“As a service” security could be the answer to price wars from China

“As a service” security could be the answer to price wars from China
Video surveillance as a Service (VSaaS) and Access Control as a Service (ACaaS) have evolved and improved significantly over recent years. Now, a research firm has pointed out that manufacturers could turn to these cloud-based solutions as an answer to margin-related concerns that Chinese suppliers have been causing lately.

In a recently published note, Memoori stated that suppliers were investing more in service-based solutions, helping to overcome challenges and lower costs. More systems integrators were also willing to adopt these solutions now, which could in turn help convince end users on the benefits as well.

“Product manufacturers are also increasingly seeing this route as one that could help them to alleviate some of the pressure on margins if the leading Chinese suppliers continue to cut prices in a ‘race to the bottom,” Memoori said.

This is relevant as competitive pricing strategies from Chinese manufacturers appear to have hurt several global suppliers. In a report from ZDNet published in 2017, an IHS analyst speaking of the U.S. market warned that any more intensive export attempts from Chinese manufacturers could hurt U.S. suppliers. In its 2018 half-year financial earnings report, the biggest Chinese surveillance solutions provider Hikvision Digital Technology said that it was intensifying sales efforts in overseas markets.  

VSaaS market crosses US$1 billion

Memoori believes that the global VSaaS market may have reached US$1.2 billion in 2018, finally crossing the billion-dollar mark after being promoted as the next big thing in the industry for several years. Some forecasts estimate this market to grow at a CAGR of 20 percent to 2023.

Interestingly, despite being half the size of VSaaS, ACaaS shows higher market penetration rates.

“Existing owners of video surveillance and access control systems have, within the last two years, seen the need to upgrade their operations and many are now investigating ‘as a service’ options,” Memoori noted, adding that" “More customers will come into this category over the next five years. However, VSaaS and ACaaS have taken much longer to get established than analysts originally predicted. We have now reached the stage where this option is being seriously investigated for both new installations and retrofitting.”

Much-anticipated growth has been delayed for several reasons. These included the lack of upstream bandwidth and the high cost of storage solutions.

Fortunately, internet speeds have increased considerably in recent years and new smart codecs and H.265 have become popular.

“One of the major value propositions for clients is that VSaaS is continually monitoring the system 24/7,” Memoori said. “Because of this, they are put right in the event of a failure. Paying through a monthly service charge ensures that this is done promptly so reliability improves. This should ensure that the quality of the video is satisfactory for forensic purposes and that all aspects of usability (like how do I retrieve the video and share it) are taken care of.”

Resistance remains at the high-end level

Given the advantages cloud-based video surveillance brings, it would seem ideal for protecting high-value assets.

However, penetration at this level may take a while as high-end consumers like large prestige buildings may already have invested heavily in their own systems and personnel. A change may be seen after five to ten years when legacy systems have to be replaced.

“Most followers of VSaaS believe that the small- and medium-building sector offers the most attractive proposition for buyers because they would rather pay a monthly fee for this service than buy the system with a large upfront cost,” Memoori said, adding that ACaaS too had made inroads into these sectors, due to the fact customers can avoid the hassle of owning and maintaining servers and related infrastructure.  
 


Share to:
Comments ( 0 )