Another year has gone by. As we bid farewell to 2017, it’s time to review some of the events and happenings in security this year and take a sneak peek for next year. While different regions in the world are set apart by different characteristics and needs, it can be said that the outlook for the industry remains upbeat in 2018 and in subsequent years.
For North America, it’s a growth market, with physical security sales expected to increase from US$25.94 billion in 2016 to $43.4 billion by 2021 at a compound annual growth rate of 10.8 percent, according to MarketsandMarkets. This trend is confirmed by security players as they expressed upbeat sentiment about the North American market.
Terrorism and other physical threats continue to be a main driver. Another growth catalyst is the need for compliance plays a significant role. Some examples include standards formulated by the North American Electric Reliability Corporation (NERC) and the Federal Energy Regulatory Commission FERC regulating the utility industry. These regulations force end user organizations to purchase and invest in security. “Regulatory compliance is one of the most significant drivers in these verticals. Customers are looking to comply with state, local and federal regulations, and to do so, they are investing heavily in security technologies,” said Tony Varco, VP of Security at
Convergint Technologies.
“In hospitality specifically, there has been an uptick in the necessity of security systems both for surveillance purposes, as well as for staff safety. Several states have implemented new laws which require hotels to provide their staff with panic buttons, to ensure their safety as they service guestrooms,” said Bill Lally, President of
Mode:Green.
Prevailing technologies
Some of the prevailing technology seen this year and going into next year include the use of cloud for on-premise and off-premise security management, the popularity of subscription-based service, the deployment of virtual security operation centers, and the H.265 compression technology to optimize transmission of ultrahigh-definition video.
Meanwhile, organizations using security for non-security applications has become more common, thanks to data, analytics and interoperability between systems. “Security devices can be incorporated into an automation system in a hotel or restaurant environment to simplify operations. By combining the security features into the same interface where the energy, lighting, or entertainment devices are managed, staff can more easily utilize both systems, or they could be coordinated to interact,” Lally said. “A singular interface optimizes the investment and ensures that the systems will be fully used, as well as providing these additional benefits.”
“We recently provided an airline with a solution involving several hundred cameras, and I was very surprised to find that those cameras were being used for purposes beyond just physical security. They were being used, in combination with analytics, for training purposes, tarmac safety, and customer service. These uses go above and beyond traditional physical security,” Varco said. “This is about helping customers create business outcomes. Once you have the data from these systems, what do you do with that data? What problems do you solve? Focusing on those business outcomes provides customers with a return on investment.”
Selling solutions
Despite the sense of optimism expressed by North America security players, challenges still remain, the biggest of which is the issue of commoditization. With camera prices falling lower and lower, selling a solution rather than a product has become the only way to go.
“If you look at trends within camera pricing, what we have to address is how to respond to commoditization. Convergint’s approach to that is a significant focus on higher-level advanced solutions and professional services,” Varco said. “We don't talk about selling cameras to customers. We talk about selling compliance, selling risk mitigation, and selling solutions. It’s important to move away from selling commodities and move into providing enterprise-level solutions.”
As for next year, growth is expected to continue in North America as the market influencers found in 2017 will remain in place. “We're blessed to be in this industry. The security industry overall is absolutely incredible,” Varco said. “We're experiencing double-digit growth, and we see the outlook, not only for 2018 but well into the future, to be positive, both within North America and globally.”