After COVID-19 brought a hiatus of about 24 months, 2022 has been a rather busy year for video surveillance companies.
After COVID-19 brought a hiatus of about 24 months, 2022 has been a rather busy year for video surveillance companies. Several projects that were put on hold due to health care concerns have restarted, while customers are eager to invest in new plans that would increase market demand.
“From a company perspective, we have seen solid growth across the year, driven by growth in market demand,” said Ray Mauritsson, CEO of Axis Communications. “We believe the recovery the markets are experiencing since the pandemic is a key factor in this.”
But the pandemic hasn’t been the only reason. Technological developments that allow customers to improve security and convenience have also increased demand. “2022 continued a growth path within the video surveillance industry,” said Charles Pitman, Product Marketing Manager at Genetec. “Customers are more and more comfortable with having connected devices and systems within their environment and are increasingly looking at ways to simplify system maintenance while having access to their security systems on the go.”
Challenges to overcome
But the improved demand does not mean an absolute lack of challenges. Most video surveillance companies are still forced to deal with several challenges, including supply chain irregularities, chip shortages, and other related uncertainties.
Component shortage challenge
Supply chain disruptions and unavailability of components were one of the biggest challenges that businesses across the board faced in 2022. Although the chip shortage appears to ease now, the industry continues to reel under this pressure.
“Like many other organizations, we are still challenged by the lingering effects of the pandemic combined with global component shortages and supply chain disruptions,” Mauritsson said. “While this situation is not unique to Axis, it has presented us with issues that have caused us to adapt. However, this has given us the opportunity to rethink and revisit how we go about the design and manufacture of our products, and as we see the markets recover and improvements in supply chains, we are now seeing steady and continuous improvement.”
Recovering from lockdowns
Another problem was that the recovery from the pandemic had not been the same across markets. In many parts of the world, governments have remained slow to restart unrestricted travel and operations. Countries like China continue to remain cautious, prompting businesses to take things slow.
“General market instability, supply chain issues, and labor shortages have all put infrastructure investment in business functions like security in a precarious position,” Pitman said. “Meanwhile, the slower than expected return to the office slowed down major projects and new construction.”
Factors driving demand
The pandemic, which forced people to stay indoors, has brought fresh perspectives on the benefits of video-based technologies, especially when combined with AI and analytics. The use of surveillance systems for purposes beyond security is more popular now than ever before.
Benefits of AI and analytics
More customers are now aware of the power of analytics and how leveraging it could help their businesses. The reduced cost, improved efficiency, and better protection that analytics offers have a better appeal than the reactive security devices of the previous era.
“Over the last year, we have seen new projects of all kinds, private and public, requiring surveillance by design,” Pitman said. “Many businesses have been turning to video analytics solutions to strengthen site security, gain new insights, and solve unique problems. Greater adoption of video analytics has also been propelled by technologies such as machine learning and deep learning, which offer the potential to automate a lot of data processing and workflows while delivering actionable information to operators.”
Pitman added that video analytics applications have continued to mature in ways that make them easier and more economical to deploy at scale. This was made possible by vendors who focus on hardware resource efficiency and offer more granular controls for running analytics at certain intervals or schedules instead of continuously.
Inherent demand
Mauritsson added that increased demand is a natural progression as customers become more aware of security concerns and how to deal with them. More and more customers are attracted to advanced surveillance solutions that can offer better protection and peace of mind.
“Firstly, there has been an underlying growth in our market for many years now, mainly driven by an increased interest and need for security technology across all sectors,” Mauritsson said. “This growth in demand was not really affected by the pandemic, even though lockdowns and supply-chain issues had some short-term impact on Axis sales. Secondly, there is a demand for more and more innovative technology. We have always prided ourselves on being at the forefront of technological innovation,and with that comes an increased demand for our products.”
Major verticals driving demand
For many reasons, it isn't easy to point out verticals that are growing faster than others at the moment. New and old projects are picking up across sectors for many companies.
“It’s difficult to pin any one vertical that has experienced the most demand and growth as so much of what we offer can be broadly applied to many sectors,” Mauritsson said. “We’re seeing growth across all major segments.”
Pitman said that Genetec is also seeing growth across many sectors, particularly in the transport, public (government), enterprise–engineering, and industrial sectors.
A report from KPMG suggests that 2022 will be a year of opportunity as the world learns from the past and works to rebuild with more resilience, sustainability, and equity. But since COVID-19 has significantly influenced people’s lives, consumer behavior would also have seen a dramatic change.
“It will also be a year of uncertainty as new challenges emerge and social expectations continue to shift as we learn to live in a world with (not after) COVID,” KPMG noted in its report. “And infrastructure leaders have an opportunity to fundamentally change our collective path on the climate, social, and governance agenda.”
What changed for integrators in 2022
The pandemic has changed the way many businesses operate. While systems integrators couldn’t go out in the field when restrictions were in place, the nature of their work has changed even after the pandemic because customer-interested have shifted.
Customers want connected devices
The arrival of the Internet of Things (IoT) and better integration have helped integrators offer better returns on investments to customers. The pandemic has made customers become more aware of the benefits of features like remote monitoring.
“The drive to connectivity has never been more acutely felt,” Pitman said. “Finding ways to minimize on-site maintenance and reduce the burden on already over-taxed on-site staff has meant customers are looking for paths to the cloud either directly or with lightweight, managed appliances that can lighten the load on internal IT teams.”
They also want cost-efficiency
Customers are becoming increasingly cost-sensitive, and they are looking at ways in which they can monitor or configure systems remotely and minimize displacements/fees related to on-site maintenance. They are looking to their systems integrators to focus more on value-added services vs. basic installation and maintenance.
Fortunately, developments in software and algorithms have helped integrators meet such demands.
Cybersecurity and analytics are a priority
Mauritsson pointed out that the interest in analytics and better cybersecurity has had a significant impact on integrator businesses.
“One developing trend we’re seeing is the growing interest among customers, which also affects system integrators, for analytics,” Mauritsson said. “This is driven by AI capabilities improving analytics performance. Also, while it is not a new trend, there has been a growing demand for stronger and more advanced levels of cybersecurity. Being able to offer products and solutions of the highest cybersecurity standards is becoming a crucial factor for us and for our partners.”
Pandemic behind, business as usual
While concerns such as supply chain constraints and chip shortage have plagued the industry in 2022, video surveillance companies are witnessing a return to normalcy for the most part. After a break of about two years, customers are more than happy to get back to their previous lives, prompting market demand.
But there are still several challenges for the industry, both from a vendor’s as well as integrator’s perspective. Companies will have to meet customer requirements with innovative solutions, customized service, and better investment returns.