The Physical Security Business 2017 to 2022

Access Control, Intruder Alarm & Video Surveillance

Published: Q4 2017
Date:
Q4 2017
Pages:
301
Charts & Tables:
30
Category:
Physical Security
Questions?
Call +46 8 501 64 177
This Report is the New 2017 Definitive Resource for Access Control, Intruder Alarms & Video Surveillance Market Research.

The total value of Physical Security products at factory gate prices in 2017 was $29.2Bn, an increase of approximately 5% on 2016.

This is a decline in growth from its peak in 2014 but an increase on the last 2 years. Over the last 8 years the market has grown by a compound annual growth rate of 6.41% and Memoori forecasts the market will reach $41.27Bn in 2022 at a CAGR of 7.2%.

Of the three, still largely independent businesses, Access Control has maintained its average growth of approximately 7% over the last three years, and takes a share of 23.5%.


Why Do You Need This Report?
  • 2017 has delivered an improved and more stable performance and all the main drivers for growth are now firmly ready to match the performance realized in the Halcyon days of profitable growth between 2010 and 2014.
  • However there are major technical and commercial challenges ahead that will stress the supply side and the shape and structure of the business will change significantly over the next 5 years. The challenge that currently preoccupies most companies is how they can operate profitably during the “race to the bottom” and survive.
  • The gap between the major suppliers and the many hundreds of smaller suppliers gets wider every year, whilst at the same time profit margins are falling increasing the minimum economic size to operate profitably in this industry.

In the video surveillance business 2 Chinese manufacturers have adopted the strategy of disrupting the industry by undercutting the profit margin of incumbents, whilst at the same time expanding markets and rapidly growing market share. They have built up volume and the gap in size between them today and the next tier of western companies is so wide that it looks highly improbable that it can be reversed and certainly not by western companies competing solely on price. This gives them a dominant hold today on the mainstream business.

As commoditization of video surveillance products continues to take hold it requires a strategy that broadly focuses on either going for volume through the SMB market or brand through the enterprise business. We believe that no more than five companies by 2022 will thrive by operating in both at the same time.

Major companies such as Axis Communications, Avigilon, Bosch and Panasonic are in a position to reduce their margins sufficient to hang on to their share. But to continue growing their share they need to invest more in innovative products that offer a better TCO metric but with depleted margins they would need to increase their financial resources.


Within its 301 Pages and 30 Charts and Tables, The Report Presents All the Key Facts and Draws Conclusions, so you can Understand what is Shaping the Future of the Physical Security Industry;
  • Increased penetration of IP Network systems, further advances into biometric readers, identity management and wireless locking systems have all helped deliver growth in Access Control. This is the second consecutive year that it has turned in the highest rate of growth of the 3 businesses. However there is some evidence that price pressures are starting to bite and this will eventually have a negative effect on growth when measured by value. There also appears to be reluctance by manufacturers to support open standards in order to protect their heritage business. This could damage their long-term future and open the way for Chinese manufactures to take up the initiative and make a strong push into the business they have recently targeted.
  • The market for Video Surveillance products was $15.87 billion in 2017, a growth of 5.9% on 2016 and takes a 54.5% share of the physical security business. This level of growth looks disappointing compared with growth over the previous 5 years that averaged around 9.7%. However this has been a relief to many suppliers who believed that 2017 would struggle to improve on 2016 if the drastic fall in camera prices over the previous two years continued. It has, and this has put a great deal of stress on profitability particularly for manufacturers in the western world.
  • The intruder system business took a 22% share. It is the “father” of the physical security industry and has long since reached maturity but its increasing use of radar and thermal cameras, has contributed to growth edging up to 2.5% in 2017. The use of radar, advances in sensor technologies, wireless technology and the integration with Video Surveillance, Access and outdoor lighting have all contributed to its growth.

Starting at only USD $1,500 for a single user license, this report provides valuable information into how Physical Security companies can develop their business through Merger, Acquisition and Alliance.


