Will an IP based CCTV solution cost more than analogue?

The answer to this question depends where you start from and where you want to end up.

Axis Communications carried out a very interesting exercise last year to answer this very question and the results were quite revealing. In a new installation (i.e. Cat 5 is installed as part of the building process) IP is always more cost effective and on other occasions for camera counts above 40 cameras, IP is still more cost effective.

We have also seen this in a number of projects we have undertaken with partners because these savings are brought about by such things as more efficient cabling (One cable to carry everything rather than multiple cables.), more cost effective use of storage (no wasted channels and scalability etc.) and the strength of using the larger IT market forces – Cat-5 cable for instance is a lot cheaper than Coax as far more of it is produced.

Again this all comes down to planning the correct system and either utilising new technologies to their best advantage or understanding how best to migrate existing infrastructure to meet the end users needs for functionality, future proofing and budget.

See comments below for a discussion thread that discusses the Axis report kindly posted by Carl Lindgren on a previous Controlware blog post and reproduced here.

Cware

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8 Responses to Will an IP based CCTV solution cost more than analogue?

  1. controlware says:

    The interesting discussion below is taken from a previous comment on this blog by Carl Lindgren and relates to the Axis study mentioned in the post…..

    Axis Communications has released a study that shows an IP-based system of 40 cameras offers a lower total cost of ownership (TCO) than an analogue-based surveillance system.The study also shows that if IP infrastructure is in place, the IP-based video surveillance system will always cost less.

    The study was commissioned by Axis in order to develop an understanding of the total cost of ownership for both an analogue surveillance system and an IP-based video surveillance system. Factors such as system maintenance, video recording and playback, cameras, installation, configuration, training and cable infrastructure were assessed.

    A dozen interviews were conducted with non-vendor industry participants such as security integrators, value-added resellers and industry analysts from different geographic regions in North America. Participants provided feedback, validation and cost data in the form of request for proposal (RFP) responses. The RFP was based on a typical deployment scenario that included a 40-camera surveillance system for a small to mid-size school campus. No existing cameras were said to be re-installed, and no premise wiring or infrastructure existed.

    Findings showed that the cost to acquire, install and operate an IP-based system was 3.4 per cent lower than a traditional system consisting of analogue cameras and DVR-based recording. Overall, an installation with 32 cameras is the break-even point for IP-based systems versus analogue systems. An IP-based system will cost less than an analogue system if the installation includes at least 32 cameras. With any installation between 16 and 32 cameras, the cost of IP versus analogue is similar although slightly lower for analogue systems. The research also showed that in facilities where IP infrastructure is already installed, IP-based surveillance systems would always be lower cost, i.e. even for systems consisting of 1 to 32 cameras.

    Fredrik Nilsson, general manager, Axis Communications, commented: “There is an overwhelming lack of knowledge about the total cost of ownership when it comes to analogue versus IP-based systems. The study, which was led by an independent researcher, clarifies common misperceptions about pricing and validates the cost effectiveness of IP surveillance systems.”

    “There were many observations and cost considerations in the study that were non-quantifiable but showed major differences between the two systems. Network cameras provide superior scalability, greater flexibility and image quality, also megapixel functionality. In addition, IP systems typically include better maintenance and service agreements for the equipment, plus they can be remotely serviced over the network for easier maintenance. IP systems clearly make the most sense both from an economic and technological standpoint.”

    Steve Gorski, managing director, Axis Communications (UK) Ltd, commented: “This study shows that on a like-for-like basis where cost is the only consideration, IP-based systems make sense at a relatively low number of installed cameras. In our experience, most end-users will have some IP infrastructure to integrate into already which network cameras can immediate advantage of. When you add in the wider benefits of IP-based systems, such as scalability, remote monitoring and image quality, solely basing a comparison on cost becomes less and less relevant.”

