Bosch Supplies Security Technology for Football Stadiums in South America

Editor / Provider: Bosch Security Systems | Updated: 1/19/2012 | Article type: Commercial Markets

Large crowds and big emotions are a dangerous combination. Therefore it is crucial for every sports stadium to have accurately designed emergency plans and advanced safety measurements in place. At two major South American arenas, Bosch Security Systems recently demonstrated which precautions it takes to enable trouble-free sports competitions on a large scale:

To mark the completion of the Copa America in 2011, the Malvinas Argentinas Stadium was overhauled. Its renovation included an enhancement of amenities and facilities, as well as a major update of the stadium's safety technology. A total of 17 Bosch's mobile dome cameras were placed at entrances, corridors and training rooms. Also, every chamber contains Intelligent Video Analysis from Bosch and through a fiber optic network it was possible to integrate the video surveillance system into the CEO (Center of Strategic Operations) of the city of Mendoza. Angel Pitton, head of the department of Informatics and Telecommunications of the Ministry of Medoza says: “We are now able to control the access of people to the stadium, detect crimes or unusual situations in real time and, crucially, logistical support is given to security personnel. The link to Mendoza's emergency center not only ensures prompt police services, but also the support of the fire-fighters and medical emergency.”

Being one of the chosen venues to host the FIFA U-20 World Cup 2011, the Hernan Ramirez Villegas stadium in Pereira, Colombia, assigned Bosch Security Systems to support the adaptation and modernization of the entire stadium according to the FIFA's strict technical recommendations. A newly installed surveillance system now allows video monitoring, public voice messaging and the reproduction of anthems as well as audio playbacks from the stadium's large screens. To capture detailed images at all times, PTZ cameras, Autodome Series supported by fixed cameras, Dinion XF and the Dinion Series were installed throughout the venue. In addition to the surveillance system, the 700 Series storage system was implemented. Furthermore an extensive Audio System was mounted, which not only ensures clear emergency messaging and PA announcements, but can also be used for music replays in order to create a cheerful atmosphere.

Security Industry Builds on Value and Service

Editor / Provider: a&s International | Updated: 12/22/2011 | Article type: Hot Topics

Uncertainty is the theme for 2012. a&s talks to researchers, solution providers, channel partners and consultants to find out what's next in the year to come.

Uncertainty is the refrain of 2012. While the 2008 financial crisis eliminated unfit players in physical security, a looming debt crisis slowed a “recession-proof” industry.

As security players hunker down for tough times, the lessons of 2008 apply to 2012. With impending austerity cutbacks across Europe, the immediate economic effects will be felt for at least a decade. However, the risk of increased crime will fuel security demand. “Businesses have limited budgets and we advise them on activities to achieve the best value for money and return on their investment,” said Jon Roadnight, Senior Director of Cornerstone Group, a UK consultancy. “The ROI and additional business benefit are things people look for more in tough times, as opposed to just achieving security.”

Manufacturers had to prove their solutions offered clear financial benefits during the recession, which will be the business case in 2012 as well. “We believe that having a compelling value proposition for our products, constantly driving efficiency improvements and targeting the early warning threat detection niche — rather the general market — is the key to our success in good and bad economic times,” said Kim Loy, VP of Remote Surveillance, Xtralis.

Although 2011 was the year of delays, other experts are more optimistic about 2012. “A theme I see carrying over in 2012 is doing more with less,” said Eduard Emde, 2012 President of ASIS International. “There are some differences, but in general security practitioners must do more at a higher level with less resources and money than in the past.”

Tyco Security Products exemplifies a company in flux; it was split from ADT services into different business units for better focus. It expects triple-digit growth in APAC for the next five years, but will take a few more years before it can match EMEA for sales, said David Grinstead, VP of Worldwide Sales.

While consolidation continues, the emphasis has changed from size to strategic value, Grinstead said.

With the recession still a fresh memory, some trimmed in-house costs such as operations and supply chain expenses. An efficient business model paid off for UK distributor Norbain, with plans to continue it into 2012. “If you follow industry standards of a lean organization, you make use of human and operational resources,” said Barry Shakespeare, MD. “A lot of our competitors chased very thin-margin business. Some competitors chased any and all business, regardless of the quality and customer.”

Given the gloomy economic climate, 2012 is expected to be challenging. “However, SimonsVoss Technologies is confident to achieve in 2012 — as in year 2008 — a business performance well above the industry average,” said Hans-Gernot Illig, CEO.

In the face of lean times, security providers are more focused on R&D than ever, making sure their product road map is tied to real customer needs, said Debjit Das, VP of Marketing, Verint Systems.

Beating the Market
For a lucky few, the recession had little effect. “Our sales in 2008 actually grew globally by about 25 percent, so we are fortunate to be growing rapidly and we have been able to put on a number of resources in our corporate head office and globally in the growing markets,” said Curtis Edgecombe, GM of Security, Gallagher Security (a Gallagher Group division). “We have found there is a need for innovation, particularly during a recession. It's important to differentiate business and products, and to grow your brand, to maintain loyalty from existing customers, and attract new customers to your offering.”

Megapixel video manufacturer Avigilon also did well despite the downturn; its revenue grew 26 times to US$5.2 million in 2008 and reached $32.3 million in 2010. The company went public in 2011. “When you're the best in uncertain times, people want to get more value for their money,” said Alexander Fernandes, President and CEO. It plans to use its funding from the stock offering to expand its sales team into emerging markets and double its R&D staff in the next six months.

Network video manufacturer Vivotek experienced growth from government initiatives in emerging markets and its comprehensive supply chain. “Our market share in China now stands at No. 4,” said William Ku, Brand Business Director. [NextPage]

Local Flavor
A slow economy and flat globe mean competition is bound to heat up in 2012. ASIS reflects this globalization, adding “International” to its name 10 years ago and naming its first non-American president for 2012. “Headquarters benefits from the range of perspectives and security challenges, as well as the important local flavors, derived from its global membership,” Emde said. The IT space is poised to compete with security, particularly for IP applications. “It's about drawing the complete picture. A lot of vendors are focused on the product, how it's the latest and fastest,” Shakespeare said. “Well, so what? Why should I buy it? The application story is the real difference in the space we're in.”

Tailoring solutions to local tastes is one way to distinguish a brand. With all eyes on China, the effort to reach buyers has redoubled, even by domestic vendors. The “Safe City” initiative offered tremendous opportunities over the past six years, but public spending has slowed in China and overseas demand is contracting.

Safe-city projects were limited in scope, providing video for the police but few other benefits, said Yangzhong Hu, President of Hikvision Digital Technology. Going forward, the push for smart cities will provide networked benefits and services to citizens, making security part of the solution but not the focus. As the numbers of projects and clients shrink, security will likely not be a separate industry but part of a complete service offering.

China's growth may be slowing, but it remains a target for global security players. Bosch operations in China now report directly to the board for quicker response and better management. “We have our own product development team and plans specialized for China, and the R&D results can be shared with the rest of the world as well,” said Koen Rommel, VP of Sales for China, Bosch Security Systems. “In fact, China is a continent; we have opened up 25 regional offices throughout the country so far, to have better eyes and ears on the market and to actively support customers and projects.”

APAC also figures prominently for Genetec in 2012. “Every quarter, I fly to every region to check on things,” said Guy Chénard, VP of Worldwide Sales and Business Development. “These trips are critical, as 80 percent of our business comes from working closely with system integrators and consultants.”

Entering a new market requires an understanding of the local mindset. “We cannot simply replicate and transfer what we have done in the mature markets to here directly,” said Daniel Chau, Marketing Director for APAC, Honeywell Security. “China today is the largest country for luxury goods worldwide; sometimes, customers here want even higherend, more advanced features.”

Other vendors have set up shop overseas. “In Asia, we have centers of excellence in Shanghai and Bangalore, as what has worked in the U.S. or Europe might not work in the region,” said John Becker, Senior Sales Director for APAC, Tyco Security Products. “There is no silver bullet; focus, communication and partner recruitment have to be ongoing.”

The local infrastructure also needs to be considered. For China,broadband penetration figures are higher than US figures, but the rate of penetration is not as widespread, Chau said. DSL and 3-G networks are only beginning to be rolled out in Tiers 3 and 4 cities.

Having IP solutions is a boon, as they expand a vendor's reach into more projects; each project or country has its unique requirements. “For example, we need to make sure the new products are not affected by static electricity caused by carpets, which may not be a concern in China but are a real issue in many parts of the world,” said Ricardo Ebri Sambeat, GM of China and IP Division Director, Fermax Electronics. “In the Netherlands, we need to make sure everyone can input their name regardless of length. In France, a special button for mailmen is required by law.” [NextPage]

Technology
Standards of Tomorrow
Access control is the next frontier for standards bodies. PSIA released its area control specifications in November 2011 for access control and intrusion, while ONVIF plans to introduce its access control specification in the first half of 2012. By the numbers, ONVIF is beating PSIA handily — more than 340 members and at least 1,300 conformant products — making it the organization to watch in 2012.

ONVIF presently has multiple versions of its specification, which are not interoperable. The profile concept will be finalized in 2012, simplifying setup. “Users will no longer need to determine if specific devices introduced in ONVIF 2.0 are compatible with clients that conform to ONVIF 1.0 or with newer versions introduced in the future,” said Jonas Andersson, Chairman of ONVIF's Steering Committee and Business Development Director for Axis Communications. “Instead, users will be able to easily select the appropriate profile that offers interoperability at a specific functional level among units and software that fits their needs.”

