Research from Memoori - http://memoori.com/physical-security-2012 - shows that total value of world production of security products was $20.57 billion (at factory gate prices). Of this, intruder alarms at $5.77 billion took a 27.5% share.
Combined product sales grew by 6% over the previous year, with growth in the video surveillance sector achieving 11.8%, access control 7.2%. However intruder alarms declined by 0.8%.
Increasingly security systems supplied for new projects are delivered as fully integrated systems, whereas in the past they were supplied as 3 separate and discreet systems. So whilst these numbers identify with 3 separate product markets they now overlap when incorporated into a system.
For example many intruder alarm systems are now supplied with integrated video surveillance to enhance performance and productivity, and they can make up a large proportion of the cost and sometimes the total cost when they are retrofitted to existing installations. Our figures show static or small decline but this represents just intruder products. If we add video and access control into what would have been called Intruder systems there would be growth of around 5% for the systems market next year.
Mergers, Acquisitions & Investment
The value of merger and acquisition deals in 2011 was $9.847 billion a rise of 23% over the previous year, but in 2012 it declined to $7.168 billion a fall of 27%. Poor economic trading conditions reduced the confidence of major suppliers to go for growth through Merger and Acquisition. However we don't expect this to continue and forecast a steady annual growth rate in M&A deals of 6.5% over the next 5 years to 2017.
Intruder Alarms only accounted for 5.5% by volume of the deals made in 2012.These deals included FutureNet Security Solutions acquisition of Smith & Wesson's Perimeter Security Division, Salient Federal Solutions purchase of Electronic Security Systems, whilst Bowmark Capital backed the Management Buy Out of CSL DualCom in the UK.
Added to that Wireless technology products accounted for 3.7% by volume of the deals made in 2012. These deals included Tyco International’s acquisition of Visonic Ltd.
Intruder Alarm Embraces ‘Security as a Service’ and the Cloud in 2013?
Security as a Service has become attractive to customers including both the public and private sector. Budgets are invariably tight and upfront funds are frequently hard to find because the expense of upgrading the underlying technologies remains the responsibility of the vendor rather than the customer.
The complexity of operating some of these security systems can often be best left in the hands of the companies that manufactured them. Indeed security companies now seem willing to invest the necessary money themselves in the manufacture and operation of their security products, rather than selling them for cash up front.
Consumers have already learned to rely on hosted services for email and many professionals rely on Salesforce and cloud-based HR systems. And many also rely on Internet banking. If we can trust the cloud with our money today, it’s logical that we would do the same for security systems tomorrow. Hosted services will increase its impact over the next couple years, especially in the target market of small businesses and then grow to much high user levels by the end of the decade.