1 8 · d e t e k t o r i n t e r n a t i o n a l
Security News Every Day
www. securityworldhotel.com
security
technology market
Products for a more visible future
The security system integration
market consists of the design,
consultancy, installation, service
and maintenance, as well as
sales of video surveillance,
physical access control and
intruder alarm equipment.
Revenue is expected to con-
tinue growing in excess of 9 per-
cent through 2018. The market
is characterised by a handful
of large international players,
numerous regional rivals and
many local competitors. Such
a competitive landscape means
fierce competition abounds
and that both integrators and
installers must remain at the
forefront of technology trends
to be able to continue serving
"best-in-class" integration pack-
ages to their customers.
One trend that integra-
tors have been eyeing closely
recently is Security as a Service
(SaaS), whether it be Video
Surveillance as a Service
(VSaaS), or Access Control as
a Service (ACaaS). Both offer
promising opportunities for
integrators to expand their
recurring monthly revenue
(RMR), while simultaneously
getting closer to the end cus-
tomer. This model also allows
integrators to increase the value
they bring to the table, and
lets them be seen as working
together with their customers
as partners.
According to Paul Bremner,
Senior analyst Video Surveil-
lance - Security Services at IHS,
as equipment margins continue
to edge lower for integrators,
driven by price declines in
the equipment itself, it is the
services that integrators can
offer, as well as the added value
they are perceived to bring to
the customer that will ulti-
mately prove to be the separator
between the winners and losers
in this market.
Smart home security set
to leapfrog traditional systems
It is no surprise the trend of in-
tegrating security equipment and
home automation is being spear-
headed by MSOs (multiple service
operators). Powered partially by
intensive marketing and partially
by an existing and extensive cus-
tomer base, MSOs are in the best
position to simply upgrade their
customers' current subscriptions.
All while traditional monitoring
companies and traditional high-
end providers are left to find new
customers.
In its most recent report on
residential security, IHS Technol-
ogy outlined three main system
types: traditional high-end, service
providers and device vendors.
Traditional high-end systems are
specialist whole home automa-
tion systems which are supplied
by companies, such as AMX,
Crestron and Control4, that
provide an integrated suite of
smart home products, controllers
and professional installation and
management services. Service
providers on the other hand are
packaged solutions at relatively
lower cost sold mostly through
security service providers, com-
munication service providers
and utilities which provide full
backend support. Most are profes-
sionally installed, by companies
like Comcast, AT&T and ADT.
And finally, device vendors are
individual modular smart home
devices sold directly or through
online/box retailers which in-
cludes Myq, Piper and Lowes Iris
in the States.
IHS anticipates a slowdown for
security hardware in traditional
high-end systems due to increased
competition. One of the biggest
drivers for these high-end systems
is video and remote monitoring
via a tablet or smartphone. Even
with the high-end installations, it
is rare to have the security inte-
grated into a `Jetsons-style home'
where television, lighting and
audio sequences occur to thwart
intruders. Furthermore, many of
the traditional high-end installa-
tions are reserved (by price) for
homes larger than five thousand
square feet and mostly occur in
new homes, not retrofit, limiting
the opportunity in comparison to
service providers.
According to Blake Kozak, sen-
ior analyst for Security & Build-
ing Technologies at IHS, device
vendors will continue to be a large
portion of the market, represent-
ing more than 30%, through
2016. These device types will be a
great opportunity for multifamily
housing which is slated for strong
growth due to rising rents, low
vacancy rates and a declining
market for sales of existing and
new homes in 2014. However, the
USA housing market is forecast to
rebound quickly in 2015, which
will favour service providers and
traditional high-end.
How the housing market recov-
ers in 2015 will help shape which
category end-users will fall. A
strong recovery could mean more
traditional high-end homes, while
a limited recovery in housing
formations could result in a more
favourable market for device ven-
dors. Regardless of the outcome,
IHS believes service providers are
the middle of the road offering
which can appease most end-users;
as a result, service providers are
in the best position to offer smart
security devices over the next 3-5
years.
According to IHS Technology, traditional high-end
domestic security solutions represented about 32% of
the USA market for smart security in home automa-
tion applications in 2014. By 2018, the market share
of traditional high-end is forecast to decline to about
22%. Contrary for service providers, which were esti-
mated to represent about 38% of the market in 2014,
are forecast to represent about 58% of the market by
2018. Device vendors are projected to expand pene-
tration through 2016 before losing share.
The world market for security system integration
was valued at $59.5 billion in 2013, an increase of
almost $5 billion from 2012, according to a new
report from IHS.
Security integration market up by $5Bn
By 2018, the market share of tra-
ditional high-end is forecast to
decline to about 22%. Contrary
for service providers, which were
estimated to represent about 38%
of the market in 2014, are fore-
cast to represent about 58% of the
market by 2018.