Open standards are one of many factors, but not the panacea, to promote network video surveillance growth, cautioned Gary Wong, Senior Research Analyst for IMS Research. Two standards are better than none at all, as they provide a reference for buyers.

However, clear interoperability statements are missing from manufacturers, such as whether a network camera is compatible with a third-party VMS. “It looks to be a long way to go to achieve the goal,” said Carlos Eduardo Bonilha, President of Digifort. “It may be the idealist's dream.”

The IT world has flourished through standards, which is a long way off for security. “History gives us a clue what this industry will look like,” Shakespeare said. “It will go to a single standard.”

For enterprise customers, customized deep integration of systems serves specific needs. This is achieved through PSIM, which does not require systems to comply with PSIA or ONVIF standards. “These are not consumer-grade software applications,” Das of Verint said. While basic “plug-and-play” ONVIF products may be enough for small to midsize customers, large applications will demand more functionality. The future of standards may not be in the bodies, but in high-level PSIM deployments.

Other standards are mandated, such as RoHS certification. Grade 2 EN 50313 is required in Spain and in other European countries, said Noemi Ferrarons, Export Manager, JR Security Systems.

Regional VMS
The proliferation of network video has driven demand for VMS platforms. More vendors are emerging, which cater to specific regions. AxxonSoft dominates Russia, while SeeTec is strong in Western Europe. Digifort has a loyal following in Latin America, while China has homegrown offerings from NetPosa and Ragile. Genetec and Milestone Systems have global footprints, but face challenges in new markets from local contenders.

The more regional and productfocused VMS offerings become, the greater the risk of a split product market becomes. “With the security market being end user-driven and moving toward open systems, regional VMS will lead to VMS vendors having to settle with a reduced customer base,” said Balaji Srimoolanthan, Program Manager for Aerospace, Defense and Security at Frost & Sullivan.

However, country - specific offerings provide more support for products. “Deep integration has always been the aim of our policy, and the architecture of our products is optimized for it,” said Evgenia Ostrovskaya, Global Business Development Director, AxxonSoft.

Others felt a global product strategy was more future-proof. “If country-specific standards emerge, VMS offerings may be too fragmented and therefore not scalable for global adoption, which will not benefit end users in the long run,” said Lars Gudbrandsson, Head of Product Management, Milestone Systems.

While a universal policy is ideal, it is not focused or customized enough to break into new markets. Scalability is also an issue, as increased camera counts will require server upgrades. New cameras and servers will need additional licenses, usually on a recurring annual basis, making the open path scalable but pricey.

To address specific market needs, add-on modules allow customers to do more than monitor cameras, Bonilha said. Wong added, “There has been an ongoing trend among the VMS companies to begin to focus on the integration of equipment beyond just video surveillance equipment, such as life safety sensors.”

A global policy cannot overlook localc omplexities .Genetec encourages engineers to see how solutions are used in the real world and partners with local hardware manufacturers. “In video, data just keeps coming, so there is no second chance; you must get it right the first time,” said Charles Cousins, MD of APAC, Genetec. [NextPage]

Budget Offerings
“Affordable” is a marketing buzzword and will remain firmly embedded in 2012's dialogue. Companies that previously targeted enterprise customers are shifting toward SMB buyers, as budgets tighten. “We think it is important to keep our reputation of high-quality products, even if we also address the lower-cost markets,” said Ray Mauritsson, CEO of Axis Communications. “We make sure all of our offerings are professional solutions.”

Leading manufacturers hope to differentiate their products by their brand and not just by cost. Avigilon's offerings include a 29-megapixel camera, but a corner store would not require that much performance nor pixels. “Most surveillance is bad video quality and bad compression,” Fernandes said. “People need fewer features for less deployment, but they want the same thing: a real, clear picture.”

As cost is the primary factor in SMB purchase decisions, demonstrating ROI can turn a grudge purchase into a great benefit for a business, said James Smith, European Marketing Manager at Samsung Techwin. “Increasingly, customers are using our equipment f o r mul t ipl e purpo s e s , such as security, health and safety, monitoring processes and business optimization.”

Fads
Technology holds tantalizing promise ,but can yield disappointment. Biometric identification was to do away with keys, cards and PIN codes, but cost and development hurdles burst its bubble. It is of limited significance for most customers, Illig said.

VCA has suffered bad press, due to overpromising and underdelivering. “This is beginning to change,” Wong said. “A sense of realism and pragmatism emerged in the VCA space. IMS Research forecasts that the market for intelligent video devices will grow at an annual rate of more than 20 percent over the next five years.”

Instead of hype — the notorious example of identifying a terrorist in a crowded airport — VCA emphasizes the practical, such as smart searches through hours of footage. Onboard analytics will benefit from better chipsets with faster processing, which will improve accuracy.

The HD boom makes VCA all the more relevant. Basic algorithms can detect motion and only record in HD during an event, then downscale when nothing is going on. As the catastrophic flooding in Thailand sunk nearly half of worldwide hard drive shipments, storage will become a valuable commodity in 2012. The country accounted for 40 to 45 percent of worldwide production in the first half of 2011, which will slow computer and hard-drive shipments, said IDC in a November 2011 report. “Growth for 2012 is anyone's guess, but it should be the year of harvest for HD,” said Keiki Warashina, Acting Sales Manager, Industrial Optics Business Unit, Tamron. The company will roll out 8- and 10-megapixel lenses in 2012 for better image quality and cost control.

The emergence of HD-SDI has been embraced by incumbent vendors, although it has been difficult to gauge buyer interest due to limited product availability. More product launches are scheduled for 2012, but it remains unclear whether SDI can overcome storage, processing and distance bottlenecks.

All -Access Pass
Access control lends itself to many applications beyond security, and the proliferation of mobile devices is accelerating that functionality. “Customers are seeking a more seamless experience with their credentials that incorporates the use of many applications in a single card,” said Eric Chiu, Sales Director for China, HID Global (an Assa Abloy company).

Near-field communications for smartphones and the convergence of physical-logical identity platforms are extending the credential's value. “The way we differentiate ourselves is through dedication; we can integrate with video and intrusion, but we are dedicated to secured identity and access control,” Chiu said.

Better integration with business operations further boosts the usefulness of access control. “Gallagher is trying to penetrate toward the high end of the market, offering value to customers outside of just physical security,” Edgecombe said. “We are doing this by developing our products to provide value through integration with business processes, ERP systems, and on-boarding/off-boarding of employees and contractors, and provisioning of people in an organization.” [NextPage]

Clear Channels
A brand sinks or swims depending on the manufacturer's choice of channel partners. The right partner finds quality customers and provides technical support to them, offering manufacturers and buyers a win-win proposition. However, not all partners have the knowledge or skill set to support network solutions, resulting in dissatisfaction and relatively low-margin business.

The traditional security channel has shown ambivalence about IP, but is picking up network know-how fast. “How we approach the market can be divided into three ways: electronics channel distribution (with the new budget product line), traditional value-added security resellers, and engineered solutions and software (closely with system integrators),” said Gert van Iperen, Chairman and President, Bosch Security Systems. “Given our comprehensive portfolio, our networks are not yet fully integrated at the moment, but training and certifying our partners will continue to be an ongoing process.”

Simplifying installation eases the learning curve for distribution partners. “We're primarily selling through the traditional channel,” Fernandes said. “They can just take out the camera from the box and turn it on. That's it.”

Training and education are continued efforts for security and IT channels. “It is clear to see that distributor businesses are changing, with traditional security distributors taking on network equipment product lines and hiring in expertise in this area,” Smith said. “Likewise, traditional network distributors are taking in security product lines and expertise.”

Social Media
The reach and immediacy of social media have made it indispensable for communication. More providers train channel partners through webinars. Users and integrators can get answers through Web calls, instant messages and even Facebook posts. “We see huge potential for use of social media for certain applications,” Edgecombe said. “You are able to identify your audience more easily than in traditional media.”

While it is hard to beat the trade show experience, microblogging through Twitter offers rapid online interaction. Some countries block social media, requiring familiarity with local equivalents, such as China's Sina Weibo tweets. “We are able to receive instant feedback that allows HID not only to better partner with customers and provide them with products and solutions that meet their specific requirements, but also enhance the customers and technical support they need to do business and perform at the highest levels,” said Simon Siew, MD for APAC, HID Global (an Assa Abloy company).

Blogs are common, but falling out of favor. Most ineffectively post self-promoting content, such as product releases or show announcements, defeating the purpose of dialogue. Instead of blogging, Digifort opts for direct online contact. “We choose and operate an online forum to communicate with developers and users, on top of webinars and periodic newsletters,” Bonilha said.

Services
Security procurement has long been an upfront cost, but new business models will require users to rethink this approach. Norbain introduced technical support fees in September 2011, as its diverse portfolio needs additional resources. “Companies need to create valueadded service,” Shakespeare said. “The single-digit margin in IT is bolstered by richer margins from value-added services with margin, such as training. In the IT space, people are very prepared to pay. In security, they expect a high product margin, but they don't expect to pay for service.”

