ONE of the most pervasive news trends of the past 12 months has been projections of growth in the demand for security electronics and networks – not just slight growth but enormous growth. Not only are the numbers being thrown around very large, they seem to take in most parts of the market.
There’s growth in IP video. There’s growth in thermal cameras. There’s growth in the security demands of key utilities – and this latter is spread across the entire market – including intrusion detection, perimeter, fire, building management and access control. We’ve also seen projections of growth in areas like building management and home automation which recently saw a huge confidence play, with Google buying home automation manufacturer Nest Labs for more than $US3 billion.
This sort of growth and confidence is vital for installers and manufacturers alike, and as an adjunct to growth, end users benefit from increased investment in R&D, as well as growing service staff levels that growing revenue supports. Something else that’s important from all our perspectives is that growth is forecast out into the medium term. It’s not going to be just a couple of years of expansion – we’re going to see the market expanding laterally and vertically through 2020.
Market projections are nebulous things, however. While a recent report states the IP Video and Video as a Service market will pass $US57 billion, it’s hard to know exactly where that growth is going to be centred. For all the talk about VSaaS, projections from one recent study suggest cloud surveillance models will reach just $US2.5 billion by 2017, even with a growth rate of more than 31 per cent. That suggests most the value of growth is going to be in more traditional IP-based CCTV systems. At the same time, another study insists on a VSaaS market of $18 billion by 2020.
Something that should be heart warming for locals is the fact that a recent Allied Market Research study found Asia Pac would grow the quickest – at a compound annual growth rate of 44.3 per cent. Of course, much of this growth is likely to be centred around China and other fast-developing nations but it means there are opportunities for enterprising firms brave enough to expand into Asia.
Important, too, it’s not just video surveillance that looks set for growth. An RnR Market Research report recently projected the global building automation and controls market – specifically lighting, security & access, HVAC, entertainment, outdoor controls, elevator controls and BMS – is expected to reach $US49.5 billion by 2018 growing at a double digit CAGR from 2013 till 2018. Home Automation will grow, too. The global market was valued at $US3.6 billion in 2012 and it’s expected to reach $US16.4 billion by 2019, growing at a CAGR of 24.6 per cent from 2013 to 2019.
Something else that was interesting recently was a study that suggested the value of security for global energy supplies would reach $US67 billion in 2018, growing at close to 7 per cent. This is an enormous figure, given it covers just one area of global utility. Fuelling growth in energy provision and generation are terror threats, political pressure and stringent government regulation that cover power generators and fuel suppliers. According to analysts, such organisations have been broadly classified as primary targets for physical and cyber security attacks and increasing thought is being put into ensuring they are secured properly.
Further shaping growth will be the 6 billion internet connected devices set to be manufactured and sold in 2014 – and that figure is projected to growth at improbable levels over the next 5-6 years. IMS estimated there were 9.6 billion connected devices in 2012. Intel says there will be 15 billion connected devices by 2015, while Ericsson CEO Hans Vestberg recently predicted there would be 50 billion devices connected to the Internet by 2020.
But how real these numbers are and how likely they to solidify into concrete business opportunities is more difficult to say. So many reports cross my desktop, with so many different market values, so many different contributors. At all times the figures vary enormously. But there’s one thing that does not vary. The expectation of massive growth in internet connectivity and strong global growth in security electronics and networks ranging from 7-12 per cent and compounding between 2013 and 2020.
By John Adams