In Italy, the banking and residential sectors are major customers for electronic security products. IP is proving hot in large government and industrial projects.
The fastest-growing vertical markets in Italy are banking and residential. "It is not a standard market," commented Aldo Punzo, Product Marketing Manager of Bettini. "If you want to sell a DVR, you can make it in Taiwan or Italy, and it is the same. In Italy, however, the features that banks need are different, especially in terms of central management system (CMS) software that allows users to centralize all DVRs."
"Ninety percent of Italian banks are using domestic products; the quantity for each is very small," said Punzo. "Banks have many separate rules and DVR requirements." There are different rules, he said, regarding privacy, legal compliance, cost issues and technological specifications. Each bank has a lot of unique requirements that it wants for security and DVR operating systems. This means that the DVR product has to operate on a platform so banks can centralize everything.
Another issue is that not all bank branches have ADSL lines; they may have only analog phone lines. "Equipment must be able to connect to everything from analog to advanced devices," said Punzo.
IP surveillance is not growing much in the banking sector because end users are not keen to supply the needed bandwidth. "Banks do not want to share bandwidth with security because it is needed for other purposes," said Punzo. "It will take three years before bank managers start thinking about IP. In the meantime, the industrial segment is going for IP in a big way."
Residential market is also a rapidly growing vertical that has different requirements in terms of security demands. According to Andrea Hruby, Managing Director of HESA, a couple of passive infrared (PIR) or magnetic contacts were sufficient for most homeowners. "Now, however, everyone is installing a detector on every window to prevent intrusion." In Italy, there are a lot of condominiums and detached houses with gardens. "In the past, security systems were turned on only when people left for holidays. Now, houses are being armed even when residents are home," said Hruby.
Furthermore, the wireless market is quite large compared with other countries. Customers do not want wires or holes so they use wireless detectors for perimeters. They are going for wireless because of easy installation, system upgrades and cheaper price.
Other unique features sought by Italian end users are voice dialers for house alarm control panels. "Voice dialers are dialers that are more and more often integrated with control panels. They send voice messages over PSTN or GSM telephone networks to relatives, neighbors or friends' phone numbers, instead of connecting to monitoring stations," said Hruby.
He attributes the popularity of such products to the lack of a sufficiently large market for monitoring stations in Italy. "People prefer to have an alarm and voice rather than connection to a monitoring station. The market in Italy is not big and the cost is very, very expensive. That is why very few can afford to pay monitoring station service," said Hruby.
According to FlavioVenz, Managing Director of Nexxt, 70 percent to 80 percent of large projects are based on IP and open architecture. Italy, however, still has an important analog market, and these small businesses are not installing IP solutions.
"In general, the IP market in Italy is still quite small and mainly for big projects; IP is not yet used in the commercial sector, but only by large industrial companies, government agencies and banks," said Hruby.
Another obstacle is the highly fragmented market. "Most of Italy's 5,000 installers are not familiar with IP," explained Venz. "End users are not asking for IP solutions. This is something that has to be pushed a bit more before it takes off in Italy. What happens often is that IT managers are jealous of who gets access to the network; they do not want to share their networks with security. In the next five years, though, I expect IP to become more common."
Redo Bezzo, EMEA CCTV Product Manager of Honeywell Systems Group, also suggested that 90 percent of new projects developed in Italy are now looking for IP solutions. "Since everyone talks about IP, end users are keen on it; they are the ones that keep asking for IP."
According to Bezzo, installers will offer their customers IP solutions, but may also recommend an alternative analog solution where there may be specific functional requirements or system benefits which are better suited to analog. "Installers are looking to provide their customers with the correct solutions, using the right technology for the job" said Bezzo.
In South Italy, buyers are more price-sensitive when compared to the North. South Italy is less industrialized and the cost of living is lower. The standard of living is also lower than in North Italy, consequently, cheap products are popular.
The northern and central parts of Italy are more industrialized and business-oriented. In the North, there are many supplicated installers who prefer not to sell inexpensive DVRs. "We are selling very high quality DVRs in Central and North Italy," said Venz, "because professional installers are trying to differentiate themselves from the electricians who also deal in electronic security products and systems. Low-cost, low quality products are sold mainly by electricians," said Venz.
Another unique buying behavior is that Italians take special notice of aesthetics. "For alarm control panels and other visible parts of the system, such as the keypads, Italian consumers ask for a lot of variety when it comes to design, much more than in other European countries," said Hruby.
Advice for Manufacturers
The Italian market is fragmented with many small installers. Venz pointed that there are more than 5,000 installers, most of which have no more than five or 10 employees. It is, therefore, very important to work with local distributors, suggested Venz. "Only local distributors can support manufacturers in efficiently distributing their products in such a fragmented market."
Many small installers in Italy need support, so manufacturers must work with local distributors. "This is very different from the U.K., France Germany and Spain, where the size of individual installer is much bigger; they have large networks, encompassing logistics, finance and technological support," said Venz.
Hruby agreed that manufacturers need to approach big national distributors or otherwise limit sales to the local market. "Since there are no major national installation companies, such as ADT, HESA created a network with about 100 of the biggest security installers in Italy called Gruppo Italiano Telesicurezza (GIT)."
"We created a network of installers throughout the nation," said Hruby. "Customers in one city may need service in another city; we can refer them to another installer via our network. To encourage installers to join, we reserve a specific range of products in a given area so that others will not be competing with them directly."