Jon Cropley

Video surveillance equipment vendors report their 2018 revenue data to IHS Markit in the first quarter of 2019, which is when we calculate the rate the professional video surveillance market grew in 2018. However, we expect this rate will have been around 10 percent globally -- slightly higher than the 9.3 percent growth in 2017 and much higher than the 3.9 percent growth in 2016. Changing market trends Despite this healthy rate of growth, 2018 was not without its challenges and surprises. Challenges included continued price erosion, cyber-security attacks on video surveillance equipment, component shortages and increased barriers to international trade. Surprises included the US Government banning the use of products from Hikvision and Dahua (the two largest global vendors of video surveillance equipment) in its own installations and the entry of new vendors like Motorola Solutions and Amazon into the video surveillance market. The effects of these trends and surprises is likely to reverberate through 2019 and beyond. Increased tariffs and other barriers to international trade, banning vendors, and potential changes in the product mix could cause average prices to rise. Larger vendors offering fresh solutions, and new ways to acquire those solutions, could affect traditional industry sales models and cause market disruption. Competitive supply base While the currently strong market growth rate offers big opportunities, vendors must move with the times, since fortunes can change quickly. Hikvision, Dahua and Axis Communications were the world’s largest video surveillance vendors in 2017. However, just ten years ago, the market was led by Panasonic, Pelco and Bosch. The professional video surveillance supply base remains highly competitive, and there are many vendors with lofty ambitions. In 2019, we can expect to see some vendors decline in the market, or even disappear altogether, as other vendors take the lead in shaping the industry’s longer-term direction.

Canon's purchase of Axis could be the start of a series of acquistions in 2015 This is a massive development in the video surveillance equipment market. Until last year, Canon was a small player in this market. However, back in August 2013, it revealed big ambitions when its CEO, Fujio Mitari, spoke about security cameras becoming an “important pillar” for the company and the market having “limitless possibilities for growth”. Then in June 2014, Canon acquired the world’s largest supplier of video management software, Milestone Systems. Now, Canon is purchasing the world’s largest supplier of network cameras. All of this shows just how seriously Canon is about expanding its interests in the video surveillance equipment market.  IHS estimates that Axis Communications was the third largest supplier of video surveillance equipment in 2014 with over 5% of a global market worth around $15 billion. Despite this, the company has faced intense competition, particularly from Chinese rivals in recent years. The largest of these, Hikvision and Dahua, have both been gaining market share faster than Axis. At the same time, the average selling price of a network camera has more than halved between 2010 and 2014. Canon’s acquisition of Axis is the latest in a number of major changes to the structure of the supply chain for video surveillance equipment. It comes just two months after Samsung Group sold Samsung Techwin. Today, the supply chain remains highly fragmented. The top fifteen suppliers account for less than 50% of revenues and there are thousands of small suppliers. Consolidation has been anticipated for some time and Canon’s purchase of Axis could be just the start of a series of industry acquisitions in 2015.

