SSI’s 2017 Security Industry Forecast
While security continues to be the powerful lead, business- and lifestyle-driven services are increasingly playing stronger supporting roles. This ensemble of offerings is the ticket to growth say experts, who are giving the industry rave reviews.
The security industry is looking to surpass 2016's strong returns.
SECURITY TECHNOLOGY
Oliver Philippou, Senior Analyst Technology, IHS Markit
Two big challenges for vendors of video surveillance equipment will be price erosion and cybersecurity.
The average price of a network camera in North America in 2012 was around $600, the price from vendors to the channel that is. It is forecast to be less than $170 in 2017.
Cyberattacks on networks through video surveillance cameras were big news stories in mainstream media in 2016. Vendors need to work together to ensure that the general public’s perception of the security of video surveillance systems is not further eroded. It takes a long time to overcome general perceptions.
For instance, it has taken a long time for people to overcome the perception that video surveillance systems provide grainy black-and-white images. If video surveillance systems are perceived to be vulnerable to attack, this will negatively affect demand for them.
Chris Peckham, Senior Vice President and CTO, Kratos Public Safety & Security Solutions
Continuing to drive change in the industry will be the use of the Cloud and how it is leveraged for delivery of services. Interaction with the Cloud and providing integration across different platforms will use APIs to build upon capabilities.
Mobility continues to be an area with great potential bringing video and other information together from numerous sources as well as leveraging a device that is constantly with an individual.
The Internet of Things impacts the physical security industry as well by using platforms providing a multitude of sensors on the network. It is also a means of integrating across deployed systems, devices and sensors, providing information that can aid an organization or user base in observing events across different sources.
Many vendors have been building offerings around the Cloud as well as IoT, with features such as AI and adaptive machine learning to correlate alarms and events with tools built for Big Data processing.
Robotics and drones are areas with potential as well. These technologies are being integrated into patrols and other systems to provide information from the field, and coverage in areas that would otherwise be difficult to cover. These devices can work somewhat autonomously and provide real-time data from the field including video, environmental monitoring, and tracking WiFi and Bluetooth devices around them.
Christie Hamberis, Senior Vice President, ScanSource Networking and Security
There continues to be a lot of conversations around dropping price points and, because of that, the necessity to sell more to get the same revenue numbers. The channel continues to discuss ways to combat that with more solution selling and vertical-specific solutions.
Dealers and integrators are seeing the need to develop a plan to diversify – to provide more billable value-added services, to offer more recurring revenue streams, to look at the advantages of OpEx vs. CapEx around cloud offerings.
In short, they must ensure they are much more than a hardware provider in order to maintain their margins and to continue to grow.
Brian Wiser, President of Sales – North America, Bosch Security Systems
Overall, integrated systems that tie security and communications technologies together will continue to provide opportunities to integrators in 2017, as they deliver added value and reduced complexity for the end user.
For example, presenting access credentials at an entrance unlocks the door, disarms the intrusion system and alerts security with video from a nearby camera; or, a camera with onboard video analytics that detects a perimeter breach can fault a point on the security control panel, which triggers an audio announcement in the area and alerts the central station.
Within specific technology categories, H.265 compression and noise reduction technology will help to lower overall costs for video systems. This will become increasingly important as users continue to seek more detailed images with more pixels, which can increase both bandwidth and storage requirements.
And, even if systems installed in 2017 aren’t immediately using H.265 compression, dealers/integrators will select technology that is H.265 capable to futureproof these systems.
Video analytics will become more relevant as improvements in its accuracy are making it a more sought-after feature of surveillance systems.
Enhancements in reliability are reducing false alarms in outdoor environments. Analytics can now be used in areas with heavy winds, in weather conditions l
ike rain, snow or hail, or near bodies of water that are in constant motion.
In indoor environments, analytics will become more accessible as it is offered as a standard feature built into midrange IP cameras for advanced intrusion detection, enforcing health and safety regulations, and analyzing behavior in retail environments.
For intrusion systems, there’s opportunity for integrators to offer incremental services to their customers to increase RMR. Systems that offer personal notifications of events via emails or text messages, or that integrate with IP cameras and send video snapshots of events, provide the user with greater information about what is happening at their facility.
In addition, remote command and control of systems for arming, disarming and control of connected outputs via mobile apps provides added convenience for the user. These capabilities can be sold by security dealers/ integrators to their customers as additional services.
