Frost & Sullivan: Polish Physical Security Sees Promising Opportunities

Market participants and end users are increasingly aware of the importance of technical security. This trend, coupled with the recent consolidation activities in the manned guarding market, is gradually causing a positive shift in the structure of the physical security market in Poland.

New analysis from Frost & Sullivan entitled “Physical Security Market in Poland” finds that the market earned revenues of more than US$2 million in 2009, and estimates this to reach $3 million in 2015. The following technologies are covered in this research: intrusion detection (including monitoring), video surveillance (analog and IP) and access control.

While the economic slowdown decelerated growth rates, the subsequent lack of investments in the construction sector intensified pressures in the physical security market. Frost & Sullivan estimates that the market will recover from 2010. Recovery will gain momentum in 2011 and 2012, when projects started in 2010 are finalized, some of them being hotels, stadiums and public sites that will be of critical importance during the Euro 2012 championships.

"Growth is being driven by the falling prices of electronic security equipment and the consolidation of the manned guarding market," said Emilia Jelenska, Research Analyst, Frost & Sullivan. "Monitoring and IP technology offer innovative solutions that could, in the long term, drive the shift of the physical security market from manned- and product-based services to technical solutions."

There are significant growth opportunities in monitoring systems and IP technology, with system integrators emerging as the main candidates for rapidly saturating the IP market due to their previous IT knowledge and business practices. Otherwise, manned guarding and installation companies are spurring the proliferation of intrusion detection and surveillance systems among end users, with the two technologies accounting for 90 percent of the total revenues generated from the three technologies.

The main market restraint is the sluggish construction sector and its lack of investments in building activities. The revival of this sector, coupled with the strengthening of the Polish macroeconomic situation and end users’ purchasing power, will boost growth in the physical security market.

"It is critical for the construction sector to revive building activity," Jelenska said. "This will restore healthy growth among product OEMs and distributors as well as product-related service providers."

As construction activity rebounds, it is important for participants in the physical security market value chain to offer more electronic security solutions, as costs are lower than manned product services. Such a shift would drive the transition to a more structured and developed market, resembling Western Europe.

"The consolidation of the manned guarding market, in addition to the strengthening of systems integrators’ market presence are two trends that could facilitate the development of more solutions-oriented services," Jelenska said. "It would, also, impart greater structure to the fragmented market."