As we move further into 2025, the video surveillance sector is being shaped by technological disruption, evolving customer expectations, and shifting geopolitical landscapes. From AI integration to cloud adoption, the market continues to redefine its role beyond traditional security. This comprehensive look at the state of the industry, based on insights from top security dealers, integrators and technology providers originally published in three parts in SDM Magazine, outlines the current outlook, core challenges, and emerging opportunities shaping the future of video surveillance.

Part One: Market Overview

As noted in the first installment of the SDM State of the Market Video Surveillance Report, the video surveillance sector remains optimistic, resilient and adaptive, even amid economic uncertainties and geopolitical tensions. Despite inflation and other influences outside of its control, the video surveillance industry is witnessing growth driven by innovation, strong demand, and shifting use cases.

According to SDM Magazine’s 2025 Industry Forecast, which forms the foundation for the State of the Market series, 94 percent of security professionals rate the video surveillance market as “very good” or “excellent,” marking the highest confidence level in the past five years. This optimism is fueled by the integration of advanced technologies like artificial intelligence (AI), cloud computing, and edge processing, which enhance the capabilities and applications of video surveillance systems.

Leaders in the space point to a market increasingly focused on value. Customers, especially in the commercial and retail sectors, are not just seeking security; they want ROI from their surveillance investments. Features such as AI-powered analytics, integration with business systems, and enhanced user experiences are driving purchasing decisions.

Dean Drako, president and CEO, Eagle Eye Networks, Austin, Texas, noted that while hardware margins remain thin, cloud services and AI-based video analytics present significant revenue opportunities. Similarly, Tim Palmquist, vice president, Americas, Milestone Systems, Lake Oswego, Ore., identified a growing convergence between IT and physical security teams, resulting in more sophisticated deployments and greater emphasis on cybersecurity and data governance.

One of the biggest industry-wide shifts is the growing acceptance of video surveillance as a tool for business intelligence. From retail trends to employee performance monitoring, cameras are increasingly being used for operational insights beyond crime prevention.

Top Trends for 2025

Four technology trends in particular are leading the way when it comes to video surveillance. They are:

1. AI & Machine Learning: AI has become a cornerstone in modern video surveillance, enabling real-time threat detection, behavioral analysis, and predictive insights. The adoption of AI-powered analytics allows for proactive security measures and operational efficiencies, such as the identification of weapons, unusual activities, and perimeter breaches, enhancing response times and situational awareness. According to the 2025 SDM Industry Forecast, 73 percent of respondents anticipate an increase in revenues from video analytics and AI technologies, underscoring the growing importance of intelligent surveillance solutions.
2. Cloud & Hybrid Cloud Solutions: The pandemic accelerated cloud adoption, and 2025 is shaping up as the year hybrid models become standard, according to experts interviewed in the article. While some customers remain cautious due to bandwidth concerns or data sovereignty, most integrators agree that a full-cloud or hybrid-cloud approach will eventually become the norm. Tom Cook, executive vice president of sales, marketing and operations, North America, for Hanwha Vision, Teaneck, N.J., compared this to the auto industry’s shift toward electric vehicles — hybrids are the stepping stone. Security dealers and integrators embracing cloud early will be better positioned to capture market share and generate long-term recurring monthly revenue (RMR).
3. Edge Computing: Edge computing enables data processing at or near the source of data generation, reducing latency and bandwidth usage. This approach allows for faster decision-making and real-time responses, particularly crucial in critical security scenarios. Edge cameras equipped with AI capabilities can analyze video feeds locally, ensuring timely alerts and reducing the burden on centralized systems.
4. Integrated Systems & User Experience: The demand for seamless, intuitive interfaces continues to grow. Customers want video systems integrated with access control, intrusion detection, and business tools — all accessible through a single pane of glass. The user experience is now as important as the hardware’s technical specs.

Part Two: Challenges & Considerations

The second installment of the SDM State of the Market Video Surveillance Report considers the potential roadblocks that are presenting challenges in adoption of some of the newer video surveillance technology. Despite the promising outlook, the video surveillance industry faces challenges, including privacy concerns, regulatory compliance, and the need for skilled personnel to manage sophisticated systems. Organizations must navigate varying regional laws and ensure that surveillance practices align with ethical standards and data protection regulations. Beyond that, the integration of advanced technologies requires investment in training and development to equip personnel with the necessary skills to operate and maintain complex systems effectively. Three particular issues of note include:

1. Slow Adoption of AI and Cloud Technologies: Despite the buzz surrounding AI and cloud-based solutions, their integration into video surveillance systems has been gradual. A recent survey by Pro-Vigil revealed that only 7 percent of end users currently incorporate AI into their physical security strategies. Many organizations continue to rely on analog systems, often opting for upgrades only when existing equipment fails. Brad McMullen, president of security products and solutions (3XLOGIC, PACOM, Sonitrol) at Securitas Technology, Uniontown, Ohio, noted that while advanced cameras and analytics offer significant capabilities, customers often hesitate due to cost considerations. He emphasized that the value proposition must align with the specific needs and budgets of each client.
   