We’ll also see greater use of the cloud in various ways that include making installation and programming easier for security dealers and integrators.
SECURITY MARKETS
Angela White, Executive Vice President, Central 1 Security; President, Electronic Security Association (ESA)
The smart home market will continue to grow in 2017. You will see further integration with appliances and household devices of all sorts. Consumers want convenience and to connect with all facets of their lives regardless of where they are, and we have an opportunity to provide those solutions.
On the commercial side, I believe many of the promises of video analytics and their business intelligence applications will come to fruition in 2017. Video is an increasingly important part of our lives and the market is projecting strong growth rates for the foreseeable future.
Additional stakeholders are becoming more important in security integration decisions. For example, in a retail setting while camera placement decisions used may still be a focus as a theft deterrent, we should consider engaging with marketing, HR, loss prevention and IT to add more value to the relationship.
We have solutions for all of these functional areas that are more cost effective than ever before.
Peter Boriskin, Vice President of Commercial Product Management, ASSA ABLOY
The latest developments in wireless technology, including near real-time communication, enable more comprehensive security in the education market, at a lower price point and with greater ease than ever before.
In the past, mechanical locks on doors were often the best the security industry could do. Even then, schools were not able to keep their class-rooms and facilities properly secured in many cases.
With wireless, we now have an opportunity to address that issue in a new way without the infrastructure, and its associated costs, that would have typically kept the market at arm’s length, especially in K-12 facilities.
Rob Simopoulos, President, Advance Technology
We are seeing continued technology upgrades within the healthcare market that will provide great opportunities. Many healthcare organizations are investing heavily in new security technology solutions that help protect employees, visitors and patients.
With the rapid deployment of Real-Time Location System [RTLS]-grade wireless networks within these facilities, end users are looking for solutions such as patient protection and staff duress to piggyback on these platforms.
Firms that have the solutions and expertise to deploy new services on wireless platforms will be able to increase their customer base in the coming year.
In addition, we are seeing a number of SOC [security operation center] build-outs occurring in smaller hospitals where new video walls are being deployed for command and control by security officers and other stakeholders.
These video walls are displaying all interrelated security and operational software in one place, providing keen situational awareness across campus. Regardless of market, integrators can make RMR on every piece of equipment they provide today. RMR is not just limited to alarm/fire monitoring and Cloud-based access control.
Security integrators need to look for unique ways to provide customers managed services and build an RMR model around those offerings. It will add value to the business and differentiate services from those of the competition.
BUSINESS & OPERATIONS
Richard Brent, CEO, Louroe Electronics
In 2017, we will continue to see segmentation for integrators between smaller projects for mom-and-pop businesses and large enterprises.
On the low end, it will be a matter of who can install the commoditized camera or surveillance kit for the lowest price. On the high end, it will be about who can win the bid for large service and maintenance contracts for government entities like airports or retail chains like Macy’s.
For suppliers, the trend in business strategy has been to either become the leader of the end-to-end solution in a specific market or to be the leader in an open platform solution that easily integrates with third-party products.
The change we will see in 2017 is not necessarily migration from the end-to-end approach. Instead, open platform manufacturers will practice more selective vetting on which companies their products will integrate with.
Pierre Racz, President & CEO, Genetec
Cyber responsibility will be one of the biggest challenges we will experience in the next year. Ensuring cybersecurity is not simply a device problem; it’s a lot more involved than simply telling the IT department to make sure that devices are properly secured.
The responsibility has to be taken by the companies who sell, install and operate the technology. 2017 will be a year of awareness about cybersecurity and accountability. The burden of responsibility needs to rest with the people who make us think we are secure when in fact we are not.
We have precedent in the past, when facilities were successfully sued for giving the public a false sense of security after installing fake video cameras. There was a well-reported case of a woman who was assaulted in an underground parking garage – she ran in front of a fake security camera, waved arms and asked for help.
Because it was a fake camera, no one came to her rescue and she was assaulted; subsequently she successfully sued the owner of the parking garage.
Read on for what’s in store for regulations & compliance, pressing challenges and more!
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About the Author
Scott Goldfine
Scott Goldfine is the marketing director for Elite Interactive Solutions. He is the former editor-in-chief and associate publisher of Security Sales & Integration. He can be reached at [email protected].
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