In the latest Research Note from IHS, Blake Kozak – senior analyst for security and building technologies – discusses the future of hosted and managed access control solutions.
How will the electronic access control industry embrace the cloud in the coming years? Will Governments see the value in using commercial cloud resources? Will Governments create standards and Best Practice to ease restrictions on cloud storage across borders? Will operational expenditure (opex) options open the door to more SMB adoption? With the cost per door coming down for access control solutions, will the market opportunity for Access Control-as-a-Service (ACaaS) be negatively impacted?
Many questions still exist for the providers and future adopters of ACaaS. However, IHS expects ACaaS to thrive over the long term. The global market size is expected to exceed $530 million by 2018 and $1.8 billion by 2025.
Driving this growth will be the global adoption of cloud and virtualisation in other sectors not related to security in addition to the services associated with ACaaS.
During the first half of 2014, IHS calculated that multi-tenant data centre sales grew by 12.7% on a global basis. As it relates to access control, IHS expects the commoditisation of access control hardware to draw more attention to value-added services and ROI. As a result, channel partners and providers who are more specialised in IT, integration and mobility (ie remote connectivity) could see more growth in the long term.
Change of mindset
Although the access control industry is inherently slow to adopt new technologies, end user adoption and awareness is only half the battle.
Unless they were ‘born in the cloud’, most integrators and installers must change a long-standing mindset of selling boxes and components and instead begin selling services, features and concepts.
Additionally, they must know the IT side of the business and be able to answer questions regarding redundancy, certifications, hacking and other buzz phrases associated with cloud-based services and ACaaS.
Although it’s a difficult process, the access control industry is already moving in this direction. Starwood Hotels offer mobile keys over Bluetooth and banking headquarters have now installed wireless locks.
For the questions listed above, the short answer is: ‘Yes’ and the access control industry will continue to embrace the cloud, albeit at a much slower pace than originally projected.
Today, most providers of ACaaS do not specialise in ACaaS only. As a result, ACaaS remains a small portion of most monitoring stations and integrators’ overall business. One reason why these channel partners do not specialise in only ACaaS is because it wouldn’t be profitable, at least not at the beginning. With the ACaaS model, a large number of accounts is critical so many channel partners are even holding off on providing managed services until more accounts are added.
Additionally, most of these providers do not have a ‘true cloud’ model. The majority rely on only a handful of servers to provide services. Until end users begin requesting and using ACaaS in their droves and integration with video and other services transpires, IHS expects that this non-true cloud model will suffice for most security managers.
Furthermore, IHS expects that Governments will continue to embrace the cloud, but they must find ways to manage resource and security (which is often a lengthy and expensive venture). The US Government, for example, has already started travelling down this path with milCloud and other initiatives. For the EU, the European Cloud Partnership (Trusted Cloud) has acted as a starting point and blueprint for the future.
Flexibility of the offering
Overall, IHS expects ACaaS to continue to grow and expand due to the flexibility of the offering not provided by on-site solutions. For example, end users can manage the entire solution themselves while at the same time outsourcing the infrastructure maintenance. Alternatively, they can pay an additional fee and the entire solution will be managed for them – from monitoring and report printing through to badging and granting access rights, etc.
A further option is that the user chooses to only outsource certain tasks and they can lump a portion (in some cases 100%) of the hardware cost into a monthly fee, in turn reducing the barrier to entry.
Hindering growth is the continued decline in the cost per door (hardware), privacy concerns, web-based panels, custom billing, hacking, cross-border privacy agreements and market education.