Our world report on the Physical Security Business 2020 -2025 shows that the industry in the last two years has faced serious challenges, none more so than the COVID-19 pandemic, but it has proved to be robust and will return to significant growth by 2025.
Major manufacturers will continue to increase their share of the business at the expense of small & medium size companies. Size matters in Physical Security. Big businesses will be able to sustain lower rates of growth during what will surely be lean years between 2021 to 2023, but still invest in R&D and new technologies. The global pandemic will have created thousands of struggling companies, that are already drained of sufficient cash to survive and governments will soon be turning off the life support that has kept them alive. This will have the knock-on effect of many not having the capability to finance new, or even upgrade security systems.
However, Verticals Markets such as Public Surveillance (Smart Cities), Hospitals, Education & Transport are often publicly financed and are more able and committed to investing in physical security projects. They offer the best opportunity for growth over the next few years.
Demand for VSaaS and ACaaS will grow. These services are offering buyers lower operating costs and less upfront investment as they can pay monthly. They will have a significant impact on traditional routes to market over time, challenging current manufacturer/distributor/installer/end-user routes.
Added to this, Technology such as AI video analytics is rapidly increasing the performance of VSaaS. This in itself, is contributing to growth and the attractiveness of managed services.
Finally, the geographic distribution of physical security demand will become a major factor over the next three years. China is the market that will still grow the fastest. Hikvision has recently reported that in the first 2 quarters of 2021 their sales increased by almost 40% led by domestic growth of 46% percent.
The rest of Asia will also increase its share of the business, whilst North America will struggle to retain its share and Europe’s share will decline.