The past 10 years of security have been predefined by Sept. 11, 2001. A tremendous boom with double- or even triple-digit growth took place until the recession dampened the market’s giddiness. With market uncertainty, what’s next for the coming 10 years? We find out more from Security 50 participants, along with industry players who are not at liberty to disclose physical security sales.
The past 10 years of security have been predefined by Sept. 11, 2001. A tremendous boom with double- or even triple-digit growth took place until the recession dampened the market's giddiness. With market uncertainty, what's next for the coming 10 years? We find out more from Security 50 participants, along with industry players who are not at liberty to disclose physical security sales.
Change . Convergence. Customers. When considering the future of security, these three C's figure prominently in the conversation.
The impact of 9/11 is immeasurable. As the attacks spurred a flurry of activity, security experienced meteoric growth. Strong sales and margins were achieved by security players who listened carefully to their customers and delivered solutions tailored to their needs and concerns. The growth potential of a “pro customer” approach attracted a number of traditional building or IT/IP players to the physical security space, such as Cisco Systems, Johnson Controls and Siemens Building Technologies. However, the “Great Recession” slowed growth, creating tougher competition. The surviving companies have had to adjust and restructure; while large companies can afford to acquire, smaller companies have relied on organic growth.
Our annual Security 50 coverage examines industry trends, with the customer coming up again and again in our interviews. We found that the successful companies managed to achieve 50- or 60-percent growth, even in dire market conditions. These industry leaders beat the market by targeting core needs and delivering value to their customers. While security is important, companies that went the extra mile to provide business benefits guaranteed their survival.
Growth Potential
There may be a smaller playing field in security, but it continues to beat the market. Component maker Texas Instruments (TI) started investing in dedicated security chips in 2005, which has paid off. “When the economy is taken into account, the growth of security versus the overall market is faster,” said Cyril Clocher, Business Manager for Video Surveillance. “It's still a healthy, high-growth market for TI.”
Growth has slowed in security, but not stopped. “Growth rates are still robust, and the security market still presents a strong opportunity for the manufacturers, systems integrators and service providers that focus most on better understanding end users' challenges in a truly intimate way,” said Kevin McCaughey, VP of Security Solutions, Buildings Business, Schneider Electric. “It may sound old hat, but there's nothing old or tiring about knowing a customer's business so well that you are in a position to make valuable recommendations that positively impact that customer 's bottom line. The next 10 years are all about harvesting ROI from the investments made in security in the 10 years since 9/11 — for customers first and providers second.”
Emerging regions and IP solutions will drive this growth. “While there is no doubt that global economic uncertainty has slowed the security market in some segments and regions, we continue to be bullish about overall prospects,” said Warren Brown, Director of Product Management, Enterprise Commercial Solutions, Tyco Security Products. “We see the IP video market — cameras, NVRs and VMS — continuing its strong doubledigit growth, with wireless intrusion solutions and managed security — access control and video — showing significant growth opportunities as well.”
Emerging markets will see strong growth, particularly in the Middle East, China, India and Latin America. “Key to our success is building a powerful, unified solution, with thoughtful localization for regional and national needs,” Brown said. 
A major component of growth is listening to customers. “Global organizations need to truly immerse themselves in the various markets they serve, whether it is geographic regions or vertical markets,” said Steve Gorski, GM for the Americas, Mobotix. “The key to success in the security industry is to understand the needs of the partners and customers in their specific markets.”
Distinguish Your Brand
Standing out in a crowded playing field is hard, but not impossible. A savvy solution provider should conduct market analysis to identify its position, and then improve internal processes to get to that desired position. If this is not done, companies will be eliminated for not being sufficiently competitive.
A comprehensive service approach is one way to go to market. “In this competitive environment, companies can stand out by delivering an integrated, end-to-end solution that removes risk and complexity,” said Mabel Ng, VP and GM of APAC, Honeywell Security. “Of course, quality and reliability are always essential, and companies are also looking to work with a stable partner, one that they can count on being there in the future to support their system.”
Focusing on customer business needs also sets a company apart. There is nothing but pressure on revenue models that see security as an overhead and not a business benefit. “Solutions that add considerable efficiencies, reduced costs and eliminate the need for rip-andreplace are growing faster than other segments of the security industry,” said Adlan Hussain, Marketing Manager of CNL Software.
Education and customer service are essential for manufacturers to maintain relationships with resellers and users. “Manufacturers need to invest in the success of their resellers through educational seminars, training, service offerings and comarketing opportunities,” Gorski said. “We live in a world where one bad experience can be immediately broadcast through social media or other publicity channels, and therefore, we need to make sure we are providing the support, training and service necessary to ensure a customer's commitment to our technology.”