Italiansˇ needs for security and safety have reached an all-time high. While old privacy concerns have prevented Italians from using surveillance systems extensively, the new government will be increasing investments in security measures to combat immigrant-associated crimes and other illegal activities.
"Some statistics from Italy Ministry of Interior suggest that 50 percent of the house robberies in Italy are committed by illegal immigrants," said Andrea Hruby, Managing Director of HESA.
A general election was just held in the country, and security and safety issues carried significant weight on many campaign platforms. The recently elected Prime Minister Silvio Berlusconi promised tough measures against immigration-related crime. Immediately after the election victory, he announced several hard-line policies and practices to fight criminals.
"The new right-wing Berlusconi government introduced strict regulations at once, aiming to control immigration and provide incentives to increase security," explained Hruby. Said incentives are provided locally through each municipal government. "Organizations and companies may receive incentives from their local government. Examples include financial support for taxi drivers to install cameras and DVRs in their cars, or tax reductions for shop owners in big cities like Milan who install electronic security systems."
There are several other government laws encouraging or requiring companies to install security systems, said Flavio Venz, Managing Director of Nexxt, a major distributor in Italy. "In banks, security systems are mandatory, and one cannot open a bank without video surveillance. Stadiums and sports venues are not open for games without having all the proper surveillance and security systems in place."
"Security was an important topic during the recent Italian general election," said Redo Bezzo, CCTV Product Manager of Honeywell Systems Group EMEA. "Following the elections, there may be the potential for increased government investment in video surveillance and other systems."
According to the most recent report from the Italian Association for Building Security and Automation, the total turnover of sales and installations of security systems in 2007 was around US$2.9 billion, up 5.7 percent from 2006.
Venz of Nexxt suggested similar figures: "The total revenue of security businesses in Italy (including all manufacturers, distributors and installers) is estimated by ANCISS at $2.65 billion, growing at 7 percent per year."
The ANCISS report also indicates that in 2006 to 2007, intrusion and central monitoring systems grew 2.1 percent compared to 2005 to 06; access control 4.3 percent; video surveillance 17.4 percent.
Of the total turnover, video surveillance accounted for $686 million in 2007, a 17.7 percent increase from 2006, said Hruby of HESA.
Hruby pointed out that the video market is the fastest growing segment. The number of cameras sold in 2007, according to ANCISS, is roughly 240,000 units and 200,000 units in 2006. "About 20 percent of the units are deployed by metros and railways; 30 percent by banks and financial institutions; 20 percent by city surveillance and traffic control; the remaining 30 percent by commercial and industrial sectors such as shops, drug stores, boutiques, shopping malls and factories."
Bezzo of Honeywell pointed out that IMS Researchˇs recent EMEA Security Market Report estimated that the Italian video surveillance market is roughly $164 million and boasts a compound average growth rate of 7 percent per year. "The report suggests the analog surveillance market is growing at about 2.7 percent annually, whereas the network video market, including video analytics, is experiencing a much faster and stronger growth, at about 25 percent every year,"said Bezzo.
"IMS Research indicates that the Italian access control market accounts for about $24-25 million in Italy (installer price) and is probably looking at 7-8 percent growth annually," said Bezzo. There is also a strong focus on time and attendance.
Electronic access control (readers and smart cards), Venz suggested, is a very small market in Italy. "At the level of manufacturers selling to installers, the market size is no more than $62.3 million. Some industry associations evaluate the access control market differently than we do as we do not include gates, barriers as well as time and attendance," added Venz.
Key Vertical Markets and Projects
Financial institutions are an important vertical in Italy and biggest users for video surveillance. "Even in small towns with 15,000 people, there would be 20 banks," said Colciago. "Italy has 200 chains of local banks. There are many small banks with two to three branches only. Some small branches only have two employees, but they still need video coverage. My estimate is that the Italian video market would be $233.5 million for the banking sector."
Mergers and acquisitions are prevalent in the Italian banking sector, making it the most important vertical market for security, pointed out Hruby. "After mergers and acquisitions, these banks want to upgrade their existing security systems by installing IP video and such."
Another growing vertical in Italy is the residential market. ¨Italians want to be able to push dangers as far away as possible from the house. The number of outdoor detectors we sell is large, including IR beams, microwave and outdoor PIR detectors and so on,〃 said Hruby.
The World Expo in 2015 in Milan is another important project mentioned by several companies. "This will garner substantial government support," said Hruby. "The Expo will be an opportunity to open new markets. To gear up for Expo 2015, a lot of construction projects, such as transport systems, exhibition areas, gardens, parks, museums and shopping centers, will ensue. It is hard to imagine a sector that is not in some way involved in the Expo. I believe all these constructions will further increase the demand for security products."
