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IHS Research Note: ‘Global Video Surveillance Market – Latest Trends’

In the latest Research Note to be produced by market analyst HIS, principal analyst Jon Cropley provides information on current trends in the market for video surveillance equipment.

According to recently published estimates issued by the Video Surveillance Intelligence Service (VSIS) at HIS, the world market for video surveillance equipment grew by almost 7% in 2013.

The VSIS also reveals that the ongoing transition from analogue to network equipment accelerated last year, with revenues from network solutions higher in all four major world regions analysed (ie the EMEA, the Americas, China and Asia).

IHS forecasts that the pace of transition will continue to be rapid in 2014 and 2015 before slowing slightly from 2016 onwards. In the next two years, a number of major vendors will continue focusing their efforts on network equipment at the expense of analogue.

According to recently published estimates issued by the Video Surveillance Intelligence Service (VSIS) at HIS, the world market for video surveillance equipment grew by almost 7% in 2013

According to recently published estimates issued by the Video Surveillance Intelligence Service (VSIS) at HIS, the world market for video surveillance equipment grew by almost 7% in 2013

Global video surveillance equipment revenue in 2014 is expected to rise to $15.0 billion, up from $13.5 billion in 2013.

IHS has just added new global and regional market statistics, forecasts and market share estimates to its Video Surveillance Intelligence Service.

Key findings about the video surveillance market

In addition to the trends above, other key findings include the following observations:

• A number of Chinese suppliers are estimated to have gained market share in regions outside China in 2013. They tend to offer products with low prices, and this has been a major factor in high average price erosion in those regions
• China is estimated to have been the largest regional market for video surveillance equipment, accounting for a third of global revenues in 2013
• In terms of revenues, last year the market for network cameras was much larger than the analogue camera market. However, unit shipments of network cameras are not forecast to exceed those of analogue cameras until later in the decade
• Forecasts for network cameras with 4 Megapixels and above have increased. Growth in demand for 180/360 degree network cameras and 4K cameras is a major reason
• The supply of video surveillance equipment remains highly fragmented. The 15 largest suppliers only accounted for just over half the market in 2013
• Although declining, shipments of analogue cameras and DVRs will remain high throughout the forecast period

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IHS Research Note: ‘The Access Control Industry of Tomorrow’ – How will role-based access and open standards influence market opportunity?

In the latest Research Note from IHS, Blake Kozak (senior analyst for security and building technologies) discusses the exciting changes afoot within the access control industry.

The access control market is beginning to propel itself into innovation and technological advancement through integration. Open standards, convergence of access control and video and partnerships with non-security related companies [and non-access control companies such video surveillance providers] are the focus of the industry.

It’s safe to say that access control providers, integrators and building IT managers are no longer hesitant to implement access control to its fullest capacity. Integrating access control with video allows for forensics and more seamless security.

While video recording at the door is not an entirely new concept, many providers are looking to develop software and user interfaces which unify the two solutions. Additionally, ease of use and convenience are helping to drive the industry.

The Access Control Industry of Tomorrow: how will role-based access and open standards influence market opportunity?

The Access Control Industry of Tomorrow: how will role-based access and open standards influence market opportunity?

Access control does not always need to be used for only hardened security applications. Using social media and applications/hardware in conjunction with access control could help open the market to new opportunities since interacting with the access control devices is becoming increasingly popular.

NFC (Near Field Communication) and BLE (Bluetooth Low Energy) are also trending and will allow more options in the medium term for those end users who wish to replace physical credentials with mobile credentials.

Open standards/interoperability standards

Additionally, open standards and interoperability standards may also begin to change the face of the industry over the next 12-36 months. ONVIF Profile C and Physical-Logical Access Interoperability (PLAI) may look to lead this movement.

In addition to open standards, integration with hardware and software that’s neither security related nor BMS related could also change the industry.

Role-based access control is one example. Typically, access control rights today are assigned based on time schedules which often requires additional inputs from an administrator. However, there could be a trend towards using assigned roles to provide access to not only doors but to also logical access control.

The future focus could be on allowing logical domains to work with physical domains in order to increase efficiency and open doors for other possibilities in addition to automated privilege management.

