Network Questions & Answers with Bret McGowan

• By Security Products Staff
• Sep 10, 2009

Many people I've spoken to outside the security industry believe, regardless of the overall economy, that our market should always be experiencing growth due to the unrelenting need for better security. However, the truth is that security is still a capital investment and the budget for security gets reduced or removed just like any other expense during tough economic times.

Companies are taking a closer look at everything they do these days; however, in the security industry, the choices between analog and IP-based video make decisions a little tougher.

I challenged Bret McGowan, vice president of sales and marketing at Vicon, to answer a few questions.

Here are his views.

Q.The security industry has been transitioning toward IP-based video and security solutions for the past several years. How has the current economic climate affected the willingness of security professionals to invest in this technology?

A.When deciding between an analog or IP video system, the choice is still a matter of weighing performance needs versus costs. For instance, if price is the most important factor and a facility already has usable analog cabling installed, an upgrade to the latest high-quality analog cameras and DVRs probably makes the most sense.

From a performance perspective, megapixel cameras represent a technology that is shifting the decision- making equation. Megapixel cameras may only be used as part of an IP system and, in order to take advantage of their higher-quality images, you need to install a robust network at the edge.

More users also are opting to pursue the hybrid route, an approach that allows them to take advantage of previously installed analog products, but employ only IP-based products for any new system additions. In these installations, it is critical to select a system that will seamlessly support both analog and IP devices with the same features and capabilities.

Q.Are customers willing to sacrifice performance for cost savings? Have you sensed a change in priorities among customers when evaluating possible solutions?

A.In many of the markets we serve, we've noticed an increased willingness on the part of buyers to sacrifice performance for cost savings. This is true even in public bid situations where the products selected don't really meet the specified requirements.

In today's economy, the opportunity to see raw cost savings represents an attractive option to corporate and municipal buyers who are charged with saving money. These buyers will give up higher-end capabilities in order to cut the bottom line. To address the dueling needs for both performance and cost savings, Vicon intends to release a line of products this fall that will offer the quality and performance our customers have come to expect, while delivering significant cost savings.

In addition, we are witnessing a greater cognizance on the part of both dealers and end users that—regardless of which type of system is purchased—the system's manufacturer must be there to support it in the long run. During the past decade, the industry has become populated with many new security system providers, funded by private equity investment, and many of these may not be in position to last as the private equity and venture capital money dries up.

The public is increasingly aware that it should look for companies that are well established and open about their financial situation, as these are the companies that are most likely to be around to support their systems for the next five or more years.

Q.What are the significant factors that are making today's IP systems more cost-competitive? Are integrators now able to handle more complex installations?

A.I think there are a few influencing factors. The installation of robust networks, which used to be the exception rather than the rule, is becoming standard procedure in most facility development plans. Network switches and cabling have come down in price while their performance has increased dramatically.

Installing dealers have become more familiar with network topology and, therefore, can handle the complexities of the installation without having to subcontract the work to expensive network specialists.

IP cameras and storage prices have decreased from a few years ago. Every camera manufacturer today makes IP cameras; that's where research and development investment is going. We'll continue to see the price of IP cameras drop significantly as component technology improves and competition grows. This also is true for megapixel cameras. A year ago, there were only a handful of companies offering megapixel cameras. Today, every major video security manufacturer offers some options in the megapixel range.

Q.Competitive pressures alone will drive prices down. What about the costs associated with H.264 compression?

A.The conversion by most manufacturers to H.264 compression will lower overall system costs by reducing bandwidth and storage requirements that are sometimes expensive deal breakers. In particular, H.264 will facilitate the transition to megapixel cameras, which currently require high systemwide bandwidth and are known to gobble up storage at an astounding rate.

When selecting an IP system, users need to be aware of the differences in long-term costs associated with using IP software rather than DVRs. Many IP software companies charge ongoing licensing fees for each camera within the network as a requirement for accessing system support and upgrades. They do this mainly because they don't sell the IP cameras and need to compensate for the lost revenue.

Q.What industry-related trends do you anticipate in the coming year?

A.This might sound strange, but I believe that while we will see an increase in IP specifications, we also will see a steady demand for lower-cost DVR systems. That's why we continue to invest in both topologies. The demand for better performing, lower-cost DVRs will not disappear anytime soon.

Megapixel products will continue to be the deciding factor for those who might not have gone IP before. Frame rates for these products will increase and, therefore, so will the demand for better storage solutions. iSCSI-based SAN storage with RAID protection should become a standard in consultants' specifications when secure video storage is critical. We see many system designs in which the price has been cut by eliminating the RAID protection. Today's hard drives are more robust than in the past, but they still fail, and recovery of stored video is often difficult, if not impossible. The potential loss is then exaggerated by the size of today's hard drives. The failure of a single 2 TB hard drive can mean the loss of months' worth of stored video.