Who Should Buy This Report?

The information contained in this report will be of value to all those engaged in managing, operating and investing in physical security companies (and their advisors) around the world. In particular those wishing to acquire, merge, sell or find alliance partners will find its contents particularly useful.


Table of Contents
  • Preface
  • The Executive Summary
  • 1. Introduction
  • 2. Structure, Size & Shape of the Physical Security Business
    • 2.1 Structure of the Business
    • 2.2 Trends in Market Share by Group 2012 – 2017
    • 2.3 Sizing the Physical Security Business 2017 & Forecast to 2022
    • 2.4 World Distribution of Security Products by Major Regions
      • 2.4.1 The Status in 2017
      • 2.4.2 Market Size & Trends by Vertical Sectors
      • 2.4.3 Market Size by Region & Penetration
      • 2.4.4 China & the Rest of Asia Offer the Best Prospect For Growth
    • 2.5 Comparing & Sizing, Access – Intruder – Video 2017
  • 3. The Video Surveillance Market 2017 – 2022
    • 3.1 Market Size 2017 & Forecast to 2022
    • 3.2 Market Size of Cameras
    • 3.3 Market Size of Video Management Software Systems
    • 3.4 Identifying & Measuring the Performance of Leading Camera Suppliers
    • 3.5 Identifying & Measuring the Performance of Leading VMS Suppliers
    • 3.6 Channels of Distribution & Trends
    • 3.7 Business Strategies for Ensuring Success in the Video Camera Market
      • 3.7.1 Scale / Economics Vs Technology / Performance
      • 3.7.2 Commoditization Has Taken Hold in the SMB Market
    • 3.8 Technology that Drives Demand for Video Surveillance
      • 3.8.1 IP Network Cameras
      • 3.8.2 Compression & Video Analytics
      • 3.8.3 Integration within Physical Security & Other BAS Services
    • 3.9 The Market for Video Surveillance as a Service (VSaaS) 2017
      • 3.9.1 Drivers & Road Blocks to VSaaS
      • 3.9.2 Suppliers & Operators of MVaaS & VSaaS
      • 3.9.3 Acquisitions in MVaaS – VSaaS – ACaaS
    • 3.10 Video Technology – IP Cameras – HD Analog CCTV – Thermal Cameras
      • 3.10.1 IP Network Cameras
      • 3.10.2 The Future – IP Network – HDCCTV – Analogue
      • 3.10.3 Video Compression Technologies H264 Vs H265
      • 3.10.4 Thermal Cameras
    • 3.11 Body Worn Cameras
    • 3.12 Storage Recorders
    • 3.13 Mobile Apps
    • 3.14 Video Management Software (VMS)
    • 3.15 Video Surveillance Analytics
      • 3.15.1 Overview
      • 3.15.2 Demand for Analytics
      • 3.15.3 Deep Learning & Machine Learning
    • 3.16 New Applications for Specialist Cameras
  • 4. The Access Control Market 2017 to 2022
    • 4.1 Market Size 2017 & Forecast to 2022
    • 4.2 Identifying Measuring the Performance of Leading Access Control Suppliers
    • 4.3 Channels of Distribution for Access Control Systems
    • 4.4 Major Demand Drivers for Access Control
      • 4.4.1 IP Network Systems
      • 4.4.2 Integration within Physical Security and other BAS Services
      • 4.4.3 Connecting Physical & Logical Security
      • 4.4.4 PACS – Strategic Acquisitions
      • 4.4.5 Demand for Biometric Readers
      • 4.4.6 Personal Identity Verification Card (PIV Card)
      • 4.4.7 Near Field Communications (NFC) for Access Control
      • 4.4.8 Systems Integrators Preference to push Access Control
    • 4.5 Access Control as a Service & Managed Access Control
