IP-Surveillance: Eye In The Sky

This is the time to get in to the IP video surveillance business
which has a large untapped customer base just waiting to be explored. The new
age IP surveillance is best suited for solutions providers as it involves
networking skills. So get in to the opportunity and enjoy the first mover
advantage, before it becomes an en masse business.

Mention video surveillance and most people think of video
cameras mounted on the ceilings of banks or jewelry shops, or private detectives
video taping an erring spouse for a messy divorce case. The truth is that the
history of video surveillance is much more complex and goes back much farther
than most people realize.

If you consider video in the simplest of terms, then video
surveillance began with simple closed circuit television (CCTV) monitoring. As
early as 1965 there were press reports in the United States suggesting police
use of surveillance cameras in public places.

The typical analog nature of these solutions were such that
there was no reason for any IT channel publication to talk about it. Then why
are we featuring video surveillance as a topic of interest for our core readers
- the solution providers?

The answer lies in the development that has happened in the
last few years in the world of video surveillance.

Much on this for a moment

Video surveillance, which constitutes 75 percent of the total global
security market, has transformed from analog to digital solutions.

Digital video surveillance further evolved into what we have
today the Internet Protocol (IP)-based surveillance. The entry of IP in the
digital video surveillance infrastructure is where the role of IT channel
partners steps in.

The moment IP comes in the picture, it opens up a whole lot
of opportunities. Use of IP automatically brings in business opportunities for a
large base of networking products vendors. It also gives networking solutions
providers an opportunity to

explore this market as a new business area.

The Internet has enabled video surveillance to be instituted
virtually anywhere and be watched from anywhere in the world. With satellites
bouncing signals around the globe, you can now watch anyone anywhere from your
laptop. The eye in the sky is a reality with digital streaming video.

Sizeable market

While no official surveys have been carried out to assess the total market
size for video surveillance business in this country, our feedback is that the
market is certainly huge and largely untapped. Considering the applications and
verticals that can be addressed with this technology, solutions providers
foresee a bright future for this market.

Worldover, especially in the United States and European
country, IP-based surveillance has penetrated to almost every customer vertical
that one can think of. According to assorted international researches, the US
and Europe alone contributed 72 percent to the global security market which totaled
to $63 billion in 2003-04. Asia Pacific contributed about 9 percent to this
market.

Nothing changed the concept of or the public awareness of
video surveillance as much as the tragic events of September 11, 2001 when the
World Trade Center was attacked by terrorists. Where once people saw video
surveillance as an issue that might never affect them, it was now an issue of
immediate and lasting importance.

"Businesses that were prone to theft, including banks,
retail outlets, malls and gas stations, began mounting video surveillance
systems as a deterrent and in hopes of apprehending thieves, particularly in
high-crime areas," said Tata Rao - VP, Enterprise - SE, Cisco Systems —
India and SAARC.

The insurance industry also found video surveillance
compelling to trace workers' compensation fraud, bogus accident claims and a
variety of other cases. The application of IP-based surveillance systems are
endless. Think of any vertical and one will find a place for this technology.

In India, this business is just taking off. "Security
has become a leading concern for most companies now. They want their premises
and inventory to be monitored all the time to avoid theft, pilferage and any
other unscrupulous activities. This evolving sense of wanting to safeguard their
property is compelling customers to go for surveillance," said Tushar
Sighat, VP — Channel Business, India and SAARC, D-Link India.

Manoj Rathi, Director of Kolkata-based solution provider
Diamond Infotech, started providing surveillance solutions after seeing the huge
potential in this market. According to him, the scope of surveillance business
is immense as it was largely untapped till date. "The SOHO and SMB segment
is growing at a faster pace, which is undoubtedly, a big segment for
surveillance. In fact, there are very few vendors who are into this business.
And the need is growing. Therefore, the market is still to be explored in a
proper way," added Rathi.

Opportunities for solutions providers

Until recently, this market was being addressed by a specialized set of
integrators, which included companies providing physical security solutions.
According to market feedback, there are about 200 active solutions provider in
the country providing security solutions. The type of video surveillance
solutions provided mostly included analogue CCTV solutions. However, the last
few years saw the emergence of IP-based CCTV solutions.

"There are many in the Analog market but very few in the
IP market. Therefore we have been focusing in this area. Having the advantage of
strong hold in the wired and Wi-Fi networks, and also being in the server,
storage and network security sectors are automatically the right choice for this
market," said Rollwyn D'Souza of Mumbai-based solution provider Unique
Enterprises.

Without any doubt IP-surveillance business turns out to be an
excellent opportunity for IT solutions providers to take up as a new areas of
business. Industry experts agree that IT resellers are best placed to take
advantage of the IP-surveillance systems business.

