Infrastructure development is rife across the Middle East and with it comes a demand for security. IP surveillance is emerging as one of the most compelling investment areas, creating a whole new market for networking resellers and integrators.
Channel Middle East goes behind the lens and talks to the big names to discover what opportunities there are for the regional channel to secure margins and find out if the camera is only the start of a sale.
They are: Gilles Ortega (GO), regional manager at Axis Communications; Basheer Cassim (BC), VP EMEA at Proxim Wireless; Gary Rowden (GR), sales director for security EMEA at Anixter; Gary Highton (GH), managing director at Mayflex Middle East; and Magesh Srinivasan (MS), marketing manager at Sony Professional Solutions.
The initial outlay required to acquire the skills, acquire new vendors and to integrate these systems means that for about 18 months the return on investment will be lower than expected.
What trends are shaping the growth of the IP surveillance market in the Middle East at the moment?
GO: The shift from analogue to IP is happening much faster in the Middle East than in other regions in the world.
This region contains first adopters so as long as you train and educate them you will find there is no reluctance to go for new technologies that you would find in other markets.
BC: The trends in the Middle East are very similar to the trends that we see everywhere else.
There is an increase in the need for surveillance to prevent security. That is not just to protect against security threats.
It is also for accidents or if you want to improve how you react to fire or crime. Even though it started with all the issues around terrorism it is now leaning towards more generic public safety.
People are moving faster from analogue to IP technology, it is a direct trend. People also used to have a wide cable transmission for their activity, now there is a very definite movement to wireless.
MS: There is a huge transition happening in the market from the CCTV to the IP surveillance technologies. Because the Middle East is now booming in terms of the construction industry, surveillance is becoming a prerequisite in all of these projects.
Also, when you talk about IP surveillance there is a whole host of possibilities, not just security monitoring.
GH: There are two trends. One is legislation in certain verticals, such as the hospitality market, because in some countries it is legal now to have cameras scattered around hotels and other public areas generally.
More importantly, a lot of end-users are also realising they have got a fairly expensive resource in an IP network and the more they can add to it without increasing cost, the more sensible it is.
GR: The number one thing we have seen that is specific to the Middle East market place is a much wider acceptance of what we call connected enterprise, or one IP.There is an understanding now about the importance of infrastructure in consideration of a building.
It supersedes just being a consideration of security and becomes more about how to effectively manage the business.
We have also seen vendors and end-users embracing true native IP.
As far as I can see it is still an area covered by the specialist. The demands from customers are very high so it is an area where networking companies, especially, have a better value add.
They don't use some type of protocol converter, they use a direct RJ45 connection to a particular door controller for example.
So we are also seeing a lot more security products go the same way and have the same messaging as the traditional CCTV market.
What is your current channel strategy for these solutions in the Middle East and how will you develop it over the next year?
GO: We launched our channel partner programme last year. We already had a lot of partners, but nothing was formalised. The first purpose of the programme is to educate the guys and train them.
We are a fully indirect manufacturer so they have to know what they are talking about, how to implement and install.
This year we will be adding more intelligent video features - motion detection, people-counting, number plate recognition and people-tracking for instance.
The strategy is to make sure that we communicate in the right channels and explain the benefits of IP surveillance to the channel.
GH: From this month onwards we are planning a series of roadshows to introduce the integration channel to the products, applications and some of the techniques we use for implementation.
That is the first wave. When these installers start to use this in the market place then we plan to bring in Cablenet which is probably Europe's leading IP surveillance trainer and they will start to do some real detailed design application and configuration training with our partners.
MS: We predominantly use the channel to go to market in this field. We are working with two kinds of segments.
One is the Sony trained and accredited products dealers that are able to deliver to resellers or small end-users down the line.
When it comes to enterprise solutions, we work with enterprise-level integrators who are themselves multinational companies. We propose solutions to them and they in turn propose solutions to consultants or install consultants themselves on certain projects.
The key challenge is to create awareness of IP in solutions. There's low awareness of what IP can do in surveillance. There's a lot of myth around the perceived disadvantages of IP, which is misunderstood propaganda.
BC: We work exclusively through distributors today, but our approach is to focus and work with 20 to 30 partners to cover the Middle East. Out of these partners we have selected five or six that are highly specialised in security surveillance applications.We are seeing more traditional networking integrators looking into surveillance because as we move from analogue to IP these integrators tend to say to customers, 'I am already doing your networking for your enterprise, it is very easy for me to move from my usual IP networking into a surveillance network.'
It is not a huge jump in terms of technological skills that have to be acquired to be able to deliver the IP surveillance network. Our objective is to double the number of integration partners specialising in the security applications and you will see more developing capabilities to target this market.
GR: Our strategy is two-fold really. We have a great deal of existing communications customers, some broadline IP guys and some specialist networking distributors. There is a value for each.
But if you look at the migration to IP and all the component parts it is not just about the fibre optic cable, it is about the typical storage and all of the elements.
