Growing Security Threats, Concerns Have Security Pros Expecting Opportunities for Growth in 2016
SSI interviewed 20 leading members of the industry to offer their projections for the new year across six categories.
Jim Lantrip, Security Segment Head, Siemens’ Building Technologies Division: I expect to see more technology pushing toward the edge, with more analytics in cameras and smarter card readers. We will see more wireless devices like locks, readers and cameras that take even less bandwidth. We will also see deeper acceptance of the security products by IT departments, more IT-intensive systems, e.g. systems on multiple virtual machines, working with databases in database farms, cloud-based applications that drive additional cybersecurity needs.
This will drive the need for cybersecurity awareness, adoption and processes that don’t exist today as standards in the security industry. With wireless taking many different paths, such as NFC, Bluetooth and WAP, this provides greater vulnerability while the industry catches up in the cybersecurity space. This creates opportunities for forward-looking companies by adopting cybersecurity processes and protection practices around products.
2016: SECURITY MARKETS
Anthony Leather, Senior Consultant, Frost & Sullivan: There will be increased
investment across critical national infrastructure.
In banking, high-profile data breaches will continue to drive cyber investment together with biometric authentication systems to limit fraud. There will be greater opportunities with a broader range of the general public owning biometrically-enabled devices.
In mass transport, threats and attacks against soft targets may result in a renewed focus on technology investment, especially on analytic systems that can enhance the capabilities of technology already in place.
In municipal and law enforcement, there will be greater focus on the use of Big Data and analytical products to create useable intelligence and mitigate potential threats from lone wolf-style attacks. There will be increased investment in devices and body-worn cameras to enable greater efficiencies and protection of police officers.
John Nemerofsky, Managing Consultant, Integrated Security & Communications: The new year should see modest growth in most vertical markets. But fear generated from recent terrorist attacks makes two markets ripe for major growth. One is the utility or power generation industry. Studies show a major cyberattack on the grid could lead to widespread and massive economic and social disruptions. Even physical attacks on individual sites could result in major economic losses. Hardening of utility perimeters should include those in major metropolitan areas as well as rural farm areas, where a successful attack could lead to food shortages.
The other market is transportation. Operations such as airports, seaports, railways and metro transit lines have long been top terrorist targets. Attacks can result in a large number of causalities, as well as potential long-term economic impacts. Our industry needs to develop new products and services to make these facilities more convenient to users, while still enhancing security.
RELATED: What do Pros Expect to Be the Biggest Changes, Challenges and/or Opportunities as They Relate to Electronic/Physical Security Technology in 2016?
Tom Cook, Vice President Sales North America, Samsung Techwin: Most markets continue to struggle for capital budget money, but when they do get it for security they don’t have additional monies for annual license fees. The industry is seeing consolidation and partly because the manufacturer is trying to provide a full solution that is channel license free. Companies like Bosch, Vicon and Pelco have continued success in markets like K-12, corrections, etc., because of license-free systems. We will continue to see movement this way, not just camera pricing eroding but licenses to zero.
The residential market will be the largest growth market for new technology such as wireless, battery-operated home cameras that can send information and recording to the cloud.
Jorge Hevia, SVP, Sales and Marketing, NAPCO Security Technologies: Commercial security will grow exponentially and outstrip residential, fueled by active shooter, work-place violence and soft terrorist events. Lagging income growth for consumers has made this a weak consumer-led recovery. The residential market growth will come from a more evolved lifestyle-matched offering — such as remote interactive services — via smart devices, inclusive of traditional security plus added value, notifications, video delivery messaging, etc.
Some of the residential category may move outside the professional, traditional model from installers and central station monitoring to DIY systems and MIY for monitoring. This is being aggressively marketed by newcomers like SimpliSafe and old names in the business, opening up retail channels such as Costco and Best Buy, with products formerly reserved for security pros. To successfully outcompete this expanding field, now also including cable companies and custom home integrators seeking RMR opportunities, alarm dealers will have to differentiate their offerings to point out value for money.
2016: BUSINESS & OPERATIONS
Peter Giacalone, Principal, Giacalone and Associates: With each passing year, it’s becoming more obvious how hard it is for smaller monitoring providers to compete with larger, more sophisticated firms. This is most prevalent in the wholesale monitoring space. Even the larger regionals that still offer their own in-house monitoring are struggling to keep up with the services those bigger, sophisticated monitoring firms have to offer. I expect we will see more consolidation and strategic alliances.
DIY security will grow rapidly. Products and services will expand as the DIY value proposition becomes more convincing. This will mean opportunity for some but challenges for others less adaptable. I don’t see much erosion, rather channel expansion.
Pierre Racz, President & CEO, Genetec: The cloud will play an increasing role in 2016, demonstrating a shift in how security business is offered via as-a-service models, with effective hybrid, meaning both on-premises and cloud, and cloud-first storage models. The market will see increased specialized application business models offering end users cloud-based services on a pay-for-use and pay-for-purpose model.
There will be increased awareness and demand by enterprise and citywide end users for unification and federation of their security systems to realize more meaningful intelligence for operational efficiency. Along with that will be resource management to leverage the growing number of diverse sensor devices available on the market – cameras, ALPR, access control and discreet city lighting and audio sensors – and analytic software tools.
Integrators need to be proactive and adopt a model to stay highly engaged with the end user after the initial sell and install, with the understanding that they will continue to need differentiated tools and methodologies in their security system. Be cognizant that customers are only using a portion of all features, and it will be the obligation of integrators to embrace and understand new business models that shift the one-time sale to an RMR model where the cloud plays a central role.
Steve Carney, Senior Director, Product Marketing, Video and Integration Platforms, Tyco Security Pro
ducts: We’ll see continued activity in the realm of mobility. This trend has evolved dramatically over the past year, but most importantly at the customer demand level. What started a few years ago as a simple checkbox in the list of features provided to customers has grown into an unmistakable customer demand. Apps are now important to where customers are redefining their operations around mobility and demanding that it flexes to their needs. We’ve seen this even in customers who have been slow to adopt technology in the past.
Harnessing the Internet of Things will continue as a major initiative and central focus for the security industry. The existing capabilities of our systems to collect and supply large amounts of data – security-related and otherwise – have already put our market at an advantage. At the heart of IoT – taking somewhat disparate systems with a common base and bringing them together to gain new insights – is something dealers and integrators will need to become comfortable with.
Pam Petrow, President & CEO, Vector Security: 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.
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