Integrators take note: video storage comes out of the closet

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Sunday, October 1, 2006

Video storage: Is it just a highly technical and potentially yawn-inducing component of security surveillance systems that you need to know a little about? Or is it, as some storage-savvy manufacturers and integrators suggest, a potential new source of revenue that many integrators have yet to discover?
While manufacturers and integrators who spoke to Security Systems News had divergent opinions about how and even whether it will be a significant moneymaker, a consensus did emerge about the future of video storage: Integrators should pay attention to this rapidly changing field.
Coupled with other emerging technologies, like video analytics and biometrics, those in the know say video storage is part of an impending explosion in the security field, which will lead integrators into lucrative new non-security-related business territory.
Pelco's senior product sales manager Rob Morello predicted that the security industry is about to change course "because video image quality and performance has gotten to the point in time where people are looking at video not just as security, but using it as extensions and using it in non-traditional security applications."
How does storage fit into this prediction? It's a vital component, Morello said. Video from a commercial establishment, for example, will be used to understand consumer behavior, for education, for monitoring, and to develop best practices, he said. Already, "it amazes me now how many different non-traditional security applications we run across." Those applications are only possible if the video data can be stored cost-effectively, and the cost of storage has been dropping rapidly over the past two years.
Morello envisions a time, perhaps within the next 18 months, where video analytics will have advanced and customers will "begin to look at this [video storage] product line not so much as an expense, but as a revenue stream."
Using a grocery store example, he said, "If you can show Kellogg that 500 people picked up a box, looked at it, shook it and put it back. That data is valuable," he said. Video data is the best kind of consumer report, Morello said. "As soon as someone figures out how to harness all that, I think it will be huge."
Bill Stuntz, chief executive officer of Broadware, notes the snowball effect of increased use of video and video storage.
It's been the movement of video onto the IT network paired with new storage options that's enabled various departments of a commercial entity to use the video, he said. (Stuntz frequently mentions his company's open architecture standard, which he believes positions his company well.)
"Just like many other systems-HR or e-mail-are supporting multiple departments within an organization, the same can happen for video. If you're a retail store, it can support the building maintenance people, and headquarters that want to check on the quality of service being delivered to the customers, or vendors who want to see how customers respond to their display," he said.
"If it's a government organization, you can maintain security in lots of different sites from a central location."
As video analytics improves and increases the access to effective use of video, "this will stimulate more archiving," said Stuntz.
Back to the present day, Steve Rice, director of strategic channel development for DVTel, said storage vendors are "taking a hard look at how to best support network video management systems." DVTel is working with storage vendors to test various storage solutions available on the market today to determine best practices so that the storage vendors can either "offer video centric professional services for security integrators" or provide best practices documentation directly to those integrators who are storage savvy.
Since storage is one of the biggest purchases in a network video management system, DVTel and others want to figure out how to further drive down the cost. Officials at DVTel think one answer to that question will be to offer more centralized storage via a managed service model.
Working with a managed service provider or co-location facility that offers infrastructure management services on a subscription basis would provide customers an opportunity to leverage an already existing IT infrastructure to run a network video management system and store video. The customer would pay a monthly service fee per camera for these services. Instead of the customer having an upfront capital expense, the integrator would bill monthly for camera rental.
Similarly, the managed service provider would bill monthly for the networking, server and storage services. For the integrator, this model would "offer predictive monthly revenue," Rice explained, and would be appropriate for "the customer looking to forego the capital expenditure for a network video management system.
Matthew Ladd, president of the Protection Bureau, believes that video storage will be a moneymaker in different ways. "It'll be a money maker for companies that provide the storage or the integrator who's selling it. It will also be a moneymaker in some ways because the system can be charged off to other departments [within a company] because video is becoming more and more valuable."
Ladd has one client who "uses video over the network to watch the production line and it's also used by other departments who help pay for the system."
An integrator with a central station, Ladd's currently working on a deal where he will provide customers with remote video storage: "One thing we always look for is recurring revenue and I stumbled on a product that allows us to do redundant recording. I'm going to try it out with one client as a beta and if it works out, we'll take it further."
While this particular business model wouldn't be repeated by other integrators, since most don't have a central station, it shows one way storage is being used. And, this project is being done as an operating expense; Ladd will bill the company monthly.
Alan Kruglak, president of Genesis Security, is an integrator with a different point of view. He acknowledges the increasing demand for video and storage and says it's something integrators need to pay attention to, but not something most integrators will make money on.
"The money will be in the deployment and installation of base systems," he said. Integrators looking for RMR should look to service contracts, he said.
The idea that video security systems will become an operating expense doesn't make sense to Kruglak. "Most people I talk to want to buy them," he said "If there's a need, they're going to find a way to buy them."
Whether it becomes a key part of an integrator's business, or just a part of their of their business, video storage has come out of the closet and to stay on top of this market, integrators will need to do their homework.
"Before choices in storage were always defined by the equipment," said Broadware's Stuntz. "[Integrators] have to understand that they have new options and they don't have to base their choices upon equipment constraints, they can base it upon the proper policies and procedures for the particular organization."