Looking for Opportunities

It is common to walk into an office/bank or residential building and coming
across uniformed guards at every corner. To say that guards are not required is
going a little far. But to say that building owners can save money by going in
for surveillance solution is hitting the nail on the head.

Today, there are a plethora of surveillance systems that can detect
unauthorized/unidentified objects, or better still, mark the attendance of
people as they walk by. Then there are those that can observe and note the
behavior of people on camera.

Yes, these and many more such surveillance solutions are a reality today and
as the need for security, awareness about these solutions and acceptance of new
technologies increases in India, the demand for these solutions is also going to
see a major boost.

Not only will surveillance solutions reduce the need for excess manpower, it
will also reduce the cost of securing ones premises, add to that the
convenience that surveillance solutions offer. Though there is no doubt that
this is a huge market with much potential, it is difficult to give figures due
to the lack of studies on this market, due to its nature.

There is a huge market for surveillance and it is verticals like intrastructure, residential complexes, offices, and retail stores that are driving this business

One hurdle which is flourishing in this segment is the unorganized market.
Despite this factor, there are players who are tapping this potential in India
and leveraging on the growing demand from both Indian and global players.

According to a report Global Electronic Surveillance Market Outlook by
RNCOS, the global electronic surveillance industry is largely driven by the
global biometric, CCTV and RFID industry. The global CCTV/video surveillance
market is anticipated to rise at a CAGR of 12.4% for the period spanning
2005-2008.

Whos in It?

Speak to vendors operating in this space and youll know why it is often
said that surveillance is a mine waiting to be excavated in India. Each vendor
has a plethora of offerings, each unique and suitable for a different condition,
and each catering to a different aspect of surveillance solutions.

While a report on the market would have made it easier to point out who the
leading players in this field are, its absence makes it even more apparent that
it is a huge market with ample opportunities to be explored. There are players
like Zicom and D-Link who offer physical security, and on the other hand, there
are players like Seagate and Netgear, who offer the storage to go with
surveillance solutions.

Then again, those offering physical security cater to a varied segment. For
example, a vendor like Axis Communications would typically focus on the SMB and
enterprise segment, but Zicom, a provider of security solutions for government
organizations and corporates, has launched a range of offerings for the home,
small enterprises/offices, and retails segments.

In this fast moving life, we have understood the need of individuals as per
their applications, ie, while driving, personal security and security of their
kids. Keeping these in mind, we have launched personal security products:
anti-sleep alert, personal security alarm, personal anti-loss alarm for kids,
video door phones with memory function, biometric access control system, burglar
alarm system with infrared and microwave technology, says Santonu Choudhury,
CEO, Zicom.

Axis is among the players who have recently trained their eyes on India. This
Sweden-based company began its operations in the country in May last year. It is
present in three citiesBangalore, Delhi and Mumbai through its distributors
Anixter and Ingram Micro. According to Oh Tee Lee, regional director, South APAC
Region, Axis Communications, their hottest selling products are the entry and
mid-level products and surveillance cameras.

Growth Drivers

One of the major reasons why surveillance solutions are steadily gaining
acceptance in India is due to the awareness factor. As more and more businesses
shift their operations to India or outsource their work from this hub, there is
a need to provide world-class features and facilities.

Basic things like surveillance and security solutions are being looked at and
scrutinized by the market players. Recently, various BPOs in Pune got together
under the aegis of Nasscom to discuss and formulate a common code of conduct for
security. The committee will work on strengthening workplace-related policies
and standards with the main thrust on physical security of employees, following
a spate of unfortunate incidents that some BPO staffers underwent recently.

It is increasing awareness and needs from big verticals that are driving the
growth for surveillance solutions. People are understanding the need for
security which is in turn is driving the growth for surveillance solutions. We
see a 200 percent growth in this market, and have kept a target of 300 to 400
percent growth for our company in this segment, said Akhilesh Gupta, Director,
Fortune Marketing. The company got into this field just six to seven months ago
and claims that players like them are helping to make the market organized.

