Articles by Blake Kozak
The smart home market has seen significant growth since 2010. Specifically, less than 0.5% of homes in the American region had connected home devices such as thermostats, lighting, security and entertainment in 2010; by the end of 2017, nearly 12% of households in the region will have connected home devices, an average of six devices per home. The success of smart homes started with professional security providers offering bundled packages, focused mostly on security monitoring. However, due to the cost of professional contracts, consumers began to embrace the do-it-yourself (DIY) approach. Despite the challenges and opportunities that come with professional and DIY approaches, the momentum of smart home growth depends on these two approaches working symbiotically. Smart home technology partnerships A few recent examples include the relationship with Vivint and Best Buy and Vivint with Sprint. In most cases, Best Buy is a competitor to Vivint because a consumer can buy point devices and ecosystem and install it themselves or enlist the help of the Geek Squad. Even more recently, Nest announced optional professional monitoring with its Nest Secure products in partnership with MONI. Although this approach isn’t new, Scout Alarm, LiveWatch and SimpliSafe already have similar approaches, it continues to stress the need to combine multiple channels and approaches to the smart home market. Moreover, these are examples of symbiotic partnerships that will help the total market. In 2017, there were about 122 million smart home devices shipped globally. The retail channel represented about 62 percent of all device shipments in 2017 and will represent about 70 percent in 2021. Despite the increased demand for professional installation, the do-it-for me approach, most the volume remains with ad-hoc purchases. This includes a consumer video camera or a smart thermostat purchase from a retailer or when a consumer wants to add devices to an existing professionally installed system, they often will buy products from retail. There is a growing needto combine multiplechannels and approachesto the smart home market Furthermore, the multiple-system operator (MSO) and professional security provider channels will be evenly split in 2017; however, by 2021, the MSO channel is expected to be double the market size of the security provider channel. The primary reason for this rapid change over five years is the lack of professional security providers in EMEA and APAC; as a result, MSOs will dominate the professional channels in these regions, while across North America, security providers will maintain a strong market presence. Top trends in smart homes A few of the top trends in smart homes to watch out for over the next 12-24 months include user interface, flexible services, cyber security and adjacent markets. The user interface trend continues to evolve for the smart home. Although voice commands are trending towards becoming the new user interface beyond 2017, the voice will not be the only means to control and interact with the smart home. Mobile phones or tablets will still be required to configure most devices. This means that although the Amazon Echo can control a WeMo plug, the consumer will still be required to download the WeMo app and configure the device. However, after the device is added to the same network as the Echo, the app is no longer needed on a day-to-day basis. Displays will also become increasingly popular throughout homes because the smart home is becoming increasingly isolating. Mobile phones or tablets will still be required to configure most devices in future smart homes DIY ecosystems such as Wink or SmartThings or Philips Hue lighting are often limited to one person with one mobile device. As a result, other members of the household would need access to that mobile device or would need access on their own device after being authorised by the primary user (all assuming a smart speaker is not being used). This is very limiting and the user experience is negatively affected. (Voice assistants like Google Home have added a feature to allow multiple accounts using voice recognition, which will help personalise smart homes.) However, displays in the home are a way to access all devices for anyone in the home. Smart home equipment cost Flexible service offerings and pricing is already taking shape across smart home offerings. DIY installed smart home systems such as Scout Alarm already offer no contract monitoring. Professional monitoring companies are already offering no contract pricing and providers such as Comcast are looking to pilot programs for just video monitoring bundled with Internet for a low monthly fee. Options for financing are also going to become commonplace. Smart home equipment is expensive, especially when attempting out outfit a modest size home (2,500 square feet +). Immediate access to services is becoming more critical. This means consumers should be able to access on-demand service options directly from a mobile device to activate or deactivate professional monitoring. Lastly, pricing still needs to come down for many smart home devices but there is a threshold. Since many smart home devices today do not have a recurring monthly fee, the cost of maintaining mobile apps, platforms and support services must be propped up by higher device