Physical security includes the use of multiple layers of interdependent devices, including CCTV surveillance security guards, safety barriers, locks, access control protocols, and many other techniques. Physical Security Market size is projected to reach $170.70 billion by 2025 from $87.3 Billion in 2018, with a CAGR of 10.14% during 2020-2025. The main drivers of the market includes increasing terror attack events, technological advancements and implementation of wireless technology in security systems, increased use of Internet Protocol (IP)-based CCTV systems, and increased adoption of Internet of Things (IoT)-based security systems with cloud computing platforms. A wireless video monitoring system's functions include video capture, wireless sensor network data processing, and video analysis. Wireless IP-based surveillance systems are cost-effective to implement and do not require cabling. Also, Increasing IT and OT technology integration has raised a concern about built-in security operations that are applied to a network. Because Network Video Recorders (NVRs) and IP-based surveillance cameras are network tools, they are vulnerable to sneaking into a system to become a target vector.
- Due to advanced technology and easy adoption in countries such as the United States, North America accounts for the largest global Physical Security solution market share.
- Based on organization size, the large enterprise segment is anticipated to rise at the highest CAGR during the forecast period.
- Residential segment among vertical is expected grow with a high CAGR.
By Organization Size - Segment Analysis
The large enterprise segment is projected to grow at a CAGR of 8.92 % based on organizational size during the forecast period. This segment's growth can be attributed to large companies' willingness to implement physical security technologies and services and their high economies of scale, enabling them to maximize the advantages of these systems and services. Companies spend large amounts in changing their strategic advertising techniques in order to retain their position in the highly competitive market. The market is experiencing major technological transformations in the form of technological advances and the introduction of wireless technology in security systems, increased use of IP-based video surveillance cameras, and the implementation of IoT-based security systems with cloud computing platforms. For instance, Johnson Controls, partnered with Evolv Technology in November 2019 to avoid active shooter and workplace violence. These partnerships for technological advances to be used in commercial spaces and the willingness of large organizations to adopt them will fuel market growth.
By Vertical - Segment Analysis
Residential is expected to be the fastest growing segment at a 10.21 % CAGR during 2020 and 2025 due to the large number of damage caused to property and assets during thefts and other violence. Technological advancements in security systems, such as IoT, combined with growing public awareness of cyber-attacks will also fuel the growth of the segment. In addition cloud-based remote monitoring has made it easier to monitor and control the physical environment. Applications in Residential properties has enhanced consumer experience along with the requisite asset protection from any potential risks. Security is maintained through the implementation of robust video surveillance network, smart access control and rapid detection of intrusion. For instance, Honeywell launched VESDA-E VES Smoke Detectors for Advanced Zoning in August 2019 to enhance the detection of hazards and reduce losses. These technological advancements and other collaborations in residential property protection technologies are stimulating the market.
By Geography - Segment Analysis
With a market share of 39.42 % in 2018, the North American region will dominate the market. North America is one of the most technologically advanced nations. In this region physical security is required due to factors such as the need for security against terrorist activity, government regulations, illegal migration, technological advancements, increased criminal activity, and the need to reduce the cost of security personnel. Such risks have contributed to the need for physical security systems such as protection of entry, detection of perimeter intrusion, and video surveillance. In addition, it is also predicted that the presence of some of the key market players in the region will fuel market growth in the North American region. According to the G20-migration-and-displacement-trends-and-policies-report of the Organization for Economic Co-operation and Development, there is a 7.24% increase in the number of migrants to the United States from 2013 to 2018. This increasing number will require an advanced security infrastructure and will in turn enhance the market in the region.
Drivers – Physical Security Market
- Technological advancements
With the advent of locks and keys, the global physical security industry has seen accelerated growth since its inception. Technological advances in wireless technologies and the convergence of physical & digital spaces have allowed greater physical security systems to be implemented. The implementation of wireless technology in access control systems mitigates cables and conduits, and cloud technology adoption lessens database and application requirements, thereby increasing deployment and integration time and cost. Such technological developments in the long run bring down the cost of these systems and promote remote and secure access. Moreover, IoT technology has also broadened the reach of market opportunities by allowing data protection across advanced physical security device linked networks. In addition, IoT-enabled devices are expected to fuel market growth through developments and technological advances in connected sensors, images, and access systems. According to Telefonaktiebolaget LM Ericsson, by 2022 approximately 29 billion connected devices are estimated, of which approximately 18 billion will be connected to IoT. By the end of 2016 there was about 400 million IoT devices with cellular connections and this figure is projected to reach 1.5 billion by 2022, or about 70% of the wide-area category. The connected devices are most often used in the physical security industry, and the market will be influenced by this increase in the number of IoT devices.
- Increased terrorist attacks
Public security and emerging security services have been the crucial areas of focus for administrators to ensure safety against terrorism, disasters, accidents, and epidemics. Governments across major countries are constantly working to enhance their framework for physical security to counter threats. For example, in October 2017, the U.S. Government Accountability Office (GAO) undercover federal auditors obtained unauthorized access to secure areas on the National Institute of Standards and Technology (NIST) campuses in Colorado and Maryland. According to the United Nations Counter-Terrorism Center (UNCCT) Annual Report, the annual budget increased substantially from $14.7 million in 2017 to $26 million in 2018 and expenditure rose from $10.6 million in the year ending 31 December 2017 to $17.6 million over the same period, a rise of 66%. The surge in anti-terrorism spending indicates that there is a rise in terrorist activity, which will increase demand for physical security systems.
Challenges – Physical Security Market
- Violation of privacy
Any surveillance system in areas such as highways, parking lots, parks, means of transport, retail outlets, financial institutions, and offices is often seen as a breach of privacy and is protested by various groups and advocates for civil liberties. There have been concerns about who is watching the video and how the data could be used or mishandled, because people would expect to use their private information only for legitimate and relevant purposes. For instance, with the implementation of GDPR in Europe, regulatory requirements must be met by any public or private entity using CCTV surveillance to track publicly accessible areas. The GDPR 2016 consists of eleven chapters relating to general rules, standards, data subject rights, responsibilities of data controllers or processors, transfer of personal data to third countries, supervisory authorities, collaboration between Member States, remedies, responsibility or penalties for violation of rights, and various final provisions. Each country follows certain regulatory rules that also include hefty penalties for the violation, these heavy fines hinder organizations from implementing physical security systems.
Technology launches, partnerships and R&D activities are key strategies adopted by players in the Physical Security market. In 2018, the market of Physical Security has been consolidated by the top five players accounting for 36% of the share. Physical Security top 10 companies are ADT Inc., Bosch Building Technologies, Cisco Systems, Inc., Honeywell International Inc., Johnson Controls International plc, Anixter International Inc., Genetec, Secom Co., Ltd, G4S plc, Pelco by Schneider Electric and Zhejiang Dahua Technology Co., Ltd.
- Hangzhou Hikvision Digital Technology Co. introduced a new array of fixed and portable Under-Vehicle Surveillance Systems (UVSS) in October 2017.
- Honeywell International Inc. released Smart Home Security System in November 2017, a self-installed, all-in-one security solution, which also incorporates personal assistance developed by Amazon Inc. Alexa, an Artificial Intelligence (AI).
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