Looking ahead at the game-changers for the security and safety industry, we can expect that there be more changes coming from the industry itself than from the market. In other words, new business operation strategies will soon come into play. From manufacturers to SIs and distributors, all need to stay high-on-alert in the game. Without making themselves versatile enough to respond to the changes quickly, there will hardly be any chance for survival.
Coming from a spectator's viewpoint, the products or technologies that came out in the recent years could barely be called innovative. Market-wise speaking, even though the demands from the emerging markets had been high, the growth somehow hit a plateau in 2013. Therefore, we can only expect a slow growth in 2014, but there will not be anything too exciting from the products or the markets.
The Two Turbulences Shaping The New Rules in the Industry
The excessive supplies and low demands directly cut down the profit of manufacturers, distributors, and SIs. To stand strong and offer professional consultation and services in this unprofitable environment, the key players need to give a thorough consideration on what their core competence is, and what are the necessary adjustments to redefine their positions in the industry, including scale, role, and the involvement of people.
As more applications become network based, suppliers in the market cannot purely sell products or simple systems alone. Instead, they are often forced to provide "total solutions" to meet the complex system needs with IP technology. From manufacturers to channel players, everyone should invest in the know-how of network technology, system application, services, and the special needs of different vertical markets. In addition, as the new survival rules are being structured, the trial-and-error stage could cost a great amount of resources. It is also a critical time to see if companies can reflect how well they have grasped the new needs of the market through their marketing strategies. If the players are not careful enough with their management, they could be easily knocked out of the game altogether.
The Three New Markets To Look Forward To:
The first market to look forward to is the small and medium business (SMB) market. Judging from the present economic situation, the high-end markets are rather loaded, forcing the battleground to be fought in the SMB level. The manufacturers could now be working with SIs who may not be exposed and equipped with the knowledge of IP application. To ease the transition and deployment for the new SIs, plug-and-play products became ultimately important at this level. Only then, clients would request the total solutions covering from the front to the back ends be provided by the same manufacturer. All leading international manufacturers are taking eager approaches to secure a piece of the SMB pie, such as sector-featured product-lines or expanding partnerships with new channels. The manufacturers in Asia especially are advantageous in this field, because they offer better price performance product. I am certain that the SMB will be the combat zone for the security industry; let us keep an eye out for who stands or fades out in this heated competition.
The second market highly sought-after is the consumer market driven by the widespread usage of smart phones and smart devices in the past two years. Before then, the concept of Smart Home was not an easy one to promote to consumers because the link between the application on a computer and its value was not apparent. But ever since smart phones and smart devices became a tangible part of our lives, video surveillance can also be tangible, allowing customers to appreciate the intrinsic value of monitoring shops or homes in their palms. Hence, remote surveillance suddenly becomes a desired tool to protect and manage properties and valuables. This is such an exciting new territory for the security solution providers to shine and prosper. Going from "professional" to "consumer" security means going from "high customization & small quantity" to "low customization & large adaptation." In consumer security where the concept of 3C applies, a particular security function could be used in quantities 10 times or 100 times larger than that in professional security. The trajectory of the consumer security market is still full of uncertainties; however, new business ventures will certainly offer exciting changes to the industry.
Last but not least, the video-surveillance-as-a-service application (VSaaS) market is rising on a similar cause. For those smaller-scale businesses that lack professionals to design and maintain the system, VSaaS could be an ideal solution to solve the need of securing and protecting assets easily from afar. For example, VSaaS will keep the video recordings on file during a robbery situation; owners of retail shops do not need to worry that evidence could be compromised due to damages to DVRs by the perpetrator. Furthermore, by incorporating VCA to VSaaS, intelligent analysis could be done more conveniently and promptly. In malls, this analysis results can be used in decisions regarding marketing and management-security solutions can actually help businesses improve their sales strategies,generating a larger return of investment.
The Fast Consolidation of the Industry Ensues
Ever since the security technology shifts towards IP, the structure of the channel-end has undergone some drastic changes. The first problem surfaced when the channel players showed their insufficient knowledge of IP technology, and when the existing infrastructure turned out unsuitable for the IP technology. All SIs were highly dependent upon distributors' planning and technical support for a system, but when distributors could not handle the problems, the manufacturers are forced to involve more extensively in the projects. As a result, the tighter and the more direct cooperation between manufacturers and the SIs squeezed the distributors out of the system. Those distributors, who wished to survive, were quickly turning themselves into value-added service providers. This consolidation trend at the channel-end will become ever more noticeable in 2014.
Another force restructuring the channel came from the Chinese products. Chinese products usually come with a cheaper price tag- a massive disruption to the existing game rules. I was told by many installers, that under the circumstance where product price is lowered and the amount of work carried out remains unchanged, they are really yielding less profit to survive. The installation work is still as complex as no steps of a project should be reduced, and the man power and time needed are not cut down either. With a diminished total capital to begin with was so much less than what it had always been, hence yielding a much smaller margin and a greater amount of management pressure.
I have also heard from a key Russian importer/distributor that when he did not have Chinese products to offer to the market, his business was so quiet as he would not get any enquiry phone calls. In order to stay competitive in the market, he decided to import some Chinese products. However, he then found out that as soon as he stocked up with one batch of products, he would need to sell them ASAP to avoid a desperate clearance sale because newer versions would be launched soon. It seems that there is just no win either way with Chinese products.