According to latest research from its video surveillance and analytics intelligence service, Omdia (Informa), Genetec Inc. (‘Genetec’), a global technology provider of unified security, public safety, operations, and business intelligence solutions, continues to build its position as the world’s major developer of video surveillance software with a widening share of the global market. Overall, Genetec grew at three times the pace of the global video surveillance solutions market and demonstrated the fastest growth of all major software companies across all geographies (based on Omdia reported 2018 and 2019 data). Video surveillance software major “Genetec is encouraged by this news but we remind ourselves that the true measure of success is not to be found in market share figures but whether or not our partners and customers feel like we have delivered against the service levels and outcomes they expect,” states Pierre Racz, President, Genetec Inc. Pierre adds, “Our independence and single-mindedness have helped us earn the trust of the market, and our investment in research and development have helped us deliver products at the cutting edge of client needs.” Importance of privacy and cyber-security We strongly believe that security and privacy can coexist and deliver greater benefits together than in isolation" He continues, “We have a broader obligation to our communities and society. As such we have been outspoken about privacy and cyber-security. We strongly believe that security and privacy can coexist and deliver greater benefits together than in isolation. We also believe that this is what fuels our continued success with organisations that share these values. We will continue to work hard to earn their trust.” Enterprise, government, education, and public safety organisations alike are seeking greater privacy and cyber-security functionality, as well as additional operational value and return on investment from their physical security systems. Unified physical security platform Their requirement for a secure video surveillance solution as part of a truly unified physical security platform has resulted in Genetec outpacing market growth across all geographies. “The Genetec share of the global video surveillance software market continues to grow year on year,” said Jon Cropley, Principal Analyst, Video Surveillance at Omdia, adding “The company reported high growth in all regions including in EMEA where, in spite of a slower market that contracted by over 3%, Genetec revenues increased by 19%.” Video encoders, recorders and software provider Additionally, according to the report, Genetec is now the top Western supplier for back-end video surveillance equipment that includes recorders, encoders and software, demonstrating an increasing demand for trustworthy devices from a recognised firm in privacy and cyber-security. Comparing year-on-year Omdia Research Statistics (2018 to 2019): Genetec increased its lead as the top video surveillance software in the world, with 11.9% market share (up from 10.6% in 2018). Genetec global market share growth increased 18.7% year on year, from 10.6% in 2018 to 11.9% in 2019. Genetec saw the fastest growth of the ten largest vendors in EMEA at 19% in 2019. Genetec posted Asia’s highest video surveillance software growth at 37%, compared to 11.1% growth for the market in general.

ISS – Intelligent Security Systems, a global provider of intelligent Video Management Systems (VMS) solutions with natively developed analytics, recently established a new benchmark with industry reports from IHS Markit. In its Video Surveillance Intelligence Service report, IHS Markit estimates ISS to have been the third largest non-security solution vendor of VMS in 2017. In its 2018 Video Analytics in Security & Business Intelligence report, IHS Markit estimates ISS to have been the third largest vendor of paid for video analytics software in the Americas in 2017. The combined results of these new rankings clearly position ISS as an established leader in natively developed intelligent VMS and analytics solutions. Offering higher level of intelligence By weighting the latest IHS Markit rankings, it is clear that our unified platform SecurOS VMS and analytics solution delivers a superior value proposition"“The latest industry reports from IHS Markit reflect ISS’ perseverance to develop a VMS solution that transcends typical video management and control capabilities by offering higher levels of intelligence,” said Aluisio Figueiredo, CEO of ISS. “To accomplish this goal, we have continued to develop new and innovative functionality for our flagship SecurOS VMS in tandem with the development of powerful analytics designed from the ground up to seamlessly integrate with one another. By weighting the latest IHS Markit rankings for non-security VMS and analytics, it is clear that our unified platform SecurOS VMS and analytics solution delivers a superior value proposition.” “Our estimates show that ISS has grown quickly in recent years to become the world’s third largest non-security solution vendor of VMS and the third largest vendor of video analytics software in the Americas in 2017,” said Jon Cropley, Principal Analyst Market, IHS Markit. SecurOS v.10 VMS with cyber security updates ISS introduced the SecurOS v.10 VMS, featuring an updated, highly-intuitive GUI designed to accommodate multiple clientsISS continues to adopt sophisticated technology with the use of neural networks and deep learning algorithms which provides innovative customisable video surveillance solutions to meet customers’ evolving needs. ISS recently introduced the SecurOS v.10 VMS, featuring an updated, highly-intuitive GUI designed to accommodate multiple clients, and the ability to easily manage large systems with infinite scalability. Additional enhancements include a new web client for remote access, robust cyber security updates, 64-bit edition for faster throughput and larger capacity, enhanced native failover operations, H.265 Intel QSV support and a brand-new Evidence Manager. SecurOS v.10 seamlessly integrates with a host of powerful analytics developed by ISS. This unique, highly intelligent VMS and natively developed analytics allow ISS to offer a wide range of specialised packages to fulfil users’ specific physical security and business intelligence needs. ISS’ innovative portfolio of open platform analytics also integrates with myriad third party video management solutions.