   Cloud adoption faces similar hurdles. Tim Hobbs, director of video sales engineering, Owl Services, a Gaylord, Mich.- based integrator, pointed out that many businesses lack the necessary infrastructure for comprehensive cloud-based video recording. For instance, convenience stores often have limited bandwidth, making full cloud integration impractical. As a result, hybrid models that combine on-premises and cloud solutions are more feasible for such scenarios.
2. Cybersecurity & Privacy Concerns: As video surveillance systems become more interconnected, cybersecurity and privacy issues have come to the forefront. The integration of AI and cloud technologies can introduce new vulnerabilities, necessitating robust cybersecurity measures. Christopher Zenaty, president, Turing AI, San Jose, Calif., emphasized the importance of compliance with data privacy laws, which vary across jurisdictions. Fredrick Nilsson, vice president, Americas, Axis Communications, Chelmsford, Mass., advised dealers and integrators to partner with reputable companies that have proven track records in cybersecurity. This approach ensures that surveillance solutions are not only effective but also secure and compliant with evolving regulations.
3. Evolving Channel Dynamic: Industry experts also note that the traditional model of delivering video surveillance solutions is undergoing significant changes. For example the 2025 Security Industry Association (SIA) Megatrends Report identified the “evolution of the channel” as its top trend this year, influenced by factors such as AI, cloud computing, and shifting customer expectations. Milestone’s Palmquist explained that new technologies often reach end users directly, bypassing traditional integrators. This shift challenges integrators to adapt by embracing new technologies and finding innovative ways to add value. McMullen noted that while customers are increasingly interested in cloud-hosted solutions, some integrators struggle with the recurring revenue models associated with these services.
   
   And last but certainly not least, the industry is still facing a talent shortage. Chuck O’Leary, vice president of sales, video systems and solutions – North America, Bosch Security and Safety Systems, Fairport, N.Y., pointed out that finding qualified personnel to sell, install, and service sophisticated products is an ongoing challenge. But Raminder Kumar, director of offering management, Honeywell Building Automation, Atlanta, suggested that AI-driven tools, such as chatbot-based support and installation guides, could help bridge this skills gap.

Part Three: Opportunities & Future Outlook

The final installment of SDM’s State of the Market Video Surveillance Report examines what comes next, with experts noting that some of those same challenges identified in the second installment are also potential opportunities, such as:

• AI & Business Intelligence: AI isn’t just enhancing surveillance — It’s changing the very purpose of it. Companies like Prosegur and Turing emphasized the shift from reactive to proactive systems. Where once footage was reviewed post-incident, AI now enables real-time alerts and predictions, helping prevent incidents and become more proactive, if not even preventative. Nilsson of Axis and Palmquist of Milestone both expect AI to drive entirely new business models and use cases beyond security, especially as tech giants like Google and Microsoft invest heavily in computer vision and edge AI.
• Cloud & Hybrid Cloud: Cloud solutions represent not just a technological shift, but a strategic business opportunity. McMullen of Sonitrol stressed that building a recurring revenue base through cloud services makes businesses more resilient and valuable, particularly in today’s landscape defined by M&A activity. Zenaty underscored the urgency, cautioning that integrators who wait too long may find themselves outpaced, just as those who dismissed the analog-to-IP transition were a decade ago.
• Video Monitoring: Video monitoring is another opportunity that is rapidly gaining traction, not only as a preventive tool, but as an RMR builder. Josh Dice, president and CEO of Security Alarm Corp., Salem, Ill., Noted that his company aims to deploy one new video-monitored alarm system per week in 2025, betting on the long-term market shift away from traditional intrusion sensors.

Conclusion

As channel dynamics evolve, integrators and dealers must adapt to new business models and technologies to remain competitive. By addressing these challenges head-on, the industry can unlock the full potential of modern video surveillance systems.

Despite potential challenges, the video surveillance industry is poised for continued growth and innovation, driven by technological advancements and expanding applications beyond traditional security. And as organizations recognize the strategic value of video data, the demand for intelligent, scalable, and integrated surveillance solutions will increase.