Last, travel programs within organisations could be tied to access control systems which automate access to different buildings within an organisation based on a colleague booking travel. This would effectively eliminate the need for an administrator to grant each travelling colleague access rights to each building they are traveling to in a different city or country.

Innovation and implementation very much part of the mix

Overall, the access control industry is no longer standing still with innovation and implementation of technology firmly part of the mix. The access industry is now thoroughly entrenched in wireless, IP-enabled devices and integration beyond video surveillance. Many of the leading suppliers of access control are working to offer a wide range of product and offerings which include not only enterprise but also SMB.

One of the keys to success over the next few years will be to have an offering beyond traditional access control readers, panels, cards and software and embrace the new position of the industry which includes things such as remote management, mobile and fixed functionality credentials, wireless, reducing administrative burden and increased efficiency and integration with human capital management software.

The access control industry of tomorrow is knocking at the door.

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IHS Research Note: ‘Metropolitan Police Service trial of body-worn cameras highlights new trend’

In the latest Research Note from IHS, David Green (senior analyst in video surveillance and security services) provides information on the market for body-worn video surveillance cameras in law enforcement.

In early May 2014, London’s Metropolitan Police Service announced it would be spending almost £1 million on a trial of 500 body-worn video surveillance cameras for police officers in ten of London’s Boroughs.

The move comes after several high-profile cases in recent years calling into question the integrity and transparency of police officer’s actions (for example with the shooting of Mark Duggan, which later sparked the London Riots of 2011).

Fitting video surveillance camera systems on mobile law enforcement is not a new idea. In fact, over $200 million was spent on these systems worldwide during 2013. However, so far the focus of this spend has been on in-car video – typically two-camera systems that offer both forward-facing and rear seat occupant coverage.

In the majority of cases, the motivation for fitting these cameras came through the video’s usage in prosecution cases as evidence, although as the ‘sue culture’ has become more popular there has increasingly been a benefit in helping protect against legal claims for malpractice.

If this Metropolitan Police Service trial of body-worn cameras shows clear benefits for the police, public relationships and even the Government, then it’s unlikely that this will be the last trial scheme to be announced

If this Metropolitan Police Service trial of body-worn cameras shows clear benefits for the police, public relationships and even the Government, then it’s unlikely that this will be the last trial scheme to be announced

Body-worn cameras are a much later addition to this industry segment. IHS estimates that sales reached over 5,000 units per year during 2013 for the first time.

In early adoptions, the body-worn cameras did not prove to be as successful as hoped. Issues arose with field of view, focal length and, above all else, simply whether or not the camera was pointing in the right direction when it mattered.

As a result, officers were finding that when they needed to search through video footage and prepare it for court, the video either did not show what it needed to or the quality was too poor to be admissible as evidence. The likely return, therefore, didn’t outweigh the financial cost to purchase the systems.

However, the technology has since improved and the newest cameras now offer a viable addition (but not replacement) to in-car video systems in providing law enforcement with total video surveillance solutions.

Solution to a problem

This is where trials like that planned by the Metropolitan Police Service are most interesting, though. It’s not necessarily that they are adopting body-worn cameras now that they’ve improved enough to be used as evidence. Rather, it’s more that they offer a solution to a different type of problem.

The motivation is not just about showing a tangible benefit (for example several thousand pounds a year in avoided legal claims) but that it can help rebuild the public’s trust in police officers and their conduct.

Body-worn cameras in this case are using video surveillance technology as a marketing tool rather than primarily being a security system.

It will therefore be interesting to see the progress of this trial in how it answers two key questions that could yet hold back growth in system sales.

First, will the public react in a positive way in that systems help improve public trust and reduce the frequency of legal claims against officers? Second, will the police officers themselves accept the technology?

Many arguments are made against the ‘Big Brother’ culture and there’s understandable resistance towards the idea that your every move at work could be recorded and scrutinised. However, if body-worn cameras can be shown to clearly reduce an officer’s risk in the field and improve public co-operation then maybe that resistance will reduce.

Post-recession, public services such as law enforcement don’t have a lot of funding to spend in any area. It follows that system cost will always be a concern, but if this Metropolitan Police Service trial shows clear benefits for the police, public relationships and even the Government then it’s unlikely that this will be the last trial scheme to be announced.