Hosted Video and Access Control
Value-added service will be essential for survival in 2012, particularly in challenging financial and economic conditions.

Cloud deployments have taken place but have yet to gain widespread adoption in 2011. “IMS Research believes that while VSaaS will likely suffer from some growing pains due to up-link speeds and ‘the last mile,' the world market for VSaaS solutions is forecast to continue to grow strongly, by more than 18 percent year-on-year toward 2020,” Wong said.

Privacy concerns have limited current hosted services to private cloud offerings. MVaaS has not taken off though there's a lot of “fuss,” Mauritsson said. “It is a great opportunity for our market, and for system integrators to provide for customers and generate recurring revenue.”

Enterprise cloud deployments provide benefits such as scalability and low start-up costs, Srimoolanthan said.

However, questions remain about where information is stored, making hosted video unthinkable for a sensitive government application. Hosted video may be limited to smaller deployments such as homes and small shops, Bonilha said.

The kinks are being worked out, but the technology to deliver hosted video is already in place. “Improved IT, networking and unified communications will allow Xtralis to better integrate its fire and security solutions into seamless, comprehensive threat detection systems,” Loy said. Its remote monitoring app lets users view multiple sites at high refresh rates. “Mobility extends the reach and improves the reaction to security threats.”

Access control is closely tied to business systems, making a good fit for physical-logical hosted services. “IMS Research believes that SaaS for access control has potential to be used extensively, but this has not yet come to pass,” Wong said.

Service is differentiating players, particularly with data. An intrusion solution provider branched out with a home-monitoring pilot in Europe that successfully became a long-term offering. “Although the economic situation in Europe is complicated, we believe that providing a cost-effective solution with added values such as self-monitoring and smartphone apps will help our partners increase their market share,” said Max Gadot, Marketing Manager at Risco Group. “We plan to roll out our self-monitoring service in other regions as well.” [NextPage]

IT -Fication
Security is shifting toward IP, with standards leveling the playing field. As mature markets are spending less, the push into emerging pricesensitive markets means vendors must shave profit margins. While the security industry is unlike to operate on IT's single-digit margins, it is inevitable that margins will shrink. “In the IT world, products are commoditized, and security is going that way,” Roadnight said. “But in the scheme of things, the volume is not big enough.”

Value-added services that are able to differentiate one vendor from another are important, as well as constant innovation. “It is difficult to say at this point of time if vendors could be looking at single-digit margins, as many are bringing in new strategies to keep themselves profitable,” Wong said.

A healthy investment in R&D will give manufacturers an edge. “Products now come in building blocks, so real differentiation lies in software,” Van Iperen said. “This added value, in addition to great relations with suppliers of critical components and end users, will keep us ahead of the game.”

As margins go down in security, some profitability has to be sacrificed. “As soon as we are not able to add value to new products, we will see price erosion and pressure on gross margins,” Mauritsson said. “There are still many years of useful innovation and developments left, which will help maintain margins and the value of products.”

Due to the fragmented nature of the security industry, the level of competition will escalate in 2012. With more suppliers, cutthroat pricing will lead to a decline in margins. However, in the long run, consolidation of the supply chain will stabilize competition and establish healthy margins. The security industry remains robust, warding off bad times by diversifying sales targets and developing more focused solutions.

Our next section offers a sneak peek at what's ahead in 2012. It features viewpoints from leading players on security and building automation trends for 2012.

Zooming in on Asia and China Markets

Editor / Provider: The Editorial Team | Updated: 12/20/2011 | Article type: Hot Topics

With doubts about the eurozone, many companies are looking into other markets. This will help businesses diversify their portfolios and minimize regional risk. The spotlight in recent years has focused on Asia — with reason. Asia includes many of the world's fast-growing, high-potential economies, such as China, Taiwan, Russia, Korea, India and Indonesia.

As Simon Siew, MD for APAC, HID Global (an Assa Abloy company), said, “We are targeting new market segments where we believe have strong growth potential. Since the 2008/9 recession, we have grown considerably in [Asia], which is still an unsaturated market. There is a lot of room for growth, and I believe with the right solutions, we can spur greater demand and look to surpass the European sales organization in the coming years.”

Guy Chénard, VP of Worldwide Sales and Business Development, Genetec, emphasizes the potential in the APAC markets. “APAC is our ‘last frontier,' accounting for about 6 percent of our total sales. Our overall growth target for 2012 is 36 percent, with video expected to grow by more than 30 percent and access control more than 70 percent.”

Daniel Chau, Marketing Director for APAC, Honeywell Security, explained a little behind the success of Asia. “In APAC, government and police attention, better standards of living, and foreign investment and capital expenditure have been strong driving forces, and the region has actually become the center of IP-based video surveillance.”

Without a doubt, much of the attention on Asia is focused specifically on China. Though uncertainties remain about the Middle Kingdom, its huge market potential has seduced businesses the world over. David Grinstead, VP of Worldwide Sales, Tyco Security Products, said. “China is not an emerging market; it already emerged, and the growth is phenomenal. We have also doubled our investment in China.”

IMS Research explained that the boom in Chinese security started in 2006 with the government's launch of its nationwide “Safe City” program. “As a result of this program, the market peaked between 2008 and 2010, during which time the Beijing Olympics, Shanghai Expo and Guangzhou Asia Games were also successfully held, and a massive US$600-billion (RMB$4-trillion) government stimulus funding was injected into the economy,” said Paul Everett, Research Director.

Frost & Sullivan predicts that the video surveillance market in China will continue to grow more than 30 percent year on year to 2015. Speaking about IP video, William Ku, Brand Business Director for Vivotek, said, “We have had very strong growth here from 2009, thanks to ongoing government initiatives and a complete supply chain. IP video in China is growing at 33 to 35 percent per year.”

One of the major drivers for IP-based video in China is an emerging requirement for HD video. “A good example of this is the Beijing police ordering all supermarkets and shopping malls to install HD security cameras,” said Bo Zhang, Senior Analyst at IMS Research.

Gert van Iperen, Charman and President of Bosch Security Systems, mentioned the meteoric growth of network videos in China. “Four years ago, we were talking about DVRs in China, but the market is moving now with increasing speed to IP and HD. Originally, we thought China would become our second largest market in 2013, but It is already in 2011.”

Opportunities also abound in the access control markets. Eric Chiu, Director of Sales for China, HID Global (an Assa Abloy company), said, “Globally, while China is not our biggest market, it does boast one of the highest growth rates, with doubledigit CAGRs projected for the next five to 10 years.”

“A significant part of future growth within the Chinese access control market will be generated from mid-end projects (50 to 199 doors), with a focus on port, rail, commercial, government and hospital projects,” Everett agreed. “Large government-led programs are moving aside, giving way to commercial and industrial projects of a much larger size than in previous years.”

Though there has been talk about price sensitivity and decreasing margins in Asia, an interesting phenomenon is emerging from China. “There are two extremes in the Chinese market: one where unit prices are key and changing very fast, and the other where end users are willing to pay $300,000 to $450,000 for consultation just to get system planning right,” said Tyrone Huang, GM for Security and Fire Solutions in China, Siemens Building Technologies.

Given the huge potential, there are still challenges with trying to move into new territories. Siew spoke of problems in China and another rising Asian star, India. “The challenge in these countries is twofold. One of the issues is evangelizing and promoting technology solutions in nascent marketplaces with channels which aren't very well-developed, but certainly desire to move forward quickly. Secondly, there are intellectual-property challenges that require additional attention. Despite these challenges, China and India represent tremendous growth opportunities.”

Charles Cousins, MD of APAC, Genetec, echoed similar sentiments. “Our biggest challenges in APAC are network evangelization and customizations. For big systems to work properly, consultants, channel partners and end users need to understand the intricacies of networking and storage technologies.”

However, given the past few years, security players are accustomed to dealing with trouble and are ready for changes in Asia and the rest of the world. Yasushi Matsumoto, Manager for Asia, Global Marketing Group, Security and AV Systems Business Unit, Panasonic System Networks, “After the 2008 recession and 2011 earthquakes and floods, we are as prepared as we can be for any market uncertainty and dynamics.”

a&s China Awards Honor Top Security Brands

Editor / Provider: The Editorial Team | Updated: 12/12/2011 | Article type: Hot Topics

Outstanding security brands were recognized at an awards ceremony in November. Sister publication a&s China asked readers to identity the best local and international companies, tallying nominations from more than 2,500 system integrators, users and consultants.

a&s China, the leading security publication in the nation, recognized elite providers at the 8th annual Top Security Brands ceremony on Oct. 28 in Shenzhen.

The awards ceremony honored trustworthy security providers. The first of the three categories was “a&s Top 10 Security Brands in China,” recognizing quality brands selected by end users. The “a&s Outstanding Security Brands in China” category awarded companies who upheld a consistent brand message. Finally, the “a&s Security Brands Fast 3 in China” named up-and-coming companies with strong potential.

The nominated companies were selected through a fair and open process. The awards promote security by encouraging companies with a clear brand message. The companies named are not copycat makers, but providers with a serious commitment to security.

“As we look back, the Chinese security industry was dominated by well-known global brands, with few local names,” said Parson Lee, MD of Messe Frankfurt New Era Business Media and Publisher of a&s China. “Branding is a long and hard process, which is why we salute companies — local or international — who have what it takes to survive in China.”

