The days when Chinese video surveillance products were associated with lower quality are mostly gone now. Certainly, it’s easy enough to test the quality and functionality of any Chinese-made product in a shootout against products made anywhere in the world. In that sense, the quality of Chinese goods is no longer an obstacle for security customers: Their ability to judge quality for themselves eliminates any dependence on previously held opinions.

But what about other preconceived ideas and opinions about products made in China? Such concerns range from who owns the companies to concerns about cybersecurity.

Hikvision is the largest Chinese company participating in the video surveillance market (and the largest company of any nationality). Their ascendance in the U.S. market in the last couple of years has been remarkable. Even so, questions and concerns linger surrounding the fact that they are a Chinese company. Are the concerns legitimate or ill-informed? We presented some of these questions to Jeffrey He, President of Hikvision USA Inc. and Hikvision Canada Inc., who agreed to present the company’s perspective.

SourceSecurity.com: We often hear that Hikvision is owned by the Chinese government. What exactly is the nature of that relationship?

Jeffrey He: First, I think we can all agree that it is no longer the case that only lower quality products come from China. Today we see a wide variety of products coming from China that not only meet but actually exceed Western expectations for quality and value. Hikvision is a perfect example of a Chinese-based, yet publically traded, company that provides such products, which certainly helps our ascendance in the market.

In terms of your question regarding the Hikvision’s ownership structure, I appreciate this question and value the opportunity to address any rumours out there. The company’s ownership is composed of a diverse set of private and public entities. Hikvision USA Inc. and Hikvision Canada Inc. are wholly owned by Hangzhou Hikvision Digital Technology Co., Ltd., 42% of which is owned by state-owned-enterprises (SOE), with the remaining stock owned by a combination of general public stockholders and venture capital investors, including 18% from private equity in Hong Kong. Like many companies across the globe, Hikvision does benefit from a certain amount of investment from the government. However, equating a company partially owned by SOEs with the government itself is simply incorrect and misleading.

There are two state-owned enterprises that own 42% of the company, with other people and venture capital investors owning the rest, including private equity in Hong Kong. Then in the open stock market there are shareholders all over the place. Some of the shareholders are foreign investors, as well.

Hikvision addresses cybersecurity concerns

SourceSecurity.com: Hikvision has in the past been associated with questions (and incidents) of cybersecurity of their cameras. How has Hikvision addressed those incidents and concerns? Are the products “safe” now? What about other common cybersecurity concerns of IP cameras?

Jeffrey He: The security of our products is of the utmost importance to us, and we have both internal and external teams in place that conduct ongoing testing for cybersecurity vulnerabilities. Our proprietary Network and Information Security Lab upholds the highest level of internal process control, security management, and independent auditing.

It’s true that some of our products have suffered cyber-attacks. In the past two years our products have been affected by several cyber-attacks. During a recent webinar we did with the Electronic Security Association (ESA), we went into each of them in detail. If vulnerability is found, we react swiftly to resolve it and notify our customers. Most of the time this means creating new firmware and releasing it to the public, which in most cases we were able to accomplish in a matter of days.

These attacks not only affected Hikvision products but also impacted other manufacturers as well. Being the world’s largest IP video surveillance manufacturer, we become a natural target. In comparison, some of the world’s largest software manufacturers issue new security updates almost weekly to address threats to their products. We live in a very connected world, and unfortunately this world comes with risks. 

No network product on the market – whether Hikvision or otherwise – can ever officially be declared “safe,” since new cyber-threats are constantly emerging. We continually monitor for new threats and mitigate any risks should they occur.

SourceSecurity.com: One idea floating around the industry is that Chinese surveillance products might have a “backdoor” to allow access to video by the Chinese government or other third party.

Is there any credence to the notion that Chinese surveillance products have a backdoor? What can you tell your North American customers about the security of Hikvision equipment?

