Total Cost of Ownership
Cloud computing, software have evolved and emerged as a popular option
- By Andre Fontana
- Oct 01, 2018
As cloud computing and software as a service
(SaaS) have evolved, video surveillance as a service
(VSaaS) or cloud surveillance, has emerged
as the most popular option for businesses seeking
to simplify their physical security installations.
The key benefits of cloud surveillance are:
- Instant access from any location
- Greater scalability and increased storage
- Unlimited storage for unlimited time
- Economical: pay only for what you use
One of the biggest benefits of cloud surveillance is that the total
cost of ownership (TCO) is lower for cloud based solutions versus
traditional systems. In general, the TCO is realized almost immediately
with a cloud-based solution, as true cloud systems have zero upfront
costs. There are no gateway costs—the cost is zero. Surveillance
and security systems are a large capital expense for any business. Over
the past several years, the evolution of video surveillance cameras
and technologies has considerably changed the surveillance industry
in terms of cost savings, increased safety, and convenience of the users.
With so many options available, it can be challenging to evaluate
the costs, maintenance, and overall investment required, to manage
surveillance for your business.
With traditional video surveillance solutions, there are a variety
of start-up and ongoing fixed costs.
The ongoing costs can include: annual maintenance fees such
as router configuration, system configuration and operating system
backup, OS security patches and server equipment refreshes as well
as remote network access, IT staff costs, space, power, software update
installation, PC client SW install/upgrades, central management,
mobile apps, video backup, cyber security expertise and support, and
When scaling a business with multiple locations, you will be required
to buy additional equipment for each location. The price of
ownership then grows exponentially, with each location requiring
more devices. In addition, there are typically more licenses and fees.
One other factor to consider is the additional ongoing energy costs,
estimated at approximately $700 annually to power a server (source:
U.S. Energy Information Administration). With a traditional solution,
there are hardware and software costs with major components—
such as camera networking, components, analytics, and VMS
that all have licensing fees. To calculate total costs over the life of the
solution, you must multiply by months and years, while including IT
support and the total energy costs to power servers. In addition, with
a traditional solution, you must maintain all of these ongoing costs
for three to five years.
Comparing this to a cloud-based solution—if you choose to
make any changes, it can be done with the click of a button—without
any reconfigurations. With cloud, you only pay for what you use and
there is a great deal of flexibility.
Scalable cloud solutions have zero upfront costs and no cost to
scale with additional locations. This must be factored into the TCO
for traditional systems. Beyond simple costs, there are other benefits
that cloud delivers. If you are in search of a simpler solution with reduced
maintenance, no downtime and more—a cloud-based solution
is likely the better option.
Cloud technology offers businesses substantial economies of
scale. A cloud-based deployment model does not require the capital
expenditure for traditional on-site servers. Therefore, you have lower
setup and deployment costs. With cloud-based solutions, support is
typically included—so if anything goes wrong, it is managed by your
In addition, cloud video surveillance allows software updates to
be delivered wirelessly, so any bug fixes and security improvements
are managed without having to replace existing hardware. Remote
monitoring and support means that your provider can maintain the
health of your system and notify you if there’s a problem, such as a
camera going down.
Additional benefits of cloud surveillance include scalability,
streamlined processes and reduced expenses and human resources—
that can be redirected to customer service, marketing, and other areas
that can to help grow your business.
Identifying the Best TCO
for Your Business
It can be difficult to determine how many cameras per location will
deliver the best TCO, since not all deployments are ideally suited for
cloud. Typically, there is a sweet spot of six cameras or less, per location,
for optimal TCO. Identifying sites with six cameras or less
makes it easy, as you eliminate the cost of any hardware. When you
multiply zero cost with multiple location, the savings are 100 percent
of what you’ll be purchasing for a traditional system.
Once you exceed six cameras per location, you must also factor in
the time invested. As we continue to move forward with the reduction
of bandwidth costs and storage costs, you will be able to provide a
larger amount of cameras per location for better TCO. As storage
costs are reduced, you can increase the amount of cameras per location
and this will be less costly than traditional solutions.
Deciding between traditional solutions or the more modern cloud
based solutions can be tricky. Cloud continues to evolve, and offers a
host of benefits for users, as outlined above.
If you are seeking the best solution for your business or considering
a reseller solution, contact your local cloud provider, to find a partner
with an open platform. Be sure to verify that the partner has extensive
experience with cloud solutions. And lastly, be sure to complete an assessment,
to confirm that your business is ready for cloud.
This article originally appeared in the October 2018 issue of Security Today.