IT resellers have the necessary experience and skills to take
advantage of the IP-surveillance marketplace. A typical analogue surveillance
solution integrator will not know the intricacies of IP networks. Better than
getting these integrators to learn networking, is to have network integrators to
take up IP-surveillance solutions, who have for long performed the role of
educating end users about new technologies and new applications for existing
technologies and have a very relevant knowledge base including networking and
information security expertise.

"IT solution providers understand IP networks much
better. The technology involves all components with which the IT community is
well versed. It is easier for them to develop or customize solution on IP and
they will be in a better position to integrate the surveillance part with the
existing infrastructure," said Santosh Kumar of Electro Sales - a New
Delhi-based systems integrator.

As far as the margin in this business is concerned, it can
vary from vendor to vendor and depends on the kind of customers the partner is
selling to. "But the least a partner can expect is a 20 percent margin.
Since this is a new technology, customers will not be able to always cross check
prices, so a partner can give the most competitive price for the solution,"
said Sighat.

Besides, these are high-value products, so the margins work
out to be more handsome. "For instance a customer might earn Rs 3,000 for
selling one PC. An IP-surveillance camera could cost around Rs 12,000. So if he
sells four such cameras a week, he can earn around Rs 10,000 at one go,"
explained Sighat.

Another reason that makes this market lucrative is the
current small base of IT channel partners who have ventured into this business.
There are about 200 active integrators of these solutions, of which most are not
IT solutions providers but are into providing analogues and physical integration
of security systems. This in itself throws open a large opportunity for IT
solutions providers to explore. "This market has just sprouted. The growth
will be in times not in percentage," said D'Souza who added surveillance
solutions to his IT solutions business in Mumbai.

In terms of the integration opportunities that
IP-surveillance offers, there exist tremendous possibilities starting from
implementation and integration, deployment, data synchronization, storage and
other such related solutions. "It's a big market to be explored. It will
help to strengthen both the topline and bottomline," said Rathi.

Edge over analog

In a conventional analog CCTV system, an analog camera transmits the analog
signal over coaxial cable, to terminate at the display and/or recording device.
These are typically dumb systems where there can be no intelligence or analysis
of the video data without human intervention to retrieve and evaluate the
recorded material.

In an IP-based system, a digital camera transmits the
digitized video signal via ethernet over a Cat 5 LAN cable to a LAN switch and
into a Video Server (Computer). The server manages and manipulates the video
signal from this and other digital cameras and displays, records, retransmits
the images in nearly an infinite number of options that are selected by the
administrative software, including sending data via the Internet to any site on
the world-wide web. Thus an IP-based solution is capable of analyzing and
recording the data in selectable software formats, and can initiate preventive
actions.

"Given that most businesses effectively deploy
high-speed IP-based networks, an IP-based surveillance solution has become a
business imperative. IP-based surveillance systems have an edge compared to the
conventional analog CCTV-based solutions as they enable live video to be
transmitted, stored and managed over a single data network. In many cases, IP
based—surveillance systems can be easily integrated with existing analogue
CCTV systems," informs Rao of Cisco.

Customer verticals

The images recorded digitally over a IP-based surveillance solution are so
much clearer than the often grainy images recorded with analog that recognition
was immediately improved for police, private investigators and others utilizing
video surveillance for identification purposes. With digital technology you
could also manipulate the images to improve clarity even further by adding
light, enhancing the image and zooming in on frames.

According to Sighat of D-Link, the possibilities are
limitless. All solution providers need to do is a little innovation by thinking
different. Here is an example of how a solution provider came up with a
brilliant way to offer his hotelier client a solution which was automated and
foolproof. An Indian restaurant was taking orders on a PDA, which were being
directly transferred to the kitchen and then the inventory would be balanced as
per the ingredients used in the food. Here the basic technology was wireless.

"Similarly, partners can come up with lots of solutions
on their own for various segments that they cater to. They have to understand
that they are not selling the product, but are pushing an entire solution. They
should be able to go up to a customer and say that we have a solution which will
bring down the incidence of thefts in your showroom by 25 percent, for instance.
Then the customer will be interested," reasons Sighat.

There are instances of integrators offering these solutions
to play group centers and old-age homes. As of now all types of organizations,
from government agencies and educational institutions to research labs and
retailers, can benefit from IP surveillance systems. Consider some of these
possible uses:

Government - One of the verticals fraught with security
concerns, installation protection, a large opportunity exists here.

Education - Institutions need to protect their assets and
monitor corridors, halls and classrooms, as well as secure the building itself.

Retail - Retails outlets need surveillance solutions for
protecting inventory from internal and external thefts, shoplifters, remote
monitoring for efficient store management.

Financial - Banks need surveillance at branch offices,
teller windows, and ATMs.

Transportation - Remote monitoring to track airports,
highways, and railways. Agencies need to monitor rapid transit stations,
railways, highways and airports.

Industry — Monitoring production, warehouses, logistics
systems and supply chain systems.

Others — Defense, police departments (traffic management),
hotel and hospitality industries, factories, healthcare, retail and big jewelry
shops.

