NEW YORK (FORTUNE Small Business Magazine) - Until recently a small-business owner who wanted to install video surveillance had to spend $4,000 or more for a basic product from a giant security company such as ADT or Honeywell. Dealer-installers controlled the industry, and inducing them to come to your building to string wire and mount cameras was akin to hiring an electrical contractor.

Evan Tree spent 20 years in the industry as a dealer and saw the need for a simple, inexpensive product suitable for a small business. After he sold his ten-year-old company, Double Tree Security, to national dealer Mountain Alarm, he decided that for his next venture, he would not peddle another outfit's security system -- he would design his own. Tree, 42, and partner Andrew Hartsfield, 37, an entrepreneur who had recently sold a juice startup to Jamba Juice, co-founded WiLife (www.lukwerks.com) in 2002. The off-the-shelf system they developed, LukWerks, goes on sale this month, distributed through Radio Shack: $299 for the software and one camera. (Additional cameras sell for $229).

WiLife's camera (left) and PC interface

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WiLife's approach is to put the software for motion detection, digitization, and data compression into the camera, eliminating the dedicated PC that most older systems require. Instead of proprietary operating systems, LukWerks runs in a familiar-looking Windows environment on any PC, using only a small amount of memory. The buyer installs the camera himself -- no technicians necessary. It fastens to windows or walls with suction cups and plugs into a standard electrical outlet. The images feed into the computer through existing wiring, so there's no drilling or wire pulling.

Because WiLife's cameras are all digital, the system is smarter than older analog models. A business owner can call from a mobile phone to see what's happening on each camera. If anything enters the frame, the cameras will call the owner and send the video clip to his phone. If he's close to a laptop, he can have the images (still or video) e-mailed to him. Even if he's nowhere near a PC, any disruption triggers an automatic "record" function on the camera, so he can look at the images later or hand them over to the police.

A user can adjust the sensitivity to avoid getting a false alarm every time a cat walks past the window. He can also block off areas of the image. For example, if he had a camera pointed at his parking lot and the top of the frame included the street, he can set LukWerks to alert him only when a car enters his lot.

WiLife has helped sergeant Gerry Allred of Utah's Draper police department, who beta-tested a LukWerks system in the evidence room. "We had bids out from a number of companies to get a wire analog system -- for about ten times the cost -- when we heard about WiLife," he says. Allred set up a two-camera system in about ten minutes and says that he has been impressed with the quality of the video and the power of the software.

Jeff Johnson, 38, owner of four Barbacoa Mexican restaurants in Salt Lake City, had frequent problems with the ADT surveillance systems he had installed in two of his locations at a cost of about $4,000 each. It took two workers several hours to drill holes, pull wires through the restaurant walls, and hang the cameras. "They were down quite a bit, and the features and video quality were not nearly as good [as WiLife's]," he says. When a friend introduced him to Hartsfield, Johnson beta-tested a four-camera system in one of his other restaurants. "When you go back to look at the video," he says, "it's so easy to find the time stamp you want." Johnson says he plans to switch all four of his restaurants to WiLife.

In response, ADT says it has introduced digital systems that are easier to operate. "Like the brakes on your car, you want a professionally installed system that can be counted on in emergencies," says Ann Lindstrom, director of corporate communications for ADT.

Experts say that you wouldn't use the WiLife system to protect, say, a jewelry store, but for many other businesses it is an inexpensive option. Tree and Hartfield's entrepreneurial experience has convinced them that company owners are looking for an entry-level system. "It's a true leap relative to what you've been able to do before," says Hartsfield. At least one sign that they may be on to something: The big guys are following suit. Panasonic starts selling a basic $99 camera this month.

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