Advantages

As per RNCOS research, the biggest advantage of using the electronic
surveillance technology is that it uses software-enabled products at the central
front-end for the entire security systems, ensuring complete safety and
security. Moreover, IP-based CCTV is capable of utiliging network
infrastructure, delivering sufficient bandwidth, and giving scope for routing
and switching, instead of coaxial cabling. The report reflects the vast
opportunities for dealers, who offer network and infrastructure services in
computers, networks, networking hardware, LAN, WAN, VPN, etc.

The other advantage is that being a huge market, there is ample room for many
players to flourish.

Issues to Address

One hurdle that many segments face is the gray, counterfeit, or unorganized
players. Choudhury explained that currently, the unorganized segment provides
home security largely, and the market stands at about Rs 250 crore. He shared
that Zicom holds almost 25 percent marketshare in the project business. Retail
business compromises mainly of unorganized players.

According to Gupta, 90% of the goods in this market are coming from the gray
market and this is a major challenge for them.

On the other hand, Khurana opined that market dynamics differ from market to
market, so one cannot classify the market as organized and unorganized. In
fact, according to him, the biggest challenge is education, or the lack of it.

Axis Communication also plans to launch a national-level channel partner
program next month. Apart from this, the company regularly conducts roadshows,
interacts with its customers, system integrators and participates in major
events in the country.

Trends

The RNCOS report further shared that the CCTV industry will continue to
experience strong growth in the near future, and the IP video surveillance
systems market will also post significant gains beyond expectations.

IP-based CCTV markets increased by 112.28% from 2005 to 2006 while the global
conventional CCTV market grew by 10.66% as compared to 2005. The primary reason
behind this growth is the capability to monitor the video surveillance systems
or CCTVs through Internet or over IP.

Technology will not only add new features to the products, but also will make
their usage simpler.

Axis is banking on the latest video compression standard, H.264 (also known
as MPEG-4 Part 10/AVC for advanced video coding).

In the video surveillance industry, H.264 will most likely find the quickest
traction in applications, where there are demands for high-frame rates and high
resolution, such as in the surveillance of highways, airports and casinos, where
the use of 30/25 (NTSC/PAL) frames per second is the norm. This is where the
economies of reduced bandwidth and storage needs will deliver the biggest
savings. In short, for industries like BPOs, this technology would be ideal as
it would send details using less bandwidth.

Another trend is that of vendors taking the retails route for their products.
Though surveillance solutions are typically not sold through the conventional
retails outlets, this is one model many players are taking. Zicom plans to
embark upon a major retail venture and has planned to set up 100 odd retail
stores by the end of the year, on a franchisee model.

Seagate also announced earlier this year that it would collaborate with its
channel partners to support a series of retail access points across several of
Indias fast-emerging cities, to address the countrys expanding market and
customer needs. At these outlets, customers can browse and reference information
on Seagates comprehensive suite of products. The company plans to expand the
number of retail outlets in India from the current 40 to approximately 100 by
the end of 2008.

Channel Responsibility

As in the case of most IT products available in the market, for surveillance
solutions too, the channel plays an important role in taking the offering to the
market. As more players get into the space, their channel requirement also
increases.

Most importantly, while vendors talk about education and thereafter adoption,
it is the channels responsibility to act as the last mile fulfiller. They need
to take up the task of getting certified in this field and ensuring that the
people working for them have the requisite knowledge to pass on to
end-users/clients.

Sharing the benefits of selling surveillance solutions Gupta says, There is
money in offering solutions. We work on volumes and after deploying the
solutions there is the annual monthly contract through which the channel can
make money.

The moment people are told about solutions and their benefits, they want to
go for it. Once education is in place, it is sure to set the adoption ball
rolling.

Ruth Samson

maildqindia@cybermedia.co.in