During the recession of 2008 and 2009, the physical, electronic security sector was hit pretty badly. For example, the residential vertical typically relies heavily upon new constructions, so it was inevitable that things slumped in 2008 and 2009, said Ryosuke Miwa, GM for Integral Surveillance Activation, Security Business Division, Optex. "But things have been gradually getting better since 2010. In fact, we've been having double-digit growth for the last two years."
During the recession of 2008 and 2009, the physical, electronic security sector was hit pretty badly. For example, the residential vertical typically relies heavily upon new constructions, so it was inevitable that things slumped in 2008 and 2009, said Ryosuke Miwa, GM for Integral Surveillance Activation, Security Business Division, Optex. "But things have been gradually getting better since 2010. In fact, we've been having double-digit growth for the last two years."
One big driver for growth is backlogged demand. Many end users have put brakes on projects for the last four years because of budgetary issues, and systems that would have been upgraded had there not been a serious recession are now even older and in need of upgrade, said Bob McCarthy, MD of the U.S., TKH Security Solutions. "That's one of the big drivers for growth within the security industry."
It may not be equally rosy across the board, though, since customers value their cash much more than they did prerecession. Speaking of government spending, McCarthy said that spending has not gone up, but there are still projects out there for vendors that have reliable products and responsive service. Regardless, for video surveillance, 2012 will be a bumper year, according to research. Analysts predict a significant transition from analog to digital and high demand for HD video.
MORE THAN SECURITY
Miwa noted that companies are spending more on "good guy" applications that increase operational efficiency to help their bottom lines, and more companies are catering to those requirements by diversifying offerings. "For example, everyone wants to save labor cost, so we try to develop wireless products that help installers work very efficiently.”
There is a clear trend toward using video for applications other than security, such as for management and efficiency, said Yoav Stern, President and CEO of Dvtel. "That's where people will be able to justify buying the system. If you make your business run more efficiently with video surveillance systems, you either reduce the amount of people you have or let them work more efficiently." There is also a trend toward sophisticated solutions that are tailored for specific applications.
While the market is getting crowded for smaller installations, companies specializing in high-end systems are thriving. Commenting on the video management scene, Pierre Racz, President of Genetec, offered an interesting analogy: Near the ground you have systems with 1 to 16 cameras. There are a lot of players and the view is quite foggy. As you go up in the atmosphere, it becomes much clearer.
Market research does not really differentiate between system sizes, so Genetec captures 20 percent of the overall market in those reports, but the number goes up for systems with 100 cameras or more, Racz said. In addition, Racz said that Genetec's own forecasts for the next two years are positive, matching or outpacing market research's prediction of 30-percent growth for VMS.
Support Critical
After-sales support has never been more important in the security industry. With less-than-optimal budgets, who would not want more bang for the buck? Furthermore, the increasing adoption of IT and IP-based technology means that more people will have more problems outside the control of their security systems.
For example, Intransa introduced a support program that is targeted at security professionals not as sophisticated in data storage and IT hardware. "We were getting panic calls saying, '12 of your drives crashed and the whole system is down.' What we actually found is a slightly different story," said Jeff Whitney, VP of Marketing and Business Development, Intransa. "In reality, two drives failed two years ago; three drives failed last year; four drives failed this year; and yesterday, the last one failed. So the system was actually down because the drives have been failing over the years, and the system could no longer work because there were no drives left." Now, systems can monitor hardware and notify relevant parties to send replacements and instructions when anything fails; the integrator does not go through those panic moments.
IQinVision, among others, offers a 5-year warranty for every camera. Manufacturers can include such an extended warranty because they have the confidence that every product is well-designed and thoroughly tested, said Wendy Burke, Director of Global Marketing Communications at IQinVision. She noted that only 0.04 percent of its cameras fail within the warranty period.
Smaller budgets mean that customers will want to accomplish more for less, said David Liu, National Sales Manager for Vivotek. He said that Vivotek's focus on quality and competitive prices helped the company grow through difficult times, but after-sales service was also an area that Vivotek compares favorably over many competitors. Responsive technical support and short RMA processing times for Vivotek products are a couple of factors he mentioned.