The cloud is a tantalizing opportunity for video surveillance. By doing away with hard disk drives (HDDs) and storing everything to the cloud, gone is the most costly and failure-prone part of a video system. IMS Research estimated the global market for video surveillance as a service (VSaaS) was worth more than US$500 million in 2011, up 25 percent from 2010. Itpredicts the VSaaS market could surpass $1 billion by 2014, yielding rich rewards for service providers.
The cloud is a tantalizing opportunity for video surveillance. By doing away with hard disk drives (HDDs) and storing everything to the cloud, gone is the most costly and failure-prone part of a video system. IMS Research estimated the global market for video surveillance as a service (VSaaS) was worth more than US$500 million in 2011, up 25 percent from 2010. It predicts the VSaaS market could surpass $1 billion by 2014, yielding rich rewards for service providers.
Read more in asmag.com's Cloud and Hybrid Video Surveillance Guide (Updated 2021)
Business Models
Cloud surveillance is being offered by dealers, telcos, alarm-monitoring companies and even manufacturers. Viewing is the main purpose, rather than total security, with crucial differences between each offering.
UK distributor Norbain launched a VSaaS service aimed at the small surveillance installation market of one to six cameras, or the residential and SMB market. “It is designed to be installed by a professional installer with professional equipment, but the live/playback/monitoring is to be carried out by the end user in most cases,” said Andrew Pigram, Technical Director at Norbain. “It's to make sure your camera selection is correct. Users know that alarms or any triggers are correctly positioned, so you don't get many false alarms or recorded footage with nothing on it.” Telcos have the advantage of bandwidth, making hosted monitoring a natural extension of their services. Cox Communications launched a trial security service in Tucson and Phoenix, Arizona, which has seen “good” early results. “Cox Home Security is supported by wireless and broadband infrastructure,” said Todd Smith, Director of Media Relations for Cox Communications. “Our solution includes the option of video components and broader home automation. This is a natural fit for us given our communications -- video, broadband, phone – relationship with customers already and allows them to stay connected to their homes when 
away.”
Manufacturers have the technical expertise and security background to distinguish their VSaaS offerings. “We previously were not a hosted video service provider, but we are now. We saw it as a natural fit for our business,” said John Smith, Senior Customer Marketing Manager at Honeywell. “We are a step below central monitoring for 24/7 monitoring. Our system is an automated system with smart analytics or sensors to detect people where they aren't supposed to be.”
Honeywell's offering has potential to be the one of the largest. It is available in North America, including the U.S., Canada and Mexico, and will be rolled out to EMEA in 2013, Smith said. An APAC offering is in development, which could make it a global cloud offering. “Honeywell is in a good position for access control, intrusion, video and full ID badging,” he said. “We hope to offer all services in the cloud.”
Pros and Cons
While VSaaS looks promising, the level of support differs greatly between offerings. Most telco packages only cover cheap webcams and merely host the video, not watch it. In the event of a fire or other emergency, the homeowner or shopkeeper will not be notified. Real-time security notification is still the trump card of central monitoring stations. However, security dealers and manufacturers offer more robust surveillance equipment and correct placement, ensuring a consistent viewing experience compared to a telco.
Who Wants Hosted Video?
Defining a target audience for VSaaS greatly affects how the final product looks. VSaaS holds far more mass-market appeal than enterprise-grade PSIM, requiring the user interface to be as intuitive and friendly as possible.
The residential market holds potential in the U.K. “The upper end of the residential market have intruder alarms in 50 percent of homes,” Pigram said. “So there's opportunity to add surveillance to those properties. It's not just for verification of alarms, but to give users information, such as of their pets left in the house and to see if they're all right.”
Most people are understandably squeamish about surveillance in their homes, which is why Honeywell focuses on business owners. “We sell it primarily in a commercial space; retail; quick service such as fast food and convenience stores; office buildings; professional buildings for doctors and chiropractors; and light manufacturing,” Smith said.
Honeywell examined market needs and found commercial users were maintaining their equipment more reactively. “With traditional video, a lot of people would go back and look back into their system, but the DVR failed, wasn't recording or the camera went out,” Smith said. “With the service, we found out customers needed to be notified when equipment wasn't working. They can know when a camera went offline, as the system can send notifications to the dealer and users.”
Business owners with multiple locations are a key target for VSaaS, which allows them to store video to the cloud, rather than buying a recorder for each shop. “You may have a chain of muffler stores, where the business owner with eight locations wants to check each location,” Smith said. “We provide a single login for the user. … We want to make it light upfront so it's not a heavy investment in equipment for the user, to lower the barrier of entry and capture RMR from these types of services.”
The target VSaaS customer will not be a large retailer or have a big security budget, but wants to view video remotely at an affordable rate. “VSaaS is OK for SME and residential customers with one to four cameras; not for corporate, but we're not seeing that market going to VSaaS,” Pigram said. “I'm less concerned in selling VSaaS to an existing market, as we're selling services to brand-new customers.”
Benefits
VSaaS is not intended to replace alarm monitoring centers, but delivers viewing anytime, anywhere. It reduces capital outlay for DVRs and NVRs, and saves maintenance cost on spinning HDDs, Pigram said. Efficiency is being touted in some offerings, but the energy savings do not equate to a payback for the service provider.
However, the mobile “always-on” world is driving uptake. “Some of the things driving hosted video for residential are consumer electronics with tablets and smartphones,” Pigram said. “The customer is happy because they can utilize something they've bought, and we're happy because we don't need to provide a viewing platform. It reduces capital outlay and clutter in the house. The end user does not need to buy a DVR and monitor.”
The cloud's visibility and availability on mobile devices benefits VSaaS. "The biggest thing I've seen driving adoption is perception," Smith said. "Social media drives services. You see content being delivered in the cloud."