A rapid string of merger and acquisition (M&A) transactions as 2018 passed into 2019 suggests the physical security industry may be on the verge of a busy year of companies buying other companies. Observers have noted a large amount of investment capital currently available to be invested in security M&A, and plenty of entrepreneurial companies are looking to be acquired. Joe Grillo, CEO of ACRE, previously hinted at upcoming M&A activity for his company by the end of 2018, foreshadowing ACRE’s late-year announcement to acquire access control company Open Options, Addison, Texas.The VaaS cloud-based image capture platform includes fixed and mobile license plate reader cameras driven by machine learning Just days later, in the midst of the holiday season, Qognify announced its plan to acquire On-Net Surveillance Systems Inc. (OnSSI) and sister company SeeTec GmbH. Then came an even larger announcement: Motorola has acquired VaaS International Holdings Inc., a data and image analytics company for $445 million. The VaaS cloud-based image capture and analysis platform includes fixed and mobile license plate reader cameras driven by machine learning and artificial intelligence. Most recently, ADT announced yet another acquisition, Advanced Cabling Systems, a technology integration company in the South, thus continuing consolidation on the integration side of the business. There are likely to be further mergers and acquisitions in the video surveillance supply base in 2019 Continuation of the trend In the case of the Qognify and Motorola deals, Jon Cropley, Principal Analyst, Video Surveillance & Security Services, IHS Global Limited, sees them as the next chapter in an M&A trend going back several years. “I think this is a continuation of what we have been seeing in recent years of video surveillance software vendors being acquired,” he says. In the face of intense price competition, vendors have found it increasingly difficult to compete based on hardware features" “In the face of intense price competition, vendors have found it increasingly difficult to compete based on hardware features and are looking at software to offer unique competitive advantages.” In short, he sees it as a continuation of a trend that previously saw Canon acquiring Milestone Systems and Briefcam, Panasonic acquiring Video Insight and Tyco acquiring Exacq. “There are likely to be further mergers and acquisitions in the video surveillance supply base in 2019,” adds Cropley. “However, a spree of large-scale mergers and acquisitions is not expected.” Memoori, another market research firm, forecasts that the value of acquisitions could actually decline marginally in 2019 in value terms but increase in number. This observation is based on Memoori’s charting of physical security deals over the last 18 years. Jim McHale, Managing Director of Memoori, says there have been four cycles of increase and decline in activity, often exaggerated by billion dollar deals in one year such as the merger of Johnson Controls and Tyco of $165Bn in 2016. Access control when combined with identity management is punching well above its weight, and this trend has continued Access control to open systems Only time will tell whether the new year pattern of M&A activity is a coincidence or a harbinger of a busy M&A year ahead “It may be too early to make judgements on the future based on the last four weeks, but there are some interesting points that can be made when compared with our 2018 analysis,” says McHale. “Access control when combined with identity management is punching well above its weight, and this trend has continued. "Acre has been a major contributor and has completed some 10 acquisitions. In general, the access control business has been slow to move to open systems, and hopefully we can expect this trend toward openness to continue as it will give additional growth to the business.” For more commentary from Memoori, see their report “Major Trends in the Global Access Control Market 2018”. Only time will tell whether the new year pattern of M&A activity is a coincidence or a harbinger of a busy M&A year ahead. While past trends may provide a glimpse of what’s coming, there are always new variables. It’s a sure bet the overall trend toward consolidation will continue but predicting the pace and timing of individual transactions is almost impossible. In any case, it will be interesting to watch how 2019 unfolds on the M&A front, among other factors in a changing industry.

