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Top security companies increase market share

The physical security market continues to experience supply consolidation. The market share of the top 15 companies accounted for 21.4 percent of the equipment and services market in 2014, growing to 23.1 percent in 2015, according to Oliver Philippou, senior analyst, IHS Markit.


October 4, 2016
By SP&T Staff
SP&T Staff

The latest IHS Markit Physical Security Equipment and Services Report notes that these leading security companies will further increase their market share in 2016.

Philippou explained that this market share estimate does not include mergers and acquisitions that have taken place in 2016, such as the merger of Tyco with Johnson Controls, the acquisition of Diebold’s North American electronics security business by Securitas, the acquisition of ADT by Apollo Global Management and merger with Protection 1 and ASG Security. These three deals will further expand the market share of the top 15 security companies, he said in a recent research note.

However, it is not just large-scale acquisitions that are concentrating supply. Philippou said Chinese firms like Hikvision and Dahua Technology have continued to grow much faster than the market average, not only in their domestic market but internationally too. Part of their success has been down to offering products at lower prices than their competitors.

In addition, Philippou observed that single-product suppliers are increasingly being challenged by solution providers offering pre-integrated products. He said integrators are increasingly leveraging single-vendor solutions to reduce installation costs and focus on the more profitable service and maintenance contracts.

IHS Markit estimated the combined equipment and services market to be $123.67 billion in 2015. Tyco International was the largest supplier to the equipment and services market in 2015, comprising 3.8 per cent of the market, followed by ADT at 2.9 per cent, and the biggest mover, Hikvision at 2.5 per cent.

The equipment market consists of video surveillance, access control, intruder alarms, entrance control, consumer video surveillance, mobile video surveillance and body-worn cameras, and enterprise storage. The services market consists of access control as a service (ACaaS), video surveillance as a service (VSaaS), remote monitoring services, and security systems integration.