2013: Security Markets
Pam Petrow, CEO & President, Vector Security Inc. — New and existing competitors will continue to shift the focus from basic security and fire protection to lifestyle products. Competition for some none-core services will continue to expand with energy companies and other providers offering ways to manage and measure energy consumption. Online DIY products will continue to proliferate as technology becomes more intuitive and turnkey. The demand and expectation for integrated and mobile solutions will continue to drive the residential market.
Commercially, the focus is on return on investment [ROI]. Purchasers are looking for the products and services we provide to reduce shrink, provide analysis for risk managers, allow them to analyze customer traffic patterns and many other business solutions that transcend the loss prevention teams and cross into multiple other departments. We need to deliver the ability to analyze data so the business owner has information that can drive business decisions. As more services move to cloud-based solutions, the security industry must keep pace with this trend and present competitive offerings utilizing this technology.
Joe Liguori, Vice President, Access Control Technologies and President of Security-Net — I believe markets are somewhat reflective of geography. Our company has traction in hospitals, universities and the financial communities. In other regions, energy, transportation and other vertical markets are predominant. I do not think that there will be any significant changes to markets with the possible exception that the economy overall appears to be stabilizing and some corporate entities many be better positioned to explore the protection that they will have or require, thereby creating some new demand.
I believe customers will continue to look for a single point of interface throughout geographic regions and for the vendor to provide more significant information on the specifics of the systems provided at a reduced cost. This requires intricate software that allows the VAR to make available up-to-date reporting on the status of projects spanning multiple locations.
Joe Gittens, Director of Standards, Security Industry Association (SIA) — A key area for expansion will be securing the data centers that will house all of the cloud-centric data that will be leveraged for mobile activities in this industry and others. These facilities pose a huge security risk and protection of data will be top of mind for many. It’s not just cyber/data security but also physical security of these data centers, including access control and video surveillance. Also because “mobile trends younger,” these network-enabled technologies will have high demand in the education market.
2013: Business and Operations
Mitch Reitman, Principal, S.I.C. Consulting — Independent dealers and integrators that offer innovative services like IP connectivity, IP video and automation will grow while some traditional independents that offer only standard digital monitoring may struggle. Cable companies and other providers entering the security market will provide a real challenge to traditional security companies in the short term, but eventually will realize it’s very dependent on customer service and quality. There will also be high attrition rates as customers change providers of other bundled services like TV, phone and Internet, then become less likely to subscribe to monitoring services with the next bundled provider. Security firms that focus on quality will survive and thrive in the long run; those with commoditized monitoring and service will not.
Chuck Wilson, Executive Director, National Systems Contractors Association (NSCA) — For dealers and integrators, we can expect another year of uncertainty in surety and banking. Lenders and bonding companies are still operating in a very conservative fashion. Sales opportunities will come up quick and the window will close quickly if you are not able to submit a qualified proposal in less than a week. Meanwhile the expectations for project management will again rise to new levels. And attracting and retaining the right employees will be demanding. Finding bright, tech-savvy young IT people willing to cross over to a security applications world will be necessary. Providing them with a mentoring opportunity and teaching the necessary “soft skills” to fit the culture and interact with fellow employees and the customer base will be essential.
Tricia Parks, CEO, Parks Associates — As IP-based communications emerge, dealers will need new skills; that requires training and money. They also must learn to sell ancillary features and equipment that are beyond security only, including energy and control. This also requires new training, and a good understanding of consumer mindsets. It will be easy for consumers to say “no” to extra features if they do not understand the benefits of features clearly. For those who take these learning steps, there is the potential of solid new revenue; that is an opportunity. There is also the opportunity to make customers more than one-hit wonders by developing a relationship that can expand as new features emerge on the market.
2013: Security Industry
Bob Banerjee, Senior Director of Training & Development, NICE Security Americas — There is a major shift from the low-tech, cable-pulling, sensor-centric and labor-intensive model to a more IT-centric core that utilizes appliances and a reduced infrastructure together with a more highly skilled labor force. As we approach the tipping point with the use of IP, organizations will need to involve IT in their security projects, which may pose a challenge to some. This IT-centric shift also provides the opportunity to create ‘smarter’ security organizations that are more efficient and effective. Increasing integration may result not only in improvement of overall security but operations as well. Security may soon be seen as an intrinsic element of the operations environment as information can be obtained affecting many different parts of the organization. The result is security may end up being mainstreamed in operations and as such utilize a different budget paradigm, one that is income-orientated and not expense focused. This could potentially open up more budgets.
Andre Greco, Director of Sales Security & Fire Solutions, Johnson Controls — Industry growth in North America will continue to be fairly flat as it was in 2012. Growth will come as global economies improve and as security departments show they are more than a just a necessary loss center. Real estate experts have predicted flat growth on major new construction projects in North America through 2013. So integrators and manufacturers will be mostly bidding on highly competitive, lower-margin retrofit projects. Global integrators will look overseas for better opportunities. There is solid growth in Latin America. In Brazil, a construction boom is underway as the country prepares to host the 2014 World Cup and the 2016 Summer Olympic Games. Also, the Middle East is not just developing some of the world’s tallest buildings, but in effect creating entirely new cities.
Niall Jenkins, Research Manager Video Surveillance and Security Services, IMS Research — Our portfolio of physical security equipment reports forecasts the world market in 2013 to be in excess of $23 billion, with year-on-year growth of almost 10%. An interesting challenge to the existing supplier base for enterprise security projects could come from the aerospace and defense [A&D] industry. As government funding for traditional A&D and military projects continue to decline, these companies need to look to other, adjacent markets for opportunities. At London’s E3DS Conference, much discussion focused on how A&D firms can enter commercial markets to solve problems related to the environment, economy and energy. In many regions, security is a key element of the solution and it is possible these companies could compete in the enterprise markets.
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