This exclusion of costs can, and in many cases, skews the TCO calculations.
IP surveillance vendors are quick to emphasize the cost benefits of migrating to an IP based surveillance solution over a traditional analog system. In their zeal to demonstrate the potential significant cost savings of IP, they compare the costs of cable, installation labor and the use of an existing corporate computer network infrastructure. These comparisons or TCO examples are not necessarily incorrect – they just do not take into account all of the factors necessary to accurately calculate the true TCO.
An IP surveillance system, on the surface, when compared to a traditional analog surveillance system, can look like it will cost significantly less to purchase and implement. The cost and installation of the cable is definitely lower, as an IP based system uses significantly less cable. One of the other assumptions made is in the use and availability of Power over Ethernet (POE) for the cameras. While POE is not a new standard, it might not be readily available on most corporate networks. The added cost of a supported POE injector will therefore need to be included in your TCO calculation.
The cost to install an IP based system is always represented as being lower than that of an analog system. This is true with regards to the cable. However, the comparisons rarely account for the labor required to configure the corporate network, the switches and routers, to support the required Quality of Service (QoS) features and bandwidth that an IP surveillance system will need. The amount of labor required to reconfigure the corporate network is based on how extensive the deployed security measures and it will be different for each implementation.
The assumption of converging or using your existing corporate network for both your IP surveillance and corporate data is probably the area where most misunderstandings exist. Most corporate networks either already support converged voice/data systems or have the capability to do so. The quality of service (QoS) features that Voice Over Internet Protocol (VoIP) require are the same for an IP surveillance system. The major difference is in the amount of bandwidth each requires, and a difference in bandwidth requirements between voice and video has a direct impact on the type and cost of the Ethernet switches and routers.
Network redundancy is another aspect of the hidden costs that have been ignored in many TCO comparisons. In a traditional analog surveillance system, there is a dedicated cable network to the head-end equipment. In many IP based surveillance system comparisons, any aspects of network redundancy are never addressed. If your corporate network is designed without any redundant connections, switch engines or power supplies, any failure within the network components could have a catastrophic impact of your IP surveillance systems ability to provide live views, playback and record. This could have a devastating effect on some organizations that have legal and or regulatory requirements that the video surveillance system be available and recording 24/7/365, which is sometimes referred to as Five Nines reliability, or 99.999 percent up time. The cost to achieve a Five Nines level of availability in an Ethernet network can be as much as three times the amount for a non-redundant network.
The true TCO for an IP based surveillance system is not impossible to calculate. In other words, there is no hidden cost of IP surveillance, but there is a quantifiable cost. It does require an in-depth understanding of what these hidden costs could be. By looking deeper into the impact an IP surveillance system can have on your network, all of the required accessories, installation and network re-configuration costs can be more accurately calculated to derive the true TCO. Does this mean IP surveillance vendors are wrong in their statements regarding an IP system costing less than an analog system? Not at all. In the long term, IP-based surveillance systems will replace traditional analog systems. But the cost comparisons between IP and analog should be based on a combination of the TCO and the return on investment (ROI).
The benefits offered by IP surveillance far outweigh analog systems. IP based systems allow video to be viewed anywhere on the network, they provide a means to consolidate resources (IT and surveillance sharing storage systems) and with the use of advanced video analytics, you can reduce operational labor costs by increasing the productivity and efficiency of your security staff and potentially provide additional revenue sources. This, in turn, will increase your ROI and over time, will lower your TCO.