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The future of the surveillance channel

The video surveillance market has evolved from camera-based specifications to integrated solutions that solve customers’ problems. Moreover, the growth of AI and cloud systems has changed the industry even more, but we are only seeing the beginning of the evolution, especially when it comes to AI.

The 2025 Genetec State of Physical Security Report¹ unsurprisingly, discovered an expected increase in the adoption of AI in physical security. In 2025, the report says 37% of end users intend to integrate AI-powered features, up from only 10% in 2024. Other findings from the report include cybersecurity, or cyber resilience, as part of an organisation’s complete cyberposture. It also notes that IT will play a more significant role in physical security decisions, forcing more convergence between previously different departments that rarely interacted except for network issues.

Of course, the cloud is making an impact, even in Africa, but we will likely see a balance between cloud services and onsite storage. As mentioned in another article in this issue, it is theoretically possible to host a control room in the cloud, but there are practicalities that few are willing to take a risk on. Hybrid deployments will be the key for 2025 and onwards.

AI-powered analytics that can identify and categorise objects, vehicles, and people in real time is also a key factor in surveillance going forward. While it will deliver better and more reliable solutions for detecting intruders, monitoring for suspicious behaviour, and identifying vehicles or other high-interest objects, business intelligence will be a new frontier that expands the capabilities of surveillance solutions.

This will be the tipping point for integrating security devices and general IoT, or more specifically for this industry, AIoT. We should also expect to see behavioural analytics (identifying how you walk, for example), and identity verification, including facial and licence plate recognition, advancing.

While there is no shortage of technology to buy and sell, technology changes have impacted the traditional channel and challenged manufacturers, vendors, SIs, installers and even end users in the manner they conduct business.

To get an idea of what is happening ‘in the trenches’, SMART Security Solutions asked two local companies for their experience and expectations in the surveillance market. Our contributors are Terrence Agnew, product manager at Elvey Security Technologies, and Leandro da Cunha, surveillance business unit lead at Duxbury.

What’s happening

Looking at the market generally, what are customers looking for? Have they really changed from examining product specifications and price above everything else – the ‘race to the bottom’? Are manufacturers grabbing any business they can in a poor and, nowadays, very uncertain economy, or are they trying to create a level playing field among SIs and installers?

Agnew says that while cameras, storage and networking gear remain critical in terms of sales, recent customer demand has shifted from purely hardware specifications to solutions that offer AI-driven analytics, automation and other enhanced features and benefits. “The ‘race to the bottom’ on pricing is still challenging as this impacts margins, especially on products with multiple distributors across South Africa.”

Da Cunha agrees, noting, “Our journey in the surveillance market has evolved alongside the technology itself. Initially, customer decisions were largely based on hardware specs like resolution and low-light capabilities. Today, there is a clear shift toward intelligent, connected systems – solutions with AI-driven analytics, automation, and cloud integration.”

While price pressure still affects margins in the entry-level segment, the growing demand for feature-rich, enterprise-grade solutions opens up space to differentiate on value, not just cost. He adds that manufacturers have made some progress toward pricing consistency, but regional discrepancies – especially from grey imports – continue to pose challenges.

The channel under pressure

As sales come under pressure, so does the channel. The days of having a standard hierarchy are over as manufacturers, distributors, SIs, smaller installers, and customers look for ways to shave a fraction or two off their costs and/or add a fraction or two to their profit. What are the various players doing to ensure their companies make it through an unfriendly economy?

“For smaller installers, cost remains a key driver, particularly in price-sensitive sectors, but for larger, more complex projects, the conversation shifts to value, integration, and long-term reliability,” says Da Cunha. SIs increasingly prefer full-solution approaches, bringing together cameras, storage, analytics, and networking, and often choose a single distributor for ease of logistics, support, and integration. However, he has noticed that some still shop around for niche capabilities or pricing advantages, and large-scale projects may involve direct engagement with manufacturers under special terms.

As a distributor, Da Cunha explains that Duxbury goes beyond traditional product distribution. “Our value lies in the full-service approach: pre-sales design consultation, certified training, technical support, and post-deployment assistance. We help integrators build robust, scalable solutions by aligning the right surveillance, networking, and storage technologies. While exclusivity deals are less common today, our strong vendor relationships still offer advantages such as priority access to inventory, preferential pricing, and localised support. These are all elements that give our partners a distinct edge in project delivery.”

