Published on 3 December, 2012
|The forecast finds mention in IMS Research's report, Security Systems Integration - World - 2012 Edition
A new report from IMS Research (now part of IHS Inc.) has found that the transition to IP-based technology in the security industry is changing the role of its systems integrators. Factors such as an increasingly competitive environment as new IT integrators enter the marketplace, declining product margins, and the increased importance of networking knowledge, are all contributing to this change. On the bright side, there are rewards for those integrators that adapt. The world market for systems integration is forecast to grow at an average rate of almost 10 percent to 2016.
Paul Bremner, market analyst at IMS Research comments, “As more IT integrators have been entering this market they have been fundamentally changing the way security systems integrators do business. IT integrators have brought their business model of lower equipment costs but higher service costs, and this has translated well when dealing with IP-based technology, which often requires a lot of network planning in the design stage to offer the best available solution. Design & consultancy services are likely to become a larger part of the typical integrator’s revenues. Such services include risk analysis, vulnerability assessment and client security policy analysis, to name but a few.”
The report, Security Systems Integration – World – 2012, found that one strategy some integrators were taking was to focus on specific vertical markets, as the knowledge the integrator gains from one project can then be directly applied to another project in the same vertical. This can further bolster the margin obtained from services, which can sometimes exceed 30 percent. This compares favourably with equipment margins, which can be lower than 10 percent in extreme cases.
Bremner continues, “The opportunity for design & consultancy revenues is highly dependent on the vertical market in question. Projects in transportation for example, are much more likely to include design & consultancy revenues than projects in either retail or commercial. This is mainly due to the nature of the projects themselves, but is also, in part, due to the different organizational structures found within those verticals.”
This all said, the integrator should not lose focus on providing the highest quality technology solution to their customers. Keeping track of major developments from their product vendors will still be fundamental to their success. The world market for physical security equipment sold through integrators and installers is forecast to be worth over $38 billion in 2016.
IMS Research’s report, Security Systems Integration – World – 2012 Edition, was published in October in three regional volumes, the Americas, Asia and EMEA, and contains forecasts and analysis for this highly fragmented and competitive market.