Report: Global Security System Integration Market Topped $59B in 2013
A new report by IHS says the system integration market increased $5 billion in 2013 over the previous year.
DALLAS – The world market for security system integration was valued at $59.5 billion in 2013, an increase of almost $5 billion from 2012, according to a new report from IHS.
The security system integration market consists of the design, consultancy, installation, service and maintenance, as well as sales of video surveillance, physical access control and intrusion alarm equipment. Revenue is expected to continue growing in excess of 9% through 2018, according to the research firm.
The market is characterized by a handful of large international players, numerous regional rivals and many local competitors. Such a competitive landscape means fierce competition abounds and that both integrators and installers must remain at the forefront of technology trends to be able to continue serving “best-in-class” integration packages to their customers, according to IHS Senior Analyst Paul Bremner.
One trend that integrators have been eyeing closely recently is Security as a Service (SaaS), whether it be Video Surveillance as a Service (VSaaS), or Access Control as a Service (ACaaS), writes Bremner. Both offer promising opportunities for integrators to expand their recurring monthly revenue (RMR), while simultaneously getting closer to the end customer. This model also allows integrators to increase the value they bring to the table, and lets them be seen as working together with their customers as partners.
“Vertical markets such as healthcare and education both represent great opportunities for integrators right now as both are looking at expanding their video surveillance coverage and usage,” Bremner tells SSI. “The education market, particularly the K-12 sector, has shown a great amount of interest in expanding its video surveillance coverage to ensure the safety of both students and faculty.”
Among the observed challenges facing integrators today is continued pressure from declining equipment margins. “This is primarily being driven by price declines in the equipment itself, particularly video surveillance equipment,” Bremner says. “Video surveillance equipment for most integrators represents the majority of their equipment revenues.”
These declining equipment margins are forcing integrators to focus on efficiencies such as lowering the cost of delivering projects, as well as increasing the more profitable portions of their business, he says.
As product margins continue to edge lower, it is the services that integrators can offer, as well as the added value they are perceived to bring to the customer that will ultimately prove to be the separator between the winners and losers in the market, Bremner says.
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