For the 10th year in a row, Milestone Systems continues to be the No. 1 global VMS vendor by company revenue in market research from business intelligence provider IHS Markit. In 2017 Milestone Systems had a global VMS market share of 10.2%, an increase from 9.1% in 2016. “The world market for VMS is estimated to have grown by 8% in 2017,” said Jon Cropley, senior principal analyst for video surveillance at IHS Markit. “Supply to this market is gradually becoming more concentrated. The top largest vendors are estimated to have accounted for 48% of global revenues in 2015. In comparison, this figure was 57% in 2017.” We will keep investing in our partner community with a focus on new technologies within cameras, access control and video analytics" Triple revenue growth “Milestone Systems had a solid VMS revenue growth of 21% over 2016, which was almost triple that of the market. Our open platform community and partnership business model is no doubt the reason for the positive development, and we are proud to be a trusted and reliable partner in the community,” says Lars Thinggaard, President and CEO, Milestone Systems, and continues: “We will keep investing in our partner community with a focus on new technologies within cameras, access control and video analytics. We believe in a future, where video will play an even more significant role to understand the data sources from the increasing numbers of devices that connect people and assets.” Number one in EMEA as well as APAC Milestone Systems not only retained the number one position globally but also holds the number one spot in Europe/Middle East/Africa (EMEA) with an increase in market share to 17.1% from 14.8% in 2016. Milestone Systems also maintains its number one position in APAC with a market share of 12.4%, compared to 11.7% the year before. Finally, Milestone Systems jumped one spot in Americas and is now ranked as number two in the region with a 11.3% market share compared to 9.6% in 2016.

Micron has announced general availability of the 128GB and 256GB density of edge storage microSD card solutions and collaboration with several leading video surveillance solution providers to promote surveillance-grade edge storage. Built on Micron’s industry-leading 64-layer 3D TLC NAND technology, the newly released solutions enable greater capacity in a smaller space, delivering up to 30 days of surveillance video storage in the camera itself. Over 98 percent of all microSD cards sold globally in 2017 were used in consumer applications, according to IHS Markit Industrial microSD cards Over 98 percent of all microSD cards sold globally in 2017 were used in consumer applications, according to IHS Markit. These consumer-grade memory cards are not designed and validated for commercial use in video surveillance applications. Micron’s industrial microSD cards are designed specifically for professional video surveillance use cases and include a three-year warranty for 24x7 continuous video recording usage. The Micron microSD card design and firmware is optimised to ensure a reliable, robust and low-maintenance system design that delivers 24x7 continuous recording capability with minimum video frame drops. Due to a lack of surveillance-grade solutions, organisations have relied on the use of retail microSD cards that are not optimised for 24x7 recording" “Due to a lack of surveillance-grade solutions, organisations have relied on the use of retail microSD cards that are not optimised for 24x7 recording. As a result, these cards may fail earlier and also experience video frame drops as high as 30 percent,” said Amit Gattani, Sr. director of embedded segment marketing at Micron. “With a strong industry trend toward more analytics and artificial intelligence (AI) in surveillance cameras, there is a growing demand for higher reliability and higher density storage in the cameras. Micron is addressing this need with industry-leading density of 256GB in a surveillance-grade microSD card.” Edge Storage: Industrial-Quality Storage Designed for Professional Video Surveillance Applications Micron’s industrial microSD cards are specifically designed for IP video surveillance workloads and feature: Storage densities of 256GB, 128GB, 64GB, and 32GB, which enable more video to be stored at the edge, giving system designers increased flexibility Over three years of high-quality, continuous, 24x7 video recording3 in a wide range of temperatures and environments Technology for the cards to self-monitor and provide information on card usage and expected useful life remaining for each card Special firmware designed for continuous video recording, which minimises frame drops and video loss A two million hours mean-time-to-failure (MTTF) or 0.44 percent annualised failure rate (AFR), which is equal or better than most surveillance Hard Disk Drive4   High demand for video surveillance cameras According to IHS Markit5, demand for professional video surveillance cameras continues to grow rapidly According to IHS Markit5, demand for professional video surveillance cameras continues to grow rapidly. It forecasts that over 130 million professional video surveillance cameras will be shipped in 2018, up from about 100 million in 2016. Following Micron’s release of increased capacities for their surveillance grade offerings, many leading professional video surveillance providers have adopted and deploying the solutions across their products with great success.  “We are pleased that Micron is addressing the surveillance market with high reliability and high-performance edge storage products,” said Zhiming Li, product director at Dahua Technology. “Micron’s new 256GB industrial microSD card now enables use of edge storage as the primary storage in many SMB solutions and secondary storage in Enterprise solutions, enabling system integrators to optimise solution design, increase deployment flexibility and lower total cost of ownership.”   