Nominations for the awards came directly from system integrators, users and consultants. More than 2,500 surveys were submitted nationwide over a two-month period, with the criteria including innovation, price performance, reliability and service. Each respondent could name up to five companies per product category. A total of 365 nominees were named in video surveillance; along with 286 access control companies; 250 intrusion companies; 223 intercom companies and 345 integrated solution companies.

a&s Top 10 Security Brands in China
Video Surveillance
American Dynamics (Tyco Security Solutions), Axis Communications, Bosch Security Systems, CNB Technology, Dahua Technology, HB, Hikvision Digital Technology, Honeywell Security, Infinova, Kedacom, LG Security, Panasonic System Networks, Pelco (Schneider Electic), Samsung Techwin, Santachi, Sony Electronics, Sunell Technology, Tamron, Tiandy Digital Technology, Yaan

Intercom
ABB, Anjubao, Aurine, Fermax Electronics, GST, Jiale, Leelen Technology, Legrand, LonBon Electronics, WRT

Access Control
Coson (CSST), DDS, HID Global (Assa Abloy), Honeywell Security, Indas, Ingersoll Rand Security Technologies, JSST, Peake, Reformer, ZK Software

Intrusion Detection
Aleph, Bosch Security Systems, DSC (Tyco Security Solutions), Focus, Honeywell Security, Jing Hua Long, Karassn, Longhorn (CSST), Optex, Paradox

Integrated Solution
Bosch Security Systems, GE Security (UTC Climate, Controls and Security Systems), Hikvision Digital Technology, Honeywell Security, Johnson Controls, Panasonic System Networks, Taiji, Tiandy Digital Technology, Tsinghua Tongfang, Tyco Security Solutions

a&s Outst anding Security Brands in China
AB, Aebell, Aipstar, Ampon, Blue Sky, CHD, CNAEC, Hundure, Integrated, Konlan, Launch, Meeyi, Minking (CSST), Pearmain Electronics, Skyworth Qunlin Security Technology, TCL, Telege, Vimicro, Wanjiaan, ZNV

a&s Security Brands Fast 3 in China
NetPosa Technologies, OB Telecom, Ragile

Physical Security Delivers Growth, Valuations Rise and Acquisitions Reach Historic High

Editor / Provider: Submitted by Memoori Business Intelligence | Updated: 12/7/2011 | Article type: Hot Topics

Business this year was better than ever in physical security, as detailed by Allan McHale, Director of Memoori Business Intelligence.

One of the most encouraging findings from Memoori's third annual report, “The Physical Security Business in 2011,” is that this industry has outperformed most peers. Despite a troubled economic climate, it has increased revenues and profitability, while merger and acquisition has surged by more than double in the last two years to US$9.847 billion. This business looks like a safe port in a storm.

The total value of world production at factory gate prices was $19.17 billion and it has grown by a CAGR of 4.25 percent over the last two years. Of this, video surveillance products at $9.1 billion made up 47 percent of total market, making it the fastest growing sector. This was followed by access control at $4.41 billion, which took a 23 percent share. Sales of intruder alarms fell to $5.65 billion and now have a 30 percent share. The developed markets of North America and Europe are losing market share to Asia — particularly China, which will be the largest single market by the end of this decade.

Figure 1 shows the relationship between the performance of the market by size, value of acquisitions and company EBITDA valuation on acquisition over the period 2007 to 2011. It shows that the market for physical security products did not decline until 2009, while acquisition activity and valuations declined in 2008. In 2009 both acquisition and valuation started a rapid two-year rise, while the market has grown by a CAGR of 4.25 percent.

The anticipated aftershock from the 2008 financial meltdown now looks inevitable, irrespective of whether the right corrective actions are taken now. This will dampen future demand, but we are optimistic as it can now deliver more attractive opportunities for clients to improve security and profit from it. Demand will edge forward at a CAGR of 3.7 percent over the next five-year period, while we forecast a much more modest growth in mergers and acquisitions well down to single figures.

One factor stands out in the report, and that is growth has been driven, not so much by the need for security, but by the industry's capability to produce a constant stream of new products that meet customer needs to drive more ROI. Across almost all verticals, security managers have found the budget to invest in systems that have moved from being a cost center to a profit center in some applications, through delivering increased productivity at lower prices.

It is the application of new technologies that has enabled this to happen. The report identifies five emerging technologies that have created new business opportunities. They are
1. Wireless communications;
2. IP networking technology;
3. Video surveillance as a service (VSaaS);
4. Managed video, analytics software and security management software, including physical security information management (PSIM); and
5. Physical identity and access management (PIAM).

Less M&A by Incumbents
New technologies have one thing in common: Improving productivity, providing safer and more efficient security systems, and in some cases lowering cost. However all of these technologies embrace a wide divergence of skills and expertise, which will require large R&D budgets to take them forward. It is unlikely that any one company in the security industry will master them all. So far, the leaders in introducing these new products are small- to middle-sized companies focused on one segment of the market, with the majority having been in business for less than 10 years. The traditional market leaders' shares have stagnated and the average share is less than 10 percent. Financing these developments will not improve their competitive positioning in the short term, but they have the cash to buy this expertise through acquiring companies steeped in it. However, the traditional leaders seem reluctant to take the initiative at this time.

This is one of the baffling things thrown up by the report. Despite a doubling in acquisition activity in the last two years, most of the traditional market leaders have not participated. It is not easy to fathom why, because they have had an active policy of growth through acquisition up to 2008 to 2009, and they all have strong cash reserves. By 2010, the security industry had got itself back to profitable growth and the industry had proved itself to be an attractive robust business. Although company valuations have gone up, they are still below 2008 levels.

Interestingly, some $1.178 billion accounting for 12 percent of total investment in acquisitions in the last 12 months was made by companies from defense and IT-related industries. In addition, venture capital and private equity groups acquired six companies investing some $3.605 billion, including Bain Capital's purchase of Securitas for $3.26 billion. This follows on from an active campaign in 2010 of companies external to the business seeking to become a part of it. Both defense and IT companies see opportunities in the industry to leverage through their technological expertise. With their strong finances, they will play a significant role in strengthening and growing this business.

The long standing multinational suppliers are both product manufacturers and system suppliers for almost all aspects of physical security, such as Bosch Security Systems, Honeywell Security, Johnson Controls, Schneider Electric, Siemens and UTC. When you review market share by product sales, it shows that average market share figures are little more than 3 percent, with the highest around 12 percent. Compared to market share in some segments, such as the fast-growing IP video market at $1.3 billion, leading network camera supplier Axis Communications has a share around 35 percent, with no other supplier in reach.

We wondered if the traditional suppliers are spreading themselves thin on the physical security front and need to refocus on either the product, systems business or a combination of the two to focus on specific vertical markets. They have all performed well financially in the last three troubled years and have been successful in growing their systems business. One of reason for this is they have fed off their heritage estate business and at the same time integrated activities from other parts of their organization for their clients, such as fire detection and extinguishing, evacuation control, mass notification and energy management into holistic solutions. This has been a successful strategy but it appears to have taken their eye off the product business.

In September, Tyco International announced it would split into three separate companies, with two based on security and safety. This opens the opportunity for at least one megamerger in 2012. Our bet is the traditional players will not sit it out this time around. However they will have to make sure that if they are going to stay in both product and systems camps, they commit sufficient resources to spend on the enabling technologies or acquire companies that have this expertise.

Practical Considerations for Pretty Pictures

Editor / Provider: a&s International | Updated: 12/5/2011 | Article type: Tech Corner

Earlier this year, a major typewriter manufacturer closed down its last facility. While initial reports claimed that it marked the extinction of the revolutionary device, it is far from dead. However, the magical device that took the world by storm has withered significantly and now serves only in niche markets.

The typewriter changed the world. It was a simple, elegant solution that solved a very specific problem — the inefficiency in recording the written word. It was a straightforward device with a concept that was easy to grasp.

After a little more than 100 years, the personal computer appeared on the scene, providing much more than simple word recording. “Word processing” was the name of the game, along with other applications, such as spreadsheets and automated processes.

Initially, personal computers were clunky and expensive, compared to typewriters, not to mention the fact that users needed to learn new skills and rewired their mindset to utilize the powerful, new tools. Contrast those to today's Macbooks, Ultrabooks and smartphones!

Video surveillance is undergoing a similar transition. HD video offers clearer and smoother pictures, which in turn enable a whole new batch of use cases, such as more practical video analytics. The benefits are clear. What is not clear is how users should approach this new technology and what they should expect from it, especially when the lack of universal standards is not helping at all.

Not too long ago , video surveil-lance was simply a combination of video cameras and recording devices. Though limited in use cases and functionality, video surveillance systems were simple to understand and easy to implement. Misconfiguring or overloading the system was difficult, and it was relatively simple to troubleshoot problems when things were not running as expected. Nor did they require significant technical and IP knowledge to design, implement and maintain. All this allowed for more predictable performance and TCO.

Analog cameras have served their purpose well throughout the years, but video surveillance has evolved with the advent of new technologies, which enable exciting new possibilities for video surveillance and security in general. First, we saw the rise of network cameras and IP-based video surveillance, which have already outshipped analog systems in some regions. Now, the battle moves to megapixel cameras and HD video.

