While 2021 did offer some respite from the pandemic, recovery to the pre-COVID-19 levels may take some more time.
The Middle East is a significant market for most major physical security companies. Customers in this region demand high-quality products that operate seamlessly, not just in the air-conditioned buildings of the cities but even in remote industrial locations.
The year 2021 was all about recovery from the pandemic for most industries. Security was no exception. Some customers managed to get over their initial fears and allowed projects to pick up following the protocols and health care guidelines.
But has the market recovered completely after the pandemic? What’s driving recovery? We talked to some of the major companies and a consultant to get their views on this.
Growth picking up towards the end
According to security consultant John Cowling, the security market in the Middle East has remained stagnant and, in many ways, suppressed as COVID-19 has adversely affected the global economy with a flow-on effect on the security sector. Activities picked up towards the end of the year, but there is still a long way to go before things become normal.
“Although in Q4 of 2021, we have seen some improvements as businesses are beginning to resume spending, although the procurement cycles are often slow to catch up,” Cowling said. “Supply chain activities have been severely disrupted which delayed the delivery of not only security products but also IT equipment and services that often the security equipment relies upon.”
Perhaps what’s more significant is that the nature of demand has changed after the pandemic. Talking to solution providers, the overwhelming opinion we get is that issues like safety and compliance have become a bigger priority than before.
Inconsistent recovery
Although demand seems to have increased, it is important to note that not all countries in the region recover at the same pace. The Middle East is often referred to as a single market, but countries in this region vary in the pace of development and policies.
“Some countries have managed the pandemic a little bit better,” explains Ettiene Van Der Watt, Regional Director for the Middle East and Africa at Axis Communications. “This means they were more open. Others were a little bit slower and restricted with regards to at what point will they open for foreign travelers and engage with the channel partners again.”
“What we have seen as the markets that are faster on the vaccination drive are faster on opening the borders and faster on the growth as well. The markets that were a little bit more restrictive have shown slower growth. But now they are also catching up.”
Tech for safety and compliance
The pandemic has accelerated the digital transformation across industries, including the security industry. According to Sertac Yurter, Regional General Manager, Commercial Security, Honeywell Building Technologies, Middle East, Turkey, and Africa, there is an increased demand from building owners and operators who are looking for technologies that provide enhanced safety and security to help them reassure occupants and stay compliant with changing building standards, safety guidelines, and company policies.
“This is increasing the demand for more intelligent solutions that help them gain actionable information and technology with the ultimate objective of improving the occupant experience,” Yurter said. “Honeywell has seen significant opportunities for growth through closely listening to and quickly responding to customers to providing innovative and relevant solutions. We believe there will be further potential for business growth for agile responders.”
AI rapidly gaining interest
Even before the pandemic, AI was a popular topic in security. But COVID-19 has ensured that no discussion on security and safety happens without AI being mentioned. According to Binson Xu Regional President Hikvision MENA, the worldwide physical security market is growing due to increased investments in AI technology due to enhanced digitalization and enterprise adoption of cloud services.
“The industry for AI-powered security is heavily diversified, with several local and global vendors offering solutions, as well as system integrators with expertise in physical security system design, installation, operation, and maintenance,” Xu said. “2021 has been a tough year for everyone. However, as the world and the region recovered gradually, we notice that there are booming demands for these products once again.”
Xu also pointed out that people began to care even more about their safety and society. There was also a sudden upsurge in demand from online businesses that wanted to set up remote monitoring facilities.
Supply chain constraints and chip shortage
2021 also saw technology companies struggling with supply chain constraints and semiconductor chip shortages. Van Der Watt pointed out that the challenge in procuring chips has turned the focus away from what the demand is to how fast companies can deliver what the customers need.
“Semiconductors is still a big topic within the industry,” Van Der Watt pointed out. “Not just in physical security. You talk to the automotive industry, telecoms, IoT – this is at the top of their mind. I think the challenge today is literally about how fast we can deliver.”
Staggered recovery from the pandemic
The Middle East market has obviously come a long way from 2020, when the pandemic stopped work in most areas. But recovery is still not consistent as different countries have different policies in place. While digitization is a significant driver of growth, concerns about chip shortage and supply chain persist.
In short, while 2021 did offer some respite from the pandemic, recovery to the pre-COVID-19 levels may take some more time. This becomes even more true as more virus variants continue to keep businesses and authorities on their toes.