The January edition of SECURITY SALES & INTEGRATION includes our annual industry forecast as a cornerstone of our special 2013 Industry Forecast Issue. For the piece, I interviewed 20 of the industry’s most knowledgeable market analysts, business experts, systems integrators, manufacturer representatives and trade association directors. Some of their perspectives can be found in the magazine article, with the balance of their assessments appearing in separate Under Surveillance blog posts.
Featured in this installment: Joe Liguori, Vice President, Access Control Technologies and President of Security-Net.
What do you expect will be the biggest changes, challenges and/or opportunities as they relate to security technology and business for suppliers, integrators and monitoring providers?
Joe Liguori: This is supposed to be an ever-changing aspect of our business that, in retrospect, seems to remain relatively the same with some moderate refinements each year. Cameras are now IP-based and resolution continues to improve while storage capacity has increased, but for the most part our products continue to perform the same functionality, such as the opening and closing of doors and recording the transaction. One potential change that could prove significant is in the credentialing space, as companies like HID move toward implementing wireless verification utilizing the smartphone. There are still some challenges with the NFC [near-field communication] and the development of a relationship with Apple, one of the major smartphone entities.
Another advancement is related to ASSA ABLOY and their introduction of wireless locking hardware. This technology application opens up a wider spectrum of applications by significantly lowering the cost of adding access doors to a system. Business and operations are areas that we're compelled to change in order to become more efficient and to meet customer demands. Disaster recovery was never more prevalent after the effects of Superstorm Sandy, which heavily damaged the New Jersey and New York coastlines. Remote redundancy to ensure continuation of business functionality is something that everyone must consider if it is not already in place and reexamined if it is already in place. Efficiencies of scale are essential to ensure continuity with the client. Buying practices have to be in place to ensure that the customer is making prudent purchasing choices. For manufacturers, the challenges are varied, ranging from keeping the existing products they offer current and up-to-date while introducing new products that enhance the distribution channel’s ability to increase market penetration. System upgrades are always a challenge and I would love to see a simplification of the upgrade process so that the channel is eager to implement the upgrades as opposed to avoiding them. On the suppliers side, it’s basically product availability and price. In this new market everyone must ensure that they are buying at the best price, but also that the product is readily available so inventory creates a delicate balance here.
What do you envision as far the industry at large is concerned in 2013?
Liguori: The challenge is that the industry is essentially fragmented and lacks direction and continuity. In other industries there are a few players that essentially control the marketplace. This is prevalent in most disciplines with the exception of banking where there are arguably too many banks. Consolidation allows the industry to be stronger because there are fewer players. The security industry does not have this distinction and could ultimately benefit from some contraction. On the manufacturing side there are probably over 200 access control companies alone, and perhaps multiples of that in the video area. The security integration market is also crowded and the growth potential is limited so everyone is essentially fighting for the same real estate. These are not market dynamics that lead to growth and profitability on a consistent basis as there are few new markets to conquer.
What type of year do you anticipate for 2013?
Liguori: For manufacturers the growth prospects are somewhat limited, especially in the North American marketplace because there appears to be little new construction. That places the emphasis on the introduction of new products that can penetrate into existing marketshare of others or expansion into markets by developing products that will interface with competitor’s products, allowing a takeover in lieu of a rip-and-replace strategy that is economically prohibitive. Video is a more dynamic area for growth and many access control manufacturers are looking to fortify their position in this vertical. The same philosophy holds true for the integration channel. If you accept the concept that the access control market is essentially mature then the areas for growth might be focused toward CCTV and ancillary products that might develop end-user interests. RMR is the new central theme for integrators who strive to find a model to replace the revenue stream that maintenance renewal had afforded in the past.
Other Security Blog Posts
Under Surveillance | December 9, 2013
Kristen Strausbaugh, principal of All Saints Catholic School, speaks with SSI Editor-in-Chief Scott Goldfine about budgets for school security, the security issues she has on her campus and technology she would like to see implemented on her campus in the future.
Under Surveillance | December 7, 2013
SSI Editor-in-Chief speaks with Camtronics President Mark Wellman discusses installing a unique video surveillance and lockdown solution at Canton, Mich.-based All Saints Catholic School, as well as security funding challenges for schools.
Under Surveillance | December 5, 2013
Canton Police Department Deputy Chief Scott Hilden discusses electronic security helps law enforcement accomplish its public safety mission in this exclusive Q&A.
Under Surveillance | November 18, 2013
Three members of the Custom Electronic Design & Installation Association (CEDIA) Board of Directors address recurring revenue, competition, technology and more in the latest Under Surveillance blog.
Under Surveillance | November 15, 2013
For years Honeywell has hosted annual conferences for each of its three largest authorized dealer programs. The individual format changed this year with Connect 2013, which brought together installing security contractors from the First Alert Professional (FAP), Commercial Security Systems (CSS) and Honeywell Integrated Security (HIS) networks.