Looking to 2016: Security Pros Predict Growth in Video Surveillance, Internet of Things
Industry members expect higher revenues, steady growth and more in the new year.
Security professionals expect there to be steady growth in the industry in 2016 in a number of channels.
Ian Johnston, CEO, ISD: Hikvision, Dahua and other Asian suppliers will continue to dominate the low to mid-tier. The rest will fight for their scraps, and/or further entrench their hold on the top end. Dealers will continue to slug it out in a race to the bottom. ADI, Anixter and others already have their own private-labeled gear that competes with their own solutions.
The consumers will continue to be driven to a more direct sale as the margins drop out of the bottom of the distribution market. Amazon stands to win very big here. Their core mantra of making razor-thin margins but do so at an astonishing volume while coupling in valuable services like storage and cloud to capitalize on all the cheap/free hardware that they push into the market is genius.
Provided they can modernize, monitoring services might be OK. But the scourge of DIY solutions, where anyone can feel comfortable installing their own cameras and intrusion detection systems, will bite into their markets. The value of “monitoring” solutions is waning as false positives eat everyone alive, but the solution providers seem to be incapable of finding is a good alarm verification mechanism.
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Pam Petrow, President & CEO, Vector Security: Manufacturers/suppliers will continue to consolidate. They will continue to seek more technology-driven, agile companies to provide products/solutions without the time/money required for R&D. Some will seek new sales channels to boost or diversify sales. Everyone seems to be trying to find their niche in the residential DIY space or in commercial analytics and cloud services. Patent troll claims will increase as ownership of new technology rights is challenged in the courts. Revenue growth will be challenged with the expectation of lower pricing, unless advanced feature sets provide enough differentiation to drive higher dollars.
With dealers/integrators, customers will continue to want more without an expectation of upfront investment. They will also expect to have the latest and greatest provided to them at regular update intervals, free of charge. Continual pressure on long-term contracts and low monitoring fees will challenge traditional dealers. Similar to suppliers, dealers/integrators will explore new sales channels ― DIY, online, partnerships, etc. – to boost market share and increase revenue.
Keeping up with changes in technology will continue to be a challenge for some of the smaller companies without the resources to monitor, implement and maintain more complicated network-based systems. The IoT opportunities will expand as new products become app enabled and consumers try to connect disparate devices. Monitoring providers will be challenged to add connectivity for the new service/product providers in this space. Opportunities will abound for those that are able to deliver seamless integration of these fragmented products/services. Having a talented IT team that can turn around integration development will be a requirement to stay competitive. This group will see the greatest growth in areas outside of traditional security dealers/integrators.
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John Nemerofsky, Management Consultant, Integrated Security & Communications: As the demand for security products continues a rebound from the recession, manufacturers ― especially of video and access control equipment – should see an increase in demand. That increase will be further influenced by international and domestic events ― terrorist attacks and school shootings, for example – which typically drive sales. However, competition, especially from Chinese manufacturers, will moderate price increases.
Integrators poised for growth should see an increase in 2016 revenues. But that will require a proper mix of product partners and sufficient, experienced staff to attract and service-added business. Market consolidation will continue as growing, successful integrators often find it less expensive and more efficient to add accounts and expand into new geographic areas through acquisitions.
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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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