    The Original Article can be found here:New Study

    survtech 02-26-2008 02:20 PM

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    I would have to argue a number of points with this study:

    The study also shows that if IP infrastructure is in place, the IP-based video surveillance system will always cost less.
    The study makes a number of assumptions that are not necessarily valid in the real world:
    Many installations do not have the IP infrastructure in place.
    Many more installations that do have the IP infrastructure in place do not have sufficient bandwidth within that infrastructure to accomodate more than a handful of low bitrate cameras without choking.
    You have to compare apples to apples. By the same reasoning I could state that if the analog infrastructure is in place (cable, power supplies, monitors and recorders, etc.), IP’s supposed cost benefit would evaporate. Likewise, I can make the argument that if the IP infrastructure is not in place, in other words starting from scratch, analog still would be less costly.
    Factors such as system maintenance, video recording and playback, cameras, installation, configuration, training and cable infrastructure were assessed.
    How were these factors addressed?
    System Maintenance – I fail to see any major difference in the cost of maintaining an analog system versus a hybrid system versus an IP system.
    Video Recording and Playback – Both hybrid and IP systems need storage, a major factor in system cost. Yes, IP does not need encoders but the cost difference between IP cameras and their analog equivalents goes a long way toward the cost of encoders.
    Training – IP cameras require the same basic set of abilities to install and set up as analog plus additional skills unique to IP. This adds cost and training time!
    Cable Infrastructure – While both IP and analog signals can run on twisted-pair cable, IP has to stay within the limits of ethernet (100 meters) while analog can be transmitted up to 500+ meters without the need for intervening signal processing (repeaters or switches).
    I would really like to see a vendor or vendors competitively bid totally new analog and IP systems for a casino complete with all of the infrastructure required. The two systems would have to offer comparable picture quality, expandability and simplicity of expansion and maintenance. I don’t believe IP is quite there yet.

    In addition, many IP cameras are not well-suited to casino use; lacking the low light capabilities of the better analog cameras, having ungainly shapes and sizes not amenable installation in domes or to blending in with the decor; and other faults.

    RonaldR 02-26-2008 03:45 PM

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    1 Attachment(s)
    Some very good points.

    It does seem that this report makes many assumptions, as far as infrastructure and bandwidth. Also there is no mention of the camera specifications other than some very “general” text.

    Just to fuel the fire a little bit…Heres the actual report from Axis Communications to accompany the article.

    LevonP 02-26-2008 04:52 PM

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    Survtech, all your points are well taken and there are no arguments from our end at all.

    Similar questions and even more indepth validations of your concerns were addressed with other manufacturers and yet, no legitimate response from such manufacturers that can make any financial or economical sense.

    I invited Axis to participate with this post and clarify their general statements. I am told that they will and I believe they should. Once you raise questions similar to yours and other questions that we intend to post, then it will be up to the manufacturer to address each point and make it very clear exactly what they attempt to do… and without any marketing hype of course…

    Great observations man and again thank you.

    survtech 02-26-2008 09:18 PM

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    But wait… there’s more!

    On page 5, section 4 of the Axis report, it is stated:
    For example, several study participants shared the observation that a ‘large site’ scenario may have inherent cost advantages for an IP based system. This is due to the possibility to utilize a shared network infrastructure for various data types including control, video and audio; as well as perceived advantages of an all IP network based system for simplified remote ‘end to end’ management down to each individual camera location.
    Most existing networks were designed to allow enough bandwith to handle anticipated traffic, including room for expansion, based on standard models for computer needs – email, database, internet, marketing and similar loads.
    Adding IP cameras introduces a completely different load on the network; one that typically has not been accounted for in the network’s design. Instead of the sporadic needs of workstations and other users, you now have relatively high-bandwith traffic flowing continuously in one direction – from camera to server.
    At 1-5Mb/sec per camera, it doesn’t take too many cameras to overload a typical network. And while a typical medium-sized network may have up to 100 IP addresses to manage, adding 100 IP cameras adds 100 new IP addresses.
    On Page 6, Section 4

    4 fps continuous recording
    Why was that frame rate selected. It gives an advantage to IP cameras since the bandwidth and storage requirements are 13% of real time while an analog system doesn’t save anything except the storage part. Why didn’t the study include an option to run all cameras at 30fps? Is it because IP’s supposed advantage evaporated at that rate?

