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History has shown that newtechnologies and products tend to be  diffused at an initially low pace…     The Future Growth o...
Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innov...
The growth of  digital, IP-based video surveillance  has slowed down significantly sincethe recession set in.
Prior to the financial crisis, it showed an   annual growth of up to 40 percent.
While growth has gone down in the shortterm, the long term prospects remain positive.
IMS Research estimates that about  50 percent of the surveillance  market will be digital in 2013.
IMS Research estimates that about  50 percent of the surveillance  market will be digital in 2013.This figure indicates th...
IMS Research estimates that about  50 percent of the surveillance  market will be digital in 2013.This figure indicates th...
Why?  Isn’t the technology still too expensive?Isn’t the security industry too conservative?
I’ll approach this issue by drawing uponresearch into innovation diffusion and the      work by Everett M. Rogers (1962).
Rogers studied a wide range of    different innovations.
Rogers studied a wide range of    different innovations.He tried to explain how and why   innovations are adopted.
Rogers studied a wide range of     different innovations. He tried to explain how and why    innovations are adopted.  The...
His research basically showed that the adoption     tends to follow an S-shaped pattern…
History has shown that newtechnologies and products tend to be  diffused at an initially low pace…        The pace is init...
As the technology becomes more widely known and the performance reaches sufficient levels the pace increases…
… And eventually the growth slowsdown as the market starts to mature.
The S-curve idea has been tested in     many different settings.
The S-curve idea has been tested in     many different settings.   It has rarely been contested.
The S-curve idea has been tested in     many different settings.    It has rarely been contested. Among diffusion research...
There are several reasons why such a      pattern is often identified.
The main assumption behind thismodel is that individual propertiesare normally distributed across a           population.
The main assumption behind thismodel is that individual propertiesare normally distributed across a           population. ...
The rate of adoption is considered to be affected by the amount of social          pressure to do so:
The rate of adoption is considered to be affected by the amount of social          pressure to do so:   ”Be not the first ...
Hence, the initialdiffusion is quite slow.
Hence, the initial      diffusion is quite slow. But if adoption is a social processwhere information and knowledge isspre...
You are the first person to    adopt a new idea.
You are the first person to        adopt a new idea.You talk to two friends and they also         choose to adopt it.
You are the first person to        adopt a new idea.You talk to two friends and they also         choose to adopt it.  Tho...
The S-curve now reaches its steep phase     due to this binomial diffusion.
After a while, it becomesincreasingly difficult to find ’two       more’ persons who      haven’t changed yet.
After a while, it becomes  increasingly difficult to find ’two         more’ persons who        haven’t changed yet.The ra...
… And the S-curve levels off.
The adoption curve therefore   becomes a Bell curve:
The Technology AdoptorsNumber of individuals     2.5%     Visionary ability                          Sceptic ability      ...
Number of individuals     2.5%     13.5%     Visionary ability                          Sceptic ability                   ...
Number of individuals     2.5%     13.5%      34%     Visionary ability                                Sceptic ability    ...
Number of individuals     2.5%     13.5%      34%         34%     Visionary ability                                Sceptic...
Number of individuals     2.5%     13.5%      34%         34%                  16%     Visionary ability                  ...
Number of individuals                                                           Late Majority                      Early M...
No let’s turn back toIP video surveillance!
About 15-20 percent of the market      has now adopted it…
… Which means that we are about   here on the Bell curve…Number of individuals     2.5%     13.5%     Visionary ability   ...
… And on our way to this…Number of individuals     2.5%     13.5%      34%     Visionary ability                          ...
… And this.Number of individuals     2.5%     13.5%        34%         34%     Visionary ability                          ...
Diffusion theory would tell us that IP videosurveillance is just about to enter the steep phase.
Rogers stated:
Rogers stated:“The heart of the innovation diffusion can be found somewhere between 10 and 20   percent … After that point...
Pretty interesting.
I guess one objection to this would be:
I guess one objection to this would be:“That’s just academic mambo jambo!”
