The CCTV industry has remainedtechnologically stable over several decades.

A stable technology often implies a stableindustrial structure…

Entry barriers have remained high and consequently, CCTV has been dominated by

a few large players…

However, things have started to change with the riseof digital, IP-based video surveillance.

Companies with a background in IT or electronics are increasingly entering the industry…

IP CCTV has grown

rapidlyover the

last years, but from

very small volumes.

Up until now, the ongoing shift has not created a lotof industrial turbulence since the analogue players

have still been reasonably well off.

But some more recent events suggest that the industry structure is about to change…

One such event is GE’s announcement that theirsecurity business is for sale.

A large, established

player is pullingout of video surveillance,

which is predicted to

grow a lot over the coming

years.

The only reason for this must be that GE does not believe that

their securitybusiness will be

competitive in the future.

At ASIS 2009, Pelco and Cisco stated that they havestarted a collaboration around IP cameras.

Would Pelco have gone into this if they were able to provide a good IP offer themselves?

Would Cisco have gone into this if they hadn’tbeen struggling to develop a competitive

line of IP cameras?

I think this example illustrates that the competencebase of the industry is shifting. Firms with a

background in IT need to learn about surveillance, and CCTV firms like Pelco need skills in IT and

electronics.

Some time ago, Pelco stated that they will seek to enter emerging markets such as China.

In other technological shifts, established firms haveoften tried to sell their current products to new markets as a way to offset declining revenues.

Kodak tried to do this during the 1990s.

Facit was a Swedish manufacturer of mechanicalcalculators. With the rise of electronics in the 1960s, the company approached the Soviet Union with its

outdated technology…

… In both cases, this strategy failed to compensatefor the declining revenues in the core business.

It may still be a good decision to go for emergingmarkets, but one should bear in mind that this won’tenhance the long term competitiveness of the firm.

And sucheffortscan be

regardedas an

indicationof things

to come…

Maybe we’re witnessing the beginning of the end for analogue CCTV.

Image attributions

Christian Sandström is a PhD student at Chalmers

University of Technology in Gothenburg, Sweden. He writes and speaks about disruptive innovation and

technological change.

www.christiansandstrom.orgchristian.sandstrom at chalmers.se