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Some current trends regarding video surveillance and the change from analogue to digital, IP-based cameras.
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The CCTV industry has remainedtechnologically stable over several decades.
A stable technology often implies a stableindustrial structure…
Entry barriers have remained high and consequently, CCTV has been dominated by
a few large players…
However, things have started to change with the riseof digital, IP-based video surveillance.
Companies with a background in IT or electronics are increasingly entering the industry…
IP CCTV has grown
rapidlyover the
last years, but from
very small volumes.
Up until now, the ongoing shift has not created a lotof industrial turbulence since the analogue players
have still been reasonably well off.
But some more recent events suggest that the industry structure is about to change…
One such event is GE’s announcement that theirsecurity business is for sale.
A large, established
player is pullingout of video surveillance,
which is predicted to
grow a lot over the coming
years.
The only reason for this must be that GE does not believe that
their securitybusiness will be
competitive in the future.
At ASIS 2009, Pelco and Cisco stated that they havestarted a collaboration around IP cameras.
Would Pelco have gone into this if they were able to provide a good IP offer themselves?
Would Cisco have gone into this if they hadn’tbeen struggling to develop a competitive
line of IP cameras?
I think this example illustrates that the competencebase of the industry is shifting. Firms with a
background in IT need to learn about surveillance, and CCTV firms like Pelco need skills in IT and
electronics.
Some time ago, Pelco stated that they will seek to enter emerging markets such as China.
In other technological shifts, established firms haveoften tried to sell their current products to new markets as a way to offset declining revenues.
Kodak tried to do this during the 1990s.
Facit was a Swedish manufacturer of mechanicalcalculators. With the rise of electronics in the 1960s, the company approached the Soviet Union with its
outdated technology…
… In both cases, this strategy failed to compensatefor the declining revenues in the core business.
It may still be a good decision to go for emergingmarkets, but one should bear in mind that this won’tenhance the long term competitiveness of the firm.
And sucheffortscan be
regardedas an
indicationof things
to come…
Maybe we’re witnessing the beginning of the end for analogue CCTV.
Christian Sandström is a PhD student at Chalmers
University of Technology in Gothenburg, Sweden. He writes and speaks about disruptive innovation and
technological change.
www.christiansandstrom.orgchristian.sandstrom at chalmers.se
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