So let’s see if this mambo has what         academics call ’face validity’(whether the theory makes sense if you take a   ...
More and more companies are    offering IP cameras…
… Pelco and many other analogue  players are talking about IP…
One persontalks to two  persons
One persontalks to two  persons Who talk totwo persons
One persontalks to two  persons Who talk totwo persons Who talk totwo persons
Moreover, whilegrowth has sloweddown IP firms havecontinued to invest   in marketing     activities.
Even though these efforts haven’t generated amazing results in the short term, they play          a very important role…
… in shaping the perceptions of the market.
Once the recession is over, more people than everbefore know about and want to buy an IP system…
… And they will create an even larger pressure to         switch over to IP surveillance.
The early majority will therefore buy IP in the near      future, and be followed by the late majority.     Number of indi...
Here’s an example from another industry:
In 2000, Daniel Carp became  the new CEO of Kodak…
In a speech in      2000 he said: "Kodak is convinced that there has never been a better time to   be in the picture  busi...
Carp also said:  ”… It will take more than one company to change acentury of consumer habits  and perception. With the par...
In fact, Kodak used the S-curve logic to predict thefuture of digital imaging. The resulting forecast from1994 suggested t...
Well, we know what happened to the film    business in the coming years…
Well, we know what happened to the film    business in the coming years…  In retrospective, the quote seems a bit puzzling...
But back then, the technology hadonly reached the early adopters…Number of individuals     2.5%     13.5%     Visionary ab...
… And it must have been hard to imagine…Number of individuals     2.5%     13.5%      34%     Visionary ability           ...
… That the avalanche would come     into motion so rapidly.Number of individuals     2.5%     13.5%      34%         34%  ...
Based upon these arguments, I would therefore saythat current predictions suffer from a too linear view                  o...
Adoption is not linear, it is epidemic and the full implications of this effect have          not been witnessed yet.
Who knows, maybe 50 percent of the market is       digital by 2011 and not by 2013.
Before concluding, a few delimitations of this       argument should be mentioned:
This way of reasoning has disregarded      the supply side completely.
This way of reasoning has disregarded       the supply side completely. And it hasn’t really addressed one of the  key iss...
Nevertheless, the basic argument here is pretty solid         and should not be underestimated:
Diffusion follows an epidemic pattern and not a linear one.
A slow advance in the beginning, followed by  rapid and uniformly accellerated progress, followed again by progress that c...
SourcesRogers, E.M. Diffusion of Innovations,        The Free Press, 1962.Bell Curve slide from Bengt Järrehult.
Find out more:www.disruptiveinnovation.se
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IP Video Surveillance - Predictions of Future Growth

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When will IP CCTV become the dominant technology? The slideshow argues that this will happen faster than the current predictions state. The main reason for this is that diffusion does not follow a linear pattern, but rather an epidemic one.

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IP Video Surveillance - Predictions of Future Growth

  1. 1. History has shown that newtechnologies and products tend to be diffused at an initially low pace… The Future Growth of IP Video Surveillance
  2. 2. Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
  3. 3. The growth of digital, IP-based video surveillance has slowed down significantly sincethe recession set in.
  4. 4. Prior to the financial crisis, it showed an annual growth of up to 40 percent.
  5. 5. While growth has gone down in the shortterm, the long term prospects remain positive.
  6. 6. IMS Research estimates that about 50 percent of the surveillance market will be digital in 2013.
  7. 7. IMS Research estimates that about 50 percent of the surveillance market will be digital in 2013.This figure indicates that the growth will take off again once the recession is over.
  8. 8. IMS Research estimates that about 50 percent of the surveillance market will be digital in 2013.This figure indicates that the growth will take off again once the recession is over.In this presentation I will argue thatIP may be adopted at a higher pace than IMS suggests.
  9. 9. Why? Isn’t the technology still too expensive?Isn’t the security industry too conservative?
  10. 10. I’ll approach this issue by drawing uponresearch into innovation diffusion and the work by Everett M. Rogers (1962).
