Comparative study of the full cost of analog and IP video surveillance systems. Article updated 08.04 in 2023.

Introduction
Since 1996, when the first network camera appeared, IP video surveillance systems have been developing rapidly. Despite the numerous advantages of switching to IP systems, analog technology retains a strong position in some markets and in some segments. There are many reasons for this. In particular, we can name such things as the length of the security equipment re-equipment cycles, the tendency to partially modernize security systems, insufficient qualifications of installers in the IT field, etc. One of the most compelling arguments against a complete transition to digital technologies is the significantly higher cost of IP cameras compared to analog ones. However, video surveillance systems consist of more than just cameras — the total cost of the entire system depends on many factors.
In the spring of 2007, an independent research team conducted an analysis (subsequently published as a white paper by Axis Communications) to calculate and compare the preliminary total cost of ownership (TCO) of an IP and analog system installed in a school and consisting of 40 cameras. Based on the prices offered by integrators, it was found that the TCO of the IP system was slightly lower than the TCO of the analog system. Based on the analysis, a break-even point was determined at which the TCO of the IP system was lower than that of the analog system, namely 32 cameras.Over the past three years, the video surveillance market has made significant strides, necessitating another TCO study that reflects current price points and the latest technological advances. Therefore, the current objective of the researchers is to update and improve the previous analysis. However, the fundamental objective remains the same – calculating and comparing the TCO of:
An analog video surveillance system using a digital video recorder(s).
A fully digital system using network cameras, a standard network, and computer elements.
This analysis was conducted in the spring of 2010 under the direction of Lusax, a research group at Lund University School of Economics and Management in Sweden that specializes in studying the distribution of new IP and IT systems in the global security market.

Research Method
The study took the form of a fictitious bid for one analog and one digital in-store solution with pre-defined terms and specifications. The study was distributed to a group of U.S. integrators who actively sell and install analog and IP CCTV systems. All integrators participating in the study were asked to bid for both types of systems.
Before starting to receive data from integrator specialists, a site plan and a set of real technological requirements were developed, for this purpose technical specialists with experience in developing analog and IP video surveillance systems for stores were involved. More detailed information about the site and the installation option received from integrator specialists is presented in the section «A specific example of technological requirements. Options for the location of analog/IP video cameras».
After developing a realistic installation option, the relevant documents were drawn up. Then the study in the form of a detailed technical assignment — and the accompanying technical documentation were checked by experts and the chief integrator specialist who took part in the study. The comments of the specialists were taken into account in order to more thoroughly develop the study and accompanying documentation.
The material, namely the technical specifications and all documentation, was then sent by e-mail to all selected integrators. At the initial stage, after the e-mail was sent, the integrators were contacted several times by phone to ensure that they had received the required material and to answer any questions they had regarding the study. Complete responses containing proposed prices for both analog and IP installation options were received from five integrators.
The provided prices were carefully examined to verify the quantitative data and detect any possible non-compliance. In case of errors, the integrator was contacted by phone and online and provided with clarifications.
At the final stage, after all responses had been reviewed and, if necessary, double-checked with the integrators, all data was structured and the results were analyzed.

Figure 1. Research method and process

Development of a fictitious installation and research method

Research verification by experts and the chief integrator

Start of the research, telephone reminders

Collection of responses and data verification

Data compilation and final analysis of results

In addition to the TCO study, another study was conducted in parallel in the form of a survey of representatives of the same group of integrator specialists. In this case, integrators were contacted by phone and asked to answer a wider range of questions regarding their understanding of various video surveillance solutions and technologies and their practical experience with them. Despite some similarities between the two studies in terms of respondents, most integrators interviewed by phone did not participate in the TCO study. The survey results allowed us to delve deeper into less pronounced aspects of the comparative analysis of analog and digital video surveillance systems.

Total Cost of Ownership (TCO): Definition
For the purposes of this study, the total cost of ownership of CCTV systems in the narrow sense refers to the upfront or fixed costs of a CCTV system, i.e. the cost of the major components as well as the labor involved in designing, installing, and implementing the system. In reality, many other factors will of course influence the cost and performance of a given CCTV system.
Such factors include ease of use and remote control of the system; greater expandability and integration with other security systems; video quality, etc. No less important is the time value of the TCO. Over time, the total cost is largely determined by the costs of ongoing maintenance, replacement of parts and software updates, as well as the time spent. Such factors, however, in each specific case depend significantly on the specific conditions, requirements and preferences of the end users.
Thus, to fully understand the TCO of a CCTV system for a given end user and facility, it is necessary to consider many less obvious factors, in particular the increasing costs of maintenance and operation over time. However, due to the difficulty of structurally assessing and determining these cost factors without the use of hypotheses and assumptions, they are not included in this study.