    PoE switches can be located in storage area allowing for less than 250ft PoE cable runs for network cameras
    What do you do if you don’t have IDF closets spaced less than 100m apart? Analog cameras don’t need to have equipment located every 100 meters or so. The cost of network switches greatly increases the cost of IP systems, especially on large, far-flung properties. Of course, you could use fiber but that introduces its own unique set of costs.
    On page 9, Section 6:
    In an analog system, there is very little flexibility; hence most quotes came in close to the same cost. That is quite typical for a mature market.
    And how is that a problem? Yes, analog system designs are relatively mature. So is the technology. This is a huge plus for analog. Cutting edge technology often turns to bleeding edge. Use of an immature technology must always be approached with caution lest one becomes a victim of non-standardization and premature obsolesence.
    On Page 10, Section 6:
    Cabling is almost three times as expensive in the analog system compared to the IP based system. The main reasons are that separate power cable has to be used, while PoE is used in the IP system, and separate cabling is also needed to control analog PTZ cameras.

    Power cable is not a primary cost of an analog system. In fact, separate power cable is not even needed in many systems. The same POE design for IP is available for analog and is suitable for equivalent length runs using 1 pair for analog video and 1 or more pairs for power. Even if standard 18/2 power cable is used, it is still less expensive than coaxial cable. There are also hybrid designs which can send multiple analog cameras over a single CAT-5/6 cable, thus saving cable costs.
    Installation, configuration and training is almost 50% higher cost in the analog system.
    How does that figure? This is one of the most suspect statements in the report.
    Cameras still need to be installed.
    Cables need to be pulled and terminated
    Equipment has to be connected and programmed
    People have to be trained.
    Those costs can not be substantially less since the work involved is nearly equal. In addition, analog systems don’t require highly trained technicians to install and maintain – a major consideration. Qualified IT personnel command a far higher wage than analog installers and servicers. This is an issue we wrestled with when hiring our latest technician. In the end, we decided the cost of wages for a fully-trained and certified IT technician could not be justified at this time due to our estimate that the wage needed to be at least twice what we were offering. Obviously, a major shift to IP would require that kind of outlay.

    On Page 12-13, Part 8:
    The image quality of network cameras is superior to analog.
    By what stretch of the imagination did you come up with that statement? Megapixel is one thing, but when you compare 4CIF IP (640×480) to high-resolution analog (768×494) on suitable monitors, you find a slight advantage to analog, not IP.
    Analog Coax cabling much harder to troubleshoot than IP.
    How is that? What simple, inexpensive, magic formula or tool makes IP cabling easier to troubleshoot than analog? Cable is rarely a problem, whether it carries analog or digital signals. And if it is, the same methods are used to troubleshoot either type, resulting in exactly the same costs.
    System design costs typically included at no additional cost.
    Is that a statement? If so, of what? Why would IP be any different than analog in that respect unless IP bidders decided to include that to “sweeten” the deal.

    IP system can be remotely serviced, e.g. adjusted / diagnosed over the network
    True, Some problems can be adjusted over the network with IP cameras but many can not. Loss of connectivity is loss of connectivity with either type. There are also some analog cameras that can be adjusted remotely. Every camera, IP or analog, must be aimed and focused at the source. And finally, IP cameras require adjustments that are not necessary with analog.

    Brand name PC servers used in IP systems often have superior warranty and service plans compared to DVRs
    Many DVR systems use brand name components. Our DVR system uses hp DL360G5 servers, Infortrend RAIDs and Cisco switches.

    IT equipment likely to drop faster in price than analog
    So how does that affect today’s pricing, which is supposedly the point of the report?
    As discussed above, the report makes a number of assumptions that, in my opinion are not justified. That being said, I don’t dispute IP is the future of CCTV. The real questions are when and in what form? While fully IP-based systems are the wave of the future, they don’t necessarily make sense for every application at this time.

    Does it make sense to consider IP when designing a modern CCTV system? You bet! Do IP-based systems offer advantages over analog systems? In many cases, yes. Can IP-based systems be used instead of analog systems for every application? That’s a resounding no!

    IP-based camera and recording systems are most certainly the wave of the future and can by no means be ignored as a viable alternative to analog systems. But they still have a ways to go in terms of their capabilities and their ROI.

    LevonP 02-27-2008 07:46 AM

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    Survtech, you basically dissected their entire publication or study is what they call it. This is great because now Axis has more questions to address.

    I will contact them again shortly and see what they want to do.

    If they do not respond, then we have our answers already, which will not bode well with Axis. Either way, it is important when there are questions on any technology that such manufacturers produce, the same manufacturer should be in the position to respond… Otherwise, it is no more than a marketing hype and nothing else.

    survtech 02-27-2008 09:08 AM

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    Quote:

    ——————————————————————————–

    Originally Posted by LevonP (Post 188)
    Survtech, you basically dissected their entire publication or study is what they call it. This is great because now Axis has more questions to address.