Jeffrey He: There have been some misguided accusations targeting Hikvision’s public and industry image, sometimes seeking to create controversy where none exists. Over the past 15 years, Hikvision has built strong and valuable relationships with security industry stakeholders around the globe. In North America, we have made it our responsibility to not only provide outstanding video surveillance products and solutions but also to build our partnerships based upon trust. These questions are geared in general not just to Hikvision but to many Chinese manufacturers, and none of these accusations have been proven to be true. These accusations are baseless.

The Cold War was officially over when the Berlin Wall came down, but I’m seeing that, in the minds of some, it never ended. We all would be better served if, instead of living in the past, we would look towards the future and the realities of world changes and technology changing along with it. People living in the past or pursuing their own agendas are not discussing the real threats of terrorism. Instead, they are going after the very manufacturers providing the solutions to fight criminal and terrorist activities.

We continue to take steps to improve our products, including having them tested by leading third-party cybersecurity firms in the United States to minimise any potential security risks. So far, we have seen no evidence to suggest any “backdoor” access to our products by a government or a law enforcement agency anywhere in the world.

And as you know, we are using SourceSecurity.com’s recent Technology Report on Cybersecurity and IP Video Systems to further educate our customers and end-users.

SourceSecurity.com: How did the company perform overall in 2015? Are you really taking over the video surveillance market (as we often hear)?

Jeffrey He: Hikvision had worldwide sales revenue of US $3.88 Billion in 2015, with a growth rate of 47%.

Given the size of our company, we did quite well. In North America we will continue to grow because of the right proposition set, including our versatile, innovative product suite, service, and customer support and our North America-based talent base.

We are not taking over the market. Rather, we are part of the healthy competition one sees in the video surveillance market today. There will always be new innovations, and somebody will naturally take the lead because of type and quality of technology they can provide to the market. There are market participants that used to be leaders, but things change, due to many factors, including the effect of lack of innovation. Innovation is the key factor, not pricing. Pricing can only go so far before it becomes irrelevant.

Hikvision global surveillance share

SourceSecurity.com: How is Hikvision addressing competition, both from other established manufacturers and new entrants to the video surveillance market?

Jeffrey He: Healthy competition is really the driving force for innovation: delivering value to integrators and end-users. This is true not only of video surveillance but of any industry. North America is dramatically different as a competitive landscape versus Asia or Europe.

Just a few years ago the Chinese security market was dominated by foreign brands. Talking from personal experience, I worked for a company that sold billions of dollars’ worth of equipment and services to China. However, as the technology changes, so do the value expectations in the market. Hikvision was able to drive its success with significant investment in R&D and service delivery. We were able to fulfill the value expectations for video surveillance products and solutions in the marketplace. I do want to mention that despite some accusations of protectionism that we sometimes hear, even today there are two foreign brands that dominate the intrusion market in China and probably hold the major market share there. The truth of the matter is that competition is what truly drives innovation, which creates additional value for the customers. 

One clear example of technology innovation is the 4K standard. With our 4K products we are trying to deliver value to the market. Without any competition, the industry would still be at 4 CIF. Out of this drive to compete comes a technology that has widespread benefits in the marketplace today and will at one point be the standard.

SourceSecurity.com: We understand Hikvision has been involved in some significant tenders in China. Can you tell us more about it?

Jeffrey He: We do engage in commercial tenders in China and around the globe. As a part of tender process, end-users or an organization ordering equipment or services decide on the aspects for selecting the winner. As the Chinese economy grew in the past 15 years, the security industry also expanded.  Looking at the industry reports and analytics, the Chinese security market is even larger than it is in the US. This certainly allowed Hikvision to grow in the security segment, and the company observed significant growth. As the company continues to strengthen its position as a security products and solutions provider, the opportunities for tenders increase as well. Because of our success in technology innovation and our investment in R&D, we hope for even more success in winning these tenders in the future. 

SourceSecurity.com: There have been claims that Hikvision is being subsidised by the Chinese government. Do you care to comment on that?

