Verkada’s Smart Security Camera System for Smart Cities

If you think that they’re watching you, you’re probably right, especially if you live in China … or the United States. A report last year found those two countries – rivals in everything from robotics to artificial intelligence – are also tops when it comes to the number of surveillance cameras. China leads the way in sheer numbers at about 350 million versus about 70 million in the land of the free. But when you factor in population size, the countries are nearly equal, with 4.1 Chinese per camera versus 4.6 Americans for every optical eye in the sky (and elsewhere).

Number of surveillance cameras per capita.
Credit: Informa Tech

The ubiquitous use of facial recognition technologies, especially in China, is just one way that computer vision is being used in video surveillance. A new Silicon Valley-based unicorn, Verkada, offers a suite of cloud-based smart security cameras that can recognize faces and much, much more.

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Founded in 2016 by three Stanford graduates, Verkada jumped into the unicorn club – startups valued at $1 billion or more – thanks to an $80 million Series C in January that brought total funding to about $139 million at a valuation of $1.6 billion. The latest round didn’t venture very far from Silicon Valley, with all four VC firms based in the U.S. tech capital. The newcomer to the list of investors backing Verkada, Felicis Ventures, led the round. The other three – Sequoia Capital, Next 47, and Meritech Capital Partners – all participated in a $40 million Series B less than a year ago when Verkada was valued at under $600 million. 

The sharp uptick in value reflects the popularity of the company’s hybrid cloud-based smart security system platform, one of an increasing number of public safety solutions for the smart city market. As we’ve noted in recent articles about companies in both Russia and Germany, smart security camera systems powered by computer vision are popping up everywhere. Let’s take a closer look at what makes Verkada’s offering particularly appealing

The Verkada Smart Security Camera System

The average IQ in the United States is 98 (and that’s on the high end of the global list), so any solution has to be simple and intuitive, and that’s pretty much what you get with Verkada’s smart security camera system. The company dubbed its cloud-based management software Command, which pretty much says it all. Command allows users to manage a network of cameras from virtually anywhere in the world, as well as access the company’s edge-based analytics. That’s another way of saying that most of the cool AI-type processing, such as people and object detection, happens right on the device by what is also called edge computing

It’s Fast and Smart

Long gone are the days of sitting in front of tiny monitors and scrolling through hours of grainy video footage looking for the crooks who broke into your storage unit. It literally takes seconds to search through months of footage. The cameras can store up to 120 days of history that is broken down into hourly chunks that a user can scroll over by moving a mouse from left to right, seeing everything that happened at an exact point of time.

Verkada hybrid cloud architecture.
Credit: Verkada

However, the really useful part is the ability to do filtered searches using various tools through the web-based dashboard. There’s a feature called Motion Search where you can highlight any region in the camera frame, such as a crosswalk in a street. The computer instantly provides results of all the people and cars that entered that part of the camera view. Users can also set up alerts to be notified about any activity in the highlighted area. 

Of course, there’s also a face search function under the People Analytics solution that allows you to pull up a list of the individual faces of people entering or exiting the camera’s view. A click on one of the thumbnails will then pull up snapshots of all the times that person entered or exited the frame, so you’ll finally find out who’s been stealing your lunch from the breakroom refrigerator. The software also allows users to filter people by various attributes such as a particular clothing color (green is definitely not Greg’s color) or those wearing backpacks containing your tofurkey sandwich.

Example of Verkada People Analytics solution.
They found it was hard to catch a criminal on St. Patrick’s Day. Credit: Verkada

There’s also a Vehicle Analytics solution that filters for vehicle make, color, and body type, as well as the standard date and time search.

Example of Verkada Vehicle Analytics solution.
Credit: Verkada

The latest addition to Verkada’s services, Access Control, is expected to roll out this spring. The system combines real-time video analytics to control who can access any secure door in a building.

Verkada Access Control
We know it’s you, Greg, even if you ditched the green outfit. Credit: Verkada

The new product can be integrated with an existing card reader or customers can buy a Verkada hardware and software bundle. 