According to research, by 2015, megapixel cameras will account for 88 percent of the video surveillance market, of which more than 70 percent will be HD. SD network cameras still outsold their HD or megapixel counterparts in 2010, but there was also significant growth in the number of HD and megapixel network security cameras shipped, said Mrinalini Lakshminarayan,Video Solutions Strategist for Motorola Solutions.

In any case, as with any product in a free market, customer demand drives availability and brings down price, while the increased competition drives quality and innovation. The costs of these cameras will only go down in the coming years, further fueling wider adoption and better solutions.

So…Who Needs It?
Strong demand is a given, but is HD necessary everywhere? Applications that benefit the most from HD surveillance are the ones involving forensic search or archiving, due to the increased amount of detail captured, said Craig Howie, Commercial Director for Visimetrics. “A typical example would be casinos, where the level of detail available from HD systems could prove financially significant during a dispute investigation from a gaming table.”

In general, the benefits of higher resolutions can be approached with two mindsets: reduced costs due to fewer cameras needed or increased performance through upgraded cameras.

Some vendors argue that the higher resolutions and wider view allow users to have one HD or megapixel camera assume the role of several SD ones. While this may be true to some extent, optimal camera placement is still required for effective coverage. With this approach, the larger field of view with HD can cover a larger area due to the 16:9 aspect ratio, but with only the same number of pixels per meter as SD. So, there is no performance increase, but product and installation costs go down due to fewer cameras required, said Ad Biemans, EMEA Product Marketing Manager for CCTV, Bosch Security Systems. “However, there is a catch. Your cameras do need to point in one direction, such as at checkout lines in a supermarket, car lanes at a petrol station, check-in desks at airports and so on.” In short, this argument is moot if the setup requires cameras to point in different directions or need a persistent front-facing perspective.

With the performance increase approach, you get more details (pixels per meter) with the same field of view — ideal when requiring the best quality for retrospective interrogation or needing a flexible camera installation, Biemans continued. “Superior HD captures all the details for applications involving cash registers, check-in counters, access gates, reception areas and grandstands.”

Applications with camera scenes covering larger fields of view are also better suited to using HD surveillance over SD systems by virtue of the increased information available in post event analysis, Howie agreed. “Citywide systems with complex street scenes and wide fields of view will provide the most significant demonstration of the improved results of HD over SD.”

In city surveillance and safety, HD video enhances identification because of its higher resolution; similarly, crowd surveillance will be of better use in arenas and stadiums. Together with improved identification capability, HD installations typically require fewer cameras than SD solutions to cover a similar area, Biemans said. “This can significantly lower TCO for large systems, such as those in airports. Obviously, highly detailed images of HD systems are also important in the finance and banking market.”

Today, there are few, if any, applications for which SD is “good enough,”as years of frustrated surveillance operators can attest, said Becky Zhou, Sales Director for APAC, Arecont Vision. However, there are still instances where SD is an optimal choice, said Karen McCarrison, Product Marketing Manager for IndigoVision. “For example, if you are covering a narrow field of view, SD cameras may be more than capable of giving the level of detail that you need.” [NextPage]

SD Still Kicking
Users are more likely than not to be interested in HD video. Just as a personal digital video recorder is to the average consumer, users certainly want their video surveillance cameras to produce more detailed images, said Xiang-Qun Ying, IP Camera Director for Hikvision Digital Technology. “However, the hefty investment in networking, storage and the cameras are prohibiting for cost-sensitive industries. For example, public agencies on a tight budget may have little choice but to settle for SD. Of course, there are also some scenarios where SD is already more than sufficient for the purpose intended.”

Smaller sites with relatively small fields of view and constant lighting tend not to fully need the benefits that an HD surveillance system can produce, Howie said. “Smaller sites with narrow confines, such as retail, banks and small offices, don't really have the distance/detail perspective to show significant value in using HD over SD.”

In some settings where only a small area is monitored — for example, a jet bridge — only a very limited scene needs to be covered, and D1 resolution would be sufficient to clearly recognize and identify a person, Ying agreed. “In other cases, you may need to cover a wide area, but not for petty details. For example, when monitoring for a forest fire, an alarm must be triggered when smoke is spotted. However, you don't need to see clear details of the flames. SD satisfies these applications in a more economic fashion compared to HD, in terms of bandwidth, storage and equipment.”

Other examples of prime SD applications are perimeter surveillance and locations involving looking in a large corridor, due mainly to the 4:3 aspect ratio providing better coverage of the scenes, Biemans added.

Looking at Big Picture
The popularity of HD video in the consumer market pushed forward video surveillance, but an exceptional HD video surveillance system requires much more than just good cameras. For IP-based HD video, things get a bit tricky. The edge device, transmission media and back-end processing all have a say in whether the system works properly.

Many of the system design considerations for IP-based HD video are similar to those for IP-based SD video, McCarrison said. “Cable distances must be considered, with restrictions easily overcome by good design and switch location, or the use of a fiber backbone. Many systems suffer from bandwidth issues when all video is streamed via a central server. This issue can be overcome by using a system with a distributed architecture, not only removing network bottlenecks, but also removing single points of failure and reducing costs.”

Edge Devices
Camera manufacturers could be a dime a dozen, but it is important to note that similar specs do not translate to similar performance; they will vary in image quality or bandwidth consumption. Good video encoding is critical to produce good quality video, and at usable bit rates. Networks that are already struggling to transmit HD video do not respond well to bandwidth spikes, which can be reduced through using a camera with better compression technology, McCarrison said. “As resolution increases, the ability to achieve good compression becomes much more difficult, especially when trying to maintain a guaranteed frame rate.”

In addition, the right cameras must be selected for the right locations. Each application and customer expectation of image quality should also be matched to the right megapixel camera, Zhou said. “While a 5-megapixel (MP) camera might be an excellent choice in some projects, it is not necessarily ideal for all scenarios. If an application requires full motion, for instance, a 1.3-, 2 or 3-MP camera would be a better option, or even a dual sensor day/ night camera. Being attentive to application requirements is a critical step in choosing the right megapixel camera and avoiding performance issues.”

Another area that can make a significant difference to the video quality is the lens choice. A quality megapixel camera requires a quality megapixel lens; without this combination, the benefits of higher resolution and good compression can be negated, McCarrison said. “Customers should not be tempted to save cost on the lens; otherwise, the money that they have spent purchasing an HD camera could be wasted. Some manufacturers spend a lot of time testing and selecting lenses, and often supply cameras with lenses that have been calibrated.”

An HD camera fitted with a standard lens will not deliver, as a dedicated HD lens capable of supporting megapixel images ensures top performance, Biemans agreed. “Indeed, the entire signal chain, from scene to screen, must be HD-optimized.” In the next part, we explore the chain of command in HD surveillance and common points of failure to watch out for.

Year in Review: Security Surges in 2011 from Delayed Projects

Editor / Provider: a&s International | Updated: 11/30/2011 | Article type: Hot Topics

The economic crisis seems to be largely over in 2011, but new debt concerns are sparking anxiety about a second depression. As security deals with market uncertainty, we look at the year's milestones in events, regional and vertical markets, technologies, challenges, and drivers and differentiators.

There has been no shortage of grim headlines this year. In March, the strongest recorded earthquake in Japan killed scores of people, leaving extensive destruction and a nuclear meltdown in its wake. Along with natural disaster, deliberate acts of violence took place, including the senseless Norway attacks and the Moscow airport suicide bombing. In the U.K., mass riots resulted in five deaths and widespread damage.

The past decade in security has been shaped by 9/11, with its mastermind Osama bin Laden meeting his demise in May. However, the war on terrorism is far from over, affecting a younger generation throughout the region. Across the Middle East and North Africa, Arab Spring uprisings toppled authoritarian regimes. Egypt's Prime Minister Hosni Mubarak stepped down after 30 years of power, while Libyan leader Moammar Gadhafi was killed in October. Political instability coupled with economic uncertainty has marked the past year as an eventful one.

Not all is bleak though. China hosted the successful 2011 Summer World University Games in Shenzhen, welcoming student athletes from all over the world. Projects came back online, with Asia Pacific expected to invest US$100 billion for 350 airports in the next 10 years, according to Frost & Sullivan. More new infrastructure boosted the security market, which grew in some areas due to political unrest.

M&A
Notable consolidation and restructuring activity went on in 2011, a welcome sign after the recession. Tyco International announced a three-way split in September, with security divided into two companies: ADT and Commercial Fire and Security. “One of the business reasons for splitting up Tyco was serving the customer better,” said Charlie LeBlanc, President of Security Services for FrontierMEDEX. “One of the dangers in consolidation is you start losing the customer and understanding what they want or need.”

Prior to Tyco's split, ADT Security Services acquired physical security information management (PSIM) provider Proximex in April. In the same month, Verint Systems also made a PSIM buy for Rontal Engineering Applications. As security systems handle more data, there is a clear need to aggregate it in management platforms.

UTC reorganized in September, combining security and fire with HVAC provider Carrier to become UTC Climate, Controls and Security Systems. The new business will be led by new President and CEO Geraud Darnis. Siemens also restructured in September, with a new Fire Safety and Security business unit made up of Life Cycle and Enterprise segments.

Pure-play video analytics providers were either acquired or eliminated this year. Vidient was in both categories, going under in January and then being acquired by Agilence in April. In August, Keeneo's 4-D analytics was sold to Digital Barriers for $2.8 million, diminishing the ranks of stand-alone analytics providers.

