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The cloud spurs interest in managed and hosted services

Centrally managed or hosted services have been getting a lot of press over the last few years.

Borrowing from the recurrent monthly revenue model of central stations that monitor residential and commercial intrusion systems, the concept is gaining traction within the access control and video segments. It represents a shift from the traditional security system deployment where a customer purchases and installs an access control or video solution for their organization to one where the customer purchases one or more services to accomplish the same goal. The advent of the “cloud” and the benefits espoused by many in the IT world have helped fuel further interest in these non-traditional services.


October 12, 2011
By Rob Colman


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What most offerings have in common is that customers pay a monthly fee for services such as centralized monitoring and periodic maintenance, and can go as far as customers leasing a security system rather than outright owning it. Within the context of a centrally hosted services agreement, the security servers are not located at the customer’s facility, but rather at a remote location or “in the cloud.”

In this first of our two-part series, we will discuss briefly what hosted or managed services are, the value proposition, and the benefits for integrators/dealers and their customers. Next month, I will provide an overview of features that security solutions must have to facilitate managed/hosted services and evolve into “cloud-friendly” offerings.

To begin, let’s look at the intrusion-based services before we look at access control and video surveillance.

In the world of intrusion, alarm panels are installed in the field while monitoring is centralized. Other than arming and disarming their intrusion panels locally, customers generally do not require more than that. In a typical scenario, alarm dealers will install panels at their customers’ locations and either monitor these systems at their facilities or hand off the monitoring to a central monitoring company.

Customers pay a monthly monitoring service fee, thereby generating recurrent revenue for both the central monitoring company and the dealer. End users benefit from the peace of mind that comes with knowing their facility or residence is monitored around the clock.

From an access control or video perspective, many services are similar to what we see in the intrusion space such as central monitoring and periodic maintenance. That being said, other service offerings for access and video take on a different dimension. New models have emerged where a customer will purchase a service to secure their facility rather than a full system. This is what is typically known as a hosted service; the service provider is therefore centrally managing their customer’s security infrastructure and servers. An integrator or service provider will install edge devices such as door controllers and cameras at the customer’s location, while the security servers are hosted by the service provider. The customer does not own the system but rather pays a fee to secure their facilities.

The benefits for end users are numerous. End users do not have to purchase a security system outright or the servers on which to run the system; nor do they have to maintain all the elements that comprise the security system and upgrade them over time. All these activities are handled by the service provider.

Another service offered by access control service providers is one where they manage their customer’s cardholders as well as credential issuance. The end users avoid the need to hire and train staff to handle all these activities; they can outsource these tasks and focus on their core business.

A final example regarding video is the case where cameras with edge recording capabilities are installed at the customer’s site. These cameras record video locally, but during off-peak hours when bandwidth is less expensive, the video will be offloaded or trickled to the cloud for longer-term storage. The customer pays a fee for storing video at an off-site location such as a datacenter and avoids having to purchase, manage, and maintain storage equipment.

In all the cases described above, one of the clear benefits for service providers is the recurrent monthly revenue stream that is created as opposed to the traditional one-of sale of a system. Clearly, there is a place for centrally managed or hosted services in the security world. Many access control and video manufacturers have developed or are on the path to develop solutions tailored for this emerging need. This need is further fuelled by the growing number of IT departments around the world that see the “cloud’s” benefits. Beyond the technological aspects of hosted or centrally managed systems, the costs or fees associated with all these offerings will ultimately dictate their success. Join me next month when we discuss the technology required by hosted services.


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