Global physical security market to top $100 billion by 2019

North America will be biggest contributor 2014-2019
Tuesday, January 20, 2015

LONDON—The global physical security market will more than double in value to more than $100 billion between 2014 and 2019, according to a report from TechNavio. North America will remain the largest contributor to the market.  

“North America is dominating the market,” Navin Rajendar, senior analyst for TechNavio, told Security Systems News. “We also see that North America will continue to dominate this market although its share will drop down” from 37 percent to around 33 percent by 2019, he said.

Rajendar noted that the drop is not due to a decline in the North American market but  because of higher growth in other regions.

TechNavio projects that the North American market, valued at $17.57 billion in 2014, will have a CAGR of 13.93 percent, leading to a value of $33.73 billion in 2019. The global physical security market will have a CAGR of 15.49 percent across this time period, Rajendar said.

For the report, TechNavio examined several main factors of the physical security market; video surveillance, access control, cloud-based services and software.

Since North America contributes the largest share of this market, many of the market trends at the global level are dictated by trends in North America, Rajendar said. A large example of which, he said, is cloud-based technologies for storing video surveillance.

“[Another] key trend, looking at technology for physical security systems, is the emergence of customized solutions,” Rajendar said.

There are five main groups of customers, according to Rajendar: government, retail, transit, education and banking and financial services. The transportation and education sectors are key for market opportunities in North America, Rajendar said. He cited access control as an example.

“The government sector has always been the highest growth area for security systems across any region. One of the main reasons for that is, when you’re looking at any mandate from a government, you have no choice but to implement a security system,” he said.

Rajendar said that the North American market will be driven by adoption of monitoring solutions, like video surveillance, and the increasingly lower cost of IP video surveillance and cloud-based solutions.

AXIS, Bosch, Honeywell, Cisco, Nice and Tyco International will be key vendors in the global growth of this market, he said.

The difficulties for end users integrating newly released technologies with their current systems would be a deterrent for this growth, he said.

“In North America we also see a possible challenge [with] saturation in certain areas, for example in the [banking and finance] sector,” Rajendar said, where the only opportunity for growth could come from replacing current systems.

While North America is and will be the largest player in this market, the fastest growing region will be the Middle East and Africa, with a CAGR of 19.49 percent.