15/05/2013
The security system landscape is shifting dramatically, and security systems integrators need to evolve with it.
That was the premise of a talk given yesterday at the IFSEC International show by Paul Bremner, security market analyst at IHS (previously IMS Research), and Phil Stockham, project manager at VidSys.
A quick glance at market figures bears out the premise. First, there's plenty of business to be had in the physical security market. In fact, the world market for physical security equipment sold through integrators and installers is forecast to be worth over $38 billion in 2016, according to a November 2012 report from IHS.
However, there is a dramatic shift in where money is being spent. Between 2008 and 2010, the analog market grew 2.2 percent, compared to the IP market that has grown 126.8 percent in just the past two years, according to Bremmer. "The IP market has more than doubled in size, while the analog market hasn't done much in the past few years," he noted. Going forward, this trend will continue. From 2012 to 2016, the researcher expects the growth of network products to reach 48.2 percent compared to 16.1 percent for analog products.
Further, the competitive landscape is heating up. Large aerospace and defense contractors are entering the fray, and vendors are also providing services, Bremmer said. "IT integrators are now participating in the security systems marketplace. They are seeing increased margins, so for them it is a good place to be."
For aerospace organizations, the margins are not as compelling, but the large amount of opportunity is a draw. "It leads to increased competition for security defense and changed the business model," Bremmer said. "Product margins have declined across the board for the last few years, so integrators have been shifting focus to service revenues." According to research by IHS, service revenues will rise 38.7 percent between 2012 and 2016.
Further, client expectations are on the rise, and these customers are looking for full integration from security systems, said Stockham. He listed a handful of challenges that integrators need to address with new business models:
The increased growth of IP-based security systems provides both challenges and opportunities.
That was the premise of a talk given yesterday at the IFSEC International show by Paul Bremner, security market analyst at IHS (previously IMS Research), and Phil Stockham, project manager at VidSys.
A quick glance at market figures bears out the premise. First, there's plenty of business to be had in the physical security market. In fact, the world market for physical security equipment sold through integrators and installers is forecast to be worth over $38 billion in 2016, according to a November 2012 report from IHS.
However, there is a dramatic shift in where money is being spent. Between 2008 and 2010, the analog market grew 2.2 percent, compared to the IP market that has grown 126.8 percent in just the past two years, according to Bremmer. "The IP market has more than doubled in size, while the analog market hasn't done much in the past few years," he noted. Going forward, this trend will continue. From 2012 to 2016, the researcher expects the growth of network products to reach 48.2 percent compared to 16.1 percent for analog products.
Further, the competitive landscape is heating up. Large aerospace and defense contractors are entering the fray, and vendors are also providing services, Bremmer said. "IT integrators are now participating in the security systems marketplace. They are seeing increased margins, so for them it is a good place to be."
For aerospace organizations, the margins are not as compelling, but the large amount of opportunity is a draw. "It leads to increased competition for security defense and changed the business model," Bremmer said. "Product margins have declined across the board for the last few years, so integrators have been shifting focus to service revenues." According to research by IHS, service revenues will rise 38.7 percent between 2012 and 2016.
Further, client expectations are on the rise, and these customers are looking for full integration from security systems, said Stockham. He listed a handful of challenges that integrators need to address with new business models:
- Security integration increasing in both scale and complexity
- End clients seeking full integration across a myriad of subsystems
- Demand for understanding of value of money and a clear ROI as critical in the face of constrained budgets
The increased growth of IP-based security systems provides both challenges and opportunities.
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