Frost & Sullivan makes bold predictions for security, IP
CYBERSPACE--In a Webinar held March 12 for the press, Frost & Sullivan analyst Dilip Sarangan said economic recovery for the United States in 2009 is not a "far-fetched idea," that network-based security technology will still grow at 15-20 percent, and that the current economic climate will actually increase the speed at which IP-based technology is adopted by the security end user community.
"Here at Frost & Sullivan, we look at the crossover from analog to IP-based systems," he said, "and the crossover was taking place beyond 2013, 2014, but with things moving in this economy, it seems like that crossover will actually take place sooner than expected, where more than 50 percent of the systems are network-based systems."
This is contradictory to comments made by some other industry observers. Recently, John Monti, vice president of sales and marketing at chip maker Pixim, said, "I think the transition point for analog to IP might move out about two years" because of the economy. And Bob Gauvreau, an industry observer retired from heading security efforts for the city of Ottawa, said, "end users without IP technology products such as cameras will be hesitant to convert their hardware due to cost. Analog cameras that need to be replaced are not being replaced by IP cameras as quickly as anticipated by manufacturers due to budget restraints."
However, others have made the argument that network-based systems leverage a common backbone that exists already in enterprises. "Given the significant and growing investments in IP technology overall," said Bob Beliles, vice president of enterprise business development for Hirsch, "companies may look at IP-physical security installations as a better use of a common resource that can yield improved capital cost structures and potentially improve operational benefits over the long term."
Sarangan predicted that analog product sales would be flat to negative for 2009, while the industry as a whole grows at roughly five-to-six percent. Later, however, he said he was seeing reduced demand for security systems as a whole, especially for wireless and analytics technologies.
He called the U.S. market "bottoming" and predicted new growth for the U.S. economy as a whole by summer. So, "How can companies actually grow in a bottoming market?" he asked. "The main thing is to build security systems that demonstrate the cost benefit, using HD or multi-megapixel cameras to give good images for evidentiary purposes, make surveillance systems a better value to end users, be interoperable ... lower operating expenditures, reduce the total cost of ownership."
"One of the things that's lacking in our industry are tangible demonstrations of the ROI of systems," he continued, "and that's what companies should be doing, using case studies to demonstrate what the return on investment is and doing this in a timely fashion up front to help the end users reduce the sales cycle and update their technology."