going to break into that closed circuit. They can continue to tell that story but with better resolution.”
Low-cost IP options
If IP is still highly desired by a customer, Espenschied says that can be met in a more economic way, too, with “full-featured, all-in-one” NVR and IP cameras — without going to a higher-end server appliance and separate VMS (which typically means license fees, he notes).
Additionally, if you’re installing a completely new system, customers can still run a network cable and have it working with something like Tyco’s Holis product, explains Dyk, which ties right into the Holis unit.
“So in fact, it’s not much different than coax,” he notes.
The Holis line for IP video uses Illustra cameras and is the “least expensive” type of solution at the company, according to Dyk, “easily meeting the budgets for small to medium sized businesses.”
When people think of IP, they often think of big installations “where you have a big dedicated server with a lot of hard drives in it, so you’ve got to get Milestone or some big VMS to run it,” says Espenschied. “What people like about their analogue system is you basically have a box that looks like a video recorder and there’s one interface and it’s easy to understand. Well, there are those type of appliances for IP and if you want to make the transition from analogue to IP, you don’t have to go into a big enterprise system.”
Whether it’s video surveillance or access control, when the time comes for transitioning and upgrading, end users want to save the coin, contends Iain Morton, executive vice-president of Eastern Canada with Paladin Security.
“Many people transition video systems in five to seven years. Access control is 10-12 and intrusion alarm is 15-20 years, in terms of system conversion,” he explains. “Clients are looking to do this without a full rip-and-replace model. That’s often cited, so it’s an area where we’re paying a lot of attention.”
In the past, a typical situation involved “very expensive head-end software and expensive servers,” Morton says. “We’re approaching that by saying almost every system we sell, we can put into a virtual machine, VMware, on a client server farm and just let it sit there — something else under their IT command control, without separate servers.”
Selling systems with Thin Clients, which are browser-based, and detaching from a reliance on Thick Clients, which have their own workstations, is also a way to help clients save.
“Designing systems where we can emulate the same form factor in the communications room that the old system had” is going a long way when it comes to tightening up expenditures, Morton adds, as well as “taking out the board and putting the new one into the same old panel to make it more efficient.”
When asked about the best way to optimize security solution spending, Ken Francis, president of Eagle Eye Networks, offers: “The simple answer is, Cloud is better.”
“When using the Cloud system, a customer can afford to select a quality and economically priced camera because the camera resides on an isolated surveillance network and price-driving features are unnecessary,” Francis says. “You don’t need to buy extremely expensive cameras with all of their extra features because the Cloud system will do that for you. So you really just want to focus on quality of image and durability in an economical camera selection.”
Expanding on that, he says using the Cloud means “substantial savings in post-installation support,” especially when it comes to storage and power requirements for commercial and enterprise customers. While these total savings may be less for a small business application, there are still “incremental features and benefits” (such as easy scalability and high security, according to Francis) from the Cloud system’s “continuous delivery,” he assures.
Cloud-based solutions are changing the security game, echoes Thomas Lynch and Dominic Williams with IHS Markit, as “in one sense, it is expanding the market, as end users that would previously not have considered a security surveillance solution are now adopting — this is the case in the residential market for VSaaS.”
The RMR (recurring monthly revenue) business model that goes along with Cloud surveillance solutions means a reduction in upfront Capex (capital expenditure) costs, and in some cases, an overall reduction in cost of ownership, according to Lynch and Williams — “although this will depend on the use case/end-user,” they note. For example, a commercial VSaaS deployment is going to “cost a fair bit more than a set of cameras purchased from Costco. However, it does provide value elsewhere.”
The cost of hardware is typically included in the ongoing monthly cost, or at least heavily subsidised, Lynch adds. There is no need to purchase a storage device and therefore you see a reduction in maintenance cost. “So price sensitive end-users, particularly in SMB and residential markets, will find this attractive.”
Eagle Eye notes its Cloud VMS customers can expand their systems as fixed per camera costs, “alleviating concern over large capital investments as systems grow.”
Customers with high location counts typically “suffer considerable deployment costs of servers, operating systems and servers,” Francis continues. He says deployment is much less complicated with the Cloud and therefore also usually more affordable.
“It is worth noting that the RMR billing model that comes along with a Cloud solution is attractive to vendors, so this shift is not just end-user driven,” Lynch and Williams point out. “There is a conscious effort on the part of vendors to move to this model.”
