ROI for Networked Video
Ray Mauritsson is president and CEO of Axis Communications. The company was founded in 1984 and introduced the first network camera in 1996. A decade later, IP video continues its rapid rise and will account for nearly 16 percent of all camera/video applications sold in 2007 (a 50 percent increase over 2006). IMS Research forecasts the global video surveillance market will grow from five billion dollars in 2005 to over nine billion dollars in 2009. Security Magazine Publisher Mark McCourt sat down with Ray at Axis headquarters in Lund, Sweden in late 2006 to catch up on the network camera market and discuss his vision for the future.
Security Magazine: What has driven the adoption of network video to date?Mauritsson: Our initial success was in the educational market because that market had a strong IT infrastructure in place to utilize IP video and the security requirement for surveillance. Second is retail. Twenty-five percent of all surveillance cameras sold are used in retail and it continues to grow. More recently, transportation has come on strong due to terrorist events and increased spending as a result. Banks are also a good market for Axis, but they are adopting the technology more slowly that these other markets. There are many business projects where process control is the goal and improved security is a benefit.
Security Magazine: Network video has grown to a five billion dollar market; what is your outlook for the future?Mauritsson: While the growth has been strong so far, I am actually expecting IP Video growth to accelerate. The technology shift to digital should lead far beyond today’s 40 percent-plus annual growth rates. To key contributors for growth include analytics and sensors. There is more hype right now than reality regarding analytics right now, but the capabilities are coming. Sensors are coming to market that will drive the network video market’s growth.
We expect the security market to continue an overall ten percent annual growth rate. While analog video will decline as a percentage of the overall market, analog sales will still grow as well.
Finally, the total cost of ownership for network video vs. analog is lower. As a result, network video’s economics will accelerate its acceptance.
Security Magazine: How do you view Cisco’s impact in the security market?Mauritsson: Cisco’s drive is to make certain they are the infrastructure leader. Their impact will be to accelerate change from analog to digital.
Security Magazine: How do you keep up with market changes and customer needs?Mauritsson: Right now we have over 9,000 partners around the world from which we solicit feedback, requirements and needs. We get regular input from our sales channels and keep close communication with our top customers on their changing requirements and future needs. This balances our product management for development direction and what is possible with the technology.
Security Magazine: You mentioned that 25 percent of all network cameras are used in retail applications. What is the unique about retail?Mauritsson: The key for retailers is ROI and value. We are able to demonstrate a direct improvement to profitability based solely on a more effective surveillance system. And we can do so without the retailer having to start from scratch. We are able to combine network video systems with security cameras. After the security solution’s bottom line value is calculated in reduced shrinkage, then additional benefits such as customer counting, integrating alarm functionality or monitor displays and appearance can be measured.
Security Magazine: One of the big trends in the U.S. is that end user organizations want assurances that the integrators and dealers they work with are professionally trained. What channel programs does Axis have in place?Mauritsson: The Axis Channel Partner Program is in place in over 70 countries, including the United States. There are three levels to the partner program designed to help our partners become expert in network video and meet the future expectations of their customers. The first step is to become an Authorized Partner and being approved to sell Axis products.
Second, The Axis Academy Training Program is designed to increase our partners’ knowledge of IP Video technology including both hardware and software. Training ranges from one to multi-day programs with hands-on sessions for installing and using the different functions and features.
In addition, we have account managers that interact directly with our channel partners to get their input on market dynamics and customer needs.