Report: Growth rate for service offerings to soar
WELLINGBOROUGH, England—The North American market for physical security equipment and services is poised to exceed $61 billion by 2018, up from $44.4 billion in revenues in 2013, according to a new report, “Physical Security Equipment & Services Report—2014,” from IHS Research, a market research firm based here.
Service-based offerings are projected to further emerge as a defining feature of the North American market, their growth powered by manufacturers and service providers looking to bridge the gap between consumer-style business models and professional standard services, according to David Green, IHS senior analyst, video surveillance and security services.
While markets such as video surveillance as a service (VSaaS) or access control as a service (ACaaS) currently account for a small proportion of total revenue right now, such technologies are expected to enjoy some of the most robust growth rates during the forecast period, Green told Security Systems News.
“So many industries are moving toward service-based offerings and I don’t think the security industry is going to be any different,” he said. “It’s less about equipment and more about companies positioning themselves as solution providers.”
Now, as end users develop and implement security projects, they’re increasingly trying to identify what value-added services they can leverage within a given solution, Green said. That means they’re asking about everything from cloud storage and remote monitoring to cloud-based access control and maintenance tools.
To that point, Green noted that during the course of his research, multiple North American camera manufacturers told him that end users were asking less about IP cameras themselves than about the surrounding architecture of the system.
“End users are going to them now saying, ‘A camera’s a camera, tell me about the back end,’ ” Green said. He cautioned, however, that security’s gradual evolution to a software- and service-based industry shouldn’t obscure the fact that the equipment market in North America stands to remain strong. But in terms of growth rate, it will be outstripped by some service offerings over the course of the forecast.
Among market watchers, the North American security market is reputed for the high market acceptance and relatively robust penetration of remote monitoring services. This market dynamic could help propel the software and services trend beyond the commercial space and into the consumer market, Green told SSN.
To that end, Green said that telecommunications companies, having already gained a purchase in the residential arena, might look to incorporate more consumer-oriented, value-added services into their array of offerings.