A proportion of the traditional communications marketplace understands the chance to diversify into a security space.
They are already laying the cable and putting in the networking switches so security for them is just another application that can run over their core infrastructure.
What challenges do resellers face when it comes to making profit from selling IP surveillance solutions?
GO: If the reseller is only going to sell our products in a box moving fashion then I don't think our products are right for them. Our products are meant for systems integrators. They should be able to offer a whole solution.
It is not about fiddling around with the camera, it is also selling the software application, the servers and the networking. Obviously the most important in terms of value is the storage.
When you start to store streaming video you know there will be a lot and the storage part of the system is important. There is an ecosystem around these products.
BC: At the beginning they must learn a lot of skills and there's an investment needed. At the same time, network and security players are usually well funded.
The outlay required to acquire the skills, acquire new vendors and to integrate these systems means that for about 18 months the return on investment will be lower than expected. But once they have acquired skills the return will be much higher.
GH: They need more product, application and configuration knowledge. They need to know how to design, install and manage IP surveillance systems - there really isn't that level of knowledge out there at the moment.
The other thing is profit because a lot of people in the IP market are used to making a relatively low level of growth profit. Well there is a better degree of profits that can come out of IP surveillance solutions.
GR: The biggest thing is to understand how to position a complete integrated security solution on top of what you do.So if you are a comms guy, you say it's just an IP camera, but you have all the nuances of positioning and learning the core skill sets of risk assessment.
If you are focused on security the biggest challenge is to really understand how to put in a backbone or a mesh network system on wireless and get it right at the beginning without any long-term problems with the system.
So investment in training is always going to be a big issue.
What skills and expertise do resellers need to possess in order to make the most of selling IP camera systems?
GO: They must be very good in terms of networking. In terms of security it is knowing which cameras to pick up and where to install them. Networking and storage skills are just as important as video surveillance.
Systems integrators are now trying to integrate video surveillance systems to other systems like access control and building management.
GH: Let's start from the top. They need to know about the product, you don't just pick a camera and hope for the best.
There's camera and lens selection. Is it indoor or outdoor? Is it infrared? That comes down to the end-user and what they are trying to monitor.
They need to understand the software integration side, with event triggering. It is all about software integration, physical installation and configuration. They need to know these skills.
Most of them have got the IP skills so it is not so much that, there is a lot more software and IP integration needed for this type of sale.
MS: The most important thing is to really understand the technology provided by the brand.
And then it is important to understand what is needed for deployment at the application level, which means having the key skills to integrate.
Depending on the size and scale of the project the channel partner really needs to develop a solution rather than just a project.
The margins at the product level are really slim owing to various reasons such at the depreciation of the euro against the dollar, overall reduction in the pricing of cameras and other market dynamics. So it is more important to deliver a solution.
GR: We assess what the customer requires and then plug-in the most appropriate person or team of people suitable for that need.
If you are doing a mesh wireless system for a transportation system, for example, we may look to bring in an integrator that has a great deal of knowledge about wireless systems.It is always driven around what the customer wants and who can deliver that for them in the most appropriate way.
Is there a possible future role for the mainstream IT reseller channel in the IP surveillance market or is it confined to more specialised networking resellers?
GO: It could be for the IT resellers as long as they are really keen to start.
They really need to involve themselves, it's not just deciding to add a couple of products to their catalogues.
In most cases they have to dedicate a couple of people to be trained and to really understand what the customer needs. This shift is happening; right now we are meeting with IT and with managers.
These guys are now working together. If you go back 10 years they were not talking to each other. It was two totally different departments of the company, but now they have to work together.
If your IT reseller is only talking to the IT guys they will not be that interested in video cameras because according to them it is not their cup of tea. The best companies are the resellers that learn how to approach these kinds of guys.
If the IT reseller wants to differentiate themselves then I think security integration is very interesting. GH: There is a role for both. The more sophisticated applications - in terms of what happens if an event is monitored, either movement, noise or whatever - will need a lot of integration and will require a specialised IP reseller.
There are the more basic requirements where someone just wants to put a set of cameras onto their network, just to monitor and record, and where the needs are not that sophisticated. That is where the mainstream resellers can come in.
BC: As far as I can see it is still an area covered by the specialist.
The demands from the customers are very high so it is an area where networking companies, especially, have a better value add.
I would think over time that, as the networks become more common, IT resellers could probably move into that segment.
I don't think it would happen in the next 18 months or so though. GR: One of the most exciting things about this whole opportunity is that it is open for everybody if they want to grab it.
Even mainstream IT companies have a way into the market. Of course they will have to acquire and invest in some resources and skills to satisfy the security needs of customers in the region.
If you are a cabling guy you are already laying cable that is going to be used for a security system so you have two choices.
You can either lay more cable and prepare the system, ready for someone else to come in and add the cameras, or you can physically make security part of what you do.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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