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The Physical Security Business 2017 to 2022Access Control, Intruder Alarm & Video Surveillance
Published: Q4 2017
PhysicalSecurityBusiness2017to2022
Synopsis
Thisreportaimstoassistallstakeholdersandinvestorsinthephysical
securityindustryinidentifyingbusinessopportunitiesingrowthsectors
ofthemarket;andforecastsdemandto2022
©MeemooriResearchAB
PhysicalSecurityBusiness2017to2022
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Introduction
ThisReportistheNew2017DefinitiveResourceforAccessControl,IntruderAlarms&VideoSurveillanceMarketResearch.
ThetotalvalueofPhysicalSecurityproductsatfactorygatepricesin2017was$29.2Bn,an
increaseofapproximately5%on2016.
Thisisadeclineingrowthfromitspeakin2014butanincreaseonthelast2years.Overthe
last8yearsthemarkethasgrownbyacompoundannualgrowthrateof6.41%and
Memooriforecaststhemarketwillreach$41.27Bnin2022ataCAGRof7.2%.
Ofthethree,stilllargelyindependentbusinesses,AccessControlhasmaintaineditsaverage
growthofapproximately7%overthelastthreeyears,andtakesashareof23.5%.
PhysicalSecurityBusiness2017to2022
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Why Do You Need This Report?
2017hasdeliveredanimprovedandmorestableperformanceandnowallthemaindrivers
forgrowtharenowfirmlyreadytomatchtheperformancerealizedintheHalcyondaysof
profitablegrowthbetween2010and2014.
Howevertherearemajortechnicalandcommercialchallengesaheadthatwillstressthe
supplysideandtheshapeandstructureofthebusinesswillchangesignificantlyoverthe
next5years.Thechallengethatcurrentlypreoccupiesmostcompaniesishowtheycanoperateprofitablyduringthe“racetothebottom”andsurvive.
Thegapbetweenthemajorsuppliersandthemanyhundredsofsmallersuppliersgets
widereveryyear,whilstatthesametimeprofitmarginsarefallingincreasingtheminimum
economicsizetooperateprofitablyinthisindustry.
Inthevideosurveillancebusiness2Chinesemanufacturershaveadoptedthestrategyof
disruptingtheindustrybyundercuttingtheprofitmarginofincumbents,whilstatthesame
timeexpandingmarketsandrapidlygrowingmarketshare.Theyhavebuiltupvolumeand
thegapinsizebetweenthemtodayandthenexttierofwesterncompaniesissowidethat
itlookshighlyimprobablethatitcanbereversedandcertainlynotbywesterncompanies
PhysicalSecurityBusiness2017to2022
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competingsolelyonprice.Thisgivesthemadominantholdtodayonthemainstream
business.
Ascommoditizationofvideosurveillanceproductscontinuestotakeholditrequiresa
strategythatbroadlyfocusesoneithergoingforvolumethroughtheSMBmarketorbrand
throughtheenterprisebusiness.Webelievethatnomorethanfivecompaniesby2022will
thrivebyoperatinginbothatthesametime.
MajorcompaniessuchasAxisCommunications,Avigilon,BoschandPanasonicareina
positiontoreducetheirmarginssufficienttohangontotheirshare.Buttocontinue
growingtheirsharetheyneedtoinvestmoreininnovativeproductsthatofferabetterTCO
metricbutwithdepletedmarginstheywouldneedtoincreasetheirfinancialresources.
Withinits301Pagesand30ChartsandTables,TheReportPresentsAlltheKeyFactsandDrawsConclusions,soyoucanunderstandwhatisShapingtheFutureofthePhysicalSecurityIndustry;
IncreasedpenetrationofIPNetworksystems,furtheradvancesintobiometricreaders,
identitymanagementandwirelesslockingsystemshaveallhelpeddelivergrowthinAccess
Control.Thisisthesecondconsecutiveyearthatithasturnedinthehighestrateofgrowth
ofthe3businesses.Howeverthereissomeevidencethatpricepressuresarestartingtobite
andthiswilleventuallyhaveanegativeeffectongrowthwhenmeasuredbyvalue.There
alsoappearstobereluctancebymanufacturerstosupportopenstandardsinorderto
protecttheirheritagebusiness.Thiscoulddamagetheirlong-termfutureandopentheway
forChinesemanufacturestotakeuptheinitiativeandmakeastrongpushintothebusiness
theyhaverecentlytargeted.
ThemarketforVideoSurveillanceproductswas$15.87billionin2017,agrowthof5.9%on2016andtakesa54.5%shareofthephysicalsecurity
business.Thislevelofgrowthlooksdisappointingcomparedwithgrowthovertheprevious5yearsthataveragedaround9.7%.Howeverthishasbeena
relieftomanysupplierswhobelievedthat2017wouldstruggletoimproveon2016ifthedrasticfallincamerapricesovertheprevioustwoyearscontinued.Ithas,andthishasputagreatdealofstressonprofitabilityparticularlyfor
manufacturersinthewesternworld.