Of the VCA companies still in operation, ObjectVideo sued Bosch Security Systems, Sony and Samsung Techwin for patent infringement this year. While the defendants have countersued and the legal outcome is uncertain, the lawsuits make ObjectVideo look desperate. Even if ObjectVideo wins, it has lost credibility by alienating some of the biggest names in video surveillance.

GROWTH MARKETS
Public spending came back in 2011, with government projects and airports being among the most active vertical markets. “Due to the large number of airports across the U.S. and Europe, there is a constant need for retrofit as terminals get updated,” said Blake Kozak, Senior Market Analyst for IMS Research.

DVTel won a project for a major European airport with 1,200 cameras, along with a contract for the Mumbai airport this year. “We see new opportunities largely in emerging markets,” said Ami Amir, Executive VP of Marketing and Products, DVTel. “We had significant success in South Africa, Latin America, Russia and Asia. For us, India has much more activity than China.”

A military site in Afghanistan was one of Delta Scientific's biggest projects in 2011, using barriers and barricades to protect it from car and truck bombers, said David Dickinson, Senior VP of Delta Scientific. Its key regions were North America and the Middle East, with a focus on areas facing high risks from vehicular bombs. Many investments have been made in city surveillance, infrastructure and government buildings. “Government spending in Asia Pacific has been one of the key drivers for security revenues in 2011,” said Susan Sahayan, Research Analyst for Frost & Sullivan. “Railways, airports, highways and in-flight security are some of the key sectors within transportation driving the growth of video surveillance, access control and biometrics.”

Rising fuel prices are increasing demand for public transportation. “As we see an almost negative situation in the economy, we see a positive situation in public transport,” said David Gorshkov, CEO of Digital Grape. “There's an increased need for monitoring, to meet the demands of public transport for both road and rail.”

Threats from domestic and international terrorists around the world remain, making transportation a major security market. “In the public sector globally, we see the increase of security systems, whether they be access control or video surveillance,” Gorshkov said. “Government buildings are increasing their security, as well as educational installations.”

The Beijing metro chose a networked access control solution with card readers to enhance access management and overall security, said Simon Siew, MD for APAC, HID Global (an Assa Abloy company).

Infrastructure and government were among the company's top verticals for 2011. “Geographically, we have grown in India and China in the past year, as their economic environments have rebounded faster than most countries,” Siew said.

Corrections saw growth this year, with OnSSI installing systems at several Texas prisons. Each system includes more than 800 cameras. “OnSSI will be standardized throughout the Texas prison system's 114 facilities in the coming years, with new installations taking place as funding becomes available,” said Gadi Piran, President of OnSSI.

City surveillance also sees greater demand for scalable management. “There is increasing interest in separate control rooms to make better use of data citywide, such as transmission,” Gorshkov said. “There's interest in the consolidation of systems in various control centers, or PSIM.” [NextPage]

PRIVATE SECTOR
The commercial sector saw good movement in the past year. “The global economy trickles down to all spending, whether the government or private sector,” LeBlanc said. “The private sector is driving the spending more so than the government sector.”

Sports and leisure grew, such as athletic venues and stadiums. Dallmeier installed a multimegapixel solution for the Olympic Stadium in Berlin, which can seat more than 74,000 spectators, according to a prepared statement from the company.

In emerging countries such as Brazil, India and China, high growth can be found. “With the World Cup and Olympics to be held in Brazil in the coming years, the country is set to increase its capacity by about 85 percent,” Kozak said. “The number of hotel rooms is also expected to increase by nearly 40 percent, increasing demand for products such as electromagnetic locks. Qatar is also seeing strong growth in sports and leisure as well as other vertical markets, because of the need to secure both established and newly constructed infrastructure.”

Financial institutions witnessed increased demand. “Banking experienced moderate growth in 2011 despite the downturn, because of consolidation and the need for logical- physical access control,” Kozak said.

Retailers are also investing in security. “Retail, certainly supermarkets, are performing quite well, with refurbishment programs for main stores and new developments with new smaller ‘in-town' stores,” said Andrew Pigram, Technical Director at Norbain. “One of the first sectors to react to the downturn was retail in 2008, but we're starting to see a gentle recovery.”

Europe and North America are seeing retail growth. “As it turns out, it has been strong as retailers have an increased need to protect their assets,” said Paul Bodell, Business Development for IQinVision. “In some places, the bad economy or threat of a higher crime rate has accelerated investment.”

Another growth market is the industrial sector, such as energy and petrol. “We've done work in Brazil, Mexico, Chile, Columbia and several other countries,” said John Moss, CEO of S2 Security. “The nice thing about servicing a number of markets in Latin America and Asia is you have some protection from difficulties in any single market.”

Integrators focused on ROI for installations, which grew in 2011. “We saw a spike in 2010 and 2011 in power and utilities, particularly remote sites,” said Mark Gally, VP of Marketing for VideoIQ.

TECHNOLOGY TRENDS
As more markets have already reached the IP tipping point, standards become crucial to integrating multiple devices. ONVIF is by far the largest of the physical security groups, counting more than 300 members. However, the present version is limited to display. Support for each member's unique PTZ protocols, night vision controls or in-house analytics is still a way off.

Supporting generic functions is already a big step forward, but “standards” still lack a uniform guideline for image quality. “Standards provide a framework for performance criteria to be achieved by the various members,” Gorshkov said. “But ONVIF and PSIA are trade groups, not standards bodies. They are interconnect agreements between vendors.”

Installers and integrators should be more concerned about designing systems that deliver the proper imaging for user needs, rather than just looking at cost. “Integrators need to maintain an appropriate standard of quality, rather than leaving it in the hands of vendors,” Gorshkov said.

Some standards are drawn up by federal bodies, such as Homeland Security Presidential Directive-12 mandates for government identification. “The government has extended its influence on physical access initiatives, imposing tightened privacy standards and mandating secure-compound directives,” Siew said.

MANAGEMENT AND ANALYTICS
The migration to IP has yielded benefits for businesses. “The industry as a whole has embraced what technology can do to assist a corporation or entity in protecting their assets,” LeBlanc said. “It's a multiplier that compounds upon itself. There are much easier ways to integrate into a solution.”

The accessibility of smartphones and tablets is expected to drive home automation growth to reach a wider audience, according to Frost & Sullivan.

As IP yields business benefits, it sees strong growth. “We continue to see rapid adoption of IP technology across product categories,” said James Rothstein, Executive VP of Tri-Ed/Northern Video Distribution.

Edge devices did well, as the hardware and software are optimized to work together. Integrators can save time for setup and calibration, while differentiating with analytics. “It offers nice infrastructure savings and operator efficiency for search and presentation capabilities,” Gally said. “The continued adoption of analytics in the mainstream is a critical component in powering an overall system. You can optimize storage and empower people to do faster searches.”

Delivering ROI was a focus for manufacturers. VideoIQ launched its first business continuity rule for 24-hour ATM vestibules to detect sleeping vagrants, which can be a problem in cold climates. “They're concerned about customer safety and whether people can go in the ATM to do business,” Gally said. “We can track objects that go motionless for a long period of time and send an alarm. Banks are actually impacting their bottom line by making sure there's access to ATMs 24/7.”

Other providers are providing more value by offering more functionality, such as unlimited installs for VMS client software and incremental licenses by camera count. “OnSSI has reconfigured how the software platform goes to market,” Piran said. Its scalability provides upgrade opportunities for customers with cameras and severs at multiple sites. [NextPage]

VIDEO SURVEILLANCE
Network video may have reached its tipping point in several regions, but analog is far from dead. HD-SDI provides a midway point with HD video over analog cabling. “HD-SDI is only available in the U.K. through a limited number of suppliers, so it's not really launched or established yet,” Pigram said. “However, there's a lot of end user interest, and more manufacturers will be launching products towards the end of 2011.”

For network video provider IQinVision, it consolidated its M-JPEG and H.264 product lines for greater efficiency. “In 2011 we converted all our cameras to multistream,” Bodell said. “We now have the largest portfolio of H.264 cameras and consolidated part numbers. Since the market would not allow us to increase the price of the M-JPEG cameras, we are selling the multistream H.264/M-JPEG cameras for the price of M-JPEG cameras and letting the users select the compression in the field.”

This year 's multimegapixel cameras generated plenty of buzz at trade shows. “There is a trend to use high-megapixel cameras, in standard format and increasingly more specialist 180-degree/panoramic and 360-degree fish-eye technology to capture a complete view from a single camera,” Pigram said. “This is proving to be a valuable addition to many video surveillance systems and in some cases, customers prefer to use them compared to traditional fully functional domes.”

Among the high-megapixel solutions was a 51-megapixel multisensory system with a dozen lenses, capable of displaying background objects as clearly as ones in the foreground. “This makes it possible to identify people at a distance of 160 meters,” said Roland Feil, Sales Director for Dallmeier electronic.

UP IN THE CLOUD
More hosted offerings were launched in 2011, but not all sites have the infrastructure to support large bandwidth. “For the smaller commercial and residential sectors of the market, it's just starting and will grow in the next five years and expand to larger applications as greater bandwidth becomes available,” Pigram said. Norbain introduced a hosted access control solution, targeting multisite end-user companies.