Tyco mentions EntraPass — its “cost-conscious” access control system from Kantech — is available as a Cloud offering, which has been “growing by leaps and bounds,” according to Dyk.
“Customers don’t have to buy a server, they just have to buy the controllers,” he notes.
The bottom line, according to Lynch, is “Cloud has the potential to save you money, but much like a cell phone contract, primarily by spreading the cost of the solution out over a period of time.”
Meanwhile, Morton says that cost-savings or not, Cloud feasibility varies from client to client and many of Paladin’s are not entirely comfortable with streaming data to the Cloud just yet.
Cloud is gaining traction, IHS maintains, and many of the historical technological barriers to adoption have become less influential in recent years. “Bandwidth is still a serious consideration that means Cloud will not be the right solution for a lot of people,” Lynch says. “For example, many retailers’ network infrastructure was installed in order to facilitate credit card validation, and not to support the upload of video to the Cloud.”
That’s not deterring any positive vibes in Francis’ backyard, though.
“I humbly believe we’re going to see an explosive growth in Cloud system adoption in the security industry,” he says, looking ahead to the next five to 10 years, and pointing out the pervasiveness of Gmail accounts and Google Docs — all in the Cloud.
Free software beware
Leveraging “free software with cameras” is another way many are securing the best bang for their buck but both vendors and integrators urge customers to execute their due diligence with these types of attractive offers.
Tyco, for example, says it offers free software but only after you first buy the hardware — such as with Total Tyco Security bundle.
“Let’s put it this way,” Dyk cautions, “if you download a free app on your iPhone, how much support will you get on that app? You get what you pay for.”
He says the demonetization trend on the Internet is driving the company to offer more products “that don’t have a cost associated with a particular aspect,” but they still have to have a good business model that allows the company to provide support.
VMS software and cameras alike are becoming increasingly feature-rich, IHS notes, “integrating suites of analytics algorithms as standard for example, that could save and end user money in licence fees for the additional software and through increasing the effectiveness of the cameras themselves.”
Anecdotal data gathering suggests that these extra features are finding use, Lynch says, but one of the problems is the analytics that are being included generally lack the sophistication of other paid for analytics. They are also a bit harder to operate as the end user has to put in more effort actually interpreting the data that gets produced by the algorithms, than they would with a more sophisticated paid for platform.”
It’s not just about the price of an individual product, Dyk reminds us. “It’s the whole package.” This means you can’t work in isolation to just reduce the product price or just the labour — it’s a combined effort.
It’s all too easy to fall into a trap of comparing costs camera to camera, Espenschied adds.
“We ask integrators and customers to consider the cost of the system, not just the cost of the camera, recorder or software,” he says. “When you design a system to take advantage of higher resolution, a product that may seem less expensive may not deliver the expected savings when the whole system cost is compared.”
Likewise, Paladin says it is in the middle of rebranding as Paladin Technologies on its systems site, which will look more deeply at opportunities to bundle technologies together and sit them on the same backbone, to avoid situations where “five or six different contractors are coming in for five or six specialities”. This means structuring cable backbone that can run audio/visual systems as well as telephone, IT network, building controls, etc.
“This is about minimizing the infrastructure in the building to save costs,” Morton says, noting this is especially valuable for the healthcare security sphere. “It’s still emerging and has a long ways to go.”
It pays to plan
While cutting costs is crucial for many working with increasingly shrinking security budgets, everyone mentioned in this article expressed caution when it comes to weighing costs against quality.
“It’s really important the product remains reliable,” Morton says. “A cost-conscious client should really understand licensing and software maintenance agreements and stay away from those systems with recurring annual licenses, going with systems, that if they do have a license structure, it’s an upfront license so the customer owns it outright, and then they can choose a software maintenance agreement or not.”
Paladin also encourages clients to “do plenty of due diligence” into what products can be reusable down the road, as with the trend of open boards in access control.
DW says it believes it always pays to use professionals to design and install a system. “They will get you the best pricing and design the most efficient system for your need,” Espenschied says.
“A very low price is very attractive but business owners are smart people and we find most are going to do their homework,” he says. “They often find out, something for a couple dollars more is going to give them the confidence they’re looking for… It pays to plan and an end-user can plan the best system by engaging the professional who does this all the time, who knows the alternatives and can present them at the right moment.”
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