Security Integration Growing at 4.6 Per Cent Towards $US76 Billion by 2020
IHS says the global market for security systems integration will grow to $US75.7 billion by 2020, up from $60.3 billion in 2015.
According to the research company, the global market will increase at a CAGR of 4.6 per cent to 2020, driven mainly by service and maintenance services, which will climb from $14.5 billion in 2015 to $18.8 billion in 2020, at a CAGR of 5.4 per cent.
The Americas region, which includes North and Latin America, will rise from $22.3 billion in 2015 to $25.4 billion in 2020, a CAGR of 2.7 per cent. IHS Markit senior analyst Oliver Philippou told Security Systems News that a number of factors are contributing to this global growth overall.
“The equipment part is being driven by technology changes, increased use of newer equipment, while the service part is being driven by an increase in use of service and maintenance contracts and a move to a model where fees will be paid out more on a recurring monthly basis, as opposed to just an initial upfront cost,” said Philippou.
“Integrators are looking for a more stable and steady revenue stream, and are going to be looking more increasingly at RMR business models,” he explained. “This is really going to be the talking point of the systems integrators’ business models in the coming years.”
According to IHS data, service revenue in the Americas accounted for 63 per cent of total security systems integration in that region, while in Europe, Middle East and Africa (EMEA) it accounted for 56 per cent, and revenue from services in Asia-Pacific (APAC) region made up 43 per cent of the market.
“Service and maintenance is viewed by most security system integrators as a primary profit center, because contracts tend to generate a predictable revenue stream,” Philippou said. “Service agreements also allow integrators to further develop customer relationships, increasing the chance for future upgrades, retrofits and new installations.”