The Future of CCTV

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 With the rise of electronics in the 1960s, the company approached the Soviet Union with its outdated technology…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.

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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

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The Future of CCTV

by Chris Sandström on Sep 25, 2009

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