Magazine Article | April 21, 2014

Boosting Video Surveillance Revenue In Retail

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By Brian Albright, Business Solutions magazine

Analytics and hosted solutions can provide upsell and recurring revenue opportunities for VMS VARs.

The opportunity for VARs in the VMS (video management software), IP video, and video surveillance space in general is growing. According to TechNavio, the global VMS market is expected to grow at a CAGR of 18.51 percent through 2018. Allied Market Research predicts the global IP video surveillance and Video Surveillance as a Service (VSaaS) market will grow at a CAGR of 37.3 through 2020. Interest in IP video solutions, hosted video management systems, and other video-related security systems has drawn generalist IT integrators into the market, and more IT distributors are adding video surveillance equipment to their product mix, according to a report from IMS Research.

The opportunity is there, and with prices of IP cameras and VMS products falling, retail clients may be interested in upgrading their older analog solutions to newer systems with more functionality. “Not only are IP cameras and IP VMS getting lower pricing, but mobile technology is quickly becoming an expectation,” says Trenton Thoms, retail business development manager at Milestone Systems. “Retailers want in their business technology the same advantages they have in their personal lives with smartphones, tablets, Wi-Fi, etc.”

For retail clients that are looking to future-proof their video surveillance systems, tie video to other business data, or add high-definition cameras to their facility, VMS solutions will be a fit. Not only can these solutions improve store security and simplify systems management, they can also provide cost savings when combined with new camera equipment.

“All retailers can benefit from a VMS/NVR [network video recorder],” says Mike Scirica, president of WavestoreUSA. “CCTV or analog systems limit the maximum resolution of the image, whereas newer IP-based systems support HD, full HD, megapixel, and even 180-degree and 360-degree camera views. More detail means fewer cameras and/ or better coverage, which lowers the overall total cost of ownership.”

Match The Right Hardware And Software For The Installation
With feature sets expanding, integrators and clients alike may be underutilizing certain pieces of functionality. According to Thoms, companies are failing to take full advantage of the ability to integrate the VMS with other data from POS (point of sale), ERP (enterprise resource planning), time and attendance, SKU (stock keeping unit) management, and other solutions.

“That may be underutilized simply for lack of education or because the messaging becomes lost throughout the course of a project,” Thoms says. “The importance of integrating these types of data sets is a matter of making the search of key video extremely efficient, and it results in saving many man-hours whenever there are incidents.”

Scirica cautions VARs to deploy open and standardsbased VMS solutions in order to help hold down solution costs for clients. “The two highest costs associated with a video surveillance/security system are camera costs and storage costs,” he says. “Limiting the number of different cameras will limit options and ultimately prove to be more costly. It also future-proofs the system because of the flexibility. If you want to select a new camera after the fact, you don’t want to be told ‘No.’”

Purpose-built storage hardware is also designed to scale, which provides an advantage on overall system flexibility and cost. “Such platforms are efficient at lower camera counts and small storage requirements, but offer future options for large-scale storage as surveillance needs change,” Scirica adds.Subscribe to Business Solutions magazine

VARs should also avoid underspecifying the server hardware and keep an eye out for additional add-on sales. “A lack of education on third-party plug-in capabilities has the VAR missing out on additional upsells when specifying a project,” Thoms says. “Something as simple as license plate recognition or other video analytics can help increase the revenue on a project with additional cameras, wiring, and plug-in sales. They just have to be sure they choose an open platform VMS that integrates with the widest choice of analytics offerings.”

Even the best VMS can be undermined by poor hardware. Select the right camera for the application, and be mindful of the camera parameters, which are now housed in the camera itself rather than the DVR system. “VARs need to fine-tune parameters on these devices to get the best video for the customer,” Scirica says. “Also, poor focus, poor lighting, and improper settings can lead to poor video and excessive storage requirements. For example, today’s modern compression can misinterpret poor video as movement and try to compress noise. Garbage in/garbage out comes at a cost.”

Remote Options, Mobility Make Solutions More Competitive
With competition increasing, VARs can take a number of steps to stand out from the pack. According to Scirica, service and maintenance contracts are a critical area of differentiation for retail customers.

“Select a VMS/NVR that allows remote management of the system to lower ongoing costs to the user,” Scirica says. “Also, remote options such as remote video monitoring allow for high priority alarms or specified events.”

Unique system features like automated alerting based on predetermined data points and video integration with POS and analytics for marketing use and upselling can also be important for retail clients. “There’s also the ability to turn any mobile device into a surveillance camera and have it handled within the VMS environment as any other surveillance camera on the network (pushing the video),” Thoms says. “This can turn any employee with such a mobile client into an additional loss prevention resource.”

Mobile devices are also an important tool for managers, so mobile device access to the VMS is increasingly important as loss prevention staffing has been reduced, and managers have been asked to travel more frequently. This makes the client more efficient and more appreciative of the vendor that provided that access.

“With the ability to remotely view video from anywhere, loss prevention staff can remotely view live video and review recorded incidents in a timely and costeffective manner,” Thoms says. “The integrator should know the mobile viewing applications are continually being updated with new and exciting functionality such as video push and remote triggers for events such as panic alarms and remote control of existing systems such as access control that can be integrated with an open VMS.”

Surveillance As A Service Provides Recurring Revenue
There are also recurring revenue opportunities in the VMS market. “As an extension to alarm monitoring, VARs can provide Video Surveillance as a Service,” Scirica says. “This can include options like virtual concierge, visual escort for openings and closings, virtual doorman, package receipt, and access control.”

Software upgrade plan sales are another potential source of ongoing revenue and continued interaction with VMS clients. “Many VARs miss this opportunity to expand their recurring revenue model,” Thoms says. “A VMS can be offered as a monthly service fee with maintenance, support, and upgrades and is in common practice today. The VAR should be careful to select a VMS that can provide this capability.”

When VARs are evaluating new VMS solutions, they should find vendors they can partner with (rather than basing these decisions solely on price), watch for hidden costs, and participate in any factory training available from the vendors. There are also a variety of third-party solutions available, such as business analytics, which can be a fairly easy upsell for retail clients.

“When specifying a VMS solution, be sure to consult with the VMS provider to ensure the correct server specification and system design is done correctly in the most cost-effective manner,” Thoms says. “The VMS provider should also have a subject matter expert on staff to help with correct messaging to assist in your sale to the end user.”

Interest in security solutions is rising. With the right combination of hardware and VMS, VARs can offer their retail clients a cost-effective way to improve store security, while also providing value-added functions (like analytics and advanced video search) that boost system functionality and present additional revenue opportunities for the VAR.

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