White Paper Total Cost of Ownership Release date: Summary In this paper, Peter Ainsworth highlights the important questions that should be considered when looking at the Total Cost of Ownership of a security system. In an industry that has seen huge technological advances during a sustained period of economic hardship. the issue of Total Cost of Ownership is a complex one which when understood, can lead to increased system performance with reduced overall costs. About the author Peter Ainsworth is Senior Product Manager for Samsung Techwin Europe Ltd. He joined the company in August 2009, prior to which he worked for thirteen years for Norbain, the last eight years of which he was Vista Product Manager. In this article Peter highlights the importance of considering the total cost of ownership at the planning stage of a video surveillance project.
White Paper Total cost of ownership It s unwise to pay too much, but it s unwise to pay too little. When you pay too much you lose a little money. That is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do. The common law of business prohibits paying a little and getting a lot. It can t be done. If you deal with the lowest bidder, it s well to add something for the risk you run. And if you do that, you will have enough to pay for something better. John Ruskin 19th century poet and author. Peter Ainsworth is Senior Product Manager for Samsung Techwin Europe Ltd. He joined the company in August 2009, prior to which he worked for thirteen years for Norbain, the last eight years of which he was Vista Product Manager. In this article Peter highlights the importance of considering the total cost of ownership at the planning stage of a video surveillance project. There is absolutely no shortage of manufacturers competing to supply video surveillance solutions. This high level of competition has fuelled the drive to introduce features and functions that deliver a level of performance which would have been unimaginable just a few years ago. It has also driven down prices so that businesses and organisations can now expect to achieve remarkable value from their investment in a video surveillance system. In tough economic times however, when there is constant pressure to minimise expenditure, there is always the risk that return of investment (ROI) projections for a video surveillance system might reflect immediate or short term objectives, rather than the total cost of ownership over the useful life of a system. When calculating the total cost of ownership a wide range of one off and recurring costs need to be factored in, including system design and planning, purchase price, installation, maintenance and service charges, as well as upgrade costs. When all of these are taken into consideration, what would appear to be the cheapest option may prove to be otherwise and buyer s remorse, albeit as a delayed reaction, could occur. For example, the lowest priced camera on offer may on paper perfectly match the user s requirements and yet need replacing much earlier in what could reasonably be anticipated in the life cycle of a system, compared to a camera costing just a few pounds more. Samsung has been acknowledged by independent research companies as one of the top three European security brands. Until recently our strength has predominantly been with analogue technology, but we now also have a comprehensive range of IP network based solutions. All our products are extremely competitively priced, are backed up by unbeatable pre and post sales support, and most importantly, are always designed with the future in mind. We therefore have less to fear than most manufacturers from the large influx of cheaper products that are a huge temptation to installers and end-users. Samsung Techwin Europe 1
This article is therefore presented from an objective point of view with the intention of highlighting the key factors which should be taken into account when considering the long term value achievable from a video surveillance system. With this in mind, Manchester Metropolitan University is perhaps an excellent example of how an organisation has done the necessary research in order to guarantee it gains maximum benefit, both in the short and long term from investment in a video surveillance system. Its new Business School, which opened in September 2012, is located in an architecturally stunning 75 million building located on the University s All Saints campus. 4,000 undergraduate and 1,000 postgraduate students are able to enjoy the ultra modern facilities of the new building whilst pursuing degrees or carrying out research in all the major sub-disciplines of business and management. The teaching rooms and lecture theatres in the new Business School are equipped with the very latest IT equipment, projection and audio equipment, said Mark Shutt, Security Manager for Manchester Metropolitan University. We need therefore to detect any would-be thieves who might be tempted to steal the valuable equipment that we have invested in to provide the best possible teaching facilities. Apart from the cost of replacing any items which might be stolen or damaged, the consequential costs in terms of disruption to the teaching process is also something we are determined to avoid. We also intend to have a zero tolerance policy in respect of anti-social behaviour. 110 Samsung dome cameras have been installed throughout the new building, 95 of which are SNV- 3080 fixed position dome cameras. The remainder are SNP-3301 PTZ domes which have a 30x optical zoom facility to allow operators to observe close up detail of faraway objects or people. Both models incorporate Day/Night cameras and feature Wide Dynamic Range (WDR) technology which makes them ideal for locations where there may be strong contrasting lighting conditions. They also both offer multiple streaming of images with a choice of MJPEG, MPEG-4 and H.264 compression methods, providing the option to simultaneously transmit images to multiple locations at various frame rates up to 25 frames per second, and at different resolutions. This allows different authorised users to monitor live images at the University s control room whilst having the option to record and store video evidence at another location. At the same time, images can be saved onto an on-board SD memory card and if required, email notifications of any incidents can be sent to a smartphone. The images from all of the 110 domes are streamed across the network to a secure control room located in the University s Cambridge Halls South building. Operators in the control room can view live or recorded images of any incident with the help of Samsung s recording software platform via one of six monitors. We took advice from a number of people, as well as carrying out our own research, as we wanted a video surveillance system that was not only fit for today in terms of our existing requirements, but was scalable to allow for expansion if required in the future. We did not have an unlimited budget for the project and we could therefore have been tempted to specify a traditional analogue based system. However, there was no doubt that an IP network based system was the best solution for us as it provided us with the flexibility we might need should our requirements change. We gave considerable thought to what cameras to specify and although they were not the lowest priced PTZ dome on the market we came to the conclusion that we could trust the Samsung brand and that their cameras offered us the best price/performance ratio. So here are some suggestions for you to take into consideration when looking to establish an informed view as to the likely total costs of ownership of a video surveillance system: Every business or organisation will have differing operational requirements and every building or site will inevitable present different kinds of challenges. Do not therefore just rely on sales brochures. Ask your installer to seek written assurance that the cameras, video recorders and other devices that you have chosen to work with, are able to match your expectations. Samsung Techwin Europe 2