Jeffrey He: This is simply not accurate. We are a commercial enterprise competing with international and domestic companies in every aspect. In every government project there are commonly policies and regulations managing the costs of projects; it is clear that the pricing of those tenders is extremely competitive. Considering that, it is hard to imagine a government subsidizing a company under these conditions; it’s quite illogical to suggest that we are being subsidised by the Chinese government. There are many factors being taken into consideration during the selection process for projects in this industry. We became a market leader organically, because of our technology and customer service, not because of government subsidies.

When questions like these are raised, I can’t think of anything but the naive nature and potentially misguided principles behind them. Having said that, I’m confident the company will persevere by continuing to offer outstanding value to our customers and partners.

Download the White Paper on Cybersecurity and IP Video Systems here

 

 

Download PDF version

Author profile

Larry Anderson Editor, SourceSecurity.com

An experienced journalist and long-time presence in the US security industry, Larry is SourceSecurity.com's eyes and ears in the fast-changing security marketplace, attending industry and corporate events, interviewing security leaders and contributing original editorial content to the site. He leads SourceSecurity.com's team of dedicated editorial and content professionals, guiding the "editorial roadmap" to ensure the site provides the most relevant content for security professionals.

In case you missed it

Six reasons security integrators should adopt cloud technology today
Six reasons security integrators should adopt cloud technology today

As technology advances, the world is becoming increasingly connected, changing the way users think about and interact with security systems, which continue to evolve across all verticals and applications. With this change comes new opportunity for security integrators; security systems are advancing, creating new needs for products and services — some of which can be met through the adoption of cloud-based service systems. Cloud technology is no longer a dreamt-up version of the future of security — it’s here. If you’re hesitant to make the move to the cloud, consider these six reasons to embrace this new technology now.Cloud technology has created an opportunity for integrators to offer managed services to their customers Increased RMR Cloud technology has created an opportunity for integrators to offer managed services to their customers, producing a new business model that generates more stable and predictable income streams. By offering managed services on a subscription basis, integrators can build a part of their business to provide recurring monthly revenue (RMR), allowing them to scale faster. This business model is especially beneficial for customers who prefer to pay a fixed monthly or yearly rate for services rather than a large upfront fee, which can help attract new business while growing revenue from current customers. Stickier customers Providing managed services fosters a more involved relationship between integrators and their customers, which can help boost customer retention. This is primarily the result of three factors. Firstly, customers who buy managed services are committed for a specified term, which helps develop an ongoing business relationship between them and the integrator. Secondly, providing managed services creates an opportunity for more customer contact — each interaction is an opportunity to build rapport and monitor customer satisfaction.While the functionalities of each system vary, their potential is evident in the cloud-based services available Third, customers who purchase managed services generally tend to do business longer than customers who purchase products or services individually; with the monthly purchase of their services on autopilot, customers get into the habit of receiving these services, which helps reduce the chance that they’ll cancel their subscription while also building customer loyalty. High gross profit margins Cloud managed services create an opportunity for a service and technology to be purchased together, helping to generate a higher gross profit margin from the beginning of the customer relationship. On an ongoing basis, cloud service platforms offer a new level of accessibility to integrators, helping to provide better insight on activity trends to identify opportunities to continuously grow their revenue through subscription-based streams. Easier to provide managed services Traditionally, serving more sites required integrators to hire more technicians to meet the needs of their growing customer base, but the cloud has helped overcome this demand. While the functionalities of each system vary, their potential is evident in the cloud-based service platforms that are available today. When a problem occurs on a site that is managed by a cloud-based system, the integrator can receive a real-time notification regarding the issue The Avigilon Blue™ platform, for example, is a powerful new cloud service platform that helps integrators address the needs of their customer sites using fewer resources by offering the ability to administer system upgrades, fixes, health checks, and camera or system settings adjustments remotely.  The Avigilon Blue platform automatically sends, and stores video analytics highlights in the cloud, which can easily be accessed from any PC browser or mobile device. This data can be used to efficiently manage customer sites and maintain the health of those sites, helping to increase speed of service and expand the capacity to have more sites up and running. Cloud service platforms have the potential to revolutionise the security industry by providing new opportunities for integrators Not only does this help integrators scale their business faster, it creates an opportunity to provide added value to the customer at a lower cost as new upgrades and services come out. Proactively fix problems before they occur In addition to automating notifications and tedious maintenance tasks, cloud service platforms help provide integrators with the information and abilities they need to keep their customer sites running smoothly. When a problem occurs on a site that is managed by a cloud-based system, the integrator can receive a real-time notification regarding the issue — possibly before the customer even notices a disruption in service. They can then identify the problem and determine whether it can be resolved remotely or requires a technician to be deployed. By having the capacity to pinpoint service needs and make certain adjustments via the cloud, integrators can streamline their customer service processes and lower their response times to provide better, more efficient service. Increased valuation of business Companies that utilise cloud technologies are experiencing as much as 53 percent higher revenue growth rates The ability of cloud service platforms to help integrators manage more sites remotely and expand their revenue through subscription-based streams offers a competitive business advantage. Security innovators have harnessed the power of the cloud to enhance integrator efficiency so that they can spare their attention, resources and effort for where it’s needed most. As a service that helps offer scalability and a high gross profit margin while requiring fewer resources to maintain customer sites, cloud service platforms have the potential to revolutionise the security industry by providing new opportunities for integrators that may ultimately increase their business valuation. According to a study by Dell, companies that utilise cloud, mobility, and security technologies are experiencing as much as 53 percent higher revenue growth rates compared to those who do not such technologies. Integrators who adopt cloud service platforms can benefit from numerous advantages — cost-saving maintenance capabilities, the potential to generate new monthly recurring revenue, and user-friendly design and data security — which make them a significant development within the industry as well as a potential lucrative new business model. The dream of cloud technology is no longer a distant idea of the future, it can become a present reality — and integrators who harness its power can reap its business benefits now.

