In the analog security video boom, end users’ surveillance needs were very similar, regardless of their company’s size, but today’s surveillance product technologies are rapidly changing this historical norm. The needs of small and midsized businesses (SMBs) are moving in the opposite direction of enterprises, where the surveillance needs are getting more closely aligned with the enterprise’s IT requirements. What makes these market segment observations interesting is that all end user needs are largely based upon the available product technology. This is evidence that the significant product technology introductions over the past five years are going to become mainstream.

During the past 20 years, product technology within the analog security video industry had been very stable, with only minor product advances. In fact, for many years the only real differences were price based. Pricing has a wide range of possible impacts on the market, but those tend to be the opposite impacts of product technology. Between enterprises and SMBs, product technology over price has the greatest influence. So as product technology advances, new market opportunities become available to end users of any means, independent of price. This is where the IP surveillance products are changing the SMB markets and showing big surveillance product technology requirement differences, provider changes and price variations.

Small Business, New Providers, Bigger Expense

Small businesses typically have fewer than eight cameras, and they make up a large part of the DVR market. A small business’s surveillance needs are most often serviced by the building alarm monitoring industry, which is accelerating offerings of network-based products, including surveillance. However, in addition to these traditional small business security providers, new companies are entering the small business surveillance market, often from the traditional telephone and cable providers. These non-traditional security companies own the IP network and already have existing relationships with the small business owners and end users. These two service providers are offering similar IP surveillance product technologies, but very different service plans.

One of the big differences between the two types of providers comes from their business models: The traditional security providers’ business model is centered on monitoring, whereas a telecommunication or cable provider is about bundling additional paid services or network-consuming devices onto a network that they provide. In the latter case, you are self-monitoring for your business. This trend of self-monitoring is also impacting the security officer industry. Traditional guard companies may have to turn to new types of “remote” guarding or remote live monitoring to keep your business.

Midsized Business, Supersized Technology, Big Risks

For midsized businesses, surveillance systems are moving from a “nice to have” to a “must have.” Here, you make relatively big investments in product technologies well ahead of larger enterprises. Rapid adoption of product technology for midsized businesses is a key to survival; it is also a way of being able to scale your operations to become global or achieve higher growth. The same holds true with IP surveillance systems, which range from 16 to as many as 1,000 cameras in system size.

When managing security for a growing business, keep in mind the differences in choices of the type of technology, who is servicing the business and the product technology risks. Where a small business’s end user is typically buying a safe, bundled offering, the midsized business’s end user is purchasing a riskier, standalone system from a traditional security systems integrator. You would negotiate the price and select best-of-breed equipment from an expansive range of product offerings. This contract is typically negotiated with a similarly sized service provider, which can create a business partnership between equals to offset some of your implementation risks. Compare that to the small business’s security manager, who is buying the listed price and choosing from a limited product choice from a much larger service provider.

Enterprise Business, Enterprise IT, Lowest Prices

Lastly, within the enterprise class come enterprise-sized IT requirements. The importance and costs of IT compliance to the enterprise often outweighs the actual surveillance product’s technology requirements. Enterprise security contracts also come with the lowest per-unit price tag, thanks to your enterprise’s purchasing power and the maturity of your procurement process. Although enterprise-class businesses make up a small segment of the overall market, their impact is significant: Surveillance manufacturers will make large R&D product investments in the hopes of winning your business, only to sell their wares at the lowest unit pricing. This results in enterprise end users having the lowest year-over-year R&D product return on investment.

Target Practice

So, the best bundled services are targeted to the small businesses, the best surveillance product technology is targeted at the midsized businesses, and the lowest price is targeted at the enterprise. Knowing where you stand as a business, and how that standing affects your security partners, will help guide you to your best surveillance options. 

About the Columnist:

 Keven Marier is the founder and CEO of Connex International, Inc. He has a 20-year background in technology consulting, publishing and educating within the physical security technology and enterprise IT industries.