Planning for the Future
- By Ralph C. Jensen
- Dec 01, 2014
Business planning for 2015 likely started a long
time ago. I know it has for the publishing industry,
as we keep our editorial calendar upto-
date each quarter. It won’t be long before the first
quarter of 2016 is updated on our website.
The same is true for the security industry. Planned
upgrades and new products have been released
throughout the year. December, however, is the perfect
time to review what some of the industry analysts
have to say about the coming year.
The good news is that the physical security market
continues to grow.
According to IMS Research, there is still strong
market demand in what is described as “an increasingly
competitive physical security equipment and
services industry.” The market reached $120 billion
in revenue during 2013, which reflects a 10.8 percent
increase, compared to 2012. The United States remains
the largest country with $6.5 billion spent on
equipment. China, however, is closing that gap each
year, where one in every $5 spent on physical security
equipment in Asia is for a government building, not
including state-led facilities and installations such as
airports or infrastructure.
“As global economic conditions continue to improve
and budgets slowly increase, the physical security
industry continues to perform strongly across the
world,” the IMS Research report stated. “Growth in
the number of projects employing different types of
physical security equipment as a single solution is also
increasing, often managed through the same platform.”
Physical security remains a competitive market,
and while global revenues for equipment and services
continue to increase, expectations that the industry
supply market would begin to consolidate seem premature.
The top 15 manufacturers and service providers
accounted for only 22 percent of the market in
2013, a decrease of 3 percent from just a year ago. In
fact, no one can boast more than a 5 percent market
share, showing how fragmented this growing industry
truly is, and that there are high levels of competition.
Asian-based manufacturers are gaining market
share outside of their domestic markets. Last year,
four of the top 10 equipment manufacturers globally
were in Asia. They have improved product quality
and are starting to expand to new markets. This also
means increased price pressure on the American and
EMEA markets. Price pressures are not strong enough
to outweigh the increases in general market demand,
so there is consistency for strong growth in the foreseeable
future, especially in the following sectors:
Ethernet switch manufacturers. There are new, fastgrowing
markets where Ethernet switch manufacturers
can diversify. Data from ISH Research shows that
606,000 Ethernet switches were sold for use in video
surveillance deployments in 2013. This is but a small
portion of the Ethernet switch world right now.
The forecast for Ethernet switches is that by 2018,
there will be some 1.6 million units sold, representing
a much larger portion of the market. IHS estimates
that 24 port switches are the most widely-used in
video surveillance applications and Ethernet switches
used in video surveillance revenue are estimated at
“A number of Ethernet switch manufacturers have
been quick to capitalize on the growth in this market
and have started producing solutions tailored specifically
for video surveillance,” IMS Research reported.
“Two such notable moves were the launch of Avaya’s
Fabric Connect solution, and the strategic partnership
between Extreme Networks and Milestone Systems.”
Smartcards. Global shipments of smartcards are
expected to rise by 2.1 billion from 2014 through
2019. Smartcard shipments in 2019 will rise to 10.9
billion units, up from 8.8 billion in 2014.
“The key end-user sectors that will drive growth
over the next five years include payment and banking,
e-government, healthcare and transportation,”
said Don Tait, senior digital and ID market analyst
at IHS. “The market will expand despite declines in
subscriber identification cards (SIM), which are used
in mobile phones. Slowing growth in mobile phones
will cause SIM card shipments to flatten or decline.”
Asia also plays a key role in the overall smartcard
market. China, India and Indonesia will be a huge
part of the growth of the smartcard market over the
next five years, and electronic passports are contributing
to high volumes in the Asian market. The Asian-
Pacific region accounted for the highest number of
ePassport shipments in 2013.
PERS. The North American personal emergency
response systems (PERS) market is forecast to grow
from $700 million in 2014 to $1.5 billion in 2019. The
main market driver in this vertical is a growing elderly
population, increasing the use of mPERS. However,
as the United States moves away from the POTSbased
communication in the home, mPERS will grow
It seems to me that 2015 is the year we’ve all been
waiting for since 2008, when the economy began a
nose dive. Overall unemployment in the United States
is declining, and with more people back to work,
there is a greater need for high-tech security systems.
Many companies have been planning for the worst
and hoping for the best. It seems the time to hope is
over; the time to perform is now at hand.
This article originally appeared in the December 2014 issue of Security Today.