Increasing urbanisation, the desire for greater public safety and technological advances are fuelling the expansion of smart cities worldwide – and with it the market for video management software (VMS). Whether for traffic control, protecting critical infrastructure or real-time monitoring of public spaces, VMS solutions are at the heart of modern smart city strategies. Current market forecasts and technological developments clearly show that the VMS sector is experiencing a sustained boom.

Market forecast: billion-dollar market in sight

According to an analysis by Grand View Research, the global market for video management software will grow to around 40.9 billion US dollars by 2033. Based on a market volume of 11.67 billion US dollars in 2024, this corresponds to an average annual growth rate (CAGR) of 14.3%. Technavio outlines a similar dynamic: According to this, an additional market volume of 14.01 billion US dollars is expected by 2028 – with a projected CAGR of around 24.9%.

These figures underscore that demand for efficient, scalable and intelligent video systems is growing steadily, especially in application areas such as city surveillance, retail, healthcare and industrial facilities.

Smart city projects as growth drivers

The implementation of VMS technologies is a key element of modern smart city initiatives. Cities around the world are increasingly relying on networked CCTV and IP surveillance systems to regulate traffic flows, reduce crime and shorten response times for emergency services.

A key advantage of current VMS solutions is their flexibility: they can integrate analogue and IP-based cameras, manage them centrally and network them with other security systems. This enables cost-efficient expansion of existing infrastructures – an important argument for local authorities with limited budgets.

Technological innovations are shaping the market

The VMS market is benefiting from several parallel technological advances:

• Video compression: The use of High Efficiency Video Coding (HEVC, H.265) enables efficient transmission of high-resolution video data while reducing bandwidth – essential for mobile or cloud-based applications.
• Artificial intelligence (AI): AI-supported video analysis, especially with deep learning algorithms, enables automated recognition of objects, faces or suspicious behaviour patterns. This significantly increases the effectiveness and response speed of security services.
• Edge computing and cloud integration: Modern systems rely on hybrid architectures. While edge devices perform initial analyses directly on site, central cloud platforms take over long-term storage and more in-depth evaluations. This improves scalability, reliability and data availability.

Market segments: Transition from analogue to intelligent

A look at the market segments illustrates the structural transformation in the VMS sector:

Segment Status 2024 Forecast / Trend

• Technology : 67% share of revenue for analogue systems Growth in IP-based solutions
• Deployment: Dominance of on-premise Highest CAGR expected for cloud VMS
• Functionality: Market leader: video analysis Growth in remote monitoring & AI
• Application industries: Leading: retail/e-commerce Strong growth in the healthcare sector
• Regional development: Market leader: North America (35%) Fastest expansion in Asia-Pacific

Particularly noteworthy is the strong growth of cloud-based solutions, which enable both medium-sized and large companies to operate flexibly and independently of location – a decisive advantage in times of distributed infrastructures and mobile working models.

Key market players and their technologies

The development of the VMS market is largely shaped by leading manufacturers offering both hardware and software solutions. The key providers include:

• Axis Communications: Pioneer in network-based surveillance technology; known for modular IP cameras and open VMS platforms.
• Genetec: Provider of integrated security solutions with a focus on AI, data protection and cloud connectivity.
• Milestone Systems: Danish company specialising in open VMS architectures with strong third-party integration.
• Bosch Security Systems: Performs AI-based video analytics with embedded intelligence directly in the cameras.
• Hikvision and Dahua: Chinese providers with a strong presence in edge VMS and smart city components.
• Honeywell and Johnson Controls: Integrate VMS into comprehensive building automation and security systems.
• Verint: Provider of data-centric security solutions with a focus on analytics and customer behaviour.

These companies are increasingly relying on open platforms, modular expandability and partnership-based ecosystems to meet the diverse requirements of the market.

Conclusion: Intelligent VMS as the backbone of smart cities

The growing complexity of urban spaces requires highly connected, intelligent security solutions. Video management software plays a key role here as the link between sensor technology, real-time monitoring, data analysis and automated responses. The combination of AI, cloud, edge computing and open standards not only makes VMS more powerful today, but also a cornerstone of the smart city transformation.