Security Electronics Market Midpoint, 2011
Posted by Security Electronics and Networks | @Analysis Articles | June 16, 2011, 7:00am AEST
Another key element of 2011 is the strength of the local currency, which is now proving to be a boon for those who buy in the United States and Asia with U.S. dollars – especially those who kept stock levels low in 2010 and are buying at or above parity. Predictions of an Aussie dollar basking at $1.16 against the U.S. in Q4 2011 are also likely to please some importers.
But a non residential building start rate that’s nearly 40 per cent lower than this time 2008 is the key for the electronic security industry. Until these numbers turn around (and turn around they will), our industry will find greenfield installs hotly contested and will need to look hard at organic growth through upgrading of existing clients.
It’s not that there are no big installations happening – there certainly are – the recent $A30 million NSW Police CCTV system springs immediately to mind. But the mid-sized jobs are fewer in number and fiercely scrapped over. On the positive side we’ve noticed an increase in public surveillance and safety applications filtering through this year. And in the mining industry access control players are enjoying a strong run.
Another interesting characteristic of systems in 2011 is their propensity to be hardware agnostic. Yeah, this is the cliché du jour, but many systems are being installed that combine cameras on the basis of particular strengths in a manner we’ve not seen before.
As management solutions improve it’s likely we are going to see more of these pick’n mix installations. Consider that Milestone’s XProtect now integrates nearly 1000 camera types and it’s clear that users and consultants will use the camera they think best when performance is more important than price. The same camera brand agnosticism applies to the capable Verint, Genetec, SAAB and DVTel management solutions.
When it comes to electronic security distribution there are also clear trends. A few years ago it seemed inconceivable the market could support multiple big distributors. At that time there were a handful of larger companies and a clutch of small players carrying OEM-branded gear of slightly lesser quality and much lesser cost.
Things have changed through 2010 and into 2011. There are now perhaps a dozen reputable distributors, around half of these having national footprints of various sizes, the rest doing good business in their home ranges. As part of this shift, manufacturers with the exception of Bosch, Ness, Inner Range, Gallagher and a couple of others, seem to have left the market.
Then there’s the product split. Not content with bringing product to market via a single distributor, most manufacturers now have relationships with multiple wholesalers. Not 2, but 5 or 6. The idea behind this is probably to fuel competition and brand commitment but what impact such fractured loyalty might have in the long term is yet to be seen.
In the lead up to Security 2011 in Sydney it’s fair to say that product is going through that evolutionary phase analogue technology existed in through the 80s and most the 90s. Perhaps the analogue-to-IP transition has spoiled us for those big leaps in product capability, those long jumps in underlying technology. Moving forward we will see better HD IP cameras, more seamless management systems, more IP-based alarm and access platforms, more robust DVRs and NVRs – but the product forms of the foreseeable future are now set.
Something I’d like to see from the industry is a roadmap for the future that takes the NBN into account. A roadmap that wrestles with the issues surrounding non-licensing of IT techs and further legitimises video monitoring through integration with Australian Standards for alarm monitoring. A roadmap that recognises the need for IP-based training and encourages those companies investing in this area to keep up their good work. A roadmap that looks the future of the electronic security industry squarely in the eye.