Changing the CCTV Game

On the 21st of
september 2009,
Axis
Communications
announced that
any company may
develop
downloadable
applications for
its cameras and
video encoders.

Axis is the largest manufacturer of digital, IP based
surveillance cameras in the world.

The company (and its stock, prior to the financial
turmoil) has been growing rapidly over the last years
as a consequence of the ongoing shift from
analogue to IP-based CCTV.

”Our
favourite
year is still
1984”

The
company
hasn’t lost
its sense
of humour
since it
was
founded in
1984.

Anyway, why does a company open up its products
for application development by other players?

The reason is simple: the value of buying an Axis
camera increases if others create software that can
be bought along with it.

Consider Facebook.

There are thousands of applications that have been
developed for Facebook. Needless to say, this
makes Facebook much more attractive than for
instance Myspace.

Consider the IPhone.

Anyone may develop software for it, which means
that consumers will be willing to pay more for an
IPhone, simply because it gives you more value.

You create more value for your
customers, and it won’t cost you
anything.

That’s business model innovation.

You change the way value is created, without
changing the product itself.

Moreover, this may benefit the video analytics
area, which has been subject to a lot of hype
over the last years, without really meeting
these expectations.

This event can also be regarded as yet another
illustration of the profound changes that are
currently going on in the video surveillance industry.

Surveillance is
becoming an IT
issue and it’s no
coincidence that
Axis is doing
something similar
as Facebook and
Apple.

As the technology is changing, so does the very
business logic of the industry.

And those who do not change will be left behind.

Image attributions

Christian Sandström is a
PhD student at Chalmers
University of Technology in
Gothenburg, Sweden. He
writes and speaks about
disruptive innovation and
technological change.
www.christiansandstrom.org
christian.sandstrom at chalmers.se