Installation Case
A fictitious installation was performed in a store. The full cost of installing a greenfield system with an analog camera and DVR was compared to an all-digital IP solution.
Given the focus on cost, the fictional setting was somewhat simplified, and peripheral components and additional features that would not have a direct impact on the analysis results (e.g. public viewing monitors) were excluded.
The primary setup was as follows:
A medium-sized retail store.
Greenfield installation: no coaxial cables, IP network infrastructure, or power equipment pre-installed for CCTV.
CCTV only: no additional analytics or integration with other systems.
Two technology options:
1) Analog CCTV with DVR.
2) All-digital video system with network cameras, video management software, and standard IT network and storage.
Three camera layouts in each case: 14, 25, or 40 cameras.
Given these conditions and detailed technical requirements, the integrators were asked to provide detailed prices for each of the three layouts for both analog and IP video cameras, i.e., six options. The requirement to provide different prices for each layout was due to the need to obtain a broader understanding of how analog and IP video systems are differentiated in terms of cost when installing additional video cameras.
Various video camera layouts reflect the real situation in stores, taking into account the different requirements and financial capabilities of users. For the objectivity of the comparative analysis, when choosing the number of cameras for each layout, we tried to avoid the well-known «zone of best perception» of analog systems — 16, 32 and 48 cameras — and IP solutions — 17, 33 and 49 cameras, respectively.
Integrators were asked to list their pre-selected network camera models. For analog cameras, integrators were asked to select reputable branded suppliers that could provide the same quality and performance as their IP equivalents. Furthermore, integrators were asked to consider possible volume discounts as well as actual inventory needs for various alternative solutions.
To simplify the task set before the integrators, given that the installation option was fictitious and there was no real store that could be visited and checked, the length of all cables was pre-calculated and specified in the technological requirements, which also contributed to greater consistency and comparability of alternative solutions, since the possibility of arbitrary selection of cable length by integrator specialists was excluded.
The recording solution was chosen from a leading IP system manufacturer, with a fixed cost for each server in systems consisting of up to 50 cameras. It is assumed that in the case of installing analog cameras, the video management software is included in the system with a video recorder. In order to successfully use the latest video compression technologies, the analog system with a video recorder and the IP solution had to support the H.264 standard.

A specific example of technological requirements
Options for the arrangement of analog/IP video cameras
14 cameras:
12 stationary indoor dome cameras
2 fixed (24/7) outdoor installation, including housing
25 cameras:
16 fixed indoor dome cameras
9 fixed (24/7) outdoor installation, including housing
40 cameras:
29 fixed indoor dome cameras
2 indoor PTZ cameras
9 fixed (24/7) outdoor installation, including housing
System specification and technical requirements

Video camera resolution
480 TV lines, 4CIF
Minimum SVGA (800 x 600 pixels)

Video Cameras
High-quality brand name cameras
Indoor fixed
Outdoor PTZ cameras
Outdoor fixed

Cables
(video and power)
Coaxial from each camera to the DVR, plus CAT5E power cables, including PoE power

Average cable length per camera
100 feet (30.48 m)/camera (video coaxial)
65 feet (19.81 m)/camera (power)
65ft (19.81m)/camera (Cat5, includes PoE)

Power Supply
Camera Power Supply
PoE Switch

Switches
None (any surveillance using DVRs)
As needed

Server/Storage
Mid-range «brand name» DVR
(H.264 capable) with storage PC (standard) with storage

Software
Included with the DVR (H.264 enabled)
From a leading IP system manufacturer
Monitor
Standard high resolution monitor (matching analog/IP camera)

Accessories
Fittings, fasteners, etc. (matching analog/IP camera)

Recording parameters: analog/IP video system

Inside the store Outside the store

Minimum 7 days: 24 hours/day Minimum 7 days: 24 hours/day
Store open: 15 fps (18 h/day) 10 fps average (24 h)

Store closed: 1 fps (6 hours/day) Captions to Figure 2
Power substation
Network switch
Storage device/server
Power station

(End of material – in No. 2–2011)