Leaders in the Video Surveillance business are in full agreement that IP Video has had the most impact in shaping the future of the business in the last fifteen years and  that it is has now crossed the chasm and with a market penetration of around 30/40% it is well into its growth stage.

The most notable innovators of this technology include Axis Communications and Mobotix.

The first centralized IP camera was released in 1996 by Axis Communications. It was called the Axis Neteye 200 and was developed by the team of Martin Gren and Carl-Axel Alm. It used a custom Web server internal to the camera. In late 1999, the company started using embedded Linux to operate its cameras. Axis also released documentation for its low-level API called “VAPIX”, which builds on the open standards of HTTP and real time streaming protocol (RTSP). This open architecture was intended to encourage third-party software manufacturers to develop compatible management and recording software.

The first decentralized IP camera was released in 1999 by Mobotix. The camera’s Linux system contained video, alarm and recording management functionality, thus the camera system did not require licensed video management software to manage the recording, event and video management.

Both of these companies have achieved strong growth during the last five years with Axis now being the undisputed market leader. However even for them, the last 12 months growth has slowed down and margins have fallen as competition has become much stronger. So what is euphemistically called the growth stage will be more difficult to navigate, particularly for those that have recently entered this market. Expect more to enter if they believe some wildly optimistic analysts forecast that are being pushed around of $29 billion in 2015 for just IP Video equipment.

The Second Wave of Innovation

IP Network Video is concentrated on large installations requiring complex and often integrated solutions. The bigger and more comprehensive the project, the more buyers need and want open platform IP video surveillance. To continue high rates of growth, it will require further penetration into the analogue market which is the small scale application but high volume end of the business.

To achieve this, innovation needs to be centred on bringing down manufacturing costs of IP-based products and this will come through the development of semi-conductors. The IP camera market will also start to experience more competition on price, especially from manufacturers in China, Taiwan and Korea.

Whilst innovation will be much more incremental, performance will continue to be enhanced and new applications will open up. We will discuss this area of business opportunity in our blog next month.