Access Control has over the last 5 years become a much more attractive business. It has realized the highest rate of growth of all physical security sectors over the last 2 years, partly because of moving into IP technology and improving product and management performance.
It now has come to a crossroads. Will it now take the bold step of becoming “Open” or just ignore industry standards for a time. There have been some intriguing acquisitions this year and together with the arrival of 2 major Chinese manufacturers into the western access control market this could have a significant bearing on a move to more Open Standards.
Our new report shows that suppliers have in the recent past listened and acted on the needs of the stakeholders in the supply chain and as a result the world market for Access Control products and software reached $6.858 billion in 2017 an increase of almost 7% on 2016. For the last 2 years Access Control has achieved a higher rate of growth than either Video Surveillance or Intruder Alarms and it looks like it will retain this status in 2018.
We forecast that it will grow by a CAGR of 8.04% to 2022 making sales of $10.10 billion in that year. These levels of growth will be driven by ACaaS, Biometric Readers and Identity Management, Wireless Locking systems and more penetration of IP network systems.
It is still a much smaller business than Video Surveillance and this will always be the case, but it now has the confidence to move forward and pick up the challenge of embracing new technologies, which will drive up demand.
Prospects for the future look sound but there are some clouds on the horizon. The first is the lack of interest by manufacturers to adopt the latest ONVIF conformant standards, which smacks of “why take this challenge when the business is going so well”. The second is that the two Chinese companies that have created a major challenge to the western Video Surveillance business are now investing heavily in Access Control. Open Standards would suit them fine, helping them take a share of the retrofit / refurbishment business as well as new installations.
We are bullish about this business as it moves further into IP Networking and strengthens its relationship with biometrics and identity management. These trends are significant drivers that should maintain the growth momentum that has built up over the last 3 years but it will also require Open Standards to be adopted.
However both manufacturers and system integrators are clearly not “excited” about the benefits to them. It is possible that some access control manufacturers will become complacent and hold back on changing. Our report explains why ONVIF will have much more resistance to adoption than Video Surveillance did.
If access control manufactures hang on to proprietary systems, it will not be good news for business growth. Traditional proprietary systems mean limited options, central servers with complex and expensive cabling, as well as restricted possibilities for integration and scalability. The industry now waits to see if HID Global’s acquisition of Mercury will encourage the later to adopt open standards or in the short term allow Mecury to retain its strong hold on proprietary systems.
HID Global are major players in Identity Management and the integration with Access Control is becoming a much more important feature particularlly now that the EU’s General Data Protection Regulation (GDPR) is set to go into effect in May 2018, triggering penalties for non-compliance with the new set of rules.
As IT departments rush to ensure that everything is ready for the change, one key area that needs to be incorporated is data that is held within the Access Control system. This is yet another driver for Access Control and Identity Management to Integrate into one system, particularly for the enterprise market.
Access Control as a Service (ACaaS) is rapidly increasing its penetration. As charges come down, more IP Network PACS are installed and the technology surrounding identity validation takes a more important role. The attraction of ACaaS and Managed Services has become more appealing to end users particularly those who don’t have IT skills onboard.
ACaaS end users no longer need internal IT departments to build up and maintain the servers and infrastructure at the business facility, which incurs a very high price tag. With cloud-based solutions, onsite servers and appliances are eliminated. This should reduce the total cost of ownership while not losing any functionality.
Winning new business in this environment will be more competitive and will require continual product development, which is absolutely essential in order to maintain growth. Both the leading Chinese Video suppliers have this year entered the access control market in North America and Europe and we expect that they will cause disturbance through reducing profit margins and there is already some evidence of this in the last 3 months of trading.
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