Review preview (2016/2017) of systems integration across regions: Americas

Review preview (2016/2017) of systems integration across regions: Americas
In 2015, the growth of the global security systems integration market had fallen from the previous year. In 2016 though, the market bounced back to higher rates, boosted by recovering demand after the economic gloom. IHS Markit estimates the global market for security systems integration to grow from US$60.3 billion in 2015 to $75.7 billion in 2020, which is an increase at a CAGR of 4.6 percent. The Americas generated revenue of $22.3 billion and $23 billion in 2015 and 2016 respectively, and this is expected to expand at 2.7 percent to 2020.

Growth in the Western markets
Confirming IHS’ findings on the pickup in overall performance, systems integrators in developed economies said that the year 2016 has been quite positive for them.

Mike Duncan, VP of Global Accounts at Convergint Technologies, said that the US market has seen moderate growth in 2016, mainly driven by the continued need for surveillance and the arrival of new technologies. His company has also expanded in tandem with the market growth.

“What I mean by moderate growth is mid-single digit area. It’s been driven by both the need for more video surveillance and also the new technologies that are available,” Duncan said. “IP has been in the market, on the video side, for almost 15 years now, but several new technologies are now coming in. People are refreshing their technologies and adding new ones. I think these are all driving the market.”

Oliver Philippou, Senior Analyst at IHS Markit’s opinion that the year 2015 was weak was also confirmed by other SIs. Brent Franklin, President of Unlimited Technology, said that while 2016 has been a robust year for the company, 2015 was slow as customers were reluctant to spend money.

“The security market in the U.S. for Unlimited Technology has been good in 2016, our numbers are up,” Franklin said. “We believe that the American companies that we work with are starting to spend more money, not only adding to their infrastructures but also doing a better job at maintaining them.”

“2015 was up a little bit, but our opinion is that it was still a sluggish economy, and our customers were only spending money on things they absolutely had to spend their money on,” he continued. “They were not actually proactive in upgrading and replacing some of their old equipment because they were still coming out of the recession and were still not confident that it was here and here to stay.”

Some of the reasons for the growth of Unlimited Technology include a vertical-based approach the company has taken. Apart from a strong performance in verticals like critical infrastructure, health care and higher education, the company has benefited from a recovering construction industry. This is in line with market research findings that the US construction industry strengthened in 2016.

“If you go to any of the major cities of the United States, there are cranes up everywhere,” Franklin added.

The story is not much different in other parts of North America and other developed economies. Don MacAlister, COO of the Canada-based Paladin Security, explained that the year saw double-digit growth.

“2016 has been another year of tremendous growth and change for Paladin Security,” MacAlister said. “We further solidified our core business and enhanced our integrated systems capabilities through strategic acquisitions. In 2016, we once again saw double-digit growth, while still focused on continuous improvement in order to provide excellent service to our existing clients.”

Across the Atlantic, the picture is similar. David Collins, Sales Manager of the U.K.-based NG Bailey, said the company has seen year-on-year growth in 2016 and that the market remained buoyant.

Andrew Lanning, Co-Founder of the Hawaii-based Integrated Security Technologies, pointed out that regulatory compliance requirements, new construction and existing system upgrades helped their business.

“2016 was a strong year for the security market in Hawaii,” Lanning said. “We’ve experienced overall growth i n our DOD [Dept. o f Defense], municipal government,and commercial vertical sectors due primarily to regulatory compliance requirements, new construction and existing system expansion or equipment refresh in the form of digital camera upgrades. We are already booked heavily for 2017 so we anticipate double-digit growth percentages to remain consistent.”
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