Hardware Compression: Both Capturing Video Signal and Compressing Video Signal are done by DSP chipset integrated on DVR Board. It doesn't need the computer's CPU to do this work. It's low cost of CPU and RAM resources. In this system the computer CPU's task focus on answering network request, streaming the video/audio to network and saving recorded data to local hard disk.

Software Compression: The DVR Board only capture video signal but doesn't compress it, it is the computer CPU and RAM to do this compression work. It's high cost of CPU and RAM resources. In this system the computer CPU and RAM are often overloaded. It is easier to crash than hardware compression system.