  11. 11. Rogers studied a wide range of different innovations.
  12. 12. Rogers studied a wide range of different innovations.He tried to explain how and why innovations are adopted.
  13. 13. Rogers studied a wide range of different innovations. He tried to explain how and why innovations are adopted. The models he came up with are generic and have turned out to beapplicable in surprisingly many and diverse settings.
  14. 14. His research basically showed that the adoption tends to follow an S-shaped pattern…
  15. 15. History has shown that newtechnologies and products tend to be diffused at an initially low pace… The pace is initially low…
  16. 16. As the technology becomes more widely known and the performance reaches sufficient levels the pace increases…
  17. 17. … And eventually the growth slowsdown as the market starts to mature.
  18. 18. The S-curve idea has been tested in many different settings.
  19. 19. The S-curve idea has been tested in many different settings. It has rarely been contested.
  20. 20. The S-curve idea has been tested in many different settings. It has rarely been contested. Among diffusion researchers, it ismore or less taken for granted today.
  21. 21. There are several reasons why such a pattern is often identified.
  22. 22. The main assumption behind thismodel is that individual propertiesare normally distributed across a population.
  23. 23. The main assumption behind thismodel is that individual propertiesare normally distributed across a population. And therefore, the willingness to adopt something new is also normally distributed.
  24. 24. The rate of adoption is considered to be affected by the amount of social pressure to do so:
  25. 25. The rate of adoption is considered to be affected by the amount of social pressure to do so: ”Be not the first by whom the new is tried, Nor the last to lay the old aside.”// Alexander Pope, An Essay on criticism
  26. 26. Hence, the initialdiffusion is quite slow.
  27. 27. Hence, the initial diffusion is quite slow. But if adoption is a social processwhere information and knowledge isspread by people, it should have an epidemic pattern.
  28. 28. You are the first person to adopt a new idea.
  29. 29. You are the first person to adopt a new idea.You talk to two friends and they also choose to adopt it.
  30. 30. You are the first person to adopt a new idea.You talk to two friends and they also choose to adopt it. Those two persons talk to two persons each and suddenly, four more persons have changed!
  31. 31. The S-curve now reaches its steep phase due to this binomial diffusion.
  32. 32. After a while, it becomesincreasingly difficult to find ’two more’ persons who haven’t changed yet.
  33. 33. After a while, it becomes increasingly difficult to find ’two more’ persons who haven’t changed yet.The rate of adoption therefore slows down again as the market becomes saturated…
  34. 34. … And the S-curve levels off.
  35. 35. The adoption curve therefore becomes a Bell curve:
  36. 36. The Technology AdoptorsNumber of individuals 2.5% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  37. 37. Number of individuals 2.5% 13.5% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  38. 38. Number of individuals 2.5% 13.5% 34% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  39. 39. Number of individuals 2.5% 13.5% 34% 34% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  40. 40. Number of individuals 2.5% 13.5% 34% 34% 16% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  41. 41. Number of individuals Late Majority Early Majority Early Adopters LaggardsInnovators 2.5% 13.5% 34% 34% 16% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  42. 42. No let’s turn back toIP video surveillance!
  43. 43. About 15-20 percent of the market has now adopted it…
  44. 44. … Which means that we are about here on the Bell curve…Number of individuals 2.5% 13.5% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  45. 45. … And on our way to this…Number of individuals 2.5% 13.5% 34% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  46. 46. … And this.Number of individuals 2.5% 13.5% 34% 34% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  47. 47. Diffusion theory would tell us that IP videosurveillance is just about to enter the steep phase.
  48. 48. Rogers stated:
  49. 49. Rogers stated:“The heart of the innovation diffusion can be found somewhere between 10 and 20 percent … After that point, it is oftenimpossible to stop the further diffusion of a new idea, even if one wished to do so.”
  50. 50. Pretty interesting.
  51. 51. I guess one objection to this would be:
  52. 52. I guess one objection to this would be:“That’s just academic mambo jambo!”
