The shift to IP is coming. For large installations and government projects, the switch to IP has already happened. “All new government projects in India now specify IP-based systems,” said Vivek Bagri, CEO of Livedarshan. “A noteworthy phenomenon in India is that more major projects now demand brands listed on IMS Research market share rankings.”Large projects invest in network infrastructure also required by other systems, which means that there are less network and bandwidth issues compared to before. “For critical-infrastructure projects and large enterprises (including retail), bandwidth is no longer that big of an issue as their billing and other automation systems already require and rely on IP networks,” said Bagri. “Of course, integrators will have to play with bit rates and strike a good balance between video quality and network traffic.”
The shift to IP is coming. For large installations and government projects, the switch to IP has already happened. “All new government projects in India now specify IP-based systems,” said Vivek Bagri, CEO of Livedarshan. “A noteworthy phenomenon in India is that more major projects now demand brands listed on IMS Research market share rankings.”
Large projects invest in network infrastructure also required by other systems, which means that there are less network and bandwidth issues compared to before. “For critical-infrastructure projects and large enterprises (including retail), bandwidth is no longer that big of an issue as their billing and other automation systems already require and rely on IP networks,” said Bagri. “Of course, integrators will have to play with bit rates and strike a good balance between video quality and network traffic.”
However, a different story is painted for smaller installations. Though market figures tout large numbers of IP cameras, the vast majority of IP cameras are used in large government or enterprise projects. Smaller installations are just starting to adopt IP video. “Though IP video stands 15-20 percent of our market, from a distribution point of view, IP video is just starting now. Up till now, IP market was only for projects,” said Alessandro Berio, MD, Eurogroup. 
Visitors from different regions including Philippines, Malaysia, India and Italy think that a major shift to IP video may not happen for at least another three to five years. Though there are a lot of advantages that IP video can bring to surveillance, for many, the cons still outweigh the pros. Price is often a big factor. “The Malaysian market is huge, and people want the latest technologies, they (customers other than the government) are just not willing to pay the price,” Adly Effendi Bin Hasan, Executive Director, and Azrin Bin Abu Bakar, MD of Kiwitech agreed.
“I don't see a professional solution at a good price,” said Giovanni Novelli, Sales and Marketing Director, Assy Global View Technology. “The only professional solutions available come at a high price; I want a professional solution at a medium or low price.”
Users of IP video also have some technological problems to overcome. “IP video still has hardware and bandwidth constraints,” said Sumit Behl, Product Manager, Sparsh. “It also has other drawbacks — its price is higher and it is not as easy to use as analog.” Unlike large installations, smaller installations may rely on national infrastructure that isn't there. “In Italy, the infrastructure for IP is not good,” said Berio. “It would be stupid to put high megapixel camera on an internet line similar to one that existed 20 years ago in Taiwan. Good IP infrastructure is very expensive.”
Moreover, many installers do not have the technical know-how to make the switch to IP. Several Secutech attendees emphasized the amount of training still needed. “There is still a lot of work to be done with the installer base for new IP products,” said Dan Tilly, Division Manager, Kamic Security.
IP can also potentially bring more value to the table. “The debate between analog and digital isn't just about the technology; it is about the value you get for your money,” said Riyaz Ali of RK CCTV. “Analog isn't adding anything new, but with IP, there is more value addition.” Overall, there seems to be less and less room for players to deal exclusively with analog video. “If someone is not prepared for the shift to IP, then they will quickly find themselves out of the market,” said Ali
SHIFTING TECTONIC PLATES
Many in security source their security products from the manufacturing hubs of Taiwan, China and Korea. Many of Secutech's visitors feel they need to come straight to the source, to figure out who to buy their products from. “Everything is produced in Asia, it is just a matter of which brand puts the sticker on the box,” said Rok Bajec, CEO of Mobicom. “And that's why I'm here — to figure out who is really making the product. Only the people who made the product can really provide you support when something has gone wrong. If we send a product back to somebody that's not actually making the product, support could take a week, whereas it could take an hour if we're talking to the people that actually made the product.”
The high quality of Korean products was accepted across the board. Although products from Taiwan are mostly acknowledged as high quality, there were a few doubters in the group. Generally, people are not as trusting about the quality of products from China, but recognize that they have competitive prices. However, Taiwanese and Korean manufacturers may need to keep a close eye on China as the quality of Chinese products rise. “The problem with Korea and Taiwan is that they are not competitive with Chinese products,” said Novelli. “Chinese products are starting to become better in quality, and they are less expensive. The ratio between quality and price is much more competitive from China.”
Another game changer could be the recent free trade agreement. The European Union and South Korea recently signed. “Korean products will not pay taxes; China is already low priced. This puts Taiwan in a difficult position,” said Berio. “You don't pay any tax on cameras from Korea, but you pay 4.9-percent tax on cameras from China and Taiwan. For DVRs, you pay 13.9-percent tax from China and Taiwan. Korea does not pay any tax on DVRs yet, but as the tax on Korean DVRs gradually lowers to 0, and that will be a big price gap.”
However, China has a few problems that are holding them back. One issue is trust. “China has more competitive pricing, but we can't trust what they say,” said Behl. “Often their information is misleading. We are especially apprehensive the first or second time that we work with a Chinese company, but even working over the long term, we are still keeping our fingers crossed. Taiwan and Korea are better — we usually get what is committed to at the beginning.”
China's customs procedures may make it difficult for buyers that need to send products back to China for maintenance. “I have a lot of trouble returning goods for warranty to Chinese manufacturers because of Chinese customs,” said Warren Simmons, Company Director, Techniport. “The company that's accepting the warranty will have to get through red tape and bureaucracy to accept and return repaired items. This is a detriment to Chinese companies because they can't honor their warranty obligations in a timely manner.”
Taiwanese manufacturers seem especially vulnerable to the changes occurring in China. So far, the strategies that Taiwanese manufacturers are using to stay competitive are not very impressive. “I see Taiwan pushing products full of features that may not be useful in the market," said Berio. "Is this a marketing strategy just to differentiate themselves from China? People are not willing to pay 30 to 40 percent more for something they will not use.”
Berio acknowledges that there are great softwares coming out of Taiwan, but that as a distributor, software is not a good sell. “If you visit any booth, they will tell you about software, but software side is not for distributor, it's more for systems integrator.”
Berio advises Taiwanese manufacturers to quit infighting and organize for more fighting power. “They will probably need to concentrate more on product sourcing. Maybe Taiwanese manufacturers can work together, and organize to buy raw materials. If labor cost is high, you must save money on production materials.”