    I will contact them again shortly and see what they want to do.

    If they do not respond, then we have our answers already, which will not bode well with Axis. Either way, it is important when there are questions on any technology that such manufacturers produce, the same manufacturer should be in the position to respond… Otherwise, it is no more than a marketing hype and nothing else.
    ——————————————————————————–

    Still, with all that said, I would strongly recommend that any new installations be made IP-ready to the extent possible depending on budget and space requirements. This would include considering the use of analog video over twisted-pair; limiting continuous cable runs to 100 meters max and utilizing patch panels or ethernet-capable punchdown blocks and keeping all connections capable of being simply converted to handle data to enable easy conversion to IP in the future.

    LevonP 03-06-2008 08:35 AM

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    Survtech, I have been in contact with Axis and actually spoke with two people in their corporate and also in our region.. According to what I heard, their corporate policy states (which of course I would like to see as well) that they do not have to reply on any question in forums or to any other publication. Rather, they want to talk to someone face to face, which of course I call it “damage control”.

    One liner that I heard more often than usual was, well Axis is a publicly trading company and that they sold millions of these type of solutions and nobody asked these or any questions… Why are we asking these questions now? What I am reading between the lines in their statements is that they can say what they want about any publication and they do not have to be kept accountable for their statements nor have to produce any justification on their claims…

    Imagine this, if Axis answers these questions and more questions that we have and if they back their statement with hard evidence, who will not be willing to purchase their products? I know that we can sell tons…

    Something tells me that they will not attend this forum now or even in the future… and I hope that they will, because we all want to understand their justifications on how they derived with substantiation of cost vs. benefit or what they call it TCO…, so this way we can learn something new today…

    survtech 03-06-2008 12:49 PM

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    Levon,

    That’s pretty much what I expected. If this was a major public forum, they might have responded but they probably figure few people will ever see my questions and by responding, they would just leave themselves open for more questions. My biggest question is did they even see my questions?

    LevonP 03-06-2008 02:51 PM

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    Quote:

    ——————————————————————————–

    Originally Posted by survtech (Post 198)
    Levon,

    That’s pretty much what I expected. If this was a major public forum, they might have responded but they probably figure few people will ever see my questions and by responding, they would just leave themselves open for more questions. My biggest question is did they even see my questions?
    ——————————————————————————–

    This is how I interpret their position – they can place self serving publications throughout the security industry and they do not have to answer questions that arise from their assessments on cost justifications on their product line.. and they can use the lines such as “we are publicly traded company and do not have to answer questions”…

    I do not disagree nor condone what Axis does or will do. This is their take on the industry and if they believe their own unsubstantiated studies, then that is their decision. What is important to address is that Axis is unwilling to work with the industry in a manner that is not only could have been beneficial for everyone, but also for them too.

    It does not matter if we agree or disagree on why Axis takes a stand like this… Reality does not change for all of us… We have to make decisions on security surveillance equipment based on facts and not on marketing fluff, which incidentally is filled this industry by so many.

    There are buyers and dealers in this forum that read your post and are in agreement with your assessments… They all would have liked to add more only if Axis would have answered your questions first…

    This forum being private is actually has more exposure than you think. All the members regardless which section that they participate in read important articles and news and are in position to make their own conclusions. These type of useful info is what everyone needs, instead of second guessing on what manufacturers want you to believe. Perception on products is what manufacturers want, rather reality check and of course, Axis is not the exception to this rule.

    I guess we will wait and see. I only hope and optimistic that they may reconsider their position in this matter and come forward with solid answers.

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  5. CCTV Studio says:

    I think Analog camera cost cheaper than IP camera

  6. controlware says:

    Yes, analog cameras are less expensive but especially for business installs we need to move away from cost and look at meeting operational functionality requirements. There is no use using a cheap analog camera if it is not fit for purpose. Plus today a 4MP camera can replace a number of analog cameras. By selecting a VMS platform users can increase system flexibility and resilience by getting away from DVR’s which are a single point of failure themselves. Cost is important yes but it should never be the main consideration above functionality because at the end of the day CCTV must be fit for purpose.

    There is a good article here about the importance of image quality.

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