NVRs are rapidly replacing DVRs, but a closer look reveals that the NVR market pie is divided by standalone NVRs and PC-based NVRs. Although they are not “birds of the same feather”, they share many similar features. Not surprisingly, their target markets are increasingly overlapping. This article looks at just how much they are overlapping.
NVRs began as PC-based solutions, harnessing the powers of a CPU. However, in recent years, these are no longer the mainstream products on the market. A couple of years ago, standalone NVRs were introduced into the market, catering to the increasing popularity of network cameras. Since then, their popularity has risen in the industry and standalone NVRs are claiming their spot as the mainstream video storage product. Another NVR develop in recent years is in response to community- and city-wide surveillance projects. The NVRs that cater to this market segment are large with powerful data processing capabilities.
PC-BASED VS. STANDALONE
While both PC-based and standalone NVRs record video, store video, and manage cameras, recorded content, viewing and archiving, the differences between the two lie in how they operate and the features they provide.
Standalone NVRs are smaller and more compact in size compared to PC-based NVRs. In terms of performance, standalone NVRs operate on SoC and usually have one or more DSPs for video compression, decompression, and a CPU for other functions. On the other hand, PC-based NVRs utilize the CPU for video compression/decompression, viewing and recording content, and managing cameras.
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Currently, standalone NVRs are better suited for systems where the number of cameras is within the limits of an NVR's capacity. PC-based NVRs are decidedly more powerful in processing data, and offer much more flexibility in storage scalability, compared to standalone NVRs. PC-based systems also offer more camera scalability, whereas standalone NVRs tend to have an upper limit of camera capacity.
Standalone NVRs triumph over PC-based NVRs in the following areas: price, reliability, and stability. With fewer components and packaged in a compact case, they are appealing in price and more reliable in performance. They are also more stable, secure, and less prone to viruses and hacks, as they run on Linux, as opposed to a Windows-based system. Finally, as they run on a standalone operating system, they have a shorter boot time, compared to the longer loading time required by PC-based NVRs.
With their many benefits, standalone NVRs are gaining traction in the market. In response, several manufacturers are hearing this call and offering attractive products. For example, Shany Electronic is launching standalone NVRs in 4-, 20-, and 36 channels to meet the market demands of SMB enterprises. In this way, smaller projects benefit from the features and capabilities of standalone NVRs and SMB enterprises are able to save substantially on costs. More importantly, “these NVRs are not only powerful, but also boast ease-of-use features, such as auto search and built-in network power to remove the need of a PoE switch. The perk of this function is that it further reduces costs for customers as they do not have to purchase PoE switches, which could be costly. PC-based NVRs, for example, require substantial investments such as licenses for Windows, video analytics software, and monitors,” said Steve Tang, GM at Shany Electronic.
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TARGET MARKETS
According to Joe Qiu, Overseas Business Director at TVT Digital Technology, the choice between PC-based NVRs and standalone NVRs depends on end users. More customers are familiar with PC-based NVRs now due to historical reasons, while more and more will adopt standalone NVRs because of their better prices and higher reliability. Currently, standalone NVRs are optimized at operations of up to 64 channels, although some manufacturers such as Hikvision, Dahua, and TVT are offering ones with over 100 channels. In the future, more and more applications would be covered by standalone NVRs.
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However, the number of channels is not the only deciding factor. Aaron Yeh,Director of Surveon Technology, noted that some installations require more complex functions, such as integration with POS and delivery systems. In this scenario, even a franchised convenience store may require a PC-based NVR which is further integrated with its headquarters.
Generally, PC-based NVRs are deployed in large-scale projects, such as enterprises, and government and mission-critical applications. They may also be deployed in high-end homes or smaller-scale enterprises with more complex security requirements.
On the other hand, standalone NVRs are best suited for homes and small businesses with systems of up to 16 channels. QNAP Security, for example, recently completed a project in India where a gas company deployed standalone NVRs at its multiple sites. According to Evelyn Kao, Product Manager at Surveillance Business Division of QNAP Security, standalone NVRs met end-user requirements in terms of budget, reliability, local display feature, and functionality.