And while megapixel counts might be climbing, few networks have the bandwidth to transmit enormous video files at real-time frame rates. “Distributed storage is a key component to intelligently manage data to a cloud service,” Gally said. “HD video into the cloud will require customers to invest so much in the infrastructure that it's hard to cost-justify.”

ACCESS CONTROL AND INTRUSION
Managing access can now be done through integration with other physical security systems, such as video door phones for remote monitoring. “The integration of video surveillance with biometrics is gaining traction,” Sahayan said. “This growth in biometrics is expected to create the need for end users to utilize more advanced surveillance systems, particularly IP systems, which will be more cost-effective as a security solution.”

Mobile devices will also feature near-field communications (NFC) for access control. “HID Global sees significant opportunities in taking NFC technology beyond cashless payment into new, complementary physical access control applications,” Siew said. “The industry has made great progress in moving payment applications onto NFC smartphones.”

The global intrusion alarm market is expected to reach $2.4 billion in 2011, according to IMS Research. Opportunities were mainly in retrofit activities, as new construction has slowed.

CHALLENGES
CHANNEL
Finding new opportunities was a top distributor target in 2011. “The economic slowdown has us focus even more on presenting ways for our customers to diversify into new product areas and revenue streams,” Rothstein said.

Network video channels have been tricky to navigate in recent years, as traditional distributors may not understand IP issues. However, IT resellers may know about networking, but lack security experience.

From the experience of 13-year-old IQinVision, security distributors are the way to go, particularly in the high-volume market or sites with less than 10 cameras. “In the early days, we focused on IT integrators,” Bodell said. “But more security channel dealers are becoming network-savvy. Three to four years ago, I would have picked IT as the channel that would win, because the security channel was not embracing IT. But with turnover, you get a younger generation of security integrators who understand networking, because they have grown up with it.”

While IP uptake is seeing more acceptance, education is still a challenge. “It's a fact that the end user and system integrators are exposed to new network solutions and don't know enough about IP,” Amir said.

ECONOMIC WOES
Challenges in 2011 were spending and economic difficulties. “Western Europe has been greatly impacted by the recession, namely Spain, Italy, Greece and the U.K.,” Kozak said. “As governments look to balance budgets, there could be a slowdown in growth. The Americas is forecast to see slow growth in 2011 as a result of the high growth that returned in 2010 following the economic recession. Despite rebounding, the growth could not be sustained. The EMEA region is only forecast to grow by 2 percent in 2011.”

Market uncertainty forced installers and end users to reconsider their security purchases, even if they were satisfied with how they performed. “Economic pressures have forced companies to either consider whether they need to spend money on features they don't really need or conversely that the system they buy delivers more: not just in the security arena, but potentially in new areas which will drive economic growth of the end user,” Pigram said. “This has driven a trend to two different purchasing dynamics — cost-effective video and integrated IP systems.”

Regional buying behavior has further compounded market troubles. “Low levels of awareness on the importance of security and the availability of cheap manpower in emerging countries such as Vietnam, Indonesia, Thailand and the Philippines are restraining the adoption of security solutions,” Sahayan said. “However, this scenario is expected to change in the next few years, as end users begin to gain more exposure to surveillance technologies through trade shows, media advertising, as well as success stories.” [NextPage]

DRIVERS AND DIFFERENTIATORS
After a relatively calm year, companies are gearing up for a possible debt crisis. In the face of macroeconomic factors, a combination of innovation and responsiveness to customer needs enabled companies to beat the recession and weather the coming storm.

One way to survive is through continuous innovation. “The path we embarked on many years ago has proven to be correct,” Feil said. “We address all aspects of video security technology rather than concentrating on individual components.”

While R&D is not cheap, it can pay off. “Our competitors reduced their workforces during the recession,” Moss said. “We didn't do that, we hired through it. When the recession eased up, they didn't have enough people and we had a bunch of new products.”

Warranties support a highly innovative position with guaranteed quality. “Given the number of low-cost competitors, we've gotten business back from customers who had catastrophic product failures in the field,” Bodell said. “We always boasted the best products, and in 2011 we backed that up with a five-year warranty on our minidome and a three-year warranty for our professional line with on-camera recording and analytics.”

DVTel also launched a quality assurance program, providing a lifetime warranty for new products good for at least four years, Amir said.

CUSTOMIZATION
Tailoring solutions for specific applications benefits both manufacturers and customers. “Diversification related to multiple vertical markets is one way to ensure ongoing success,” Piran said. “It helps that OnSSI has a product that is versatile and useful in a variety of end-user environments, which allows us to focus on hot verticals without having to reengineer the system when the market shifts.”

One phenomenon this year was low-volume customizations. While this was previously unthinkable, economies of scale have enabled manufacturers to adjust products to customer specifications.

CUSTOMER FIRST
The goal of innovation and customization is to satisfy buyer demands. “Companies have to be consistent and focused on execution,” Amir said. “Focus on the customer.”

Continued engagement is about supporting user needs. “Our sales guys are with integrators every day,” Bodell said. “Product management talks to customers and gets feedback. Then we make a list of things, determine what's real in the long term and we invest in that. The simple way to say it is it's just the voice of the customer. You've just got to learn to listen to it.”

Extending the value of existing customer investments is crucial. “In the recession, we solved business problems for end customers and that allowed us to grow,” Gally said. “Our strategy and advice is to make sure solutions delivers a value-add to the channel partner as well as the customer.”

Customer satisfaction is not a new concept, but achieving it is easier said than done. Providing security and convenience at an affordable cost benefits all parties. As companies with a clear value proposition witnessed growth even after the market contracted, it proves that following best practices delivers real results.

Targeting Emerging Markets and Innovations

Editor / Provider: The Editorial Team | Updated: 11/23/2011 | Article type: Hot Topics

Targeting Emerging Markets
The seemingly recovering yet shaky global economic conditions required security companies to tighten their belts. Top performers found success in emerging markets, and aimed to increase market presence in these regions through partnerships, acquisitions or new offices.

Assa Abloy saw 2 percent growth in EMEA in 2010, up from a -12 percent drop in 2009. The Americas division fell -2 percent due to the lack of new construction, which was better than its -19 percent slump in 2009. Asia Pacific saw strong growth in China, Korea, Australia and New Zealand at 14 percent growth, up from -1 percent in 2009.

Asia continues to be a growth powerhouse. For network camera leader Axis, its revenue breakdown by market in the Americas, EMEA and Asia were 47, 43 and 10 percent, respectively; growth by region was 26, 26 and 40 percent.

The ongoing shift in economic power towards emerging markets is a particularly important trend for Bosch. A new hub in China was established last year, adding to the existing 14 sales offices in this market with an additional 10 planned for this year. Bosch is also taking this strategy to increase market presence in other important emerging markets, such as Latin America.

RCG even restructured its board of directors and senior management to focus more on developing the Southeast Asia market.

Public Spending Steals the Show,Again
The biggest verticals in security are infrastructural assets that are exposed to an increasing number of risks, such as those from terrorist attacks.

This includes utilities, governmental buildings, public areas and transportation hubs. These verticals represent more than 50 percent of the total security market worldwide.

Infrastructure projects are key drivers for the high growth rates in emerging markets. This is most evident in the transportation and public safety segments, as shown by the Safe City initiative in China.

Renewed Focus on Customer Needs
Top performers continued to invest in product development, some even investing more. As the competition continues to heat up, companies are putting more effort into R&D to stay ahead of the game. New technologies and standards, as well as increased scrutiny from end users, can make or break a company if it just sits back and smiles.

Assa Abloy's product development focuses on increased customer value, aiming to improve cost-efficiency yet maintain higher quality and increase functionality. HID Global increased its activities in value analysis, which has led to significant cost savings in both the existing product range and the production of new products.

Companies offering high-end products began to cater to the midrange market, such as the new Honeywell SMB product line. These offerings increase cost-effectiveness. On the other hand, Hikvision expanded its offerings to be more comprehensive, including products that compete in the high-end market.

Hikvision recognized the dropping profit margins for low-cost DVRs, and did not invest significant capital in this space. Instead, it shifted its focus to complete end-to-end solutions. The strategy proved worthwhile, and it won them significant government projects in China.

Avigilon also provides an end-to-end video solution to customers, while each component in the system can also be sold separately. These components are versatile enough to be configured and deployed in many different applications. Avigilon also sells accessories to complement its system.

A common product platform with fewer, integrated components enables enhanced customer value and lower costs. It also raises the technology level of traditional products and offers customers higher security and better functionality.

Efficient product development with a strong customer focus is the strongest driver of organic growth. A complete solution gives customers a single point of accountability, ensuring confidence that their project will roll out smoothly with optimum performance and stability. Furthermore, customers are unwilling to invest heavily in security amidst economic uncertainties, which creates a demand for scalable systems with lower upfront costs.

Utilizing New Technologies
The proliferation of mobile devices and their ever expanding capability create opportunities to provide more value to customers, such as mobile phone payment systems, remote monitoring on smartphones and hotel access control solutions.

Mobotix introduced remote access control functions through integration with mobile devices. As companies struggle to balance cost and value, taking advantage of new technologies can be key for growth in a shaky economy.