  53. 53. So let’s see if this mambo has what academics call ’face validity’(whether the theory makes sense if you take a glance at reality from your ivory tower).
  54. 54. More and more companies are offering IP cameras…
  55. 55. … Pelco and many other analogue players are talking about IP…
  56. 56. One persontalks to two persons
  57. 57. One persontalks to two persons Who talk totwo persons
  58. 58. One persontalks to two persons Who talk totwo persons Who talk totwo persons
  59. 59. Moreover, whilegrowth has sloweddown IP firms havecontinued to invest in marketing activities.
  60. 60. Even though these efforts haven’t generated amazing results in the short term, they play a very important role…
  61. 61. … in shaping the perceptions of the market.
  62. 62. Once the recession is over, more people than everbefore know about and want to buy an IP system…
  63. 63. … And they will create an even larger pressure to switch over to IP surveillance.
  64. 64. The early majority will therefore buy IP in the near future, and be followed by the late majority. Number of individuals Late Majority Early Majority Early Adopters LaggardsInnovators 2.5% 13.5% 34% 34% 16% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  65. 65. Here’s an example from another industry:
  66. 66. In 2000, Daniel Carp became the new CEO of Kodak…
  67. 67. In a speech in 2000 he said: "Kodak is convinced that there has never been a better time to be in the picture business…. Digital can change the way people take and use pictures. Suddenly there are no boundaries to how often you can takepictures because costand availability are no longer issues."
  68. 68. Carp also said: ”… It will take more than one company to change acentury of consumer habits and perception. With the participation of the entire industry, I am confident that we can lead the waytoward a more picture-rich era, and that, together, we can break through the technical and marketing challenges facing our industry.”
  69. 69. In fact, Kodak used the S-curve logic to predict thefuture of digital imaging. The resulting forecast from1994 suggested that 50 percent of the market wouldbe digital in 2004. The prediction was very accurate, it actually happened in 2003 (Read more here).
  70. 70. Well, we know what happened to the film business in the coming years…
  71. 71. Well, we know what happened to the film business in the coming years… In retrospective, the quote seems a bit puzzling, given how fast digital cameras became so popular.
  72. 72. But back then, the technology hadonly reached the early adopters…Number of individuals 2.5% 13.5% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  73. 73. … And it must have been hard to imagine…Number of individuals 2.5% 13.5% 34% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  74. 74. … That the avalanche would come into motion so rapidly.Number of individuals 2.5% 13.5% 34% 34% Visionary ability Sceptic ability Everett Rogers Innovation/Adoption curve
  75. 75. Based upon these arguments, I would therefore saythat current predictions suffer from a too linear view of market growth.
  76. 76. Adoption is not linear, it is epidemic and the full implications of this effect have not been witnessed yet.
  77. 77. Who knows, maybe 50 percent of the market is digital by 2011 and not by 2013.
  78. 78. Before concluding, a few delimitations of this argument should be mentioned:
  79. 79. This way of reasoning has disregarded the supply side completely.
  80. 80. This way of reasoning has disregarded the supply side completely. And it hasn’t really addressed one of the key issues in the interaction betweensupply and demand, namely the fact that IPsurveillance is in many ways incompatible with the established way of buying, installing and using analogue CCTV (more about this here).
  81. 81. Nevertheless, the basic argument here is pretty solid and should not be underestimated:
  82. 82. Diffusion follows an epidemic pattern and not a linear one.
  83. 83. A slow advance in the beginning, followed by rapid and uniformly accellerated progress, followed again by progress that continues to slacken until it finally stops: These are the three ages of … invention … If taken as a guide by the statistician and by the socoilogists, they would save many illusions.// Gabriel Tarde, The Laws of Imitation, p. 127
  84. 84. SourcesRogers, E.M. Diffusion of Innovations, The Free Press, 1962.Bell Curve slide from Bengt Järrehult.
  85. 85. Find out more:www.disruptiveinnovation.se

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