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Video Surveillance Systems: Demand for Integrated Security Solutions

Friday, 20 July 2012

Traditionally dominated by analog-based surveillance systems, the Indian market is gradually shifting toward digitized, IP-based surveillance systems.

The video surveillance industry has changed dramatically over the years. The need for intelligent security systems, increasing terrorist strikes, dwelling infrastructure, and rising criminal activities have fueled the demand for reliable and intelligent security systems. The advantages of surveillance systems over physical security such as the ability to allow remote monitoring have resulted in wide deployment across India.

Global Scenario

The video surveillance industry has continued to enjoy a robust growth despite the unfavorable economic climate. The growth in worldwide market for video surveillance equipment has been mainly driven by the sales of IP-based network video surveillance equipment. The global CCTV and video surveillance equipment market is growing at a CAGR of about 25 percent and is poised at Rs. 80,000 crore. It is expected to arrive at Rs. 150,000 crore by 2015.

Asia accounts for 35 percent of the global CCTV market, estimated at Rs. 27,000 crore. The network video surveillance equipment sales will witness an increase of 25 percent in 2012, despite uncertainty in the Eurozone, according to IMS Research. It is likely that a greater volume of medium-sized agreements will close in the next 12 months.

Indian Market Dynamics

The ever-increasing requirement for safety and security in almost every aspect is fueling the demand for video surveillance systems, ultimately creating lucrative opportunities for traders, manufacturers, and operators in India.

On the back of such considerations, CCTV and video surveillance equipment market has been estimated to possess enormous growth potential, and expand at a CAGR of 32.49 percent from 2011 to 2016. The Indian video surveillance market is expected to reach Rs. 4855 crore (USD 952.94 million) by 2016.

In 2011, analog-based surveillance systems were accounted for majority of the share, i.e., 67.8 percent in the overall market. IP-based surveillance systems are expected to grow at a relatively higher CAGR of 41.78 percent from 2011 to 2016, according to 6Wresearch.

Axis, Bosch, Cisco, D-Link, DVTel, GE, Honeywell, Ingersoll-Rand, Karel Electronics (represented in India by Intellicon), Schneider, Samsung, Siemens, Sharp, Sparsh Securitech, Sony, Verint, Vicon, Tyco, and Zicom are the major players in the CCTV and video surveillance equipment market.

In India, CCTVs are the most sought-after security systems and apart from government, both at the central and the state levels. The private sector is also increasing their expenditure on security surveillance and as a result the cost of the CCTVs is going to head south.

On regional front, industry trends reveal that North India including Delhi, NCR, Haryana, Punjab, Uttaranchal and West UP, and Rajasthan have the largest proportion of security installations with Southern India closely following it. Deployment of CCTVs significantly help in carrying out post-attack investigations. Besides, continuous monitoring of the video surveillance system also plays a vital role in combating security breaches and terror threats at sensitive places like railway stations, airports, hospitals, and busy market places.

Traditionally controlled by analog-based surveillance systems, the Indian market is gradually shifting toward digitized, IP-based surveillance systems. These surveillance systems are finding their space across industry verticals, namely, government and transportation, banking and financial, retail, commercial, industrial, and residential.

Government, transportation, banking, and financial verticals accounted for the total 77.89 percent of the market share in 2011. Other verticals such as retail, residential, commercial, and industrial are also seen as key growth verticals.

Further, IP-based system is moving toward HDTV image qualities and distributed intelligent video capabilities, which will eventually provide better clarity, more details, and color reproduction. It enables centralized surveillance management of multiple areas/districts with local storage so that network bandwidth issues and security efforts can be optimized.

It makes it possible to have an integrated video surveillance system over different geographical locations. With specialized video surveillance devices, intelligent video will continue to emerge as a tool for gathering business intelligence.

Industry vendors have been keen on user group supporting strongly with a more focused approach toward security requirements and concerns. Unless the user group attributes significance to this area, efforts from various players will remain unsuccessful.

Technology Trends

Going forward, the industry is expected to witness demand for cloud-based video surveillance or video surveillance as a service (VSaaS) similar to the SaaS model. The world market for VSaaS was estimated to be Rs. 2550 crore (USD 500 million) in 2011, an increase of 25 percent from 2010. The functionality of VSaaS can be augmented by the addition of cloud-based video content analysis. By running analytics in the cloud, enterprises would be able take advantage of the large virtualized processing power available to them.

An increasing number of entrants to the market has accelerated the growth of service development and marketing presence, and is also creating a more competitive environment. VSaaS will continue to gain traction and solution providers need to look at new applications for video surveillance. The infrastructure cost required to provide a VSaaS solution remains expensive. Hence, it necessitates providing solutions that offer real benefits like monetizing otherwise unused video to fuel growth for this emerging market.

A vast majority of manufacturers are believed to be refocusing on image quality in 2012. HD and megapixel resolution security cameras have been a much talked about feature in the video surveillance industry over the last few years. It has been forecasted that by 2015, more than 70 percent of all network camera shipments will be megapixel resolution.

With an ever increasing number of HD resolution security cameras being released on the market, manufacturers will need to further develop their points of differentiation. Probable advancements will be in well-established areas of need, such as low light capability and wide dynamic range.

Integration between access control and video, greater interoperability, and intelligent video analysis are few technologies registering interest from customers.Despite the concerns with available bandwidth, broadband speeds are likely to continue to increase, leading to greater capability and greater expectations from the technology.

In addition to HDcctv Alliance conformant products, HD-SDI and Security Link over Coax (SLOC) products are also available in the market for the transmission of high-definition images over the existing (or new) analog infrastructure. Looking forward, the concept and market potential for HD over Coax is fundamentally sound. There is a large amount of analog video surveillance equipment and infrastructure currently in existence and there is a strong demand for high definition video.

For HD over Coax to penetrate the existing analog market, multi-vendor/brand compatibility is required. Manufacturers will continue to push HD over Coax equipment to the end-user, increasing the availability and choice. It is most likely that a number of large video surveillance vendors will begin to introduce some form of HD over Coax products in their portfolios in 2012. The HD over Coax category will still see strong growth, with the market size nearly doubling, as increasing numbers of manufactures begin to push this technology forward.

H.264 has become the de-facto compression technology for video surveillance systems. However, a combination of factors in 2012 could lead to advancements in video surveillance compression. The increasing amount of high definition video, coupled with decreasing availability of storage and a greater demand for cost efficiencies, could prove to be a driving force for the industry to transition to more efficient video compression codecs.

The security market in India holds immense potential for vendors who are able to find the accurate mix of price, technology, and awareness. There will be a considerable increase in video surveillance market in the coming years with a gradual shift in demand for a more integrated security solution.


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