Despite being smaller in terms of value compared to video surveillance, a slew of consolidation efforts has made the global access control market comparable. According to
Memoori, the product market grew 8 percent to US$ 7.5 billion in 2018. The growth is expected to continue at 7.5 to 8 percent by 2023, with the total value touching $11 billion by then. As the year draws to a close, we take a look back to see the progress.
To be or not to be open
A major question that lurks in front of the industry now is whether to go for open standards or not. In a recent post, Memoori pointed out that this is topic warrants discussion after the recent acquisition of Mercury by HID Global and as more and more Chinese companies look to make inroads into the global market.
“We are bullish about this business as it moves further into IP Networking and strengthens its relationship with biometrics and identity management,” Memoori said. “These trends are significant drivers that should maintain the growth momentum that has built up over the last 3 years but it will ultimately require open standards to be adopted.”
Proprietary systems are definitely not good for technological advancement and growth. This limits the customer’s options and scope for integration. And as we move forward, integration inevitably becomes crucial to the efficient operation of security solutions. Memoori points out that as the Chinese security giants Hikvision and Dahua enter the Western access control market, competition will tighten. Eventually, adopting open protocols that will allow better use of technologies like the Internet of Things (IoT) will become inevitable.
Notoriously slow to change
The access control industry has historically been slow to adapt to changes. In 1999 Isonas Security Systems came up with the first IP-based reader but it took another eight years for HID to follow suit. Despite the fact that IP is more or less the standard today, opportunities remain high in the retrofit sector.
“In fact, a common, standardized digital environment has the potential to create countless opportunities to integrate other systems such as intrusion detection, fire detection, and so on, into uniform manageable and user-friendly systems,” Memoori noted. “There are a number of systems on the market that can deliver this, but the vast majority are proprietary.”
Over the past decade or so, access control has moved from merely being a system that controls entry and exit to identity management, location services, etc., which helps in recognizing people, finding out who is where and providing limited permissions to certain areas. Integrating such a system with video surveillance further amplifies the benefits, making it a worthy investment by improving the efficiency and lowering operating costs.
Impact of acquisitions from the previous years
The year 2015 saw major high-value acquisitions in recent years, with the likes of Gemalto acquiring 3M’s identity management business, Thales buying Gemalto, and HID Global buying Mercury Security.
“Strategic acquisitions are having a major impact on the competitive landscape of the Access Control business, particularly in the area of integrating with identity management,” Memoori noted. “This has been an important factor in a number of major acquisitions of Access Control companies over the last few years. Since as early as 2011 some of the largest acquisitions were in this area, with HID Global, 3M and Hewlett Packard making acquisitions. This trend has continued over the last 6 years and we expect into the future.”
The market growth of cloud-based access control solutions provided as a service and managed access has seen some pick up in the last three years too, with the growing popularity of Video Surveillance as a Service (VSaaS). Low bandwidth requirements and a proactive step from systems integrators to look for recurring revenue are mainly driving this sector.
"Investment capital continues to flow into the Access Control as a Service (ACaaS) business and companies such as Brivo acquired 3 years ago are showing sustained growth and more companies are offering this service, all confirming that there is a good reason to believe demand will continue to rapidly grow,” Memoori noted. “Future growth looks sound and we can expect that there will be further consolidation in the business over the next five years.”