Tanoc-keeping the bad guys out: security CCTV systems company is on a tear

Japan, Inc., Summer, 2005 by John Dodd

The cohesion of Japanese society is starting to break down as its demographics change. The increasing demands of a competitive work and school environment are starting to take their toll on kids and parents alike. Almost daily there are cases of bus hijackings, home and school invasions, burglaries, phone extortion of old folks and pillaging of their bank accounts, and a million other miseries that can be visited by one human being on another.

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Although Japan's crime rate is still much lower than that of other developed countries--for example, the homicide rate in 2002 was just 1/20 of that in the USA--robbery, auto theft, and burglary have jumped by 105 percent, 75 percent, and 48 percent, respectively, in the last five years. Fanned by sensationalist reporting, the jump in crime has created a siege mentality, with kids being chaperoned and electronically monitored, and communities installing camera systems in shopping streets.

Against this background, it is no wonder that the Japanese home and office security industry is undergoing a revolution. Leading companies have grown into billion-dollar behemoths--with the top player, Secom, expecting to post JPY553.8BN (US$5.3BN) in group sales in fiscal 2004 (ending March 2005), a 5 percent rise from the previous year. As of the end of September 2004, they had 610,000 security contracts with corporate clients and in the hot new home sector, around 300,000 clients, up 8 percent from a year before.

Then there is upstart rival, Sohgo Security Services, which although not making as much profit, has cut the cost of home security solutions by 50 percent, to around JPY2,000 per month. As a result, they are now delivering an unprecedented 3,000 plus new systems to homes around Japan every month, and will soon hit an installed base of 70,000 homes.

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Now that both companies are busy duking it out, squaring off feature-for-feature, they are obliged to not only deliver reasonable costs, but also quality features as well. Unfortunately, if you've ever seen those crime scene videos on the TV news, most surveillance systems provide a grainy image of the perpetrator, and you have to wonder how the police can ever utilize those fuzzy images as substantial proof in a court of law.

Catching Criminals

In fact, the open secret is that the low quality of many surveillance systems means that a lot of crimes don't get solved quickly from visual evidence; the features of people captured by cameras are often indistinguishable and the standard 1-frame-per-second video capture rate can miss much fast motion. The poor performance of surveillance equipment came to light in a very public way in December 2004, when an arsonist began a series of sometimes deadly attacks against the discount store chain Don Quixote.

Although security people caught a fleeting image of the suspect on camera, the image was not clear enough to be of use. A few days later the arsonist struck a second time. Staff noted the license plate of a woman who fled the scene. Police later identified her from DNA extracted from saliva on a cigarette butt found at the scene. But for that lucky break, the arsonist might still have been at large.

Stand-out Solutions

Clearly, then, as the Japanese public becomes more sensitized to the need for personal security, the quality of the security infrastructure and systems is also becoming an issue. One start-up company based in Asakusa, Tokyo, Tanoc Inc., has interpreted the trends well, and is producing high-quality video capture servers for use in the home and office. Business is good for Tanoc, and in the last three years the firm has become one of the fastest growing security equipment and systems vendors in Japan.

Tanoc's underlying technology is the key to the firm's success. It represents the Japanese arm of two core technologies which prove that seeing is believing. First, it uses an advanced variant of MP4, called AcroSecure, to store the video. Not only does this provide noticeably better image quality for a given lens, but it also compresses better into smaller archive files. Second, Tanoc has built systems with very small footprints to manage and archive a large number of cameras all at the same time. Thus the company's technology is finding its way into some large installations in banks, hospitals, and campuses around Japan. Coupled with the power of its mini server units, Tanoc has also created massive storage capabilities, which in the case of one unit allow up to 7 months of continuous footage at 5 frames per second (5fps) from 16 cameras to be stored internally without any archiving!

Tanoc Inc. was started by CEO Takeshi Seoka, in July, 1999. Seoka, originally a manager with Oki Denki, decided that in the last decade of his working career he should try to create something a bit more substantive for himself than just a simple pat on the back and a parting handshake upon retirement. Initially, he tried to create his own product range, but he soon realized that he was more suited to marketing and sales than technology development. As luck would have it, he attended an office/home security show in late 2002, and realized that there was potential in helping to protect your loved ones.