Impact Analysis of Covid-19
The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.
Physical security refers to protection of hardware, software, networks, and data from physical events and actions that could pose severe loss or damage to an institution, agency, or enterprise. This includes protection from natural disasters, fire, flood, theft, vandalism, burglary, and terrorism. All government and business operations face new and complicated security challenges across various operations. The two primary concerns of physical security include prevention and protection serving the security interests of people, equipment, and property. The need for securing critical infrastructure combined with real-time response systems has emerged as the major concern for governments and organizations.
The global physical security market is estimated to account for US$ 500.2 Mn in terms of value by the end of 2027.
Market Dynamics- Drivers
- Increasing security concerns and rising budget allocation for physical security are expected to drive growth the global physical security market during the forecast period
Governments in many countries are investing to develop the most sophisticated physical security and expand its use, in order to fight again street crime and terrorism. According to the U.S. National Security Agency, around 50 terrorist plots have been disrupted in the past few years by law enforcement agencies in the United States and other countries with the installation of surveillance technologies. Furthermore, according to the U.S. Department of State, the number of global terrorist activities reported in 2009 was 10,968 which increased to 11,641 in 2010. These factors have created a massive demand for physical security solutions and the trend is expected to continue in the near future. Thus, such factors are expected to drive growth of the global physical security market during the forecast period.
- Constant investment in infrastructure is expected to propel the global physical security market growth over the forecast period
The investment in global infrastructure has been on a rise in the recent past. Currently, there is a need to expand and replace existing infrastructure including global energy infrastructure and public sectors such as airports, roads, railways, and communication networks. Furthermore, major sports events held during the forecast period are expected to drive the demand for physical security products. The physical security market is expected to witness strong demand in the coming years on the grounds of the 2014 Sochi Winter Olympics and the 2018 FIFA World Cup, both events being held in Russia. Therefore, such factors are expected to propel the global physical security market growth in the near future.
APAC held dominant position in the global physical security market in 2019, accounting for 35.5% share in terms of value, followed by North America, Europe, and RoW respectively.
Figure 1: Global Physical Security Market Share (%), in terms of Value, By Region, 2019
Market Dynamics- Restraints
- Device interoperability issues related to physical security systems are expected to hamper the global physical security market growth over the forecast period
Device compatibility is major issues associated with physical security system installations. Systems and devices used in physical security provided by some vendors are not compatible with those provided by other vendors, which remains a major problem. However, organizations such as the Physical Security Interoperability Alliance (PSIA) and Open Network Video Interface Forum (ONVIF) have been attempting to develop specifications for the unification of solutions, in order to ensure that manufacturers and integrators in the physical security industry can develop easily administered and cost-effective solutions for the end users. Therefore, these factors are expected to hamper the global physical security market growth over the forecast period.
- Privacy concerns against installation of surveillance cameras are expected to restrain growth of the global physical security market during the forecast period
Although video surveillance is a critical part of the physical security, it is also vulnerable to privacy concerns. The degree of public surveillance has seen a high growth in recent years on account of threats from various terrorist activities. Although majority of people appreciate this move, a considerable segment also feels that this is violating their privacy and thus stand in opposition to public surveillance. Associations including the New York Civil Liberties Union and Electronic Privacy Information Center have taken a drive to gather support against public surveillance. Therefore, these factors are expected to restrain growth of the global physical security market in the near future.
Physical Security Market Report Coverage
||Market Size in 2019:
||US$ 125.0 Mn
|Historical Data for:
||2016 to 2019
||2020 to 2027
|Forecast Period 2020 to 2027 CAGR:
||2027 Value Projection:
||US$ 500.2 Mn
- North America: U.S., Canada
- Latin America: Brazil, Argentina, Mexico, Rest of Latin America
- Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe
- Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific
- Middle East: GCC Countries, Israel, Rest of Middle East
- Africa: South Africa, North Africa, Central Africa
- By Component:
- Hardware: Intrusion detection and prevention, Access control, Others.
- Software: Physical Security Information Management (PSIM), Management Analysis and Modeling Software.
- Services: Video Surveillance as a Service (VSaaS), Remote Management Services, Technical Support, Public Safety Answering Point (PSAP), Security Consulting, Public Alert and Warning System, Others.
- By Application: Transportation and Logistics, Government and Public Sector, Control Centers, Utilities/ Energy Markets, Chemical Facilities, Industrial, Retail, Business organizations, Hospitality and casinos, Others.
Axis Communications AB, VidSys Inc., Bosch Security Systems Inc., EMC Corporation, Morpho SA, Tyco International Ltd, HikVision Digital Technology Co., Ltd., Assa AB, Genetec Inc., Honeywell Security Group, Cisco Systems Inc., and Pelco Inc.