prices. However, companies can look to offset some cost by sourcing different material. According to the IHS Markit Teardowns Team, the cost of the metal ring on the Nest 3rd Generation thermostat is $10, which is more expensive than the LCD display which comes in at $9. In comparison, the Ecobee3’s most expensive part is the LCD screen at about $4.00. As a result, the Ecobee3 costs nearly $20 less to manufacture compared with the Nest 3rd Generation thermostat. Smart home security Securing the smart home will be a hot topic over the next 12 months. One method of change will be manufacturers requiring consumers to change default passwords. Manufacturers need to start requiring consumers to change passwords before a product can be used. Home routers, for example, often use ‘admin’ as the username and ‘password’ as the password and most users never change these. For elder care, door/window sensors and motion sensors could be used in combination with software to monitor routine The challenge that many consumers and suppliers face today is that many passwords are built directly into the firmware and the consumer has no way of making changes. As a result, the integrity of the device comes down to the supplier. As threats become more severe with ransomware and other botnet attacks, manufacturers will need to implement additional thresholds of threat assessments to keep consumers safe. One method involves two-factor authentication. IHS Markit expects the monetisation of cyber-security for residential customers to start appearing in 2018. This means that security service providers would monitor network traffic for the consumer. The software would not be monitored or implemented directly by the consumer; instead, the service provider will take care of all the monitoring of network traffic. What this means is that the software or router would monitor network traffic for patterns and manage which servers are pinged by IoT devices such as consumer video cameras. Care homes and insurance companies Although the compound annual growth rate (CAGR) for smart home device revenue is set to exceed 50% through 2021, the growth could be much higher with support from adjacent markets such as elder care, construction/developers and insurance companies. For elder care, door/window sensors and motion sensors could be used in combination with the software to monitor routine. If an elderly person suddenly changes their routine, this would alert caregivers. This same premise can be used in professional elderly care settings to help staff prioritise patient needs. IHS Markit expects the monetisation of cyber-security for residential customers to startappearing in 2018 Working with insurance companies is another method of reaching the customer with smart home devices; however, the use of insurance is highly fragmented across regions. As a result, North America is the best opportunity as of 2017 to partner with insurance companies. Furthermore, insurance companies are mostly interested in managing the entire ecosystem. Blending professional and DIY smart homes While offering subsidised equipment (smoke detectors and water leak detection) can reduce claims, insurance companies need to have full access to the data – as a result, they are more interested in creating their own platform from scratch or working with a provider to support data analysis. Working closely with builders will also continue to gain traction, especially across EMEA and APAC. By working closely with builders, this reduces the challenges associated with B2C channels and the overall cost of the system can be masked by the mortgage payment, resulting in more system installations with less distribution expense. Overall, the line between professional and DIY smart home is blending. CEDIA and Amazon recently announced a collaboration and Netgear Arlo announced the first wire-free and battery-operated ONVIF compliant camera. With the combination of voice-control, consultations from Amazon and Best Buy, the reduction in the pile of smart home hubs in the basement as more protocols are embedded in gateways/routers, and no further need for the special Apple chip for HomeKit compliance after iOS 11, smart homes are becoming easier to achieve both for consumers and professionals.
Security’s intersection with consumer electronics is on view at CES 2020, the world’s largest technology event, Jan. 7-10 in Las Vegas. The giant show features more than 170,000 attendees, 4,500 exhibitors and 1,100 industry thought-leaders featured on the CES stage. A range of technologies will be on display, from artificial intelligence (AI) to 5G, vehicle technology to AR/VR (augmented and virtual reality), robotics to home automation. Security plays a prominent role, too.The impact of this event for the smart home could be about delivering home analytics and enhancing privacy" Smart home market on the forefront The smart home market is a major focus. “For the smart home market at CES this year, we expect to see numerous announcements regarding home awareness,” says Blake Kozak, Senior Principal Analyst at IHS Markit. “This will include brands offering up additional analytics for consumer security cameras with a focus on edge-based solutions.” “The impact of this [event] for the smart home could be about delivering home analytics and enhancing privacy through cloudless architectures