Theintrudersystembusinesstooka22%share.Itisthe“father”ofthephysicalsecurity
industryandhaslongsincereachedmaturitybutitsincreasinguseofradarandthermal
cameras,hascontributedtogrowthedgingupto2.5%in2017.Theuseofradar,advances
insensortechnologies,wirelesstechnologyandtheintegrationwithVideoSurveillance,
Accessandoutdoorlightinghaveallcontributedtoitsgrowth.
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Table of Contents Preface
ExecutiveSummary
1.Introduction
2.Structure,Size&ShapeofthePhysicalSecurityBusiness
2.1StructureoftheBusiness
2.2TrendsinMarketSharebyGroup2012-2017
2.3SizingthePhysicalSecurityBusiness2017&Forecastto2022
2.4WorldDistributionofSecurityProductsbyMajorRegions
2.4.1TheStatusin2017
2.4.2MarketSize&TrendsbyVerticalSectors
2.4.3MarketSizebyRegion&Penetration
2.4.4China&theRestofAsiaOffertheBestProspectForGrowth
2.5Comparing&Sizing,Access-Intruder–Video2017
3.TheVideoSurveillanceMarket2017-2022
3.1MarketSize2017&Forecastto2022
3.2MarketSizeofCameras
3.3MarketSizeofVideoManagementSoftwareSystems
3.4Identifying&MeasuringthePerformanceofLeadingCameraSuppliers
3.5Identifying&MeasuringthePerformanceofLeadingVMSSuppliers
3.6ChannelsofDistribution&Trends
3.7BusinessStrategiesforEnsuringSuccessintheVideoCameraMarket
3.7.1Scale/EconomicsVsTechnology/Performance
3.7.2CommoditizationHasTakenHoldintheSMBMarket
3.8TechnologythatDrivesDemandforVideoSurveillance
3.8.1IPNetworkCameras
3.8.2Compression&VideoAnalytics
3.8.3IntegrationwithinPhysicalSecurity&OtherBASServices
3.9TheMarketforVideoSurveillanceasaService(VSaaS)2017
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3.9.1Drivers&RoadBlockstoVSaaS
3.9.2Suppliers&OperatorsofMVaaS&VSaaS
3.9.3AcquisitionsinMVaaS-VSaaS-ACaaS
3.10VideoTechnology-IPCameras–HDAnalogCCTV–ThermalCameras
3.10.1IPNetworkCameras
3.10.2TheFuture-IPNetwork-HDCCTV–Analogue
3.10.3VideoCompressionTechnologiesH264VsH265
3.10.4ThermalCameras
3.11BodyWornCameras
3.12StorageRecorders
3.13MobileApps
3.14VideoManagementSoftware(VMS)
3.15VideoSurveillanceAnalytics
3.15.1Overview
3.15.2DemandforAnalytics
3.15.3DeepLearning&MachineLearning
3.16NewApplicationsforSpecialistCameras
4.TheAccessControlMarket2017to2022
4.1MarketSize2017&Forecastto2022
4.2IdentifyingMeasuringthePerformanceofLeadingAccessControlSuppliers
4.3ChannelsofDistributionforAccessControlSystems
4.4MajorDemandDriversforAccessControl
4.4.1IPNetworkSystems
4.4.2IntegrationwithinPhysicalSecurityandotherBASServices
4.4.3ConnectingPhysical&LogicalSecurity
4.4.4PACS–StrategicAcquisitions
4.4.5DemandforBiometricReaders
4.4.6PersonalIdentityVerificationCard(PIVCard)
4.4.7NearFieldCommunications(NFC)forAccessControl
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4.4.8SystemsIntegratorsPreferencetopushAccessControl
4.5AccessControlasaService&ManagedAccessControl
4.5.1GrowthThroughAccessControlasService&CloudBasedSystems
5.IntruderAlarms/PerimeterProtectionMarket2017to2022
5.1MarketSize2017&Forecastto2022
5.2DemandDrivers
5.3Identifying&MeasuringthePerformanceofLeadingSuppliers
6.WirelessTechnology
6.1WirelessintheVideoSurveillanceMarket
6.2WirelessintheAccessControlMarket
6.3WirelessintheIntruderAlarmMarket
6.4WirelessWillbeDrivenbyIoT
7.Standards&CyberSecurity
7.1ONVIFforVideoSurveillance
7.2ONVIFforAccessControl
7.3PSIA
7.4CyberSecurity
7.4.1TheMostSeriousThreattoPhysicalSecurityStakeholders&Emerging
BIoT
7.4.2TheCyberRiskThreatLandscape
7.4.3ThePhysicalSecurityIndustryistheWeakestLinkintheBIoTChain
8.SoftwareMarketsinthePhysicalSecurityBusiness
8.1PhysicalSecurity&InformationManagement(PSIM)
8.2PhysicalIdentityandAccessManagement(PIAM)
8.3SituationalAwareness
9.BusinessDevelopmentOpportunitiesThroughIntegration,ITConvergence&IoTRequire
NewBusinessModels
9.1GrowthThroughIntegration&ITConvergence