Does the manufacturer offer a free system design service? Your installer may have the expertise to advise you on the best combination of products for your project, but the manufacturer is likely to be best placed to advise on camera selection and compatibility issues. How long will the specified cameras, video recorders or other devices take to install and commission? In addition to this cost which will be passed onto you by the installer, there is also the cost of the disruption to your business which should be taken into consideration. Has the manufacturer given an estimation of the life cycle of the specified products? This will be particularly significant where there are moving parts such as is in PTZ dome camera. How much is the product likely to cost you in maintenance charges during the period of its useful life? Is the product upgradeable and will any upgrades be provided free of charge? The latest generation of cameras, for example, have firmware that can be upgraded as and when new features become available. Is the product future proof, i.e. has it been designed to backwards and forwards compatible with other items on the system? Does the manufacturer provide license-free video management software? If not, how much will you have to pay for it? Has the manufacturer integrated its cameras, DVRs or NVRs with video management software offered by the leading independent video management software development companies? This could be one of the most important questions for you to ask as it could have a major impact on your the costs associated with expanding your system as and when your requirements change. Whilst leading manufacturers such as Samsung are able to provide a single source for an end-to-end IP network based video surveillance system, you should retain the option to control and monitor equipment produced by a number of different manufacturers. VMS suppliers such as Axxon, Aimetis, Digifort, Griffid, Ipronet, Exacq, Genetec, ISS, Milestone, Mirasys, ONssi and Seetec, are able to offer open software specifically designed to facilitate the integration of equipment and systems from different manufacturers. The functionality of the software available from the various VMS companies will not of course be identical but, regardless of which platform you choose, you can expect to be able to have a high degree of control of cameras and recording devices from various manufacturers, as well as the flexibility to integrate, for example, video analytics, access control systems and mobile devices. What are the estimated energy costs of the individual components of the system? You might be unpleasantly surprised to learn how much some devices cost to run. The good news is that most of the latest IP network cameras are equipped with a low power consumption PoE (Power of Ethernet) feature. Samsung Techwin Europe 3
Are the specified cameras able to cope with varying lighting conditions and if not, what is the cost of installing and running supplementary lighting? Last but not least, and although perhaps somewhat obvious, it is crucially important to clearly define in writing what your requirements are i.e. what is it that you are trying to achieve from your investment in a video surveillance system? What environmental conditions will it have to cope with? Are you likely to need to expand the system in the foreseeable future and if it is being installed for security purposes, are you looking just for verification that an incident is occurring or do you wish to capture evidence grade images? An IP network based solution should always be considered and should you decide to go this route, it is of course important to involve your network manager at an early stage in order to ensure that bandwidth requirements are taken into account. Simon Lambert BSc(Hons)MIET MASC is an independent consultant specialising in both the engineering and commercial aspects of CCTV systems for 25 years. A graduate in Physics and Electronics, he is Technical Lead on the CCTV National Standards Forum and sits on the British Standards Institution CCTV sub-committee. He is also a member of the Association of Security Consultants. Below, Simon offers an independent view on the total cost of ownership of a CCTV system. Wise owners of CCTV emphasize TCO (Total Cost of Ownership) considerations before making purchasing decisions. The folly of focusing only on equipment s initial purchase price is apparent to anyone who owns a cheap inkjet printer and spends a small fortune on replacement ink cartridges. TCO thinking has been commonplace in the world of corporate IT purchases for many years, and many IT professionals are expanding their empires into the larger systems end of the video surveillance world. The crystal ball that accurately predicts the costs of fixing equipment failures is not yet available. The MTBF figures (Mean Time Between Failures) from manufacturers are, regrettably, rarely used competently for cost projections. Common experience shows maintainers simply estimate, say, 7% to 12% of the CCTV s installation value for each year s maintenance which can reinforce the significance of purchase price. CCTV owners are becoming convinced of the benefits from diligent TCO exercises which may stem from growing realization of how similar their IT and CCTV systems have become. With the latter now so often an extensive deployment of network switches, hard-disk drives, software licence fees and obsolescence, the cost of upkeep over five or ten years can be so significant that heeding TCO is most wise. Samsung Techwin Europe 4
About Samsung Techwin Samsung Techwin are a global leading manufacturer of video surveillance and access control products designed to meet the current and future needs of security professionals. The products utilise innovative technologies, many of which are unique to Samsung, which can deliver tangible benefit and outstanding value to those involved in combating criminal activity, whilst offering time and cost saving advantages to installers and system integrators. Samsung Techwin s philosophy of delivering Smart Security is reflected in a product portfolio which provides customers with the flexibility to choose the best solution for the job in hand. This choice includes a comprehensive and competitively priced range of analogue cameras, DVRs and monitors, a complete end-to-end IP solutions range, licence-free viewing and recording software, and an impressive line-up of high definition megapixel cameras. Samsung Techwin Europe Ltd 1000 Hillswood Drive, Chertsey, Surrey, KT16 0PS, UK T 01932 455 308 E STEsecurity@samsung.com W samsungsecurity.co.uk