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IHS Research Note: ‘Middle East and Africa set for strong growth opportunities in access control’

In the company’s latest Research Note, Blake Kozak (senior analyst for security and building technologies at IHS) highlights the potential growth opportunity for electronic physical access control equipment in the Middle East and African regions.

The EMEA region continued to make strides toward recovery in 2013 and is expected to see moderate growth from 2014 through 2015 for traditional electronic access control.

For traditional access control, IHS has estimated growth of about 3.1% in 2014. When including electronic locks (mechatronic, digital cylinder and electromechanical), IHS estimates a growth of about 7.4% in 2014.

According to IHS’ 2014 report on access control, the Middle East and African regions are forecast to be worth about $180 million in 2014, which combine to have a CAGR of about 15% from 2013 through 2018.

Cutting-edge technology is sought after

IHS found that many countries across the Middle East are searching for and installing the most cutting-edge technology available.

To encourage Best of Breed adoption, many countries in the Middle East have programmes in place to reduce the amount of counterfeit product entering the country (for example Saudi Arabia with the Intertek program). IHS expects this program is helping to keep margins higher than in other parts of the region.

Detail of a typical mechanical combination lock

Detail of a typical mechanical combination lock

For Africa, many international banks and regional banks have been investing in expansion across the African continent. When banks expand and/or new banks are created, this presents a growth opportunity for electronic access control.

In the past, South Africa represented the most opportunity for access control adoption but this may be changing soon. In April 2014, Nigeria’s official statistics agency released rebased GDP data – the first such revision since 1990 – providing a more accurate assessment of the economy. The broad revision puts Nigeria ahead of South Africa with a GDP measure for 2013 of US$509 billion (89% higher than the corresponding figure from the now outdated series).

Additionally, infrastructure such as airports, seaports, education and critical sites (including oil and gas and energy) are all experiencing very strong growth. IHS expects a significant impact on the access control industry in the short to medium term.

Rate of movement towards IP

Lastly, IHS has assumed the consumption of IT equipment suggests the rate of movement towards IP and other more advanced security technologies.

According to IHS’ Global Insight, the Middle East and Eastern Europe/CIS countries were expected to both have a CAGR of about 6.5% from 2013 through 2018.

Overall, the Middle East and African regions are expected to be great markets for growth over the next 2-3 years. Wireless locks, IP-enabled devices and iris recognition readers will be at the forefront of product requests.

Training and educating not only integrators, installers and distributors but also end users is going to be critical for success.

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IHS Research Note: The Year Ahead for Access Control

In the latest Research Note produced by market analyst IHS, Blake Kozak – senior analyst for security and building technologies – summarises the year head for electronic access control.

The electronic access control sector saw many changes in 2013, and the next 12 months should be no different.

Indeed, the access control industry could begin to see rapid changes in the short to medium term. In an historically slow moving market when compared with video surveillance,) the access control market has seen many new entrants, such as Axis, as well as new end user demand from the residential space and continued adoption of newer technologies such as wireless electronic locks.

IHS expects that the market size for electronic access control will top $3.5 billion in 2014, driven by returning growth in the Americas market as well as emerging regions such as the Middle East and Africa.

Detail of a typical mechanical combination lock

Detail of a typical mechanical combination lock

For hardware, much of the growth will be driven by electronic locks which can either be offline-standalone, data on card or wireless-online.

Wireless continues to see strong growth as end users begin to trust and understand the technology. Additionally, IT departments are more involved than in the past and will likely continue to be heavily involved. In some cases, they may even begin to manage and dictate access control installations.

Open standards: beginning to take shape

IHS also expects that open standards will begin to take shape for the access control industry in 2014, although widespread adoption may take a few more years.

Prior to investing in R&D, many suppliers are waiting to see how the rest of the industry will adopt and implement standards.

Other trends such as NFC continue to garner interest. However, adoption hasn’t been as extensive as originally expected. According to IHS, NFC has not yet been installed for access control purposes and some manufacturers are beginning to look toward other options such as Bluetooth Low Energy (BLE).

Lastly, IP devices are seeing more uptake and are being pushed closer to the edge, allowing for more remote management and reducing installation costs.

