Inclusive monthly models ‘could transform video surveillance buying’

business_dealThe market for video surveillance as a service (VSaaS) is to hit $1.3 billion by 2017 as a result of a growing trend for monthly revenue models, according to new research.

A report from IHS claims the world market for VSaaS – also known as hosted or managed video surveillance – will see average annual growth of 17 per cent between 2012 and 2017.

Users are traditionally charged a monthly per-camera fee, but the research claims a growing popularity in hardware-inclusive monthly billing models can reshape the market landscape and generate new interest in video surveillance.

The model of including hardware costs within a monthly service fee is popular in the China market – which accounted for an estimated 68 per cent of global revenues last year.

Surveillance equipment vendors are used to traditional sales, but the analysts claim a recurring monthly revenue model can provide a “more dependable” cash-flow model with the potential for larger profit margins.

In addition, both integrators and manufacturers could benefit from strategic partnerships, where the integrator provides a service package and the manufacturer benefits from extra camera sales.

IHS LOGO1The analysts claim growth in the residential and small-medium business sectors (SMB) will be driving forces behind the change in the typical video surveillance buying model.

Aaron Dale, analyst for the Security and Fire group at IHS, said: “End users in the residential and SMB segments, while interested in a video surveillance system, often are not in a position to make the significant capital outlay required to purchase hardware upfront.

“Inherently, businesses and consumers prefer to spread the cost of goods and services over time.”

He added: “Security systems integrators are uniquely positioned to capitalize on the growing popularity of this business model, as they are used to billing on a monthly basis.”

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