and new electronic door lock approaches,” he adds. An example of cloud analytics is the Resideo Home app, introduced in December, which will make whole-home monitoring possible for four critical networks of the home – water, air, energy and security. Resideo promises a “simplified and integrated smart home experience.” Video is also prominent at the show. “For cameras, we can expect to see more cameras focused on the outdoor space and possibly new form factors for video doorbells,” says Kozak. Familiar security industry brands exhibiting at CES 2020 include ADT, Ring, August Home and Yale (both part of ASSA ABLOY), Bosch and Alarm.com. Focus on Cybersecurity In 2020, companies will continue to focus on solutions for protecting consumer data" Cybersecurity is an aspect of many of the devices on display at CES. “Device security and data privacy play a key role in the adoption of connected devices,” says Elizabeth Parks, President, Parks Associates. “Consumer security concerns for smart home products will continue to be a barrier to adoption in the U.S. and Europe, and these concerns can actually intensify with device adoption-71% of U.S. smart home households are concerned about cybersecurity. In 2020, companies will continue to focus on solutions for protecting consumer data. One big area of interest is protection on the network router, providing whole home solutions, which are very appealing to consumers.” “At CES we will see the traditional players introducing new DIY (do-it-yourself) products, as well as new players announcing new product features, services, and partnerships,” Parks adds. Smart access control Smart locks will be among the security products at CES 2020. For example, PassiveBolt, a lock company, will show the Shepherd Lock, a touch-enabled smart lock with enhanced security through sensors and AI. The add-on lock converts existing locksets into touch-activated devices. Another lock manufacturer is Kwikset, whose door locks and door hardware include Wi-Fi-enabled smart locks, Bluetooth-enabled smart locks, keyless and keyway-less locks and connected home technology. Video doorbells, including industry-innovator Ring, have been a hit in the consumer market. At CES, Ring will expand the mission to make neighbourhoods safer by creating a “Ring of Security” around homes and communities with a suite of home security products and services. The “Neighbors by Ring” app enables affordable, complete, proactive home and neighbourhood security. Homeguard offers a range of affordable CCTV solutions for home and small business DIY CCTV demonstrations DIY security systems are another market. Homeguard is a leading DIY consumer brand offering a range of affordable CCTV solutions for home and small business, including wired and wireless CCTV kits, smart cameras, home alarm systems and wire-free HD CCTV kits. Swann Communications is also at the forefront of surveillance and monitoring with new products developments including wire-free HD cameras and doorbells, professional CCTV video surveillance systems, and 1080p full HD systems with “True Detect” heat and motion sensing. AVTECH, and subsidiary YesGo Tech, will demonstrate a compact Wi-Fi home security set, a series of special cameras with face recognition, thermal detection and license plate recognition, customised central management software and a university ID tag that is compatible with access control, OEM and ODM opportunities. Security and automation solutions D-Link’s home networking, security and automation solutions will help consumers connect, view, share, entertain, work and play. SECO-LARM, manufacturer of a Room Occupancy Monitor that shows whether a room is in use, has a line of keypads and proximity readers with built-in Bluetooth for convenient access. Another smart home security solutions provider, Climax Technology, integrates wireless security, home automation, energy management, home emergency monitoring and live visual monitoring. Personal safety mobile application Manufacturers are positioning outdoor cameras as deterrents to theft before a burglary happens" WaryMe designs and develops a personal safety mobile application to improve a user’s security in public places, schools, transports and companies by addressing major risks such as terrorism attacks, intrusion, fire and even industrial accidents. An all-in-one mobile application integrates alerting, crisis management and mass notification features. “Market players are looking to expand beyond established smart home devices like smart thermostats and networked cameras to products like smart water leak detectors, smart pet feeders, and smart air purifiers,” says Elizabeth Parks. “Manufacturers are positioning outdoor cameras as deterrents to theft before a burglary happens. This trend is part of a broader security marketing effort to extend the perimeter of home security beyond traditional home access points.” “Familiarity with smart home devices lags behind familiarity with smart entertainment products; it even lags that of smart speakers, which are quite new in the market,” adds Parks. “In 2020, we will see players working to advance the visibility and marketing around device integration, and specifically focus on use case scenarios around safety, security, and convenience, which have always been the primary drivers of adoption of these types of products.”
