While we all speak lovingly about the goodness of standards, the fights to
set and control standards can be severe. Indeed, a battle may be emerging in the
road to setting IP camera standards.
- ONVIF: Lead by Axis, Bosch and Sony, they seem motivated to protect the interests of the largest selling camera manufactures
- PSIA: Lead by Cisco and supported by a half dozen camera manufacturers, they seem motivated to protect the interests of manufacturers with lower IP camera market share
- SIA standards committee: the oldest of the 3, this committe has actually published standards and looks to be the least political (though not an industry alliance like PSIA and ONVIF, SIA could be the organization that eventually manages the process of standardizing the winning specification)
Why is this Happening?
The IP camera business is exploding. What may be a $700 Million USD market
today is poised to be a multi-billion dollar business in a few years. Indeed,
the fight for standards is really a fight to shape a market that will generate
sales of $20 - $40 Billion USD in revenue over the next 10 years. With the
growth rate and such large revenue at stake, it is reasonable to see why
companies would be motivated to act.
ONVIF and PSIA were
launched publicly early this year. This week, they both issued new releases (ONVIF's
release and PSIA's release).
Both organizations will be making a push next week at ASIS. While SIA has the
infrastructure in place to create ANSI/OSI standards, large manufacturers are
certainly motivated to try to shape and expedite development in their favor.
What is the impact of standards?
Customers win because standards ultimately drive down costs by eliminating
market control over interoperability. You can make any IP camera work with any
IP video management system. The problem is that it's often custom and costs
$10,000 - $20,000 USD or more to do so. This makes it infeasible for most. Once
you have standards in place, this cost diminishes, allowing many more suppliers
to be supported. With more suppliers in the market, incumbents usually have to
respond to the pricing pressures of new competitors.
As such, standards can actually undermine the market leader's position.
Market leaders generally do not need standards because most parties already
support their products. For instance, Axis is already supported by almost every
IP video management system. A standard would not increase their support much at
all. However, it could dramatically increase support for competitors (which
removes a key advantage that Axis currently has). On the other hand, standards
tend to make the market grow quicker (but usually with downward pressure on
pricing). As such, market leaders may be able to benefit from standards but it
is certainly risky.
On the contrary, companies with small market shares or those trying to get
into the market benefit greatly with standards. One of the biggest problems for
analog camera companies trying to get into the IP camera market is that hardly
no one currently supports their IP cameras (an ironic state of affair for analog
market leaders like Pelco, GE and Honeywell). With standards in place, this
would eliminate a key barrier and allow them to compete with an Axis on other
dimensions they might be stronger at (like distribution or imaging quality,
etc).
Overviewing the 2 Key Alliances
So it seems to me that you have ONVIF vs PSIA (you can also consider it Axis
vs Cisco or Leaders vs Laggers).
ONVIF: Since ONVIF represents Axis and Sony (with about 45%
market share of IP cameras), they should be motivated to control or delay the
adoption of standards. Since they have the market power, they do not need to
rush into any program that does not support their interests.
PSIA: They represent the companies with smaller IP camera
share (Panasonic, Pelco, Honeywell, GE, DvTel, Verint, IQinVision - all together
are a fraction of Axis and Sony's IP share) and Cisco. Cisco is an interesting
factor here because Cisco is more motivated to sell networking equipment than
cameras. Cisco has a heavy incentive to make cameras as cheap and easy to use
as possible because that sells more of Cisco's core networking products (indeed,
this ironically may make Cisco the best consumer advocate for IP camera
standards).
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