Preventing workplace violence: considering the instigator's perspective
Preventing workplace violence: considering the instigator's perspective

A complex set of biological, psychological, sociological, contextual and environmental factors are involved when a perpetrator decides to commit an act of workplace violence. In many cases, the perpetrator doesn’t really want to become violent; rather, they are seeking to achieve an outcome and mistakenly believe violence is their only option. An underused approach to preventing workplace violence is to consider the issue from the perspective of the instigator, to seek to understand their grievances, and to suggest alternative solutions, says James Cawood, President of Factor One Inc. “It’s helpful to consider their perspective at a point of time, and how do I use that information in a way that explores the issues and influences them to seek other means of achieving their goals without violence?” suggests Cawood. Preventing workplace violence An underused approach to preventing workplace violence is to consider the issue from the perspective of the instigator Factor One specialises in violence risk management, threat assessment, behavioural analysis, security consulting and investigations. Cawood will present his insights into preventing workplace violence in a session titled “Workplace Violence Interventions: The Instigator’s Perception Matters” during GSX 2018 in Las Vegas, 23 September. Intervening and seeking to understand the instigator’s viewpoint can direct them away from violence. Often, diffusing a situation can prevent tragedy. Delaying a violent act is a means of prevention, given that the instigator might not reach the same level of stress again. Cawood says several recent examples of workplace violence illustrate the importance of identifying behavioural precursors and intervening. It is difficult to quantify the benefits of such an approach, since no one is keeping statistics on incident that were successfully diverted, he says. Reaching a mutually agreeable solution “Accommodation and appeasement often won’t serve the problem,” says Cawood. “Instead of projecting our needs on what would be effective for us, we must really understand what matters to them and what we are able to do to solve the problem. “It’s about listening and reflecting back to reach a mutual agreement of their perspective of what matters,” he says. “Now we can talk about what’s possible or not. Is there something concrete I can do that is within the rules? Just being heard in depth is a de-escalator of violence.” It’s the same methodology used by hostage negotiators: Listen, reflect back, and come to a mutually agreeable solution. Giving a troubled employee a severance package – money – might not address their underlying complaints For example, giving a troubled employee a severance package – money – might not address their underlying complaints. “We may not have solved the underlying problem as they perceive it,” says Cawood. “They may feel disrespected or picked on. There may be an underlying mental condition, such as paranoia, or a grandiose sense of self-worth, underlying filters that have nothing to do with money.” GSX networking and education GSX is the new branding for ASIS International’s trade show, attended by more than 22,000 worldwide security professionals  Global Security Exchange (GSX) is the new branding for ASIS International’s annual conference and trade show, attended by more than 22,000 security professionals from 100-plus countries. Cawood’s session will be 24 September from 2:15 to 3:30 p.m. “My purpose is to hone in on an area of workplace violence that is often ignored,” says Cawood. Cawood started out in law enforcement in the 1970s and transitioned to security in the 1980s. His credentials are typical of the high level of speakers presenting at GSX 2018: He holds a Master’s Degree in Forensic Psychology, and a Doctorate in Psychology, is a Certified Threat Manager (CTM), and has successfully assessed and managed more than 5,000 violence-related cases. He is the former Association President of the Association of Threat Assessment Professionals (ATAP) and currently the Vice-Chair of the Certified Threat Manager program for ATAP. Cawood has written extensively on the topic of violence risk assessment, and co-authored a book, Violence Assessment and Intervention: The Practitioner's Handbook. Cawood has been active in ASIS International since the 1980s and sees value in attending GSX 2018. “People from all over the world are coming and being exposed to a common set of topics to use as jump-off points for additional conversations. People from all types of experiences and exposures will be providing information through those lenses.” Knowledge gained from GSX provides a “real chance to drink from a fire hose” and get a deeper understanding of a range of topics. The relationships and networking are another benefit: “Nothing is more powerful than knowing someone face-to-face,” he adds.

