Brave new world: Drivers propel software use in market
We have all heard it: There is a revolution going on. Analog is old; digital is new. Physical security and IT are converging. And, this market, which was once so focused on the hardware end game, is beginning to embrace more software-based applications.
Of course, the increasing prominence of software within the industry is a direct product of today's convergence and digital trends.
"Just in terms of the big picture, the first and earliest driver for this change has been the integration of IT with physical security," said Alan Lipton, ObjectVideo's chief technology officer. "What we've seen over the last five years is a slow migration of hardware-centric cameras with cables and DVRs to a switch to IP products."
As products have made the transition from analog to digital, software has played a pivotal role. An IP-based camera relies on its software to sort through the variety of information it captures. The software is able to flag what information is important to the user, and what is not. Without software, there would literally be an information overload.
With the growth of IP-based products, the need for software applications increases, Lipton said, as it will run these applications. But according to Vineet Nargolwala, director of strategic marketing for the Honeywell Systems Group with security, some sectors of the market have been slow to embrace it.
"In the lower end of the market, some fear software," Nargolwala said. "What becomes popular is something that installs easily from a CD-ROM and has very little configuration involved."
Glenn McGonnigle, president and chief executive officer of VistaScape, said that using software will increase as it becomes more easily adaptable.
"We have solved the complex problem with shifting through sensor data and the person you are showing it to is the guns and badge guy," he said. "A lot of early generation software products on the market are overly complicated."
But even with some security software applications still grouped in the difficult-to-use range, Nargawala said the fear of software seen on the lower end of the market begins to subside as you move up the spectrum. In the medium commercial segment, "you start to see a lot of integration into IT networks of facilities. Now, you start to see software gaining prominence," he said.
In large commercial applications, integration is a key driver of software use, Nargolwala said, while in the enterprise market the end user demands it.The end user also wants software that can interact with other software programs, such as human resource databases and other Enterprise Resource Planning systems.
In access control, when software is combined with human resources software, such as PeopleSoft, within an organization, the systems can communicate in an instance when an employee is terminated and subsequently, the employee's credentials to enter the offices are no longer active. Compare that immediate to analog systems that required confiscating a badge and deactivating it manually.
"Integration is taken to other business focuses and processes," Nargolwala said.
Paul Terschuren, co-founder of visitor badging and lobby security software provider, Stopware, concurred.
"End users are looking for a much higher level of integration between various security systems deployed in their facilities," he said.
Peter Boriskin, access control and video systems chief technical manager of Software House, said the reason end users are demanding more from their systems is because they have gradually become more educated on what technologies are available.
"Integrators are more educated now and users are more educated now," he said. "They are looking at a computer much more than they ever were."
Terschuren said systems were previously interfaced with others to perform sequential operations, but today's digitally driven systems allow previously autonomous systems to be integrated to perform complex operations simultaneously.
As security systems grow in size and complexity, there is an increased demand for a solution capable of handling various systems on the enterprise.
"The only real way to achieve enterprise-level integration and control is via software," said Andy Lowen, product marketing with Checkpoint Systems.
As a result, the industry has started to shift its focus away from hardware to take a longer look at what can actually control these pieces.
McGonnigle of VistaScape, a provider of automated wide-area surveillance systems, said software is the backbone for intelligent operations.
"Software is the intelligence," he said, "whether it is a box or a CD, if it is going to do something specific for someone's security needs, there is software in there somewhere."
Boriskin of Software House said that in addition to software intelligence, hardware had to take a step up as well.
"Not only can panels run on their own, but they can interoperate with all of it and that was one of the major architectural shifts," Boriskin said. "With peer-to-peer architecture, you have the capability to have all those pieces talk to each other."
Boriskin said it will become harder to divorce hardware and software as the industry moves forward, and that the two pieces are literally becoming one platform, such as in the video world where an intelligent device is integrated with cameras.
Beyond the need for integration and intelligence within operations, there are a number of other factors that are driving the demand for security software platforms.
ObjectVideo's Lipton noted that one of these drivers is the changing of the guard occurring in the market.
"We will have the next generation of security professionals coming in that will have grown up in an IP-based world," Lipton said, "and they will demand that power to be in their security environments."
The goal to be able to access a wide array of information is also another reason for software's gain in use because it can sort through a large amount of information. Intelligent video is one example, Lipton of ObjectVideo said. With that technology "you can watch your video in real time to find out interesting things going on, but you have to be in a software world to truly take advantage of that."
That world will continue to expand, especially as larger companies take notice of the smaller players within the market.
"It's a pretty typical market evolution with big monolithic companies who tend to move slowly," Lipton said. "It is market driven for them."
It is the smaller companies that get the ball moving, he said, especially on the software front, and it is larger organizations that look to make acquisitions. A prime example of this is UTC's $400 million purchase of access control and data management provider Lenel earlier this year, a deal that provided UTC with an extended reach in the market and allowed Lenel to reach further into the government and commercial segments.
The price tag UTC offered for Lenel garnered attention in the industry due to the high multiples of the deal--nearly five times the firm's sales, which analysts estimated to be around $80 million at the time.
As the use of IP products continues to grow--for example, IP cameras currently account for 10 percent of the camera market--so will software.
"The industry is still undergoing a migration from analog to digital applications, but at a much more accelerated pace than previously experienced," said Teschuren of Stopware. "As a result the demand for software-driven solutions has risen as more and more security personnel look to enhance their security systems with digital technology."
"We believe this is a growing trend that is shaping a new direction for the security industry."