Summary Date: Tuesday, September 20, 2016 Time: 10:00am PT / 1:00pm ET / 5:00pm UTC Duration: 45 minutes + Q&A What's the webinar about? Mobile credentials are one of the most exciting areas of the access control market. The transformation caused by the development of various mobile solutions in payment, banking, ticketing and automation is poised to deliver similar changes in the access control industry. Mobile credentials are now entering the market as a serious commercial product after many years of pilots and testing, and this webinar sheds some light on how the market is likely to play out in the next five years. Who should attend? Security managers and consultants; access control integrators and hardware and software suppliers; smartphone manufacturers; mobile network operators; app developers; and end users. Financial analysts and the press are also encouraged to attend. Topics for discussion: The future potential market size for mobile credentials Mobile credentials vs. physical cards and the general mobility ecosystem The dynamics of the vertical markets most likely to adopt mobile credentials The opportunities and challenges that mobile credentials face Answers to audience questions during live Q&A Speakers: Blake Kozak, Principal Analyst, Access Control & Fire, IHS Markit. Daniel Bailin, Director Strategic Business Development and Innovation, PACS BU, HID. Allen Tatara, Manager, Webinar Events, IHS Markit (Moderator). Register for Mobile Credentials in Access Control webinar now! Save Save Save Save Save
Everything about wireless access control makes life easier for those who install and operate it A lot of market data crosses my desk at ASSA ABLOY. Sometimes it can be hard to spot patterns or pick out the trends. But not always. Some recent access control market research we commissioned pointed in one direction. Our conclusion? Slowly but surely, access control is becoming a wireless technology As the global leader in door opening solutions, we are able to survey a large, representative segment of security professionals. Comparing our latest data with similar research conducted in 2014 clearly indicates the trend. Our 2014 report found 23% of commercial properties using a wireless or hybrid wired/wireless access control system. Fast forward to 2016 and the proportion has risen to 29%, with 5% of the installed base already with a fully wireless setup. That’s a significant leap, in a relatively short time. Find out about wireless access control for universities Already, 69% of respondents consider wireless locks a cost-effective alternative to wired access control. A whopping 62% even predict that few business premises will still have mechanical locks within a decade. We published the detailed results in a report, “The Wireless Access Control Market in 2016”*. Easy to operate, easy to integrate But why wireless? What aspects of the technology appeal in particular to facility managers, integrators and installers? Cost-efficiency, ease of installation, and the compliance requirements for audit trails are often cited by building managers. Everything about wireless access control makes life easier for those who install and operate it. It’s easy to extend an existing third-party access control system by switching mechanical locking cylinders for battery-powered, electronic Aperio® cylinders, for example. You can bring them into the existing, single control panel via communications hubs (online integration) or via update-on-card (offline). Compare that to the full-scale rewiring job needed to add traditional magnetic locks! Key management headaches are eliminated by RFID smartcards, as are the security risks posed by a lost mechanical key — an all-too-common occurrence Equipping doors previously locked using mechanical keys with electronic access control upgrades a site’s security in an instant. Key management headaches are eliminated by RFID smartcards, as are the security risks posed by a lost mechanical key — an all-too-common occurrence, and something 86% of our survey respondents also worry about. EN, DIN and CE wireless lock certification drive still more customers to wireless. Easy, effective integration of wireless lock technologies like Aperio® with CCTV, alarm and other security systems is another major benefit. The era of the smart building is here; locking systems that integrate seamlessly with complementary building management infrastructure are increasingly vital. “Wireless locks are often specially designed for integration with other systems. The integration capabilities and ease of use can be a significant benefit,” writes Blake Kozak, principal analyst at IHS Research, in commentary on our report. Extensive adoption across many business sectors Wireless is extensively adopted across many business sectors. In a corporate office setting, the ability for facility managers to amend access rights remotely, to instantly cancel lost cards or to extend an existing wired access control system without disruptive structural alterations are all valuable. Sensitive settings