Assa Abloy introduced RFID and wireless technology to hotel management, allowing guests to open door locks via contactless card soreven NFC-enabled mobile phones. While new hotel construction is slow, this new technology creates strong demand for retrofit systems.

RCG believes RFID technology can be utilized in various aspects of daily life, which creates numerous business opportunities. It is currently involved in an “Internet of Things” projects in Xiangyang, China.

Nedap Security Management also sees great potential in RFID technologies, as more applications rely on it. Accurate reading of RFID tags is more important than ever, and Nedap invested heavily to develop a new generation of RFID readers that allow RFID tags to be accurately read in even the most difficult conditions.

As Jerry Maguire so eloquently put it in the 1996 film, “Help me, help you.” This is probably how customers today feel. With the economic downturn, customers began to reevaluate their options to get the most bang for their buck. In shaky economic conditions, customers would rather spend on a great product that provides true value and scalability, rather than one that merely gets the job done for the time being.

An investment in security itself may be hard to justify, as the perceived threat is generally not as evident in the commercial world. However, vendors have seen success in providing for targeted markets specific solutions that also integrate into business operations.

The bottom line is that customers who have the resources are willing to spend when it makes sense. Vendors must realize that customer demand is more important than anything, and a gazillion new features do not amount to anything when the customers do not need them. Simple as it may sound, listening to the customer is something many companies find difficult to do.

In addition, factors like industry standards are reshaping and redefining the security industry in the form of convergence and consolidation. In the coming years, the company that can provide a truly integrated solution will rise above the competition, regardless of economic conditions.

New and different approaches and business models are emerging. More so than ever before, companies need to adapt and adopt effective methods that reduce costs, increase productivity and improved core competencies.

Ways to Survive in Recession

Editor / Provider: The Editorial Team | Updated: 11/23/2011 | Article type: Hot Topics

Growth picked up significantly in the latter half of 2010, allowing the security industry to take a few gulps of fresh air amidst the suffocating effects of the recession. While the transition to IP-based security and the demand for sharper images have enabled companies catering to the video surveillance market to enjoy healthy growth, things have been rough for other segments of the security industry, such as access control and intrusion detection. Nevertheless, the Security 50 ranking was not dominated completely by video surveillance manufacturers. Several access control companies weathered the hardship through strategic acquisitions and cost-cutting measures. Several companies also made first-time appearances on the Security 50 ranking due to newly available data, while some disappeared because of acquisitions

Average revenue growth for access control manufacturers on the Security 50 ranking was 8 percent, compared to 2009. The Global Technologies division of Assa Abloy remains the top player at US$776.8 million in revenue, up 5.2 percent from 2009. Second was RCG, which saw revenue grow by 23.5 percent to $388.4 million, due to the company's aggressive expansion in China and Southeast Asia.

Growth for video surveillance companies was especially strong, at an average of 20.2 percent. The growth was largely fueled by the markets' demand for better image quality. Avigilon, one of the top profit growers, saw revenue grow to $32.6 million, up 91.2 percent from 2009. Chinese manufacturers Hikvision Digital Technology and Dahua Technology have also scaled the ranking ladder. In fact, 13 of the top 15 revenue growers cater to the video surveillance market. Vivotek is another company riding the megapixel waves, growing 71.5 and 57.5 percent in revenue and profit, respectively.

Security giants such as Honeywell Security and Bosch Security Systems were hit harder than most by the economic crisis. Although they remain the top performers of the year, growth in 2010 was modest, albeit much better than the previous year.

Fit = Happy
The financial crisis shrunk the market for security, and manufacturers were faced with intense competition. Many of the top 15 performers, with regards to revenue and profit growth, jumped up from much lower positions. Under the circumstance, established companies were forced to examine their processes to trim fat and increase efficiency.

In the first half of 2010, Bosch Security Systems gradually toned down aggressive cost-saving measures, playing it safe due to doubts regarding the strength of the global economic recovery. In the second half of the year, demand for security technology increased significantly, with Asian markets showing the strongest growth. This was especially beneficial for the product business of Bosch. However, cost-efficiency measures taken during the financial crisis were not in vain, as they prepared Bosch to take advantage of the economic recovery in 2010.

Assa Abloy also benefited from successful restructuring, closing down 38 of its production units and switching 42 to focus mainly on final assembly. A total of 5,387 employees were let go as a result. An increasing volume of standard production has been transferred to internal and external units in low-cost countries. The remaining local assembly units were improved through the introduction of lean methods throughout the company, combined with efficient final assembly of customized products.

Trimming Fat to Increase Efficiency
Measures made to cut costs were consolidating production units, shifting production to low-cost countries, increasing production efficiency, optimizing inventory management, and streamlining administrative processes and workforces.

Flir Systems also successfully reduced production costs. By designing and manufacturing products that take advantage of economies of scale, Flir reduces the cost of delivering a product to customers. The increased unit volume output reduces production costs, which allows lower selling prices and increases demand for its products.

Flir designed a vertically integrated manufacturing process that allows full control over key component technologies. Through acquisitions and internal development, they created an internal supply network that optimizes manufacturing throughput, increases product design flexibility, enhances product reliability and provides independence in designing key components. The integrated approach enables Flir to lower costs, yet continue to improve the functionality and efficiency of critical components. Furthermore, Flir can deliver products in a more timely and cost-effective manner by relying less on third-party suppliers, .

On the other end of the rope, Axis Communication does not have its own facilities. This enables it to be more flexible in the manufacturing process. The supplier strategy Axis employs is to account for more than 5 percent but less than 25 percent of each supplier's sales to ensure suppliers remain focused on Axis, while also allowing the flexibility to rapidly scale up or down volumes.

Regardless of manufacturing strategy, providers striving to offer a comprehensive product line streamlined their production processes to increase productivity and reduce costs. An effective method was to develop common product platforms wi th f ewe r c omponent s and common product development. In production, flexible final assembly close to the customer is combined with the transfer of high-volume standard production to external and internal production units in low-cost countries.

Mobotix transitioned to a new processor technology for all singlelens cameras. It will be gradually deployed in dual-lens cameras as well. One advantage of the new platform is that all Mobotix products now utilize an identical electronic board. This simplifies purchasing logistics, reduces production costs and increases product quality.

AVTech also develops products based on a common platform, allowing it to reduce development and production costs, while catering to different market segments with a comprehensive product line.

In addition, companies that have invested in lean manufacturing techniques, such as Assa Abloy and Visonic, were able to control production costs more effectively. Pioneered by Toyota, lean manufacturing allows more efficient production flows, better control of material costs, improved decisionmaking procedures and shorter development times.

Beyond Streamlining Production
Inventories are difficult to manage. There are considerable costs based on anticipated sales, and risks arise when an event impacts product demand. Coming up short in sales results in higher inventory levels of finished goods, components and raw materials. Reducing inventories helps reduce capital employed and improve cash flow. However, it is equally important to maintain stable and swift product delivery.

Administrative flows gradually grow cumbersome over time. Automated and standardized solutions help reduce and eliminate manual work to create a seamless flow from internal processes to external communication to final delivery, increasing efficiency and customer satisfaction.

One interesting cost-saving measure Bosch took was to focus on prevention. Extended field-analysis testing was used to determine what products would encounter in real-world situations, and additional findings were fed back into the development loop. With products that are designed to withstand stresses and strains in the actual environments they are targeted for, Bosch was able to reduce support costs.

Flir employed several strategies to lower operational costs through vertically integrating operations, expanding use of shared services, rationalizing strategic sourcing processes, and diversifying manufacturing operations.

Dahua also optimized management and production to control costs and increase productivity, resulting in 125.4 percent profit growth, which is higher than its revenue growth of 81.4 percent.

Bosch Secures Shanghai Oriental Sports Center With Comprehensive Video and Audio Coverage

Editor / Provider: Bosch Security Systems | Updated: 11/17/2011 | Article type: Commercial Markets

Known as the "Sea Crown" in China, Shanghai Oriental Sports Center has installed a range of Bosch solutions to safeguard smooth operations in all venues. The implemented products already functioned reliably during the 14th FINA World Championships in 2011. Going forward, they will continue to secure smooth operations at all times.

The Shanghai Oriental Sports Center close to Huangpu River and next to the Expo Park in Shanghai's Pudong New Area is an integrated sports venue mainly used for aquatic activities. It covers an area of almost 35 hectares and has an arena with 18,000 seats. As the host of the 14th FINA World Championships, Shanghai Oriental Sports Center features a complex stadium and an aquatics center including an outdoor diving pool. In order to assure sound operations when hosting grand events of this kind, the primary consideration that should be taken into account are security factors and an efficient contingency plan when facing emergency.

Shanghai Oriental Sports Center got equipped with a fully networked sound reinforcement system from Electro-Voice which is remotely controllable. It features horn-loaded EVH speakers as main sound system. The installation was completed by a series speaker. For the system drive Precision Series amplifiers have been deployed, miking comprises REV wireless systems, Polar Choise table top paging stations and N/DYM microphones.

Bosch also provided the center with advanced public address solutions including Praesideo Digital Public Address and Evacuation systems, ceiling speakers and other cabinet loudspeakers which make audience from all sections enjoy a clear divisional broadcast.

Over 1,000 cameras with excellent performance, including Bosch Day/Night Cameras and AutoDome Day/Night Cameras, have been installed to achieve a 360-degree real-time supervision.