2013 Security50 access control(2-1): Standardization hits industry
Editor / Provider: Jill Lai, a&s International | Updated: 11/25/2013 | Article type: Hot Topics
The access control industry is doing well and the market continues to present opportunities. In line with the above perspective, IMS Research, an IHS company, forecasted that the global access control market will reach US$2.3 billion by the end of 2013, from $2.1 billion in 2011.
Access Control Market
The access control market continues to be reflective of the global economy, with regional performances following the footsteps of national economic performances. Nevertheless, the industry as a whole is seeing good performance in a weak economy.
Globally, “IMS Research projects a CAGR of 6.5 % (7.2 % if you include electronic locks) for the access control global market between 2011 and 2016,” said Jason Ouellette, Director of Product Management of Software House at Tyco Security Products. Regionally,“these figures vary from a 3.2% (7.5% with electronic locks) CAGR for EMEA, up to a 5.9% (6.6% with electronic locks) CAGR for the Americas, jumping to a 9.7 % (15.5% with electronic locks) CAGR for the APAC region. We are forecasting a stronger growth rate than IMS projections for access control in each of the respective regions today, without electronic locks,” added Ouellette.
In terms of market size, the U.S. is the largest market for electronic access control products. The Freedonia Group listed access control as the fastest product segment within the US security industry, increasing at 9 percent annually to $5.6 billion in 2016. "Americas is doing well. The U.S. especially, has bounced back after several difficult years,” said Chris Bone, VP of Access Control for EMEA at Assa Abloy."
In Latin and South America, the market is seeing some resurgence. Colombia is growing and with the roll out of the Olympics, Brazil is likely to be relieved of the recent political and economic tensions, as the country works to complete preparations ahead of the global event. There are obviously some areas of trouble and we do not anticipate a steep growth, but there should be a rebound in the Brazilian market in the next 12 to 18 months,” echoed Matt Barnette, Executive VP of Sales & Marketing at AMAG Technology.
As expected, emerging markets continued to grow faster than the developed markets. “From HID Global's perspective, the emerging regions such as Eastern Europe, the Middle East, and Africa are experiencing stronger revenue growth than the traditional markets in Europe, said Harm Radstaak, MD of EMEA at HID Global.
“The key driver in the Middle East and South East Asian markets is the integration of security products with building management systems. In the UK market however, whilst this integration is important, the feedback we have is that customers are especially looking for value for money and return on investment,” said John Davis, MD of TDSi.
The economy is challenging, but the significance of access control remained and even increased as the year went by.
Firstly, the volume of data that corporations and governments hold has dramatically increased over the years and the need to control access to them, be it the system or the location that houses these data is crucial.
Secondly, the shift from mechanical locks to electronic locks continues to take shape in 2013, providing vendors with plenty of opportunities to upgrade existing systems. Electronic locks provide records of transaction details, such as whom and when the system was accessed, to provide a much more accountable security system.
Thirdly, the integration of access control systems with video surveillance and/or intrusion alarm systems is now possible with IP-based systems. This integration is also increasingly expected by end users, thereby spurring demand.
Finally, socioeconomic factors include new regulations regarding access to information and a general heightening of security concerns amongst the general public. These factors have required end users from all verticals to upgrade or install new access control systems.
Activity is brewing in the commercial sector, although the drivers differ amongst the various regions. “Canadian growth is really more related towards the oil and gas revenue, which has been a significant growth driver up in the Canadian market. In the U.S., commercial construction has largely rebounded,” said Barnette.
“There is quite a bit of activity in the corporate sector. For example, we are seeing a lot of smaller and mid-sized projects that are driven by tenant improvement type work on companies that may be consolidating space or moving to new spaces,” continued Barnette.
Similarly, the commercial sector remains solid for Napco. The company considers the commercial sector “less volatile” and generates approximately 80 percent of annual revenues from commercial/industrial products and services.
On the other side of the Atlantic Ocean, the corporate sector has also offered plenty of business opportunities. “We have focused a lot of attention in the retrofit market in Europe,” said Barnette.
Despite budget cuts, the government sector can continue to expect modest growth in 2013.
In the U.S., the access control market in this sector is expected to grow 3.5 percent in 2013 to reach approximately $198 million, up from $191 million in 2012, according to IMS. This anticipated growth is an increase from the 1.8 percent enjoyed in 2012, based on 2011 revenues of $188 million.
A number of government initiatives are said to be driving the current growth — the Homeland Security Presidential Directive 12 (HSPD12), the Federal Information Processing Standard Publication 201-2 (FIPS 201-2), and the Global Entry Program. The HSPD12 mandates a standard for a secure and reliable form of identification to be used by all federal employees and contractors. The FIPS 201-2 demotes the Cardholder Unique Identifier as an authentication device and will help drive the market for high-assurance readers in the government space. Meanwhile, the Global Entry Program allows expedited clearance for preapproved, low-risk travelers, and will drive the demand for biometric applications, such as iris and face recognition.
Finally, the US government is also expected to continue to adopt new technology to protect critical infrastructure. Hence, market opportunities for access control suppliers remain in face of government budget cuts because the security solutions at high-risk locations need to evolve and persevere in a digital era.
In Europe and in the U.K., in particular, government buildings are starting to set targets on the reduction of carbon dioxide emissions. While governments have not specifically mandated emission reduction policies, access control companies are seeing a trend in this, especially in face of rising energy costs in many European countries. For instance, TDSi began integrating access control with building management, video surveillance, and intruder alarms about seven years ago.
One of the key drivers of access control adoption in the market is government regulations. Following the government sector, continued regulations in health, safety, and privacy issues in the healthcare, education, and oil and gas sectors are also driving sales.
“The US healthcare industry has been growing significantly for the last 10-plus years. For instance, instead of having campus complexes of hospitals, there are smaller facilities which are distributed within the communities, as the industry changes its footprint to be closer to the customer base,” said Barnette.
Moreover, the education sector is increasing security spending, especially in the access control sector, as a consequence of recent shootings. Globally, airports and seaports will continue to upgrade their security as terrorism and cross-border concerns heighten.
2013 Top Security50