such as hospitals and residential care homes need the real-time information flow that only electronic access control can supply. Online wireless locks provide this much more cost-effectively than any other technology — and are even available with hermetic sealing and anti-bacterial coating. In the event of a security breach at a medicine store of patient records area, wireless locks generate detailed audit trails for locks, users or smartcards that regulatory compliance demands. In student accommodation blocks, lost keys are a recurring security risk and drain on resources — risks and costs that are eliminated by installing wireless access control instead of mechanical locks. Critical infrastructure sites are often widely dispersed or remote (or both). Wireless locks don’t need a mains electricity connection, making them a perfect choice for reservoirs, electricity sub-stations and power generation or distribution facilities. Certified locks and encrypted communications between lock and system ensure security meets the stringent demands of such critical premises. Wireless locks don’t need a mains electricity connection, making them a perfect choice for critical infrastructure sites Aperio wireless locks Among our own product portfolio, Aperio® wireless locks integrate with almost any leading access control system, allowing facility managers to take access control much further into a site than would be possible with wired access control. At i2 serviced offices around the UK, Aperio® wireless locks replaced the slow and expensive job of hardwiring every newly sublet office into i2’s central access control system. Aperio® is the access control backbone of a 100% wireless deployment at Ghent’s Hospital Maria Middelares. It enables real-time management and “gold standard” resident care at a new care home in Umeå, Sweden, as well as flexible, online access control at the University of Surrey’s Manor Park campus. SMARTair for small to medium-sized premises SMARTair™ is a stand-alone wireless locking system aimed at small to medium-sized premises, including offices, retirement homes, hospitals, small hotels and universities. Building managers at Frankfurt’s Tower 185 chose SMARTair™ for its easy installation and access rights processing speed. Because SMARTair™ locks are wireless, they consume less energy and emit much less CO2 than wired magnetic locks. It’s no coincidence, then, that Tower 185 was among the first European high-rises to be awarded Gold LEED Certification by the US Green Building Council. The flexibility of SMARTair™ was also a major factor in the Red Cross’s decision to select it for its new Córdoba headquarters. CLIQ key management solution CLIQ® is a mechatronic technology, based on patented, high-security cylinders, battery-powered, programmable keys and encrypted electronic communications between cylinders and system. It is widely adopted in critical infrastructure settings around Europe. Its security credentials and the ability for in-house managers to issue contractors with programmable keys are a major benefit to workflow management in these complex organisations. The ability for in-house managers to issue contractors with programmable keys is a major benefit to workflow management in complex organisations In Helsinki, Finland, CLIQ® secures 3,500 interior and exterior doors at 70 different sites for Helsingin Energia, ensuring 400,000 customers have uninterrupted electricity supply. The whole ecosystem is managed remotely from simple, web-based CLIQ® administration software. Industrielle Werke Basel needed a locking system that would equip it to face 21st-century security challenges — as well as padlocks that could withstand extremes of climate and weather. CLIQ® technology ticked all the boxes. Adopting wireless beyond doors Interestingly, our recent customer research also finds the market is already tuned-in to the potential for wireless beyond just doors. Well over half of respondents judged electronic access control well suited to securing server racks, cabinets, lockers, safes, and machines, as well as padlocked outdoor structures. Flexibility makes wireless technology the natural solution. “Interior doors, file cabinets, carts and other deployments will increasingly use wireless electronic systems,” says Kozak. “In deployments beyond doors, IHS expects mechatronic locks to see the most growth. Globally, we forecast that these devices will see volume growth of about 24% in 2016 as security personnel strengthen security to adhere to strict compliance regulations, which often require audit trails. Mechanical keys simply don’t offer this level of tracking.” With audit trail compliance, easy installation, cost efficiency, and seamless integration, wireless access control makes life easier for security managers, installers and system integrators. This, surely, is the secret to its rapid growth. We see it in survey responses and its increasingly widespread adoption across many sectors— and we expect to keep seeing it, as we analyse market trends through 2016 and beyond.