Surveillance cameras are now deployed everywhere in highly distributed environments like smart cities and smart infrastructure" Edge storage of video and analytics data “Surveillance cameras are now deployed everywhere in highly distributed environments like smart cities and smart infrastructure. Edge storage of video and analytics related data in the surveillance camera gives unique flexibility to system integrators in optimising the systems for performance and cost,” said Yul Pi, product collaboration director at Infinova. “Micron’s new ultrahigh density microSD cards bring the reliability and performance required for surveillance systems.” “The IP surveillance market continues to grow rapidly across all verticals and has created a rising demand for high-performance and reliable video storage. Recognising this increasing need, VIVOTEK has deployed Micron’s new ultra-high-density microSD cards in our products to provide effective edge storage-based solutions for both SMB and Enterprise use case that enhance design flexibility and optimise system resources and total cost of ownership,” said Shengfu Cheng, director of marketing and product development division at VIVOTEK INC. “It’s important to adopt high-quality, surveillance-specific microSD cards, and we are pleased that Micron is leveraging its 3D flash memory leadership to deliver an optimised solution for this industry.” Small to medium businesses will drive significant growth in the coming years in the video surveillance-as-a-service market” Ultra-high-density edge storage solutions “Small to medium businesses will drive significant growth in the coming years in the video surveillance-as-a-service market,” said Jon Cropley, senior principal analyst for video surveillance at IHS Markit, a global business information provider. “Currently, these organisations typically rely on backend recording solutions for data storage. However, an increasing number of systems are available that do not require local network video recorders. The emergence of high-density edge storage has played a major role in this.” Micron understands launching ultra-high-density edge storage solutions based on 3D flash memory technology will change the way video is captured and stored" “Micron understands surveillance application cases and launching ultra-high-density edge storage solutions based on 3D flash memory technology will change the way video is captured and stored in future surveillance deployments,” said David Huang, president of GeoVision, US division. “We view our collaboration with Micron as a way to leverage edge storage to improve flexibility in solution designs and deployments while effectively bringing down the total cost of ownership for our customers.” Pricing and availability The 128GB ($59 MSRP) and 256GB ($119 MSRP) versions of the Micron Industrial MicroSD Cards are available now for ordering through Micron global distribution channels. Micron is also showcasing the new 256GB Edge Storage solution at Security Industry Association's (SIA) New Product Showcase at ISC-West trade event in Las Vegas on April 10th, 2018.

Umbo Computer Vision, a provider of autonomous video security technology, has announced the release of Umbo SmartBullet. Umbo SmartBullet is the bullet-style variant of its learning cameras for businesses, integrators and governments looking for autonomous video security capabilities and a simple end-to-end user experience. Surge in camera deployments “Approximately 119 million professional video cameras were sold globally in 2017*,” said Jon Cropley, Principal Analyst in Video Surveillance and Security for IHS Markit, a business information provider. “This major surge in camera deployments has caused a significant increase in hours of footage to be monitored. As a result the need for faster processing and higher quality resolution has never been stronger.” With real-time video security capabilities and AI-based technology, SmartBullet enables facilities managers at businesses in high crime areas, critical infrastructure installations, school campuses, transportation systems and other public venues to record, track and receive more accurate notifications when intruders have entered a property, climbed a wall, crossed a border, etc. Solving a market-wide problem This higher rate of accuracy means alerts that security managers will actually want to see and pay attention to, creating a safer environment for customers, employees, civilians, and students.SmartBullet takes video quality up a notch, delivering better resolutions and higher frame rates than the SmartDome “To date, the majority of security cameras on the market are lacking high video resolution, data processing capabilities or have weak exteriors. SmartBullet is the perfect solution to this market-wide problem,” said Shawn Guan, CEO at Umbo Computer Vision. “It is capable of processing more streams at better resolutions and adaptive, transformative design makes it right for all sorts of different environments. Additionally, SmartBullet seamlessly integrates with Umbo SmartCloud and Umbo Light services for the best user experience in the industry.” SmartBullet features and capabilities include: Full metal body armour SmartBullet is built with distinctive full-metal armour displaying a powerful look that deters potential crime on sight. The stunning design is as tough as it looks, rated IK10 for high impact resistance. Users can also enjoy the design’s IP66 dust and water rating for protection from the elements. 3x more powerful SmartBullet takes video quality up a notch, delivering better resolutions and higher frame rates than the SmartDome. Higher quality streams mean better results when Umbo Light, the company’s visual intelligence computer vision service, is active. SmartBullet will also have two-way audio and zooming capabilities to improve overall data capture. Adaptive design Featuring an industry-first transformative design, SmartBullet can be configured for different customer needs. Available configurations at launch include an LED torch for floodlight illumination and infrared (IR) for visibility up to 160 feet. *Information based on IHS Markit, Technology Group, Video Surveillance Intelligence Database, August 2017.