      • 4.5.1 Growth Through Access Control as Service & Cloud Based Systems
  • 5. Intruder Alarms / Perimeter Protection Market 2017 to 2022
    • 5.1 Market Size 2017 & Forecast to 2022
    • 5.2 Demand Drivers
    • 5.3 Identifying & Measuring the Performance of Leading Suppliers
  • 6. Wireless Technology
    • 6.1 Wireless in the Video Surveillance Market
    • 6.2 Wireless in the Access Control Market
    • 6.3 Wireless in the Intruder Alarm Market
    • 6.4 Wireless Will be Driven by IoT
  • 7. Standards & Cyber Security
    • 7.1 ONVIF for Video Surveillance
    • 7.2 ONVIF for Access Control
    • 7.3 PSIA
    • 7.4 Cyber Security
      • 7.4.1 The Most Serious Threat to Physical Security Stakeholders & Emerging BIoT
      • 7.4.2 The Cyber Risk Threat Landscape
      • 7.4.3 The Physical Security Industry is the Weakest Link in the BIoT Chain
  • 8. Software Markets in the Physical Security Business
    • 8.1 Physical Security & Information Management (PSIM)
    • 8.2 Physical Identity and Access Management (PIAM)
    • 8.3 Situational Awareness
  • 9. Business Development Opportunities Through Integration, IT Convergence & IoT Require New Business Models
    • 9.1 Growth Through Integration & IT Convergence
    • 9.2 The Physical Security Business Needs “Open” Systems & Structural Changes if Integration is to Deliver its Full Potential
    • 9.3 Growth Through Integration, IT Convergence within BAS Services
    • 9.4 Growth Through IoT & the Building Internet of Things (BIoT)
      • 9.4.1 The Impact of BIoT on Physical Security
    • 9.5 Business Opportunities Focused on New Verticals – Shared Intelligence & Systems Integration
      • 9.5.1 New Industry Verticals & Market Segments
      • 9.5.2 Shared Services, Smart / Safe Cities & BIoT System Integration
      • 9.5.3 Shared Intelligence in the Private Sector
      • 9.5.4 Total Solutions versus Product Manufacture
    • 9.6 Business Models Focused on Product Specialization, Brand & Commoditization
      • 9.6.1 Product Specialization
      • 9.6.2 Commoditization
      • 9.6.3 Brand
    • 9.7 Business Models Built Around Security as a Service & VSaaS
    • 9.8 Do Chinese Manufacturers Dominate the Video Surveillance Business?
  • 10. M&A Performance by Sector – Valuation and Outlook 2000 to 2022
    • 10.1 M&A Performance 2000 – 2017
    • 10.2 M&A Performance in 2017
    • 10.3 M&A Outlook 2017 – 2022
    • 10.4 M&A Analyzed by Business Segment 2017
    • 10.5 M&A Valuation – Exit Multiple Benchmarks
    • 10.6 M&A Activity by Country
    • 10.7 Strategic Buys Dominate M&A Activity but Private Equity Abstains
  • 11. Identifying Potential Acquisition Targets & High Growth Sectors
    • 11.1 Potential Acquisition Targets
    • 11.2 Acquisition in Physical Security Defined by Sector and Type
      • 11.2.1 The IP Video Surveillance Industry
      • 11.2.2 Security Management Software
      • 11.2.3 Video Surveillance as a Service (VSaaS)
      • 11.2.4 Access Control, Biometrics & Identity Authorization
  • 12. Investment & its Impact on the Security Industry
    • 12.1 The State of Venture Capital in the USA
    • 12.2 Impact of Venture Capital on the Security Industry
    • 12.3 Investors in the Security Industry & Recipients
  • 13. Strategic Alliance – Partnerships – Investments in Startups
    • 13.1 Strategic Alliances
    • 13.2 Partnerships & Investments in Startups Gain Momentum

