Growth in the video security market is expected to continue, enabled by a range of factors from AI adoption to component price hikes amid the data center boom. asmag took the 2026 edition of the Security 50 Ranking to talk to Josh Woodhouse, Lead Analyst and Founder of Novaira Insights, to talk about the road ahead.
asmag: How do you assess the state of the security industry in general this year? What is the big story, and are there smaller stories developing under the surface that might come to the fore in the near future?
Josh Woodhouse: The global professional market for video surveillance equipment is forecast to grow by 8.2% in 2026. Revenue growth is expected to be driven primarily by price increases rather than volume expansion. This relates to one of the big stories in the market - surging demand for AI data centers and high-bandwidth memory (HBM) which has triggered global shortages of DRAM and NAND flash. By late 2025, the video surveillance industry began to feel the impact. The most significant disruption is expected throughout 2026 and into 2027, as these shortages drive steep increases in component costs and create availability constraints that are already disrupting production cycles across the sector.
asmag: What are the key technology trends that you have seen this year? In what way have they influenced security players’ sales and development pipelines?
Josh Woodhouse,
Lead Analyst and Founder,
Novaira Insights
Josh Woodhouse: Cloud adoption in the video-surveillance market continues to grow. Both cloud-based VMS platforms and cloud-managed cameras are gaining popularity, and deeper integration with adjacent cloud technologies is emerging as a key future driver of uptake. At the same time, rapid advances in AI technologies, combined with the growing availability of edge-based AI enabled hardware is laying the foundation for mass-market adoption of AI-powered video analytics and system-wide intelligence in video surveillance.
Cloud adoption is also accelerating the shift to recurring monthly revenue (RMR) billing models, which remain uncommon amongst security vendors compared with other industries.
asmag: What developments in regional markets and shifts in power between them have you seen this year?
Josh Woodhouse: In video surveillance the rest of the world continues to grow faster than China. In China, government spending on video surveillance, redirected toward COVID-19 response and economic support during the 2022 lockdowns has not recovered. This means that China’s share of the world market has fallen from 52% in 2021 to 35% in 2026.
asmag: What vertical markets have seen a boom this year, and what were the causes?
Josh Woodhouse: There has been heavy investment in video-surveillance equipment for data centers. Many of these data centers are designed to support booming demand for AI.
Spending on critical infrastructure security is also growing in many regions.
asmag: Do you see security players impacted by external factors – for example supply chain issues in the wake of the Iran War and subsequent closure of the Strait of Hormuz, and the ongoing tariff war?
Josh Woodhouse: The Iran conflict is expected to have a substantial negative impact on Gulf-region economies. In the short to medium term, reduced public-sector spending, delayed infrastructure projects, and heightened geopolitical risk will suppress demand for security system spending overall.
asmag: You have previously pointed out that revenue growth at some vendors has been driven by price hikes due to higher component costs rather than volume growth. Is this a one-off phenomenon or does it mark a structural shift?
Josh Woodhouse: The global average selling price of a network camera increased in 2025 for the fifth consecutive year, after previously never rising. However, the reasons behind the price increases varied by year.
In 2025, a key factor was tariffs. Another factor was product mix the growing sales of more expensive cloud-managed cameras. This was combined with a shift in vendor mix, with movement away from lower-priced Chinese suppliers in some regions. These trends are expected to continue in 2026, along with the far greater impact of DRAM and NAND flash shortages causing even higher increases.
asmag: Many security vendors have attempted to make moves “beyond security” in recent years. How has this trend toward AI and IoT sensors that serve functions outside the security domain played out this year?
Josh Woodhouse: This continues to be an area of focus , for both technology vendors and their partners it brings new stakeholders to the table, unlocks new budgets and different customer types. The value add is in the software layers which can utilize existing physical security equipment augmented with IoT sensors to provide insights and operational function beyond security. The breadth of these ecosystems and range of new sensor offerings from physical security vendors continues to increase and we’ll as will activity in this business in future.
asmag: Looking ahead to 2027, what chances and challenges for security players do you see? Will the growth momentum continue, or maybe even accelerate?
Josh Woodhouse: The two largest challenges will be:
(1) Navigating price increases and supply chain constraints.
Customers face potential delays and stretched budgets with budgets unlikely to increase at the same pace as price rises.
Vendors face increased supply chain uncertainty and component engineering challenges. Global growth is forecast to accelerate to 9.7% in 2027. However, much of this will be driven by rising prices. DRAM and NAND flash shortages will continue to play a major role. The industry as a whole may see low or no unit shipment growth in certain categories as demand in the short term is likely to be impacted.
(2) AI strategy
The pace of change in AI means physical security vendors face challenges in the pace of their product developments, monetizing AI use and the education of a somewhat conservative customer base.