"Back in the early 90s, when more women went back to
full-time careers, digital video surveillance manufacturers found a niche market
that hadn't previously been tapped, i.e. monitoring what was going on at home
when parents were gone. The nanny cam was a huge success, providing a way for
parents to observe what nannies and housekeepers were really doing while at home
with the kids," said Rao.

The popularity of these cameras pushed the industry to
develop ever-smaller, higher resolution cameras that could be hidden almost
anywhere. The result was a boon to industry development, with new versions of
digital video surveillance cameras coming out nearly every month.

Digital video surveillance made complete sense as the price
of digital recording dropped with the computer revolution. Rather than changing
tapes daily, the user could reliably record a months worth of surveillance on
hard drive.

Evolution of video surveillance

When video cassette recorders hit the market, video surveillance really hit
its stride. Analog technology using taped video cassette recordings meant
surveillance could be preserved on tape as evidence. The seventies saw an
explosion around the world in the use of video surveillance in everything from
law enforcement to traffic control and divorce proceedings.

England installed video surveillance systems in four major
Underground Train Stations in 1975 and began monitoring traffic flow on major
highway arteries about the same time. In the United States, the use of video
surveillance wasn't quite as prevalent until the 1980s for public areas, but
store owners and banks quickly understood the value of it.

In the 1990s another advancement in the history of video
surveillance made great strides in practicality of Digital Multiplexing. When
digital multiplexer units became affordable it revolutionized the surveillance
industry by enabling recording on several cameras at once (more than a dozen at
time in most cases).

By the mid 1990s, ATMs across the United States and in most
parts of the world had video cameras installed to record all transactions. After
the first attack on the World Trade Center in February of 1993, the New York
Police Department, FBI and CIA all installed surveillance cameras throughout the
area. Soon many countries had also started using either CCTV or video taped
surveillance to cover major sporting events that could be potential hot spots,
including the World Cup Soccer games at Giants Stadium in 1994.

The second wave of increased video surveillance corresponded
with the emergence of digital in the United States. From 1997 on, police
departments across the country installed more and more video surveillance
cameras in public buildings, housing projects and areas like New Yorks
Washington Square Park. The NYPD also began using mobile surveillance vans at
political rallies and other large gatherings.

Opportunities for vendors

The Indian market for IP surveillance has been a very new. The analog market
has been here from long time but there are very few vendors/ manufacturers who
have launched the IP range of surveillance cameras and related equipment. In the
market there are very few known brands like D-link, Ever Focus and Daktech. Even
Cisco is getting in this market after acquiring SyPixx Networks an IP
Surveillance Company for approximately $51 million in cash and options.

The advent of IP surveillance is giving more and more
networking vendors opportunities to come up with best-of-breed solutions that
suit different needs. In a market that was predominately ruled by companies like
Europlex, Pelco, Siemens, Axis and Bosch providing professional analog
surveillance solutions, now has many networking players like Cisco, D-Link, IBM,
HP, Seagate and Canon as some of the new players.

"Cisco Systems and Sony have created a solution that
allows Sony's IP surveillance cameras, its robust surveillance software
application and information gathering technology to be integrated with Cisco's
routers, networking infrastructure and software. The new IP surveillance
solution combines Sony's IP video monitoring cameras, servers, and
sophisticated software (Real Shot Manager) with Cisco's networking
infrastructure," said Rao. For Cisco it is also an opportunity to sell
switches, Wi-Fi routers and IP cameras.

As Sudip Sinha, Network Consultant, Epitom Networks, Kolkata
remarks, "IP surveillance solution can lead to very good storage solution
scope, as not only generation of image is required but storage of the data is
equally important. Which essentially means business for companies like IBM and
HP for its storage and server solutions."

Even companies like Seagate with its storage solutions and
Canon with its surveillance software are focused on this markets looking at the
potential. As this technology matures and gains widespread acceptance, there is
a move to the "IT best-of-breed market approach," where vendors focus
on one part of the solution while establishing a partner "ecosystem"
to provide customers with a total solution-from equipment and software, to
systems integration and support. In this way, the security and surveillance
market is developing similar to the PC market, where Intel supplies the
processors, Microsoft the operating system, IBM the hardware, and so on.

The role of software

Software plays a major role in the IP surveillance solutions. All decent
hardware available today comes bundled with the required software. But some
specific solutions may require customized or third-party packaged software. This
another opportunity for independent software vendors to cash in.

A cost comparison of the present solutions available show
that IP surveillance is any day better and comparatively cheaper considering the
large scale implementation that it can be done on. As IP surveillance cut the
distance through the use of Internet, remote monitoring allows companies to cut
their security costs by using an in-house or third party remote monitoring
station for 24-hour security — any day cost effective security solution than
employing on-site security staff around the clock.

NELSON JOHNY

with inputs from Vinita Bhatia in Mumbai, Anjali Chaudary in New Delhi,
Piyali Guha in Kolkatta.