How Surveillance Vendors Should Adapt to the Demand from Businesses for New, Cloud-Based Service Models

This resource features revenue forecasts for the video surveillance market. It also offers strategic recommendations for video surveillance vendors as they navigate diversifying service models and new business demand for cloud-based solutions.

Market Overview

• New video surveillance cloud vendors, also known as Video Surveillance-as-a-Service (VSaaS) vendors, threaten the status quo of on-premises deployments by providing businesses with simplified, remotely managed surveillance solutions.
• Several market trends are driving demand for new service models in the video surveillance industry. A primary driver is the market's historical struggle with video data storage. As companies grapple with retention regulations and improved video resolutions, more video surveillance users are considering cloud storage options.
• Expanding video analytics use cases are introducing new Small and Medium Enterprises (SMEs) and lines of business to the video surveillance market. New cloud vendors and traditional surveillance companies are offering tailored, Software-as-a-Service (SaaS) video analytics applications to these new customers, signaling a change in the way some video surveillance vendors market and package their products.
• The 8-year Compound Annual Growth Rate (CAGR) for the total measured video surveillance service revenue between 2022 and 2030 is 13%, reaching US$47.2 billion by 2030. Regionally speaking, Asia-Pacific and North America represent the biggest revenue opportunities for surveillance services.
• Breaking down revenue by service type, cloud data and analytics software services is the largest slice of the opportunity. Growing at a CAGR of 23%, cloud data and analytics services will increase from US$4.8 billion in 2022 to more than US$25 billion by the decade’s end.

Table 1: Video Surveillance Service Revenue by Service Type

World Markets: 2022 to 2030

(Source: ABI Research)

Service Type	Revenue	2022	2023	2024	2025	2026	2027	2028	2029	2030	CAGR 22-30
Cloud Data and Analytics Services	(US$ Millions)	4,783	5,611	6,747	8,310	10,236	12,840	16,317	20,309	25,077	23%
Cloud Device and Application Platform Services	(US$ Millions)	141	199	281	445	611	920	1,270	1,702	2,251	41%
Professional Services	(US$ Millions)	12,219	12,739	13,148	13,508	13,871	14,134	14,437	14,692	14,896	3%
Other	(US$ Millions)	794	975	1,199	1,579	2,183	3,003	3,807	4,425	5,022	26%
Total	(US$ Millions)	17,938	19,525	21,374	23,842	26,901	30,896	35,831	41,127	47,247	13%

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“Video surveillance installation and integration costs are high, making professional services a lucrative and valued segment of the video surveillance market. Many video surveillance customers and manufacturers have strong relationships with SIs and ABI Research anticipates that integrator services will continually be in demand in the future. However, as more customers focus on cloud data management and storage services, hardware and installation costs will no longer dominate the market's service revenue. Professional services will generate the highest service revenue in the video surveillance market until eclipsed by cloud data and analytics services in 2028.” – Lizzie Stokes, Industry Analyst at ABI Research

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Key Decision Items

Extend Surveillance Solutions to Video Analytics Software

Surveillance cameras have the power to observe customer and employee actions in real time—these insights can have a significant impact on a company’s operational performance and profit. Video surveillance users in the future will want to harness the power of their video data. Businesses will be guided by relevant video analytics applications and use cases, and more vendors will need to meet these use cases head-on by providing tailored and managed analytics solutions.

Offer Video Analytics Solutions Tailored to Business Use Cases and Industries

Currently, video surveillance users have plenty of options when searching for a video analytics system, but these software solutions can be complex and not explicitly tailored to particular applications. Custom integrations can customize an on-premises solution to a customer’s particular application, but developing unique integrations is costly, complicated, and out of reach for many interested businesses.

As shining examples, RetailNext, Honeywell, Milestone Systems, and VIVOTEK have all created solutions that are suited specifically to certain-sized businesses or to verticals with singular needs. These types of fitted solutions provide an appropriate level of customized simplicity that will attract video analytics customers in the future.

Keep Cloud Storage Prices at Reasonable Rates

Vendors should also be mindful that customer data storage requirements will grow as the market consumes and analyzes its data. As companies grapple with retention regulations and improved video resolutions, businesses will favor vendors that can offer data storage solutions at reasonable rates.

Developing simple and practical pricing is especially important if VSaaS vendors wish to attract more enterprise-level customers, many of whom are skeptical of ballooning streaming and storage costs. Cloud storage vendors like Wasabi Technologies that lessen the expenses associated with storing data in the cloud will find success in this market. Wasabi Technologies has no egress fees, nor does it have complex storage tiers. Software companies that make video storage easy will gain trust in a market that is searching for practical data storage solutions.

Gauge the Complexity Tolerance of Potential Business Customers

Though the video surveillance market is experiencing less growth in camera sales, it is experiencing a transformation as more cloud video surveillance systems emerge, diversifying a market historically dominated by Capital Expenditure (CAPEX) costs. Vendors should continue to discern the needs of different types of business customers and understand which consumers can tolerate the complexity typically associated with surveillance architectures and which customers will demand simplified, managed software solutions that do not sacrifice data management and analysis capabilities. As video analytics applications expand and video data in the market explodes, both traditional and new service models have the opportunity to disrupt the market’s traditional revenue structure and defy its “slow-moving” reputation.

Key Market Players to Watch

• 3dEYE
• Alibi Security
• AllGoVision
• Amazon Web Services (AWS)
• Arcules
• Axis Communications
• Bosch
• BriefCam
• Camio
• Canon, Inc.
• Cloudastructure
• Cloudvue
• Eagle Eye Networks
• HiveWatch
• Honeywell
• Milestone Systems
• NVIDIA
• NVR, Inc.
• RetailNext
• Senstar
• Snap One
• Verkada
• VIVOTEK
• Wasabi Technologies

Dig Deeper for the Full Picture

As part of the Video Surveillance in IoT Research Spotlight, ABI Research recently published the IoT and Video Surveillance: Revenue Model Evolution report. By downloading this report, cloud video surveillance vendors will come away with a better perception of the market trends influencing new revenue models and VSaaS adoption from businesses. Moreover, the report provides 19 company profiles to better assess the competitive landscape of cloud-based surveillance solutions.