Milestone Systems, the open platform community in networked video management software (VMS), not only retained the number one global position but also holds the number one spot in both Europe/Middle East/Africa (EMEA) and Asia/Pacific (APAC) and ranks number three in Americas. “Milestone continues its growth with an increase in net revenue of 18 % in 2016 over the year before and has significantly exceeded the overall market growth. Our continued focus on co-creation of revenue and innovation with the Milestone community of partners and customers is a significant part of our success. We will continue and further explore this approach in the years to come,” said Lars Thinggaard, President & CEO, Milestone Systems. “Our market share estimates show that supply of VMS became more concentrated in 2016 with the four largest VMS vendors all gaining share. So far, the supply base for video surveillance equipment has been highly fragmented but I believe we will see more consolidation in the years to come,” said Jon Cropley, principal analyst for video surveillance at IHS Technology. Milestone Systems, the open platform company in IP video management software (VMS), is once again the No. 1 global VMS vendor by company revenue in market research from business intelligence provider IHS Markit. Milestone Systems receives this top ranking for the ninth year running.

CEO - Lars Thinggaard commented about being proud of Milestones’ position in security market Milestone Systems, the open platform company in IP video management software (VMS), is again ranked as the number one VMS vendor by company revenue in newly-published market research from business information provider IHS Inc.“We are proud that Milestone Systems continues to hold this top global position in the security market - for more than a decade now. It takes a lot of hard work, both from our own employees and from the thousands of great partners we support around the world,” says Lars Thinggaard, President & CEO, Milestone Systems.Price erosion – impacting growth rates A major finding in this report is that product demand will continue to grow quickly, and the world market for video surveillance equipment will be worth USD 15.7 billion in 2015. Price erosion is impacting the growth rates, but customer demand is increasing significantly. “We are not seeing the same level of price erosion for VMS as in the camera market segment,” says Jon Cropley, Principal Analyst for Video Surveillance at IHS Inc. This underscores the fact that security management software functions as the core of a surveillance system, like the ‘brain’ of the solution - especially if it is open platform architecture that interconnects and manages components from many different providers. Milestone’s VMS is future-ready for expanding with innovations in security and other business applications. Mobile applications ramping up in usage rapidly Mobile applications are ramping up in usage rapidly with valuable benefits for first responders and roving security, managers or other personnel. Smartphones and mobile technology have been the defining technologies for the beginning of the 21st century. These days about half of the adult population worldwide owns a smartphone, and by 2020 the number is expected to increase to 80 percent.  “The widespread adoption of smartphones means that most of us are carrying super computers in our pockets, and VMS user preferences are fast following suit rapidly,” says Kenneth H. Petersen, Chief Sales & Marketing Officer, Milestone Systems. “With the Milestone Mobile client we offer Video Push that enables a smartphone or tablet to act as a mobile security camera, essentially adding another set of virtual eyes where no other camera is in place. This is extremely popular in all segments of our customer base, both in the low-complexity and lower camera count installations as well as in the advanced, high camera count solutions.” 