Projects are also taking place in the critical infrastructure sector. "I think critical infrastructure is growing at more than 20 percent every year," said Venz. "Ports, harbors, railways, airports, highways and train stations all need to have video surveillance systems implemented, as per the recommendation from the European Economical Community (EEC)."
Fulvio Cartasegna, President and General Manage r of HR Europe seconded the idea. "Public infrastructure such as motorways, underground tunnels and parking lots; as well as city surveillance are the rapidly growing markets in Italy."
Luigi Bernardi, Country Manager of Bosch Italy, estimated that transportation and city surveillance projects for metropolitan areas are valued at about $389 million, and major construction/security projects in Italy include upgrades of railway tunnels, video surveillance on buses, and public address and IP video systems on cruise ships.
One prominent project is the 5 Lisbona-Kiev corridor high-speed railway project that crosses North Italy. The first part of the project, expected to be done by 2010, is 125 kilometers (from Milan to Turin) and costs $10.65 billion. This goes beyond simple security as information exchange systems such as intelligent transportation are also included.
Kimber of Honeywell pointed out that there is strong competition across Europe. "There are over 200 video manufacturers and over 300 access control manufacturers selling across Europe. As such it is hard for one single manufacturer to have a large share of individual geographic markets, never mind the whole European market."
There are only a few local video manufacturers in Italy. Important local brands in Italy, according to Venz, include Nexxt, Syac, Videotec, CIEFFE, Sicurit and Bettini and Commerson. Important global brands are GE, Bosch, Honeywell Sony and Panasonic.
Bosch, Samsung, Sony and Honeywell are named as the leading video surveillance brands by some industry players. In video surveillance, brands such as CIEFFE, Panasonic, Bosch, Axis, GE, Honeywell, Pelco and Siemens take up 5 to 8 percent of the market each. The top three among them are Bosch, CIEFFE and Panasonic.
Important global access control brands include HID Global and Honeywell; local ones include Spazio, Faac and Apice. Intrusion alarm players include international brands such as Honeywell and GE, and local brands such as Tecnoalarm, ELMO, CIAS, Elkron, Sicurit Alarmitalia and HESA.
Bernardi of Bosch pointed out that Tecnoalarm, Elkron, GE, Honeywell and other 90-plus Italian companies are quite active in Italy, with Tecnoalarm being the clear market leader with nearly 10 percent of the market share. Other major brands, including Elkron, GE and Honeywell, each take up 6 to 8 percent of the market.
Major distributors in Italy named by significant industry sources are ADI-Gardiner, HESA, Securita and Nexxt. Important system integrators include Honeywell Building Solutions, Siemens, Johnson Controls, Mega Italia and Gunnebo. According to Colciago of CIEFFE, the two biggest distributors in Italy are HESA and Securita.
Strict Privacy Regulations Still a Concern?
In contrast to Britain where cameras are everywhere, Italy's strict privacy regulations have made the use of video surveillance less prevalent. "In some countries in Eastern Europe, images have to be stored for three years because they want to keep the evidence," said Colciago. "But in Italy, the requirement is only 24 hours, so itˇs a limitation."
Although banks can record for seven days, normal shops, by law, have to delete video data in 24 hours. This inhibits wider adoption of video equipment, making business development next to impossible for suppliers. Another example of how privacy is treated delicately in Italy is that banks usually ask video equipment suppliers to embed smart card functions so images in archives can only be viewed by authorized personnel.
"If users lose their smart cards, video images become useless as one cannot access the data even in emergencies. At the moment, there's too much privacy protection, but we hope that with the new government this will change," said Colciago.
Hruby seconded Colciagoˇs view: "If we were to have less strict privacy regulations, there would be more video surveillance. In some cases, the laws even do not allow for installations of video surveillance systems and sometimes put limitations on businesses. For example, shops are not allowed to install cameras at points of sale and cannot monitor their staff even when they are handling cash."
In general, Italy is behind the other European countries in terms of security installations. Compared to Britain and Germany where all public buildings are protected with video surveillance, only a limited number of buildings in Italy are protected in a similar manner most public administration, schools and hospitals are not protected at all, said Venz of Nexxt.
There are, however, opportunities for video surveillance players as retail, commercial and city surveillance applications are slowing picking up. Venz indicated that these verticals are slower in adopting security measures than the other countries in Europe. "Public administration in Italy only recently understood the importance of video surveillance while the other European countries started 10 years ago. There is a large gap to fill, which means surveillance will be an interesting and potential segment for the years to come," said Venz.