The CCTV industry has remained
technologically stable over several decades.

A stable technology often implies a stable
industrial structure…

Entry barriers have remained high and
consequently, CCTV has been dominated by
a few large players…

However, things have started to change with the rise
of digital, IP-based video surveillance.

Companies with a background in IT or electronics
are increasingly entering the industry…

IP CCTV
has grown
rapidly
over the
last years,
but from
very small
volumes.

Up until now, the ongoing shift has not created a lot
of industrial turbulence since the analogue players
have still been reasonably well off.

But some more recent events suggest that the
industry structure is about to change…

One such event is GE’s announcement that their
security business is for sale.

A large,
established
player is pulling
out of video
surveillance,
which is
predicted to
grow a lot over
the coming
years.

The only reason for
this must be that GE
does not believe that
their security
business will be
competitive in the
future.

At ASIS 2009, Pelco and Cisco stated that they have
started a collaboration around IP cameras.

Would Pelco have gone into this if they were able to
provide a good IP offer themselves?

Would Cisco have gone into this if they hadn’t
been struggling to develop a competitive
line of IP cameras?

I think this example illustrates that the competence
base of the industry is shifting. Firms with a
background in IT need to learn about surveillance,
and CCTV firms like Pelco need skills in IT and
electronics.

Some time ago, Pelco stated that they will seek to
enter emerging markets such as China.

In other technological shifts, established firms have
often tried to sell their current products to new
markets as a way to offset declining revenues.

Kodak tried to do this during the 1990s.

Facit was a Swedish manufacturer of mechanical
calculators. With the rise of electronics in the 1960s,
the company approached the Soviet Union with its
outdated technology…

… In both cases, this strategy failed to compensate
for the declining revenues in the core business.

It may still be a good decision to go for emerging
markets, but one should bear in mind that this won’t
enhance the long term competitiveness of the firm.

And such
efforts
can be
regarded
as an
indication
of things
to come…

Maybe we’re witnessing the beginning of the
end for analogue CCTV.

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