(see bigger image) Access control market in Brazil is forecast to decline by 1.2% in 2015 and decline by another 0.8% in 2016 before growth returns in 2017 Blake Kozak, Principal Analyst for Security and Building Technologies at IHS Inc., in his research note discusses about the current state of the Brazilian market for electronic access control. While the 2014 Brazilian market for electronic access control equipment reached an estimated $92 million, the latest information from IHS Economics reveals that Brazil will struggle to see positive growth over the next several years. In fact, the access control market in Brazil is forecast to decline by 1.2% in 2015 and decline by another 0.8% in 2016 before growth returns in 2017. Despite the slowing economy, the Brazilian market for electronic access control will be resilient and is expected to return to strong market growth in 2018. Access control market in Brazil will be affected by The near-term access control market in Brazil will be most affected by the following: The access control industry slowed after the presidential elections last year, and the government cannot afford to expand public works, as fiscal accounts have already deteriorated significantly The Brazilian economy is sliding into a recession The recent Petrobras scandal will negatively affect the construction market, as audits are completed Investment has been declining since the second half of 2013 and the private sector is not very upbeat about Brazilian economic prospects, so very poor business sentiment will continue to constrain investment growth Overall, suppliers and integrators involved in the Brazilian market believe large infrastructure and government and commercial projects will soon be placed on hold, leading to a market decline through 2017. The Olympics have also not done much to help the security industry, in part because stadium construction will mostly occur in certain cities and will not have widespread effects on other end-users across the country. There will only be about 14 new venues spread across three main zones - Barra, Copacabana, Maracanã and Deodoro. Furthermore, the number of police, military and other security personnel will far outnumber that of the London Olympics in 2012. In Rio de Janeiro, reports suggest that there will be nearly 85,000 law enforcement personnel at Olympic venues. One positive sign - level of integration between video and access control One positive sign for equipment suppliers in the Brazilian market is the level of integration between video and access control. The interest and implementation of integrations is a tremendous opportunity in the country. Replacing services with technologies, like manned guarding with electronic security, is a trend that will continue to improve the market over the next five years, due to wage increases, as well as more affordable – and higher quality – access control technology.
A U.S. economic forecast of 2.3 percent growth in real gross domestic product (GDP) bodes well for security businesses to thrive in a healthy economy in 2014. The Conference Board’s 2.3 percent growth prediction for 2014 is higher than its 1.7 estimate for 2013. Globally, both the physical access control and video surveillance markets are forecast to record healthy growth rates this year. Conference board predictions on housing starts (up 1.16 percent in 2014, compared to 0.92 percent in 2013) and real capital spending (up 4.1 percent in 2014, compared to 2.5 percent growth in 2013) also suggest opportunities for growth of security companies looking ahead to the New Year. Globally, the U.S. Conference Board estimates a moderate rebound in GDP from 2.8 percent in 2013 to 3.1 percent this year. Physical access control market forecast to grow 7% in 2014 Research firm IHS Technology predicts continuing growth in the global physical access control market in 2014, about a 7 percent increase over 2013, to reach a $3.4 billion overall market size. Asia will grow fastest (at 10.7 percent), while Europe, the Middle East and Africa (EMEA) will grow slowest, but still at 4.6 percent over 2013. “The trends that continue to drive this growth are end-user education, marketing and technological developments,” says Blake Kozak, IHS Technology Senior Analyst. “Increased adoption of wireless locks and Web-enabled panels continue to drive the market. Additionally, there has been a renewed look at open standards and more secure credentials such as Commercial Identity Verification cards.” Network cameras to fuel 12% growth in video surveillance market in 2014 "The trends that continue to drive this growth are end-user education, marketing and technological developments" For the video market, IHS Technology forecasts 12 percent global growth this year, with fixed-dome and 180/360-degree network cameras as the fastest growing categories. IHS forecasts city surveillance and the utilities/energy sector as the fastest-growing verticals. The research company also points to a number of trends that will predominate in the next 12 months, including: The influence of “Big Data,” including crowd-sourcing video surveillance and social media analytics. At the Boston Marathon bombing in 2013, a prevalence of smart-phone cameras combined with social media apps led to the first “crowd-sourced” data collection for an investigation. Creating technology tools to manage data analysis and manipulation challenges is a new opportunity for the video surveillance market. Continuing growth of panoramic view and thermal cameras in the commercial markets. Expansion of cloud-based video surveillance, including new markets in China. More use of embedded audio capabilities in surveillance cameras, especially audio analytics and sound source localisation. More expansion of video surveillance companies into other markets. Construction sector growth will prop US security market, particularly educational building security segment The 2014 Dodge Construction Outlook estimates total U.S. construction will rise 9 percent in 2014 (higher than the 5 percent increase in 2013). Single family housing with grow 26 percent (measured in dollars). Commercial building will increase 17 percent, according to McGraw Hill Construction, author of the Dodge Outlook. Security companies face a positive outlook in the educational building category, where colleges are revisiting capital expansion plans, and passage of recent construction bond measures in several states should benefit K-12 construction projects, according to the Dodge Outlook. Healthcare construction is expected to remain flat, given continued emphasis on cost containment, according to Dodge.
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