- Increasing security concerns and rising budget allocation for physical security
- Constant investment in infrastructure
|Restraints & Challenges:
- Device interoperability issues related to physical security systems
- Privacy concerns against installation of surveillance cameras
- Convergence of technologies can present lucrative growth opportunities in the global physical security market
Convergence represents the approach of applying data generated for both logical IT systems and physical security systems for driving efficiency in business processes. The integration of systems is expected to improve the process of decision-making. Globally, companies and organizations have been taking steps for ensuring an enterprise-wide view of security risk including the risks associated with both IT and physical components. Furthermore, combining logical and physical security is expected to help enterprises to save cost incurred on security compliance measures.
- Smart cities projects with smart security can provide major business opportunities
Many governments have launched projects for smart cities, with immense investments. Since cities have been expanding and growing, governance has become increasingly complex. Hence, there is a need for transforming cities, in order to address the economic, social, and environmental challenges. The need for an efficient and smarter city encompassing the aspects of intelligent energy management, transportation, and security among others is fast gaining demand from the masses. In smart cities, it is expected that the adoption of physical security measures would grow exponentially apart from growing acceptance of smart technologies.
Figure 2: Global Physical Security Market Value (US$ Mn), 2017 - 2027
The global physical security market was valued at US$ 125.0 Mn in 2019 and is forecast to reach a value of US$ 500.2 Mn by 2027 at a CAGR of 18.9% between 2020 and 2027.
- Intense competition leading to adoption of new technologies
Intense completion in the market combined with growing shift towards newer technologies and strong consumer demand has emerged as the major trend in the market. Moreover, product margins are continuing to diminish and manufacturers are realizing the need to shift their business models for maintaining profitability, owing to rising competition in the market. The physical and logical security convergence is becoming real with various vendors foraying into offering such solutions. End user's needs and demand for serviceability are driving the technological trends today. Allowing solutions to be hosted into the cloud and designing applications that help facilitate service are driving the demand in the services market. Flexible solutions enabling interoperability between systems are gaining high demand from end users. Service-oriented models have been presenting challenges to equipment manufacturers and various standalone equipment vendors are looking to foray into integrated security solutions.
- Growing shift towards all-IP surveillance technology is another key trend
Video surveillance market is witnessing a transition to digital systems and some of the major players are looking to shift to all-IP surveillance technology. However, innovations in storage, alongside causing a technology shift in surveillance also present an opportunity for integrators to take IP to smaller installations. Systems integrators are focusing on delivering solutions with functionality specific to end-user industry. For instance, in the retail market, integration with point-of-sale, business intelligence, and systems such as people counting and consumer hotspot analysis is gaining importance. Moreover, larger integrators are looking to develop their own product portfolio in order to reduce dependency on suppliers. At the same time, IT companies are continuing to increase their prominence in the security world and are expected to be in a challenging position compared to traditional security players.
Value Chain Analysis
The major suppliers for physical security equipment manufacturers are the components and parts manufacturers. The components may include but are not limited to sensors, processors, electrical and electronic parts, mechanical parts and casings. Managing an optimized inventory is an important operation in any manufacturing industry. Often the end-products are only as good as the parts that go into manufacturing. Security and safety equipment are made of many thousands of parts and components, each of which may have an impact on the life of the end-product and on its energy efficiency.
Global Physical Security Market - Impact of Coronavirus (Covid-19) Pandemic
Due to the Covid-19 pandemic, many industries witnessed a significant shift in their business. There is a significant impact on the growth of the physical security market. Several cases of cybercrimes were observed in industries. Cyber threat has been increasing as every part of the demographic has searched information related to COVID-19 by using a malicious domain name registered with the names of COVID-19 or coronavirus. For instance, According to the Palo Alto Networks Inc., it has observed that around 40,261 suspicious registered domain names were identified at the end of March 2020. Furthermore, there has been a shift towards the remote working environment, as most of the companies have announced lockdown to contain the spread of coronavirus, due to this cyber threat has increased among organizations. Due to the rise in cyber threats, many organizations are adopting security solutions and configure malware protection, detection, and mitigation strategies.
Key players operating in the global physical security market are Axis Communications AB, VidSys Inc., Bosch Security Systems Inc., EMC Corporation, Morpho SA, Tyco International Ltd, HikVision Digital Technology Co., Ltd., Assa AB, Genetec Inc., Honeywell Security Group, Cisco Systems Inc., and Pelco Inc.
- Key companies are focused on partnerships and collaborations, in order to expand the market presence. For instance, in July 2019, Axis Communications AB partnered with Sensative AB for smart cities, smart buildings, and smart homes.
- Major market players are involved in product launches, in order to gain competitive edge in the market. For instance, in January 2020, VidSys Inc. launched Vidsys Enterprise 2020 R1.0, a security software platform.