Access control leads the way
The access control business has, over the last 10 years, completely changed its image from being a rather unattractive slow growth and conservative business to today, taking up a position as a fast growing, confident business.
The access control industry has 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 $6.84 billion in 2016, an increase of 10 per cent on 2015.
For the last two years access control has achieved a much higher rate of growth than either of the other two sectors (video surveillance, intruder alarms) and it looks like it will retain this status in 2017. We forecast that it will grow by a CAGR of 11.23 per cent to 2021, making sales of US$11.56 billion in that year. These levels of growth will be driven by ACaaS, biometric readers, 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 is driving up demand. The future looks bright, as some major technological and commercial changes in this sector will continue to drive growth at these higher levels.
We feel bullish about this business as it moves 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 two years.
However, it is possible that some access control manufacturers will become complacent and hold back from becoming “open.” In 2014, ONVIF announced the final release of Profile C, which brings the functionality of the ONVIF global interface specification into the physical access control arena.
ONVIF has been successfully introduced into the video surveillance industry. Baldvin Gislason Bern, Chairman of ONVIF’s Profile C Working Group, said, “Integration between IP-based physical access control systems and video surveillance is no longer considered a luxury in today’s market, and is becoming a necessary component for many different types of users. With Profile C, users and specifiers will be able to integrate the Profile C products of their choosing without relying on existing integrations between manufacturers.”
What concerns many access control manufacturers is that, as the market gradually becomes open and more competitive, their heritage real estate business will lose much of its protection. Whilst ONVIF has become a major force in video surveillance and is widely embraced by video surveillance manufacturers it has yet to get the same acceptance by access control manufacturers.
Manufacturers here prefer to continue to be proprietary. This is not good news because continued growth for traditional proprietary systems mean limited options, central servers with complex and expensive cabling, as well as restricted possibilities for integration and scalability.
The combination of IP and “open systems” will open up further opportunities for the access control business right across the physical security industry but not to those that stay proprietary.
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.
The pace of change will speed up but it will remain a much more discreet market than video surveillance and is not yet subject to the disturbance of drastic price cutting from Chinese suppliers (although there is some evidence of this in recent months).
System integrators have, in the last three years, paid much more attention to developing their access control business for it is proving to be more profitable and stable and currently offers better growth prospects and less disruption than video surveillance. We expect them to push for “open systems.”
This article was taken from Memoori’s 8th edition of their Annual Report The Physical Security Business 2016 to 2021.
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February 20, 2018
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