The analyst’s prime objectives for this latest research conducted on behalf of UBM Live’s Security Portfolio were to understand budgets and future spend on security technologies, assess the levels of awareness in relation to such technologies and critical product and solutions requirements and evaluate supply chain relationships and identify Best in Class providers.
The key finding of Frost & Sullivan’s comprehensive survey of 133 end users and 222 channel players (ie installers, distributors, systems integrators and security consultants) looking to attend IFSEC 2011 – the world’s largest annual security event – suggests that security spending is on the rise.
For their part, end users are reporting a 3% increase in budgets for video surveillance systems whilst spend for solutions involving access control and security systems integration will likely rise by around 2% over the next 12 months.
Importantly, the five-year outlook for security spending also forecasts a bright scenario, with video surveillance budgets set to increase by in excess of 5% and access control and security integration coming in at between 3% and 4%.
Channel players such as systems integrators, consultants and distributors are naturally more optimistic, anticipating an increase in budgets of close to 8% for video surveillance, 6% in the systems integration field and 5% for access control over the next year. Intrusion detection will see a modest growth in budgets of close to 1%.
According to Frost & Sullivan, growth in budgets of 4% overall suggests that the UK is lagging behind the rest of the world.
While all of the activity mentioned thus far represents good news for technology sales, there’s a bleaker picture ahead for security guarding-related spend in what is already a margin-tight market, with budgets set to reduce by around 1% over the next year.
Positive outlook for IP/network video surveillance
The overtly positive outlook for IP/network video surveillance just now is also supported by the survey, with 12% of respondents planning to install an IP/network video solution within the next 12 months.
Of course, IP/network video surveillance cameras already enjoy a fairly good penetration within larger businesses. That being the case, growth is expected to be faster within small-to-medium sized organisations of under 1,000 employees.
Video analytics is also set to experience strong new demand, though this will be experienced within larger end user organisations.
The optimistic picture for IP/network video surveillance is shared by channel players, with 71% of respondents to the IFSEC survey believing that the pace of migration towards such solutions will quicken in the remainder of 2011 and into 2012.
Systems integrators have the strongest expectations, it seems, with security consultants, installers and distributors all sharing broadly the same opinion.
Over the next two years, Frost & Sullivan’s analyst team predits the analogue market will remain flat due to loss of revenues from customers switching to network/IP-based video surveillance being balanced out by replacement sales or new sales in applications that require a relatively simple security solution.
The decline in analogue camera usage is likely to be highest in very large organisations, with 50% of those questioned for the survey reporting a reduction in spend.
Physical security and IT convergence
Convergence between physical security and IT remains foremost in the mindset of many channel players who firmly believe that it will have a positive impact on their business.
However, challenges still exist (including the compatibility of different manufacturers’ products, the lack of cross-standard platforms, installation costs and a paucity of IT skills and knowledge).
To support the migration from an analogue system to a network/IP video surveillance solution, most end users (29%) questioned for the survey suggested that they have partnered with an IT systems integrator and/or trained existing IT staff (26%).
Training existing security staff was the least preferred of the key migration strategies.
Channel players, on the other hand, are placing much more emphasis on training existing staff (44%) while also recruiting IT talent (5%) to bridge the knowledge gap.
Always important for security operations set within companies is how to demonstrate return on investment (ROI) for their solutions when security is still seen by many Boards of Directors and company bosses as little other than a grudge purchase.
Proving that the security solution will reduce the level of threat is key, though this can be difficult to demonstrate.
Increased operational efficiencies and additional adherence to security procedures were ranked as the second and third most important factors by end users when it comes to solution spend, while a reduction in security officers on site is now a major consideration for very large organisations.
Security technologies in non-security applications
The use of security technologies in non-security applications is a further consideration, allowing suppliers that think about the broader customer need and business challenge to place themselves ahead of the competition.
By way of an example, the employment of access control solutions for time and attendance is clearly gathering momentum, with 35% of customers currently using it for this application and a total of 64% (including current users) interested in implementing the same.
Furthermore, 25% of the survey sample members are currently employing security technology in other applications, ranging from Health and Safety (employees are wearing correct PPE, for example), monitoring occupancy levels and asset tracking and operational processes.
In terms of security guarding, 30% of end user customers surveyed maintain this an in-house operation. Here, you are largely talking about small-to-medium sized organisations (under 1,000 employees).
The main reason stated for this is to maintain control of the operation, with price only ranking as the fourth most important criteria.
This finding contrasts strongly with organisations that outsource their guarding responsibilities. Here, price is the key consideration followed closely by three other major factors: the service provider’s reputation, previous experience and ability to tailor the service for the user.
An Executive Summary of the new Frost & Sullivan report produced for IFSEC 2011 can be downloaded from www.ifsec.co.uk/frostandsullivan, and has also been set as an attachment to this article (see the foot of the page)
For further information on the full report contact Andrew Thorndyke at Frost & Sullivan on (telephone) 01865 398645, or contact Andrew by e-mail at: andrew.thorndyke@frost.com
About Frost & Sullivan
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The company’s Growth Partnership Service provides the CEO and the CEO’s appointed Growth Team members with disciplined research and access to Best Practice models to help drive the generation, evaluation and implementation of powerful growth strategies.
Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.
To join the Growth Partnership visit http://www.frost.com (a dedicated link is provided at the foot of this page)
IFSEC: the world’s largest annual security event
Organised by United Business Media Live Division’s Security Portfolio, IFSEC returns to the NEC in Birmingham from 16-19 May 2011.
Now in its 38th year of operation, this multiple award-winning event offers security professionals from all over the world the opportunity to view and experience cutting-edge security solutions as well as benefit from a comprehensive educational conference and seminar programme as well as innovative and interactive feature areas.
The IFSEC brand can now be found throughout the world with IFSEC South Africa, IFSEC West Africa, IFSEC India, IFSEC South India and the recently announced IFSEC Arabia all adding to the mix.
For further information on all IFSEC events please visit the website www.ifsec.co.uk (again, a dedicated link can be found at the foot of this page)