Last year video surveillance growth was a mere 4.2 percent, due mostly to Chinese vendors’ effort to drive down prices and gain more market share. Amid this, the more well-established Western vendors are investing in technology and solutions that go beyond traditional security applications and provide further value to users.
According to a recent report by Memoori, video surveillance growth registered at a mere 4.2 percent in 2016, compared to 10 percent for access control. However, the study noted that despite the growth decline, volume was well up, as the major Chinese competitors “made very drastic reductions to their prices across world markets.”
“Based on their protected home market and copious financial backing from the Chinese government they have been able to pursue this strategy and have now successfully penetrated North America and parts of Europe, where they are rapidly winning market share … and there is no sign that this strategy will not continue to gain market share,” the study said.
Most vendors we spoke with agreed with this notion, saying the growth decline had more to do with a price reduction rather than a slowdown in demand. “As far as our business, 2016 was a phenomenal year for us. We continued to experience record growth and momentum … with 67 percent of revenue coming from new customers,” said Brandon Reich, Senior Director of Surveillance Solutions at Pivot3.
“It is possible that the decrease in the video surveillance component is attributable to the recent surge in Chinese competitors at much lower prices, but what we have found is that businesses and organizations across the world are demanding further integration with unique technology offerings that leverage new kinds of data beyond traditional raw video footage for true situational intelligence,” said Steve Birkmeier, VP of Sales and Business Development at Arteco.
Johan Paulsson, CTO of Axis Communications
, mentions that while the growth in the video surveillance market as a whole is slowing down, the network camera market is showing good growth. “The strong growth rate for network video is primarily driven by increased demand in major growth regions, greater penetration in small installations and rapid technological advancements, which are creating new business opportunities,” he said.
How they cope
Amid Chinese vendors’ aggression, most Western, more well-established security players said that they would not get involved in a race to the bottom. Rather, they are more inclined to investing in new technologies and solutions, combined with sophisticated data analytics software, to help end users achieve better TCO, ROI and business intelligence.
“Our strategy for growth is about highlighting those features and technologies which make our products better value for money than other camera manufacturers,” said Karen Sangha, UK Marketing Manager at Panasonic
. “We are asking end users to take a more holistic approach to appraise any potential security system. This involves different calculations as to the total cost of ownership, including a thorough appraisal of the ongoing maintenance costs as well as the financial benefits of the ancillary features modern surveillance systems are equipped with.”
With end users demanding more out of their security equipment, vendors are turning their attention to data analytics and other solutions that go beyond security, helping improve the end user’s business processes.
“More and more companies will adopt intelligent analytics and big data analysis, which has the potential to streamline processes and optimize sales operations for organizations to drive new levels of business intelligence,” said Jumbi Edulbehram, Regional President for Americas at Oncam
. “Our business model supports numerous integrations with leading video management systems manufacturers, as well as software developers that take the footage gathered from our cameras and turn it into real business intelligence and analysis.”
Examples of this are numerous, in various vertical markets.
“Our age and gender analytics as well as facial recognition technology is finding use in different applications outside of security. For instance, we recently showcased a solution for retail at the ISE tradeshow in Amsterdam which combined analytics with digital signage, so that advertising content can be tailored according to the age and gender of people in the vicinity of the signage,” said Sangha. “At the same show we also showcased how facial recognition technology, developed by our security engineers is now in use for automated lecture capture systems for higher education. It means that tutors can capture their lectures without needing to worry about whether they’ll be in the shot, as the camera automatically pans and tilts to follow them across the stage.”
“Our technology is already being utilized by end-users for applications beyond physical security. First, the retail and hospitality industries use 360-degree video data in stores, hotels and resorts to count people, map traffic patterns and in turn, streamline business operations. Second, there’s a demand for surveillance cameras in schools for security purposes, but now some educational institutions are using the video data to improve classroom instruction and track student engagement,” Edulbehram said.