With the worldwide economic slump, security providers anticipate its effect. The Security 50 companies discuss how they stayed afloat in 2007 and remain on the cutting edge of industry trends.
With the worldwide economic slump, security providers anticipate its effect. The Security 50 companies discuss how they stayed afloat in 2007 and remain on the cutting edge of industry trends.
For this year's Security 50 ranking, we shifted our coverage for a broader perspective. While in previous years we focused on the companies, this year we also asked them for their take on the industry. We found out what unique strengths and opportunities each provider had, along with any industry weaknesses or threats they perceived, for a strength-weakness-opportunity threat (SWOT) analysis. With a more inclusive report, providers had their say on how the industry is shaping up.
Company Strengths
Even with the subprime mortgage crisis in 2007 and the ensuing credit crunch, a number of companies still grew. They each had strategies to distinguish themselves for the competition and emphasized technological innovation, along with good old-fashioned service. While the effect of 2008's financial developments is unknown, this year's providers believe they have the ability to make it through.
Growth Factors
At the top of this year's ranking is Honeywell Security, which expanded its portfolio. “One of the most notable developments for Honeywell over the past year has been the acquisitions of Hand Held Products and Metrologic Instruments, which led to the inception of our Scanning and Mobility business,” said Frank Roth, Vice President, Global Marketing, Honeywell Security and Data Collection. “This gives Honeywell a strong position in an adjacent market.”
Bosch Security Systems also grew through acquisitions and development of innovative products, buying Canadian surveillance company Extreme CCTV in 2008. “For the last few years we have experienced a continual upward trend, driven by successful acquisitions, strategic partnerships, the expansion of our regional presence, the development of new products and also the expansion of our product range,” said Gert van Iperen, Chairman of the Board for Bosch Security Systems.
Surveillance provider Geutebrück posted revenue growth of 27.5 percent through a range of efforts. “We have been able to reduce material costs, enhance our product performance by intensive R&D and broaden our reach to the market, with additional branch offices and intensified support for our partners through end user focused marketing and expert training programs,” said Katharina Geutebrück, CEO of Geutebrück.
Having a broad base of customers helped network camera leader Axis Communications increase its revenue, with a two-tier partnership sales model. “We sell to distributors, who sell to system integrators,” said Ray Mauritsson, CEO of Axis Communications. “That is a program that has been growing, with 2 4,000 partners in that program.”
The range of Axis partners provides more opportunities for the company. “The security market is rather fragmented, as a large number of small installations are provided by small system integrators,” Mauritsson said. “We must be present with small or local system integrator to cover a large part of the market.”
Loss Factors
Some companies were negatively affected by factors out of their control, such as Israeli residential security provider Electronics Line 3000. “The decline in the company's profitability is to be attributed to the significant depreciation of the U.S. dollar against the New Israeli shekel over the past year,” said Amir Hayek, President and CEO of Electronics Line 3000. It also increased its investment in R&D and incurred development costs for its flagship iConnect solution in 2007, before its launch in 2008.
Differentiators
Company strength includes what makes it unique. Some of the Security 50 group touted a broad product portfolio, while others made innovation their hallmark.
The breadth of Honeywell's offerings allows it to offer a total solution. “Honeywell is a manufacturer that can truly call itself a full-line supplier of security technology,” said Roth. “We have extensive experience and deep resources in many areas, including intrusion, video and access control and we're also a leader in integration and making these technologies work together.”
Honeywell's experience can streamline security. “It is a true differentiator when you have an experienced and knowledgeable team behind you to help you effectively deploys these technologies — both to improve security and protect the bottom line,” Roth said.
Expertise in multiple technologies set Israeli Nice Systems apart. “For the security sector, Nice is the only company that has interactions capture and analytics 
solutions for all media types — from voice, including VoIP, video, data and radio,” said Israel Livnat, President of Nice Security Group.
This year's ranking included 31 surveillance companies, not counting providers of total solutions. Having distinctive products was a must for these manufacturers to stay ahead in the competitive video space.
An industry-changing product boosted market share for Axis, which enjoys a 32 percent slice of the network camera market, according to IMS Research. “We were the first on the market with the network camera,” Mauritsson said. “We're a focused company focusing on network video.”
An established name in video and emphasis on technology helped Geutebrück. “We are a highly innovative family company with almost 40 years experience in the surveillance business offering comprehensive, flexible solutions for security professionals and experts,” Geutebrück said.
For Electronics Line 3000, its product quality enables its success. "The Company develops, designs and manufacturers its solutions at its headquarters in Israel using the latest technologies," Hayek said. "All Electronics Line 3000 solutions can also be localized and customized according to partners' requirements."
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