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Growth predicted in the global physical security market

Growth predicted in the global physical security market North America’s compounded annual growth rate slightly outpaces global rate

PUNE, India—In a MarketsandMarkets report that covers the global physical security market from 2016 to 2021, the research firm predicts a 10.1 percent CAGR in the time period, bringing the global market's value from $69.63 billion in 2016 to $112.43 billion by 2021.

MarketsandMarkets valued the North American market for physical security at $25.94 billion in 2016 and expects it to be worth $43.4 billion in 2021. The CAGR for the North American region will be 10.8 percent over the forecast period, slightly higher than the global growth rate.

“There are so many factors that make North America a very unique region in terms of the physical security market,” Shikha Kumar, research analyst for MarketsandMarkets, told Security Systems News. Kumar noted that the geography includes two major economies, the United States and Canada, and many manufacturers have headquarters in one of these countries.

MarketsandMarkets expects North America to contribute around 37 percent of the global market.

“America has a very customer-centric market,” Kumar said. “The physical security market across the region is very highly adaptive to technology development and advancements. And, when we say the market is quite customer-centric, [it] means that customers are aware [of] the new technologies … as compared to the rest of the world.”

One factor driving the global market's growth is the rising incidents of terror attacks, Kumar noted. “This is a main reason why the market for physical security is growing,” she said.

Some users may deploy electronic security solutions as a cost-savings method in man-guarded environments, Kumar said. “They can reduce the number of guards and increase the efficiency of existing guards.”

“The first and most important challenge for the market [is] … difficulty in integrating logical components with the physical components,” Kumar said.

The report divides the market into two areas: systems and services. MarketsandMarkets predicts that services will make up around 38 percent of the market and systems will contribute about 62 percent.

The systems portion of the market covers hardware and equipment, Kumar noted, such as access control, video surveillance and PSIM systems. “Due to the decreasing cost of semiconductor devices, or OEM equipment, the market [growth] for systems is quite slow,” she said. MarketsandMarkets expects video surveillance to have the largest share of the systems market—at 27 percent—and also predicts that fire and life safety systems will show the largest growth.

The services portion of the market, including system integration services, maintenance and support services, as well as designing and consulting, is showing growth in the market, Kumar said. “The integration of SMAC (social, mobile, analytics and cloud) components in physical security equipment is also fueling the market for services segment,” MarketsandMarkets said.

Government, defense, and the public sector was the largest application within the market in 2016, according to Kumar, followed by hospitality and residential applications as the second largest group, and transportation and logistics as the third largest vertical. These trends will continue to 2021, she said.

Kumar highlighted surveillance analytics and real-time alarm monitoring as key technologies for the market during the forecast period.

Some of the key players in the market include Tyco, Anixter, Bosch, Schneider, Assa Abloy, Honeywell, and G4S, according to Kumar.


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