By 2018, worldwide revenue will reach a projected $23.6 billion The global market for video surveillance equipment was worth an estimated $15.0 billion by the end of 2014, up from $13.5 billion in 2013. By 2018, worldwide revenue will reach a projected $23.6 billion, as shown in the attached figure, equivalent to a five-year compound annual growth rate of 12 percent. “The year 2014 has been one of the most interesting—and disruptive—in recent memory for both the professional and consumer video surveillance industries,” said Jon Cropley, principal analyst for video surveillance and security services for IHS. “A sharp decline in the cost of semiconductor components has ushered in a new era of price competition and the competitive landscape has shifted, with merger-and-acquisition activity affecting some of the leading global product and software vendors.” Even so, the video surveillance industry can sustain this level of fragmented supply base and overall revenue growth for a number of reasons, such as brand recognition, subtle differences in end-user requirements among geographical locations and the continued differentiation of products, as with the use of embedded analytics, for example. Differentiation will be a key market driver for almost every equipment vendor, distributor and integrator active in the video surveillance market over the next couple of years. This trend represents the first of 10 that IHS has predicted for the video surveillance industry in 2015. The remaining trends include: Shipments of high-definition closed-circuit televisions (HD CCTV) cameras are projected to have hit over 4 million units in 2014, climbing from just 1 million units in 2013. Led by the strong performance of technologies such as composite video interface (CVI), analogue high-definition (AHD) and transport video interface (TVI), 2015 will see the analogue portion of the market far outsell digital, serial digital interface (SDI)-type solutions. However, fierce price competition and small incremental product upgrades are expected throughout the year. H.265 was one of the most popular topics at the Security China Show held in Beijing in October 2014, marking a shift in cutting-edge video surveillance. In 2015 China will emerge as a leading region in product development, instead of the market being driven primarily from European and North American research and development (R&D) centres. Some leading Chinese companies now have the world’s largest teams devoted to video surveillance R&D. With complete product portfolios and cost-competitive-qualified products, more Chinese suppliers are also seeking opportunities in the global landscape, gaining share in non-domestic markets. “The year 2014 has been one of the most interesting and disruptive in recent memory for both the professional and consumer video surveillance industries" Increasing numbers of traditional IT vendors are taking note of the opportunities in video surveillance, and the migration from analogue to network surveillance cameras has changed the way many security systems are conceived, built and managed. The global video surveillance equipment and storage market is forecast to be worth over $28 billion by 2018. The consumer and do-it-yourself (DIY) video surveillance market, which comprises equipment sold through in-store or online retailers, was worth $953.4 million globally in 2013. Small business as well as commercial end users accounted for 47 percent of the $953.4 million total in global consumer and DIY market revenue in 2013. IHS expects to see more video surveillance vendors in the professional—not consumer—category taking an interest in this market in 2015, in order to fill out the low end of their product offerings. Video surveillance equipment sold through distribution channels was estimated to account for 55 percent of global equipment revenue in 2013 and represent over 60 percent of European market revenue in the same year. Furthermore, these percentages are forecast to increase as integrators and installers take advantage of the benefits of purchasing equipment through distribution. Trials of body-worn cameras as part of video surveillance systems for law enforcement have been ongoing during 2014, but 2015 is expected to be the year that firm orders and long-term partnerships are made. Body-worn cameras are not just useful as part of an overall video surveillance solution, they can also be part of a political solution in helping to promote faith in local law enforcement officers. Embedded vision—the combination of embedded systems and computer vision—will have new implications in Advanced Driver Assistance Systems (ADAS) in the automotive industry, with innovations in ADAS filtering back into the video surveillance industry.

IHS published the estimates through its Video Surveillance Intelligence Service Milestone Systems and Genetec remained the two largest suppliers of video management software (VMS) in 2013 in a market worth more 900 million dollars, according to recently published estimates from IHS Inc., through its Video Surveillance Intelligence Service. The global VMS market is forecast to grow to over $3 billion in 2018 with all four major world regions analysed (EMEA, Americas, China, and Asia) exhibiting strong double-digit expansion. The Chinese market is forecast to grow fastest. “Milestone Systems and Genetec have been the largest suppliers of VMS for the past five years. However, there have been big changes in the rankings of other top 10 suppliers,” said Jon Cropley, Principal Analyst for video surveillance at IHS. “Hikvision and Avigilon are just two companies that gained share”. Despite this, the overall VMS market remains fragmented with no single supplier possessing share greater than 10 percent. Milestone Systems had the largest share of the global market in 2013 (it shared the top spot with Genetec the year before). Milestone also retained the largest market share in EMEA while Genetec retained the largest market share in the Americas. The VMS space will remain highly competitive within the next five years and many big changes in the top ten market share ranking can be expected. The Video Surveillance Intelligence Service is available now from IHS. Readers should note that the market share estimates are based on supplier revenues from the sales of VMS software and licenses during the 2013 calendar year; shares are not calculated from software shipments or installations.

