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The development and rate of growth of the industry is being affected by series of important trends, the impact of which Apex factors into its market forecast
Retail, airports and government security contracts are the main growth segments in the security guarding market

Apex Insight’s latest report on the UK security guarding services market finds it is approaching £5bn in size, having grown in recent years despite the hesitant economy. Retail, airports and government security contracts are the main growth segments in the market.

The development and rate of growth of the industry is being affected by series of important trends, the impact of which Apex factors into its market forecast. These include the growth of integrated facilities management contracts, the application of new technology and consequent reengineering of services, government spending cuts and outsourcing of services with the aim of achieving savings, the increase in levels of security in airports and other sensitive locations and the growth of internet retailing. The report analyses the impact of these trends on the key segments of the security market.

Retail locations have seen the deployment of security guards increase. Changes in patterns of retailing have had opposing effects here. The types of store more likely to have guards – larger outlets of national chains and shopping centre locations – have gained share relative to smaller, independent stores and high street locations, less likely to have guards. While this has been partly offset by the rise of internet shopping, the overall trend has been positive with the retail spending on security having grown by over 5% per year since 2008.

Airport security has continued to increase in the post-9/11 world with more spending on both technology, such as body scanners, and the labour required to operate them. The security requirement is driven in part by the number of passengers passing through UK airports. But there has also been a significant increase in the intensity of airport security in recent years, in response to higher perceived risks of attacks on planes, with more people required to operate x-ray scanners and carry out increased passenger and baggage checks. With pressure to reduce queuing times at airports, security areas have been expanded and equipped with new passport scanners, metal detectors and conveyer-belt-like baggage control areas. These developments have increased security spend per passenger and the need for more security staff, leading to growth of almost 8% per year.

Prisons is also a key segment given the long-term growth that has occurred in prison populations combined with government desire to use outsourcing to achieve cost savings. The trend towards prison outsourcing has faltered in the last couple of years, largely as a consequence of the service failures and overcharging scandals associated with G4S and Serco. Nevertheless, growth has been at a similar rate to that of Airports, at almost 8% per year. And the segment has recently received fresh impetus from a wave of probation service contracts announced at the end of 2014. In total, 21 criminal probation service contracts worth a total of around £450-£500m per year (depending on success in areas such as reducing the rate of re-offending) were outsourced to Sodexo, Interserve and GEOAmey and other smaller suppliers in consortia, and are due to start in April 2015.

Across the market, technology such as CCTV and remote monitoring, continues to be deployed extensively, both as a complement to, and in some cases, a substitute for, human guards

While crime rates have fallen, public perception and fear of crime have not. As a result, demands for tougher sentences are widespread and prison populations have increased, with the UK locking up a higher proportion of its population than in most other European countries, but only one fifth of the level seen in the US.

Across the market, technology such as CCTV and remote monitoring, continues to be deployed extensively, both as a complement to, and in some cases, a substitute for, human guards. In most other segments, such as offices, public buildings, factories and warehouses, Apex believes it is likely that this trend has led to a reduction in overall market revenues – although the margin impact may well be positive given the lower costs associated with newer technologies.

Industry margins have increased slightly, with the average of the group of leading players having risen above 5% in the last couple of years. Price increases have been achieved despite the relatively weak economy and wage inflation has been modest. While most companies have seen margins increase, it appears that the most profitable companies have had the greatest exposure to government contracts and the retail segment.

The forecasts are for growth to be faster than historical rates. The main reasons for this are the resumption of prison and probation services outsourcing, due to start in April 2015, and the positive impact of a recovering economy on retail and airports with increased prosperity likely to feed through to both high-street retail sales levels and numbers of air passengers.

The market is not without risk. The most obvious is the potential for a change in government policy towards the outsourcing of prison and probation services. In the retail sector, if changes in store formats, such as the decline of the large supermarkets, were to occur more quickly than expected, the overall requirement for security could be lower. However, there is also potential upside for the security industry. If the outsourcing of a range of policing activities, which now appears to be on hold, was to return to the agenda, it could increase market revenues by up to 30%.

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The physical side of data protection
The physical side of data protection

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Complex security needs One misconception when it comes to data centres is that physical security is straightforward One misconception when it comes to data centres is that physical security is straightforward. However, in practice, things are far more complex. On top of protecting the external perimeter, thought must also be given to factors, such as access control, hostile vehicle mitigation (HVM), protecting power infrastructure, as well as standby generators and localising security devices to operate independently of the main data centre. Face value How a site looks is more important than you may think. Specify security that appears too hostile risks blatantly advertising that you’re protecting a valuable target, ironically making it more interesting to opportunistic intruders. The heightened security that we recommend to clients for these types of sites, include 4 m high-security fences, coils of razor wire, CCTV, and floodlighting. 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Data explosion: Futureproofing your video surveillance infrastructure
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