Australia's security industry
Editor / Provider: STEVE CHIN, a&s Asia | Updated: 8/4/2014 | Article type: Hot Topics
In recent times, Australia has developed into a premiere market for the security industry, with both production and manufacturing at new highs. We take a deeper look into the Outback and examine why Australia is such a major player in this industry now.
Australia may be better known for kangaroos, koalas, and deadly animals, but it is actually considered a fully developed country and one of the wealthiest in the world, possessing the world's 12th-largest economy. As of 2013, Australia also had the world's fifth-highest per capita income and the second-highest human development index. It also ranks in the top 10 in many global international comparisons: quality of life, health, education, economic freedom, and the protection of civil liberties and political rights. Indeed, it has come a long way since the days of being a colonized penal colony.
These days, Australia possesses not just a strong technological industry as a whole, but researchers are also predicting continued growth in the Australian region in its security industry as well. Backed up by the fact that the country is arguably the second strongest market in the APAC region after China, Australia is a country that commands respect. Indeed, according to Rocco Palladino, National Sales Manager — Australia and New Zealand for Pacom Systems, “the Australian electronic security industry has continued to steadily develop and increase since 2011. We estimate that the market has grown approximately 2 to 3 percent on average every year since 2011.” However, growth is still relatively slow and stagnant in terms of market figures, especially when compared to other countries in the APAC region, like China and India. Some factors that can be attributed to this stagnant growth include a lack of a well-established infrastructure as well as a highly tech-savvy industry that puts high demands on value from technology.
In point of fact, when looking deeper into Australia's security industry, there are other signs that it has slowed down in terms of growth in the last few years. Because of recent issues regarding the Nationwide Broadband Network (NBN), some controversy has resulted in many security solutionsproviders being affected by its slowdowns in development. Coupled together with the fact that there just is not enough readily available, widespread bandwidth yet — especially outside of major cities, it further complicates the issue when Australia as a whole is trying to faster facilitate the transfer to full digital solutions.
SLOWER THAN EXPECTED IP ROLLOUT
IP infrastructure and a resulting slow adoption of IP-related products. Indeed, analog was still the leader by a significant margin, and the IP infrastructure was slow to develop and catch up to market demands. While by no means fully developed or ready, the IP infrastructure has still made significant leaps and bounds. However, looking at issues like the NBN that was rolled out in Australia in 2011, it's easy to understand why the country is both ambitious but still facing numerous hurdles to cross.
According to a 2014 report published by the Australian government, there are over 1.6 million premises across Australia that either have no access to fixed broadband or very poor quality broadband connectivity. The NBN aims to rectify this. At its core, the NBN is an enormous, large-scale project that is still under development in Australia with rollouts already happening in several trial locations. In practice, it is a national, wholesale-only, open-access data network that is in both fixed line and wireless forms. However, from the beginning, the NBN has been plagued by numerous construction issues and a too overtly ambitious goal. With that said, it is easy to see the numerous hurdles that the NBN still has to overcome. With a cost of nearly US$29 billion, all in public funding needed to tie over construction to 2019, the build cost has also been a huge point in debate. Nevertheless, the NBN still aims to reach approximately 22 percent of all premises in Australia by 2021(which is a huge drop-off).
According to a 2014 report, there are over 1.6 million premises across Australia that still have poor bandwidth access.
The reality, though, is that Australia, like almost all the rest of the major players in the industry, has already begun a gradual adoption of IP and the slow phase-out of analog systems. Australia has come a long way in these three to four years. As Nathan Walters, Sales Engineer for RhinoCo Technology put it, “A few years ago, IP was still a non-starter due to lack of knowledge and experience by integrators. But thanks to numerous companies providing training, there has been an increased uptake. Now, people not only realize the increased benefits of IP over analog, they see it as future proof technology.” He also said that there is evidence of this by the sales of IP equipment rapidly taking over those of analog.