Overall, this is an exciting time for the access control industry. With continued interest in big data, many commentators are wondering how access control can be leveraged to harness some of this information which is leading to more seamless integrations.

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IHS Research Note: ‘PSIM software continues to see strong growth despite increased competition’

In the latest Research Note from IHS, senior analyst Paul Bremner discusses the Physical Security Information Management (PSIM) software market.

A new report from IHS reveals that the world market for PSIM (Physical Security Information Management) software is estimated to have been worth $160.3 million in 2013.

While being a small segment of the larger security and fire market, the PSIM market continues to enjoy 20% and higher growth rates, and will do so until at least 2018. This growth is being driven in part by end users deploying PSIM software platforms as a tool to enforce compliance of both internal policies and external legislative requirements.

Despite these growth rates, confusion surrounding what constitutes PSIM software remains. Competing products such as command and control platforms, advanced video management software and security integration platforms have muddied the water as their capabilities and functionality have expanded into what was once considered PSIM’s territory of situational awareness and situation management.

Connectivity and integration aspect eroded

In previous years, one of the key selling points for PSIM platforms was their ability to connect and integrate multiple disparate systems, both security and non-security. It is this connectivity and integration aspect to PSIM which has been eroded over the past two years, with many other products being able to offer various integrations to expand their software’s reach.

PSIM software has thus had to shift its USP away from this integration aspect. Customers that are buying PSIM now are really coming with a top-down view, with a need to improve their security operations in a cost-effective, operationally efficient way while improving the overall security of the environment in which they are working. This is where the PSIM value proposition lies.

That said, the market has grown in line with expectations from the previous edition of the report, with the market being $7.5 million larger in 2013 than previously expected.

However, longer-term growth will be muted compared with previous expectations. The market’s long-term growth is limited by competing products successfully being deployed in the mid-tier, a market that has historically been out of reach for the high-end PSIM software platforms due to their high price tag.

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IHS Research Note: ‘High expectations for Next Generation HD CCTV technology’

The latest Research Note from IHS has been authored by David Green (the company’s senior analyst in video surveillance and security services), who provides some valuable insight on the market for HD CCTV equipment.

Growing slice of the $13 billion video surveillance equipment market or a small-time niche which can never keep up with the double-digit growth rates for network surveillance?

It’s a very different outlook for HD CCTV technology, depending on who you speak to.

There are those who see the growing revenues and a viable alternative to HD IP cameras for many applications. There are those who want to remain technology neutral by introducing the ‘third string to their bow’ and there are those who simply don’t believe in the technology at all.

Even accounting for the inevitable bias towards their own product line, there seems to be genuine uncertainty among manufacturers at the future direction for HD, low-latency video provision.

Starting with the ‘basic’ form of HD-SDI technology drafted in from the broadcast world, HD CCTV offered live view HD images with the chance to keep legacy coaxial cabling. Relying on demand from markets with high volumes of installed analogue systems hasn’t been a guarantee of success though.

There are high expectations for Next Generation HD CCTV solutions

There are high expectations for Next Generation HD CCTV solutions

For example, over four million analogue cameras are sold each year in the USA to a market that is predominantly replacement rather than new installation, yet penetration rates for HD CCTV are low (especially when compared to the likes of China).

So what other factors are in play? Cost and cable reach are the common discussion points that seem to put many off. While there’s clearly a demand out there for this third solution, it’s fair to say that sales cannot hit that next level of growth until costs reduce and 100 metre transmission limits are improved.

Second Generation HD CCTV solutions

However, there is cause for optimism with the launch of ‘Second Generation’ HD CCTV products starting to kick in.

For example, Dahua has already launched its CVI technology, the HDcctv Alliance has released the 2.0 standard and it’s more than just rumour that other equipment and semiconductor manufacturers have their own proprietary solutions in the latter stages of development.

In all cases, the claims of 300-1,000 metre transmission ranges and prices closer to analogue than network equipment should break down some of the barriers to adoption.

In particular, this will sustain the growth in revenue for South East Asia but could yet open doors to other developing markets such as Latin America.

Whether or not HD CCTV can crack more developed markets such as the USA remains to be seen, but Second Generation HD CCTV solutions sold to developing markets definitely pushes the global picture towards a growing slice of the market rather than the small-time niche.

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