9.2GrowthThroughIntegration,ITConvergencewithinBASServices
9.3GrowthThroughIoT&theBuildingInternetofThings(BIoT)
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9.3.1TheImpactofBIoTonPhysicalSecurity
9.4BusinessOpportunitiesFocusedonNewVerticals-SharedIntelligence&Systems
Integration
9.4.1NewIndustryVerticals&MarketSegments
9.4.2SharedServices,Smart/SafeCities&BIoTSystemIntegration
9.4.3SharedIntelligenceinthePrivateSector
9.4.4TotalSolutionsversusProductManufacture
9.5BusinessModelsFocusedonProductSpecialization,Brand&Commoditization
9.5.1ProductSpecialization
9.5.2Commoditization
9.5.3Brand
9.6BusinessModelsBuiltAroundSecurityasaService&VSaaS
9.7DoChineseManufacturersDominatetheVideoSurveillanceBusiness
10.M&APerformancebySector-ValuationandOutlook2000to2022
10.1M&APerformance2000–2017
10.2M&APerformancein2017
10.3M&AOutlook2017-2022
10.4M&AAnalyzedbyBusinessSegment2017
10.5M&AValuation–ExitMultipleBenchmarks
10.6M&AActivitybyCountry
10.7StrategicBuysDominateM&AActivitybutPrivateEquityAbstains
11.IdentifyingPotentialAcquisitionTargets&HighGrowthSectors
11.1PotentialAcquisitionTargets
11.2AcquisitioninPhysicalSecurityDefinedbySectorandType
11.2.1TheIPVideoSurveillanceIndustry
11.2.2SecurityManagementSoftware
11.2.3VideoSurveillanceasaService(VSaaS)
11.2.4AccessControl,Biometrics&IdentityAuthorization
12.Investment&itsImpactontheSecurityIndustry
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12.1TheStateofVentureCapitalintheUSA
12.2ImpactofVentureCapitalontheSecurityIndustry
12.3InvestorsintheSecurityIndustry&Recipients
13.StrategicAlliance-Partnerships-InvestmentsinStartups
13.1StrategicAlliances
13.2Partnerships&InvestmentsinStartupsGainMomentum
List of Figures
Fig2.1–DistributionofSalesbyMajorGroupingbyValue2017
Fig2.2–DistributionofSalesbyMajorGroupingbyNumberofCompanies2017
Fig2.3–AverageRevenueforGroupA,B,C,&DCompanies2012-2017
Fig2.4–WorldSalesofSecurityProducts2008-2022
Fig2.5–WorldDistributionofSecurityProductsbyMajorRegions2017
Fig2.6–DistributionofSecuritySystemsbyBuildingType,2006comparedwith2017
Fig2.7–ComparisonofPhysicalSecurityPenetrationbyMajorRegion2017
Fig2.8–WorldSalesofSecurityProductsbyType2017
Fig3.1–WorldSalesofVideoSurveillanceProducts2017to2022
Fig3.2–WorldSalesofVideoSurveillanceCameras2017to2022
Fig3.3–WorldVMSMarketforVideoSurveillance2016to2022
Fig3.4–PerformanceofEstablishedPlayers/NewVentures/Challengers/Leadersinthe
VideoSurveillanceCameraMarket2017
Fig3.5–PerformanceofEstablishedPlayers/NewVentures/Challengers/Leadersinthe
VMSMarket2017
Fig3.6–DistributionChannelsofVideoSurveillance2017
Fig4.1–WorldSalesofAccessControlProducts2013to2022
Fig4.2–PerformanceofEstablishedPlayers/NewVentures/Challengers/Leadersinthe
AccessControlMarket2017
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Fig4.3–ModelofRoutestoMarketforAccessControlSystems2017
Fig5.1–WorldSalesofIntruderAlarmProducts2013to2022
Fig5.2–PerformanceofEstablishedPlayers/NewVentures/Challengers/Leadersinthe
IntruderAlarmMarket2017
Fig7.1-TheCyberAttackLife-Cycle
Fig7.2-CyberSecurityThreatVectorsforSmartBuildings
Fig7.3-BuildingElementsPerceivedtobeatHighRisk
Fig10.1–SecurityDealsCompletedfrom2000to2017
Fig10.2–ForecastofDeals2017to2022
Fig10.3–Merger&AcquisitionbyBusinessSegment2017
Fig10.4–AcquisitionValuationBenchmarks2005to2017
Fig13.1–StrategicAlliance2008to2017
List of Tables
A1–TheWorld’sMajorPhysicalSecurityCompanies2017
A2–Acquisitions&FundingAnnouncementsin2016/2017
A3–PotentialAcquisitionTargets2016/17
How to Order Thereportispricedat$1,750USD(EnterpriseLicense)/$1,500USD(SingleUserLicense).ItisdeliveredasanelectronicPDFdownload,viaemail.
Toorder,orifyourequirefurtherinformationpleasecontact;
[email protected]/+46850164177
PhysicalSecurityBusiness2017to2022
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