OVERLAPPING MARKETS
Undoubtedly, standalone NVRs and PC-based NVRs will have overlapping markets, but the question is how large and where is this overlap. In response to this, several industry experts have referenced the history of DVRs.
According to Yeh, based on the ease-of-use, affordability, stability, and reliability of standalone NVRs, the initial overlapping areas will be in the small businesses. The overlap, however, does not necessarily represent a threat to PC-based NVRs, as these small-scale installations have traditionally required less complex functions that PC-based NVRs are capable of. The advent of standalone NVRs will naturally fulfill the requirements of the end users in this segment comfortably. Beyond that, Yeh said, “there is still a large analog market and standalone NVRs will naturally replace the DVRs that are still out there.”
“Just like DVRs, when NVRs first came out, they are only available in the PC-based form. End users with less complex requirements had no other option, but now with the standalone NVRs available, it is natural that they will adopt it at a rapid pace,” he added.
Hence, some feel that standalone NVRs will take over some market share of PC-based NVRs, but this will be mostly concentrated in the mid-market segments. The mid- to high-scale installations will remain reserved for PC-based NVRs as end users require more channels and more complex integration, scalability, and storage.
At the same time, “PC-based NVRs may have an advantage because VMS technology is mature. However, with the adoption of advanced solutions and more efforts invested in standalone NVR technology, the scalability and flexibility of standalone NVRs would be enhanced dramatically. In other words, the rapid development of standalone NVRs would greatly decrease the traditional merits of PC-based NVRs,” commented Ice Wu, Product Director of Dahua Technology on the development of standalone NVRs.
The rising popularity of standalone NVRs has resulted in numerous manufacturers sprouting up in Shenzhen, China. Although standalone NVRs from these manufacturers come with a considerably lower price tag, Wu does not feel the need to be threatened by them. “I feel that they will have their place in the market, albeit mostly at the lower end. Dahua has paid attention to this trend and we have been strengthening and completing our product offerings to meet market demands," she highlighted.
MARKET TRENDS BY REGION
According to Chris Hsu, Marketing Manager at Merit LILIN, conservative market figures for PC-based versus standalone NVRs are approximately 92 percent versus 8 percent this year. The ratios would likely change in favor of standalone NVRs to 85:15 next year, and 70:30 the year after.
The uptake of standalone NVRs is different amongst the various regions worldwide. “China is a mature market and the world's manufacturing hub of standalone NVRs. Hence, from our perspective, roughly 80 percent of the market is standalone NVRs,” said Eric Shen, Product Manager of DVR/NVR at Hikvision Digital Technology.
The figures are slightly different in other regions of the world. “In emerging countries, the ratio of standalone NVRs to PC-based NVRs is roughly 50:50. The ratio is less for Europe and North America, because these regions are headquarters to many of the PC-based systems and have traditionally been more used to PC-based systems as a result,” explained Shen on the regional difference in the adoption of standalone NVRs.
Education remains key to the widespread adoption of standalone NVRs in these regions. “We work hard to show end users and system integrations the benefits of standalone NVRs and we find that this has been successful in penetrating the developed markets. At the same time, however, the first segments to adopt standalone NVRs would be the small and medium enterprises as they stand to benefit most,” explained Shen.
HOW THE MARKET WILL SHIFT
In looking at why PC-based NVRs currently have more presence in the market, Qiu explained that standalone NVRs have just been in the market for roughly three to four years and have yet to reach mass adoption stage. Currently, approximately 60 to 70 percent of the market is dominated by PC-based NVRs. However, based on the history of DVRs, the standalone DVR market matured in 2007 and rapidly reached mass adoption stage within three years. Drawing a parallel, he noted, “based on current market trends, it is likely that roughly 80 percent of the end users will select standalone NVRs in the near future. There will still be that 20 percent who would have special requirements and opt for PC-based NVRs. This is because the PC is a platform that enables end users to integrate multiple other systems as required. At the same time however, these are very specialized needs, so the majority of the market will gear towards standalone NVRs.”
As standalone NVRs improve in capabilities and features, they stand to rival PC-based NVRs even further. The day when the global market share of standalone NVRs versus PC-based NVRs is 50:50 should not be far off.