Appendix
  • Table A 1.1 – The World’s Major Physical Security Companies 2017
  • Table A 1.2 – Acquisitions & Funding Announcements in 2016 & 2017
  • Table A 1.3 – Potential Acquisition Targets 2016 / 17

List of Charts and Figures
  • Fig 2.1 – Distribution of Sales by Major Grouping by Value 2017
  • Fig 2.2 – Distribution of Sales by Major Grouping by Number of Companies 2017
  • Fig 2.3 – Average Revenue for Group A, B, C, & D Companies 2012 – 2017
  • Fig 2.4 – World Sales of Security Products 2008 – 2022
  • Fig 2.5 – World Distribution of Security Products by Major Regions 2017
  • Fig 2.6 – Distribution of Security Systems by Building Type, 2006 compared with 2017
  • Fig 2.7 – Comparison of Physical Security Penetration by Major Region 2017
  • Fig 2.8 – World Sales of Security Products by Type 2017
  • Fig 3.1 – World Sales of Video Surveillance Products 2017 to 2022
  • Fig 3.2 – World Sales of Video Surveillance Cameras 2017 to 2022
  • Fig 3.3 – World VMS Market for Video Surveillance 2016 to 2022
  • Fig 3.4 – Performance of Established Players / New Ventures / Challengers / Leaders in the Video Surveillance Camera Market 2017
  • Fig 3.5 – Performance of Established Players / New Ventures / Challengers / Leaders in the VMS Market 2017
  • Fig 3.6 – Distribution Channels of Video Surveillance 2017
  • Fig 4.1 – World Sales of Access Control Products 2013 to 2022
  • Fig 4.2 – Performance of Established Players / New Ventures / Challengers / Leaders in the Access Control Market 2017
  • Fig 4.3 – Model of Routes to Market for Access Control Systems 2017
  • Fig 5.1 – World Sales of Intruder Alarm Products 2013 to 2022
  • Fig 5.2 – Performance of Established Players / New Ventures / Challengers / Leaders in the Intruder Alarm Market 2017
  • Fig 7.1 – The Cyber Attack Life-Cycle
  • Fig 7.2 – Cyber Security Threat Vectors for Smart Buildings
  • Fig 7.3 – Building Elements Perceived to be at High Risk
  • Fig 10.1 – Security Deals Completed from 2000 to 2017
  • Fig 10.2 – Forecast of Deals 2017 to 2022
  • Fig 10.3 – Merger & Acquisition by Business Segment 2017
  • Fig 10.4 – Acquisition Valuation Benchmarks 2005 to 2017
  • Fig 13.1 – Strategic Alliance 2008 to 2017

Companies Mentioned Include Among Others
  • 3VR / ACTi / Aimetis / AgentVi / Allegion / Arecont Vision / Assa Abloy / Avigilon / Axis Communications / Axsys / Axxonsoft / Bosch / Brivo / Brickcom / BriefCam / BRS Labs / Canon / CheckPoint Systems / CIAS / Cisco / Cooper / CSST / Dahua / Dallmeier / Dedicated Micros / Diebold / Digital Barriers / DormaKaba / Dropcam / DVTel / D-Link / Exacq / Eagle Eye Networks / Eaton / Flir / G4S / Gallagher / Genetec / Gunnebo / Geutebruck / Grandeye / Hanwha Samsung / HIKVision / HID Global / Honeywell / Infinova / Ingersoll Rand / IDIS / Indigovision / IQinVision / Johnson Controls / Jablotron / Keri Systems / Legic / LG / MangoDSP / Mace / Magal / March Networks / Milestone Systems / Mirasys / Mobotix / Morpho Safran / Napco / Nedap / Nest / Nice Systems / OnSSI / Optex / Panasonic / Paxton / Pelco / Qognify / Prism Skylabs / Pivot3 / Primion / Risco Group / Salto Systems / Samsung Techwin / Schneider Electric / Senstar Stellar / SeeTec / SimonVoss / Siemens Building Technologies / Sony / Stanley / Suprema / Synectics / Tamron / TDSi / Tyco International / Ubiqity / Uniview / UTC / Vanderbilt / Verint / VideoInsight / Vivotek / Xtralis / Zicom / Zwipe
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