Memoori’s World Market 2020-2025 Report on the Physical Security business shows that all types of organizations across the world are investigating how they can leverage the Cloud to host security systems.
Video surveillance and access control business suppliers have been building up VSaaS & ACaaS services over the last decade and more recently major software companies such as Amazon, Microsoft and Google have invested heavily in Cloud services. They are now delivering AI / Machine Learning analytical services typically valuable to the physical security business.
The supply side has also been winning over system integrators to adopt cloud services and this has provided a significant boost to growth. Now the supply structure is well established, and growth has not been inhibited by COVID-19 because buyers can take the service on a monthly fee without having to make a major investment upfront. This is a much more attractive proposition in difficult financial times. Existing owners of Video Surveillance who have the need to upgrade their systems will increasingly investigate the VSaaS option.
One leading financial institution that specializes in investing in the physical security industry, Capital One, was very bullish about the business opportunities to be had in VsaaS as far back as 2016. They carried out a survey of security system professionals that showed that 85% of respondents expect improved financial performance through Video monitoring and VSaaS.
We estimate that the global market size for VSaaS in 2019 was approximately $1,200m USD. Most forecasts now predict that it will grow at a CAGR of 20% over the next 5 years which we think is too optimistic; more like 15% reaching $2400m in 2024, but growth accelerating as it reaches 2024.
The market should grow throughout the next decade as prices fall and more end user turn to security as a service because it should deliver the most economical solution in many applications. Costs will fall as new platforms realize the full benefit of the demand from IoT. We have already noted that that all the world’s major IT companies are expanding their cloud services fast, including Amazon, Google and Microsoft, driven by the anticipated demand from a number of sources including VSaaS.
New technology features are helping the service to deliver major improvements. These include upstream bandwidth availability and the relative cost of centralized storage, whilst bandwidth prices have fallen, and peak speeds have been increasing, making VSaaS potentially more viable in a larger range of applications. Smart CODECs and the wider spread introduction of H.265 can reduce the amount of bandwidth cameras consume, helping to reduce bandwidth costs and data cap barriers.
One of the major value propositions for clients is that VSaaS is continually monitoring the system 24/7. Paying through a monthly service charge ensures that failures are dealt with promptly so reliability improves. This should ensure that the quality of the video is satisfactory for forensic purposes and that all aspects of usability (like how do I retrieve the video and share it) are taken care of.