SOLUTIONS TURNING OVER A NEW LEAF
As the Australian security industry looks into the next few years, so too does security solution providers and how they must observe and react to the various changes coming to the country. Of key importance is to keep a continual eye on the status of future NBN rollouts. As was stated before, reactions and feelings towards it have been lukewarm at best, if not outright against it. Furthermore, when it comes to solution providers, some key points to highlight in order to stay in the game are the changes regarding integration and unification across all solutions platforms. As Kobi Ben-Shabat, Founder and MD for OPS explained, “the ability to integrate between multiple systems, video, access controls, license plate recognitions, intruder alarms, and intercoms into a single vendor or a single platform is the trend today.” Another way to look at it would be because of the NBN fiasco, security solutions providers have had to look at other ways to be competitive and stay afloat. By unifying systems into a single platform, it is a way to battle costs and simplicity.
One buzzword floating around is the surge in PSIM solutions. Ben-Shabat elaborated, “we also see the beginning of a demand for PSIM solutions. The rise of the ability to provide single management tools either to the operator or to senior management attractive from customer standpoints. If I was to look towards two, three years, I would see PSIM solutions.” Palladino also same feeling, “another term starting to secure a position in the market is PSIM, although this appears to originate from video management system manufacturers moving into the alarm and access control areas.”
The future of Australia's security industry hinges in a large part on the future of the IP infrastructure.
GOVERNMENT STIMULATION AND HIGH-END SOLUTIONS
While there are usually a number of government stimulus packages that exist in a lot of countries around the world, things have relatively quiet on the Australian front. The one key stimulus to point out is the nationwide rollout of city-wide, street surveillance packages. With the Australian government promising a contribution of $50 million coupled together with local grants from state governments, it is obvious the government has taken notice of the issue of better security and better surveillance. One result to this fairly lackadaisical approach to security is a lack of market for high-end security solutions. Traditionally, a big market for solutions like video analytics, facial recognition, and smart security has always laid in government. However, it is not entirely accurate to state that no market exists either. As Ben-Shabat put it, “I think video analytics when it comes to solutions like facial recognition, the application is mainly at the government level, or when looking at prevention, in retail. The cost requirement is still a factor, when the cost is right, they will accept. I believe it still needs to be more cost efficient and reliable to be successful.” Another direction that high-end security solutions points at lies in retail solutions, in both SMBs and franchises. Again, the cost issue is a big factor, but there exists a market.
Unfortunately, “too many people advertise and supply analytics (or smart security), but unless you are in defense, or perhaps customs, then you really need to ask if you are really able to use it. It is an easy way to differentiate larger more expensive solutions. It is truly something that is requested more than it is used in application,” said Walters.
THE NEXT FEW YEARS
As we look into the next few years, the overall picture of Australia looks to be good. The single, biggest factor in the security industry is definitely reliant on the NBN rollout and how far it can reach.
Palladino put it as, “progress continues with the NBN and this will definitely impact the Australian market, as their rollout progresses. Faster, cheaper communications to more parts of Australia should give rise to more business opportunities for security solutions providers.” Walter also added, “the NBN progressing as quickly as possible will help, and will help ideally fund further R&D innovation in all of Australia.”
Other things to look forward to include the idea of open platforms. As we add in the inclusion of cloud, Australia should also look forwards to more unification across all platforms.
As the IP infrastructure continues to improve, cloud should become far more utilized as the digital world continues to impact the industry. Overall, the future looks bright, so long as the technological advancements don't pull the innovations down and the infrastructure improves.
Growing Potential of HD-over-coaxial Solutions
Another key point to zero in on is the fact that analog is really on its way out the door, albeit slower than people expected. Nathan Walters, Sales Engineer for RhinoCo Technology explained, “Analog TV has recently been turned off in Australia so more and more consumers have had to become familiar with HD, and they have begun to look for this as an essential part of their security solutions.” As a result, one more key area of focus would lie in HD CCTV. As Walters pointed out, CCTV has had a good track record in catching offenders. From a transition point of view, HD-over-coaxial solutions are another great interim technology to look at as solutions providers transition into the digital age. He further explained, “more importantly, it can take existing systems over to HD without replacing the existing analog infrastructure. We expect that as more consumers experience this, they will eventually demand it on future solutions and this will itself ultimately drive the roll out into newer IP systems and continue to drive the security industry itself.”