IHS found Milestone to be the worldwide market share leader of open platform VMS for more than a decade Milestone Systems has again been ranked the number one global video management software provider in terms of revenue according to the latest analysis from IHS Inc. Research from the IHS Technology Video Surveillance Intelligence Service has found Milestone to be the worldwide market share leader of open platform video management software (VMS) for more than a decade. Milestone Systems revenues have grown close to 30 percent on average per year since 2007. “Milestone Systems retained the number one global market share position in the VMS category in 2013, recording 32 percent year-over-year USD* revenue growth,” says Jon Cropley, principal analyst for video surveillance at IHS Technology. This indicates the growing importance of software as the value-adding core of a solution – particularly when it is open platform architecture allowing unlimited integrations with other systems and devices. Milestone has documented the accelerating use of network video surveillance for more than just security: interoperability with other business systems brings the technology to support operational improvements in areas such as production, logistics, warehousing, marketing and customer service, education and patient healthcare. “Milestone is pleased to achieve the highest market share ranking according to IHS. This showcases the power of the open platform and the ecosystem we foster with that vision,” says Lars Thinggaard, CEO, Milestone Systems. “We want to thank all of our customers and partners worldwide – distributors, installers, solution integrators and manufacturer alliances – for taking part in this fascinating journey of convergence from analogue to IP in the security industry. We are proving the value of collaboration for greater innovation, delivering more than security with digital surveillance technology and endless integration options. Collectively, we achieve more than any one company can do alone.” The latest IHS Technology analysis estimates that the world market for video surveillance equipment will grow from USD 13.5 billion in 2013 to USD 24 billion in 2018. In addition to the IHS top ranking, Milestone has also received recent industry and partner accolades (Govies, PSA Security, Arecont Vision, Axis Communications), and was listed the past several years in the Security 50 global report on security market leaders.

IHS forecasts that the pace of transition will continue to be rapid in 2014 and 2015 before slowing slightly from 2016 onwards The world market for video surveillance equipment grew by almost 7% in 2013.This is according to recently published estimates from IHS Inc., through its Video Surveillance Intelligence Service. The service also reveals that the ongoing transition from analogue to network equipment accelerated in the same year with revenues from network higher in all four major world regions analysed (EMEA, Americas, China, and Asia). According to principal analyst, Jon Cropley, “IHS forecasts that the pace of transition will continue to be rapid in 2014 and 2015 before slowing slightly from 2016 onwards. In the next two years a number of major vendors will continue focusing their efforts on their network equipment at the expense of analogue”. Global video surveillance equipment revenue in 2014 is expected to rise to $15.0 billion, up from $13.5 billion in 2013. IHS has just added new global and regional market statistics, forecasts and market share estimates to its Video Surveillance Intelligence Service. In addition to the trends above, other key findings include: A number of Chinese suppliers are estimated to have gained market share in regions outside China in 2013. They tend to offer products with low prices and this has been a major factor in high average price erosion in those regions. China is estimated to have been the largest regional market for video surveillance equipment, accounting for a third of global revenues in 2013. In terms of revenues, the market for network cameras was much larger than the analogue camera market in 2013. However, unit shipments of network cameras are not forecast to exceed those of analogue cameras until later in the decade. Forecasts for network cameras with 4 Megapixels and above have increased. Growth in demand for 180/360 degree network cameras and 4K cameras is a major reason. The supply of video surveillance equipment remains highly fragmented. The fifteen largest suppliers accounted for only just over half the market in 2013. Although declining, shipments of analogue cameras and DVRs will remain high throughout the forecast period.