And Easy on the Bandwidth

One of the more amazing-balls things that we discovered about Verkada’s smart security camera system is just how little bandwidth it uses, which is even more important in these days of Netflix binging social distancing until we finally get global internet and 5G. The cameras operate at a maximum rate of 20 kilobits per second at a steady state, which is about as much bandwidth as it takes to send an email. Most cloud-based cameras require several megabits of constant bandwidth, which could be a real strain on the local network for employees checking social media videos. How does Verkada do it? We’ll let Ryan Malley, Verkada solutions engineer, explain, since he spent the time putting together a series of videos for just that purpose:

With our unique hybrid cloud approach to video storage, Verkada cameras store footage on the device itself and send encrypted thumbnails and metadata to the cloud every couple of seconds. So instead of streaming footage around the clock, users can preview thumbnails sent to the cloud before playing the video in HD. This approach not only speeds up the process of finding incidents, it also allows teams to scale coverage across any location without using a significant amount of bandwidth.

In addition, users on a local network can stream video directly to their workstations without sending footage to the cloud. Yet it’s also super easy to share access to any camera to anyone in the world in real time using a text message with a link. Saving footage to the cloud or as a standard mp4 file also just requires the click of a button.

Market and Customers

Obviously, Verkada’s smart security camera system is not really designed for home use, if your smart home security camera or package glitter bombs aren’t deterring thieves. The company’s products are definitely designed for enterprise and building security. The company claims it has more than 2,500 enterprise customers since it launched commercially two years ago, including 25 global Fortune 500 companies. Here’s how a few of those customers are using the platform:

  • Equinox Fitness: The luxury fitness company wanted to replace its clunky security camera system because of ongoing maintenance issues, the inability to access footage remotely, and limited video storage capabilities. It took about an average of 10 minutes to install each camera, and the ability to deploy the hybrid cloud system across 135 fitness clubs (especially in the yoga changing rooms) resulted in a “substantial amount of time and money saved.”
  • Godley Independent School District: The three-person tech staff for the district’s five campuses apparently couldn’t keep up with maintaining the legacy system. It took hours to scroll through footage before investigators could identify the perpetrator who put the gum in Suzy’s hair. Verkada saved the school district an estimated 25 hours per month, not to mention cut the cost of camera security in half.

You probably get the idea. The Verkada smart security camera system saves everyone time and money.  Last year, the company signed up the city of Memphis for a nearly 1,000-camera contract. Other major customers that came aboard in 2019 include Juul Labs and Newtown Public School District, where the 2012 Sandy Hook Elementary School shooting took place.

Products and Costs

Of course, all this begs the question: How much does all of this cost? First of all, Verkada only sells its products and platform through third-party partners, who also provide installation and other services. It has a range of camera types with different capabilities. Obviously, the more whizz-bang the camera, the more expensive. Each camera also requires a licensing agreement. Here’s a snapshot of some of the costs:

Pricing example of Verkada smart security camera system.
Credit: Verkada

And if you want to get really fancy, there’s the VX51 Viewing Station that streams up to 36 camera feeds, starting at $2,498 for the hardware and a one-year licensing fee.

Verkada viewing station enables user to stream up to 36 cameras.
Credit: Verkada

And, apparently, Apple gets a little free advertising to boot.

Conclusion

Like any tech startup, Verkada is growing rapidly and trying to grab market share against other startups, not to mention big players like Cisco (CSCO) and Honeywell (HON). The key to the company’s success is being able to make a platform that is both simple to use and smart enough that its machine learning algorithms can detect suspicious patterns and behaviors for real-time alerts. It will only get smarter over time, and that should make us all feel more secure, right?

Here at Nanalyze, we hold the lion's share of our investing dollars in a portfolio of 30 dividend growth stocks. Find out which ones in the Quantigence Dividend Growth Investing report freely available to Nanalyze Premium subscribers.

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