Yet we cannot deny that Chinese products have made security more affordable for the entry-level market. As if the Pandora box were opened up, you just need to play by the new rules to survive in this new world.
When talking about Chinese products, we cannot avoid Hikvision and Dahua. In the Security 50 rankings of 2013 assembled by a&s magazine, these two Chinese trendsetters both moved one rank up from last year's ranking, and are among the top 10 competing with others scaled above US$ 500million. These two companies are still growing robustly in China at a pace way above the average. Their growth means the loss of market share by other smaller companies. Therefore, we can expect that the Chinese security industry will soon be consolidated. Those smaller in scale or those without a clear vision will be out of the game in 2014. Soon, this restructuring of the industry will be expanded to Korean and Taiwan. We can also expect that in the next two years, the diversity of Asia manufacturing will disappear. Only those bigger in scale or those with distinct positioning, technology, or service, and can quickly adapt to the market, can survive.
Products and Technologies Worth Noticing in 2014
Intelligence is the breakthrough in surveillance
In the early years when video content analysis (VCA) was introduced to the market, it created a ripple of excitement. However, when the high expectation was not met by the technology, the excitement was chilled quickly. In the recent years, we have seen many applications been adapted to different vertical markets. For example, people counting is highly used in the retail sector for flow management or distinguishing out the hot selling products in malls. Another practical usage is to use VCA as a filter, to isolate suspicious activities for further determination by people. This application can be programmed to the hd ip cameras at the front end as an activity detector. If it is to be used at the back end as an intelligent analytic tool, then the pictures will become information-rich tool for further applications.
As to the improvements of VCA, there are two ways to go. One is through adding in the three-dimension (3D) technology-by incorporating determining factors such as height measured from the ground, the accuracy of the image analysis could be highly enhanced, becoming a more reliable application. Another improvement is through self-learning technology. The precision of VCA is dependent on how well the VCA corrects its mistakes through multiple trial-and-errors.
IP Security Cameras are like the human eyes. If the image registered by the eyes is not just "seen" but "comprehended," then the application will become more valuable to the system. The hottest topic in IT now is the big data. If combing intelligent surveillance and big data, security will definitely be brought to a higher level.
Higher resolution, clearer images
Recently, we have heard the coming of 4K images or H.265 compression technology - the revolution of visual demands is stimulated by the consumer market. As a product, HD can be described as mature; however, if we are talking about a system or an environment, then it is yet to be accomplished. From my point of view, it is very difficult to find new marketing topics for the IP market that is heavily competed for. In order to stay ahead in the industry, many manufacturers will pioneer into incorporating the 4K and H.265 technologies into their products despite that the environment is not mature yet.
Entry-level markets' rising demands
As mentioned, security has become more affordable and much accepted in the consumer markets. Many leading players such as AXIS, BOSCH, and SONY continuously introduce new entry-level products specially designed for this market. Similarly, the cost-downed made-in-Asia products from both IT and security industries all have something to offer to the entry-level market. To offer a stage for manufacturers to showcase their consumer-defined products, the 2014 Secutech International Expo, organized by Messe Frankfurt New Era Business Media (a&s company), is going to launch a concurrent SmaHome show, to greet the coming of age of the new security market.
Analog - bullish with upgrades
The analog technology still dominates the security market in terms of quantity with an 80 percent share even in 2013. Although the competition is so intense that little profit can be generated, the cheap pricing will still affect the market for another while. However, if manufacturers can take advantage of the large need for analog upgrades and produce some innovation for improving the existing technology, profits can certainly be yielded. Hence, we should pay attention to those solutions designed for the upgrade of the existing analog systems, such as the highly developed 960H, HD-SDI to be lowered in price, or the 800TVL products hot in China. These upgrades will aggressively seize the large analog market.
Access control onto a steady rise
Access control applications has followed closely with the IP trend, and can go along with other mature technologies such as biometrics, RFID, wireless electric lock, IP video door phone. As IP continues to excel, access control is definitely going on a stable growth for the following years.
Biometrics be lifted up outside security
In the previous issue, we have picked out iPhone 5s as the product of the month due to its selection of fingerprint technology. Biometrics will definitely be riding an upward spiral with consumer 3C products - free from the constraints of the security market. Applications such as facial recognition, voice identification, and many more will also be in demand. Some of the technologies that were unable to be supported by the surveillance industry could possibly find a new stage to shine through 3C.
Video verification enhancing applications
False alarm has always been a headache for the alarm providers. Some of the countries now have regulations requesting all alarm services to add in video images to enhance verifications that alleviate the burden of police on duty. Some alarm service providers add in the video verification to reduce the unnecessary dispatch of guards. This is even more appreciated in Asian countries, where people are accustomed to image viewing. Although alarm is not highly requested in India, perhaps more can be secured through the combination of alarm and video.
Looking Ahead the Transition Phase of Security
The most exciting trajectory of security is pointed towards to follow the path of 3C, as the value of surveillance becomes tangible through mobile devices. The untapped opportunities in the security industry will lure both geniuses and funds as how it is in the Silicon Valley! There is going to be a fiery image revolution changing the old professional security. I myself am very curious, just how will the core value of professional security - "trust" - be redefined in the consumer-driven new markets? Maybe we can hold on to this thought, and come back to examine it in 2016.
Please Login For More Information!
No comments:
Post a Comment