Given the mixed sentiments that industry players are echoing across the region regarding the concerns, systems integrators and foreign companies looking to invest in the Malaysian market would benefit from the potential in different verticals.
According to Michael Chan Yee Keen, Executive Director of Stratel, there are a number of verticals which will continue to grow. One of the most significant will be the education sector. As part of the Economic Transformation Program (ETP), the education sector has been identified by the previous Malaysian government as key to propelling Malaysia towards high-income nation status and global competitiveness.
“The National Association of Private Education Institutions and the Education Ministry's private unit has been actively promoting Malaysia as a first-choice destination as an educational hub within the ASEAN region,” he continued. “ISC Research confirmed in March 2017 that Malaysia has the highest enrollment of international students for the private schools in Southeast Asia. The new Education Minister, Maszlee Malik, has committed to improving the overall education system over the next five years. This includes building new schools, revamping and refurbishing existing schools, and modernizing schools with new technologies.”
Chan Yee Keen further added that Stratel expects opportunities for cameras with analytics for surveillance, real-time guard tour systems for patrolling of premise, intrusion detection systems to prevent theft of assets, and access control for the tracking of human capital such as academics, administrators, service providers and students.
“Transportation vertical inclusive of airports, railway, port, etc, and city surveillance vertical perhaps will grow much higher in the coming year, because of more investment from government, especially in public security, the important part of smart city construction,” added Huckel Zheng, Director of Hikvision (Malaysia). “On the other hand, public security will significantly help improving citizen satisfaction.”
Verghese Thirumala, MD of Maxitulin, suggested that along with transportation, the logistics vertical could also see growth in the coming years. Several factors are behind this. One among them is the rise in e-commerce which has increased the need for logistic solutions.
Janesta Woon, Country Manager for Malaysia at Robert Bosch, added that one of the verticals that are growing is “mixed developments” which combine office buildings, shopping malls, hotels and residential spaces. There is a potential higher return on investments when considering mixed-use projects as they are less risky and have a wider range of revenue resources.
“Mixed developments require a wide range of solutions to create a strong, holistic security and safety system,” Woon added. “Bosch's diversified product portfolio is well-suited for this, as we offer video surveillance, intrusion detection, fire detection and voice evacuation systems as well as access control and management systems.”
Simon Weng, Country Manager of Dahua Security Malaysia too agreed that with the increasing need for building infrastructures and shopping malls, building-related solutions are expected to grow. This prompts the need to consider various solutions that are seeing demand in the country at the present. While surveillance cameras are, more often than not, the most in-demand product in any security market, there are subtle differences in their adoption that can be understood only on closer inspection.
Popular solutions in the market
Stratel, a company that has been distributing security products for the past 30 years, is perhaps one of the best sources to talk about the changing needs of customers in the country. According to Chan Yee Keen, from their interactions across ASEAN, customers are now demanding an integrated response from their security products.
“Apart from just having intrusion detection systems and/or camera surveillance products, the concept of self-monitoring has proven to be ineffective,” Chan Yee Keen said. “There has been an upsurge of firms purchasing central monitoring software (CMS) to provide this last mile service. Another product that is complementary but proving to be primary to defeat intruders is the deployment of fogging systems. Once a central monitoring firm receives a distress alarm and it is verified to be a real alarm, operators are able to deter the intruder by activating a rapid fogging solution to impair the vision of the intruder, thus preventing potential burglary.”
Another solution that is in demand is real-time guard tour systems, Chan Yee Keen added. Many end-user customers of guarding firms suffer from guards that do not patrol as per their route plan/commitment. This leads to potential security breaches and gaps.
Other industry professionals are leaning more towards new technological developments that are making inroads to the market.
“Seeing from the market trend, we perceive that artificial intelligence (AI) technology is more and more in demand, for video surveillance, access control and other security solutions,” Hikvision's Zheng said. “The fusion of AI and conventional technology will bring a really huge revolution to the security industry. From now on, cameras will no longer be only ‘camera' for video monitoring. Combined with various AI technologies like ‘facial recognition', ‘people counting,' ‘queue detection,' etc., it will significantly help our customers to improve the efficiency of their business operation, not only for security purpose.”
Speaking along similar lines, Weng added that as the society develops, people's demands for safety and intelligence increase.
“In addition to the basic video monitoring function, high resolution, starlight level, full-color, face recognition, AI and other advanced technologies have been introduced,” Weng said. “As a leading solution provider in the global surveillance industry, we are applying AI and IoT to provide customers with more products and better solutions.”
Woon added that end users now expect a streamlined way of managing complex operations and automating infrastructure systems.
“Smart technologies change the nature and economics of infrastructure developments, as well as the way we work and live,” she said. “Cameras should no longer just be used for security applications. For example, our cameras are used as a sensor in public transit and traffic mitigation to ease road congestion. Another example is the analytical application where data collected by cameras are used to generate further business insight.”
Challenges in the Malaysian market
Having a clear understanding of the difficulties in a market will help systems integrators (SIs) and solution providers take their business further. “One of the major issues of the market are cheap products from China,” said Michael Chan Yee Keen, Executive Director at Stratel. “This has disrupted pricing, but we feel that this will only be a temporary setback. Unfortunately, because of pricing issues, end users and consumers are expecting products to perform at top-tier level but with third-tier pricing. Resellers will have to spend more time and effort to re-educate users on their expectations.”
Another issue to contend with is the emergence of new technologies that challenge the conventional set-up. For example, an intruder alarm system typically consists of an alarm panel, sensors, and a wall-mounted keypad. New products retain this setup but are able to replace a wall mounted keypad with a mobile app, thus improving portability but typically at the expense of stability. The key attractiveness of these new technologies is that IoT devices can be linked — it expands functionality.
“There are a number of other avenues for SIs to boost revenue — venture into Blue Ocean markets such as fogging devices,” Chan Yee Keen added. “In the Red Ocean market, the best way is to offer complementary products to the traditional setup such as adding IoT devices as well as cloud-based security devices.”
Janesta Woon, Country Manager for Malaysia at Robert Bosch, said that in terms of major challenges, it seems that end users are looking for value-added solutions which look simple and are easy to use but are complex in terms of the technology and capabilities.
“This means while we are developing the complex technologies that they require in their desired solutions, we must also focus on creating user-friendly interfaces which simplify the solution in terms of ease of use,” Woon said. “Another challenge in the market is how to play the role of a strategic partner in this ecosystem. In developing these complex solutions, we need the collaboration and integration of expertise and software of more than one party. The challenge is how to strike a balance within this collaborative ecosystem.”
Others point to the economic and political concerns as challenges that need to be overcome in the future. There is also a need for SIs to think beyond products and the margins they deliver in order to boost their bottom lines in the current market scenario. Pre-sale, after-sale services and customization are ways in which this can be done.
What to expect in Malaysia
Domestic and global political and economic concerns do tend to make market players cautious when talking about their prospects. However, in a market like Malaysia, the basic reality that there remains a room for a lot more development continues to ensure that analysts remain upbeat about the future.
In the short term, a lot will depend on the government policies and political decisions, but in the medium to long term, the prospects of security companies in this market remain strong and attractive.