Agnew echoes Da Cunha, adding that smaller installers continue to lean towards cost-effective products, often opting for the most affordable cameras to meet their budget-conscious clients’ needs. Larger projects, however, focus on complete solutions, which are often based on the choice of the video management system. Loyalty from SIs to distributors and manufacturers still exists for ease of support and warranty management, but more are increasingly shopping around to optimise pricing and stock availability.

“As a distributor, Elvey must go above and beyond simply supplying hardware to remain competitive in larger projects,” he adds. “We focus on pre-sales engineering, technical support, tailored solution designs, training and after-sales services/support.”

The impact of the grey market

The grey market is a problem in many industries. Some importers obtain goods (such as surveillance cameras), from unofficial channels at reduced prices, and sell them for prices below what SIs going through the authorised channels pay for them. Grey imports are not illegal, although the sellers outside the country are probably breaking their contracts with the manufacturers by selling outside their allowed territories.

One SI recently commented to SMART Security Solutions that grey imports resulted in them having to sell cameras at costs and rely on services to make a profit, which benefits nobody. Even the end user, who may pay less for their products, can find themselves stuck with a product that the official brand representatives in the country refuse to service because they are not authorised imports. This leaves the user at their supplier’s mercy, hoping they can service or replace faulty products.

“The grey market remains a significant issue in South Africa and throughout Africa,” states Da Cunha. It undercuts legitimate channels by avoiding duties and bypassing support infrastructure. In response, Duxbury has focused on value-added services that grey suppliers cannot match –things like official firmware updates, product warranties, certified training, and trusted technical support. “We also work to educate the market about the long-term risks of grey imports, including cybersecurity vulnerabilities and integration headaches that can undermine an entire project.”

Agnew agrees, noting, “The grey market remains a persistent issue, especially in Africa. Some distributors attempt to counter this by emphasising genuine warranties and local technical support. Unfortunately, price-sensitive buyers sometimes opt for grey imports, forcing legitimate distributors and SIs to shift profit models toward service-based revenue rather than hardware margins.”

In a price-sensitive market, grey imports remain a problem. Another risk end users take when saving money and opting for grey products is that they have no assurance that the products are the real deal, they could be cheap imitations of brands sold by vendors who have no intention of providing the support and service required.

The cloud is not box-mover

The increased use of cloud services and applications has challenged all players in the security channel as the cloud can impact the margins on hardware and software sales, or remove them completely. Agnew affirms that cloud-based surveillance and security solutions are gaining traction, affecting some traditional hardware sales. However, he says, “many customers now seek hybrid models that blend on-premise storage with cloud-based analytics and remote management.”

The attraction of the cloud is strong, particularly in environments where remote access, scalability, and operational simplicity are key, adds Da Cunha. “Duxbury is aligning closely with vendors offering flexible subscription-based models and hybrid cloud architectures. While on-premises deployments remain common, we are seeing increasing interest in solutions that combine local control with cloud-powered efficiency and analytics.”

Change is changing the focus

So what is the channel to do? Even if they work with cloud providers, they still lose significantly when compared to the old onsite hardware and software days. Moreover, SIs can easily make a deal with cloud providers directly, cutting out the distribution channel, while also losing margin. (So can users.)

“The distribution landscape will definitely continue to evolve,” says Agnew. “My thoughts are that there will be a stronger emphasis on software solutions, training, and technical consultancy.”

Da Cunha, unsurprisingly, agrees. “We are seeing a clear shift towards software-centric security, including cloud integration, cybersecurity, and AI-powered analytics. To support this evolution, we are investing heavily in training, support, and project consultation for our partners.

“While Duxbury has no plans to enter the systems integration market directly, we are strengthening our collaboration with SIs to ensure they have access to the tools, insights, and technical expertise required to stay competitive. In short, distribution is no longer about ‘box-dropping’, it is about building strategic partnerships and enabling long-term value.”

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^[1] https://www.genetec.com/a/physical-security-report

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