How to choose the right storage card for video surveillance systems
How to choose the right storage card for video surveillance systems

With increased demands being placed on safety and security globally, and supported by advancements in IP cameras and 360-degree camera technology, the video surveillance industry is growing steadily. Market research indicates that this worldwide industry is expected to reach an estimated $39.3 billion in revenue by 2023, driven by a CAGR of 9.3 percent from 2018 to 2023. Video surveillance is not just about capturing footage (to review an event or incident when it occurs), but also about data analysis delivering actionable insights that can improve operational efficiencies, better understand customer buying behaviours, or simply just provide added value and intelligence. Growth of Ultra-HD surveillance To ensure that the quality of the data is good enough to extract the details required to drive these insights, surveillance cameras are technologically evolving as well, not only with expanded capabilities surrounding optical zoom and motion range,4K Ultra HD-compliant networked cameras are expected to grow from 0.4 percent shipped in 2017, to 28 percent in 2021 but also relating to improvements in signal-to-noise (S2N) ratios, light sensitivities (and the minimum illumination needed to produce usable images), wide dynamic ranges (WDR) for varying foreground and background illumination requirements, and of course, higher quality resolutions. As such, 4K Ultra HD-compliant networked cameras are expected to grow from 0.4 percent shipped in 2017, to 28 percent in 2021, representing an astonishing 170 percent growth per year, and will require three to six times the storage space of 1080p video dependent on the compression technology used. Surveillance cameras are typically connected to a networked video recorder (NVR) that acts as a gateway or local server, collecting data from the cameras and running video management software (VMS), as well as analytics. Capturing this data is dependent on the communications path between individual cameras and the NVR. If this connection is lost, whether intentional, unintentional, or a simple malfunction, surveillance video will no longer be captured and the system will cease operations. Therefore, it has become common to use microSD cards in surveillance cameras as a failsafe mechanism. Despite lost connectivity to the NVR, the camera can still record and capture raw footage locally until the network is restored, which in itself, could take a long time depending on maintenance staff or equipment availability, weather conditions, or other unplanned issues. Since microSD cards play a critical role as a failsafe mechanism to ensure service availability, it is important to choose the right card for capturing video footage.  It has become common to use microSD cards in surveillance cameras as a failsafe mechanism if an NVR breaks Key characteristics of microSDs There are many different microSD cards to choose from for video capture at the network’s edge, and they range from industrial grade capabilities to commercial or retail grade, and everything in-between. To help make some of these uncertainties a little more certain, here are the key microSD card characteristics for video camera capture. Designed for surveillance As the market enjoys steady growth, storage vendors want to participate and have done so with a number of repurposed, repackaged, remarketed microSD cards targeted for video surveillance but with not much robustness, performance or capabilities specific to the application. Adding the absence of mean-time between failure (MTBF) specifications to the equation, microSD card reliability is typically a perceived measurement -- measured in hours of operation and relatively vague and hidden under metrics associated with the camera’s resolution and compression ratio. Therefore, when selecting a microSD card for surveillance cams at the edge, the choice should include a vendor that is trusted, has experience and a proven storage portfolio in video surveillance, and in