Axis: If there are 14 cameras, IP system cheaper

Network camera manufacturer touts new TCO study
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Friday, December 10, 2010

CHELMSFORD, Mass.—At what point is it cheaper to install an IP camera system versus an analog camera system? Three years ago, network camera maker Axis Communications commissioned a “Total Cost of Ownership” study that found the magic number to be 32 cameras. A new study, which Axis touted in a Dec. 8 announcement, says that the break-even point in 2010 is lower: It’s now 14 cameras.

“This study looked at 14, 25 and 40 cameras,” said Fredrik Nilsson, Axis GM. “I thought the answer would be 25 today. I was amazed it was 14.”

Changes in technology and lower cost of the IT components of the systems are some of the main reasons for the lower cost, Nilsson said.

While this study is an update of the 2007 study conducted by Axis, it was conducted by a different independent group of researchers, he said. Tom Hulsey, a technology consultant, did the 2007 study.

The 2010 study was done by Lusax, a research group at Lund University in Sweden. Lusax was founded five years ago, by Axis Communications, Securitas (now Niscayah) and Assa Abloy, all of which provided money to fund Ph.D. positions at the university. That arrangement ended in March of 2010, Nilsson said. Lusax subsequently decided to update the 2007 TCO.  Government grants and the university funded this study. Axis did provide names of integrators who use both analog and IP systems to Lusax, he explained.

Nilsson said the study found four main drivers for the new break-even point. First, there are big cost savings in storage with the use of H.264 compression, a technology that was not available in 2007. Second, there’s “Moore’s Law” which says equipment will get cheaper and have higher performance as time goes by. “Servers and switches are much cheaper than they were three years ago,” Nilsson said. “And the cost goes down a lot quicker on the IT side than on the analog side with DVRs.”

Third, in 2007, he said, “power over Ethernet couldn’t support moveable PTZ cameras indoors, or outdoor cameras.” It can now, and that’s important because he said “cabling installation is a big piece of the cost.” And fourth, Nilsson said, is that fixed dome cameras used in the 2007 study “cost around $699,” while the cameras used in 2010 cost about $399.

The study is obviously valuable to Axis as a marketing tool. Nilsson said it will be useful to help Axis get the word out about how quickly IP technology and the price of IP technology are changing. The market still needs a lot of education along those lines, he said. Seven years ago Axis published a white paper about the top 10 myths surrounding IP camera technology. “And I still hear some of those myths being repeated today,” Nilsson said.

The study has been criticized by some, including Ari Erenthal of B&H Photo in New York, who believe the requirements "were chosen to maximize the attractiveness of an IP solution."

 

Comments

This TCO study is absolutely incorrect. The equipment cost for a GOOD 14 channel system is $7,337.21. How much does Lusax think it costs to install a 14 channel system? There are lots of reasons to use IP over analog. Price is not one of them.