microSD card technologies. Endurance, as it relates to microSD cards, represents the number of rewrites possible before the card can no longer store data correctly  High endurance Endurance, as it relates to microSD cards, represents the number of rewrites (program/erase cycles) that are possible before the card can no longer store data correctly. The rewrite operation is cyclical whereby a new stream of footage replaces older content by writing over it until the card is full, and the cycle repeats. The higher the endurance, the longer the card will perform before it needs to be replaced. Endurance is also referred to in terabytes written (TBW) or by the number of hours that the card can record continuously (while overwriting data) before a failure will occur. Health monitoring Health monitoring is a desired capability that not many microSD cards currently support and enables the host system to check when the endurance levels of a card are low and needs to be replaced. Having a card that supports this capability enables system integrators and operators with the ability to perform preemptive maintenance that will help to reduce system failures, as well as associated maintenance costs. Performance To capture continuous streams of raw footage, microSD cards within surveillance cams perform write operations about seventy to ninety percent of the time, whereas reading captured footage is performed about ten to thirty percent. The difference in read/write performance is dependent on whether the card is used in an artificial intelligent (AI) capable camera, or a standard one.   microSD cards deployed within surveillance cameras should support temperature ranges from -25 degrees Celsius to 85 degrees Celsius Finding a card that is write-friendly, and can provide enough bandwidth to properly capture streamed data, and is cost-effective, requires one that falls between fast industrial card capabilities and slower commercial ones. Bandwidth in the range of 50 MB/sec for writes and 80 MB/sec for reads are typical and sufficient for microSD cards deployed within surveillance cameras. Temperature ranges Lower capacity support of 32GB can provide room to attract the smaller or entry-level video surveillance deployments As microSD cards must be designed for continuous operation in extreme weather conditions and a variety of climates, whether located indoors or out, support for various temperature ranges are another consideration. Given the wide spectrum of temperatures required by the camera makers, microSD cards deployed within surveillance cameras should support temperature ranges from -25 degrees Celsius to 85 degrees Celsius, or in extreme cases, as low as -40 degrees Celsius. Capacity Selecting the right-sized capacity is also very important as there needs to be a minimum level to ensure that there is enough room to hold footage for a number of days or weeks before it is overwritten or the connectivity to the NVR is restored. Though 64GB is considered the capacity sweet spot for microSD cards deployed within surveillance cameras today, lower capacity support of 32GB can provide room to attract the smaller or entry-level video surveillance deployments. In the future, even higher capacities will be important for specific use cases and will potentially become standard capacities as the market evolves. When choosing the right storage microSD card to implement into your video surveillance system, make sure the card is designed specifically for the application – does it include the right levels of endurance and performance to capture continuous streams – can it withstand environmental challenges and wide temperature extremes – will it enable preventative and preemptive maintenance to provide years of service? It is critical for the surveillance system to be able to collect video footage whether the camera is connected to an NVR or is a standalone camera as collecting footage at the base of the surveillance system is the most crucial point of failure. As such, failsafe mechanisms are required to keep the camera recording until the network is restored.