A new year brings new opportunities for security tech

Jan. 12, 2021
Analysts discuss the market opportunities and challenges that await in 2021

While 2020 will be forever remembered as a year marked by the COVID-19 pandemic, it will also likely be looked back on as an inflection point for emerging technologies in the security industry. For years, experts have talked about how mobile and cloud offerings would change how people interact with technologies like access control and video surveillance systems, but adoption of these solutions had never quite matched the buzz they generated.

However, as the pandemic gripped the world, the obvious benefits of these technologies became clear. When facilities that once housed hundreds or even thousands of employees were suddenly left vacant, those organizations with cloud-based systems could now secure these buildings remotely. And as workers slowly made their way back into offices post-lockdown, mobile credentials provided organizations with touchless access to help mitigate against the spread of the coronavirus. 

So, what will the new year mean for these and other security technologies? SecurityInfoWatch.com (SIW) recently spoke to variety of subject matter experts to get their take on what trends will accelerate and which ones could see a decline in the new year. 

Technology segments covered and panelists include: 

  • Access Control: Lee Odess, Founder and CEO of consulting firm Group337 and author of the book, "The 6 Phase Changes Shaping Access Control." 
  • Video Surveillance: Jon Harris, CPP, PSP, Director of Enterprise Solutions at Guidepost Solutions.
  • Intrusion Detection: Jim McHale, Managing Director of Stockholm-based market research firm Memoori.
  • Smart Home and Residential Security: Elizabeth Parks, President, Parks Associates.      

SIW: What do you think this year holds in store for the technology itself and how will it evolve?

Odess: Access control is definitely in an accelerated phase change, and 2021 will be a dizzying year just like the bulk of 2020 has been. Granted, the industry was already in one with cloud and mobile, but the pandemic has put it in hyper speed. Once the dust settles a bit, I believe some of the hype (e.g., temperature cameras) will subside, but there will be fundamental shifts in how business gets done moving forward. Here are three examples:

  • Architecture buzzwords like "cloud" or "mobile" or "data" will no longer be seen as "new and exciting." They are all now a standard offering and service that companies take seriously and want. The value has been felt or, in some cases, seen from a distance. What we will hear more about is the value those buzzwords help deliver, like "wellness" or "business continuity" or "trust" or "notifications and communication."
  • With this, there will be a deeper culling of the herd where old legacy access control systems that are outdated and not able to keep up lose even more ground to those incumbents that made changes to their systems or decisions long ago that are now relevant and new, well-funded startups that do not carry the baggage of antiquated architectures. We will see those that cannot turn the corner go out of business, consolidate, or sell. We have entered the next phase in our industry.
  • As the market continues to go mainstream (down market) and broader than just the high-security market, access control will continue to become a feature of a much larger value proposition offered along with other utilities like HVAC, lighting, and water.

Harris: The key takeaway from 2020 is that the industry is capable of far more than we think. COVID-19 forced the pent-up phase changes onto the industry and adoption of emerging technologies were expedited; I expect this trend to continue in 2021.

The key obstacle is the inability to re-imagine the approach to solving the security problem. Traditional technology mindsets are unable to envision how emerging technology such as Machine Learning (ML) and image recognition can tackle securing a building or proactively identifying threats. As long as the industry approaches problem solving with iterations of old technology versus innovations with the infusion of new technology, I feel we will be limited from meeting the true potential.

McHale: The world market for Intruder Alarm/Perimeter Protection (IA/PP) products declined slightly to $5.7 billion in 2020 but we forecast it will grow to $6.8 billion in 2025 at a compound annual growth rate (CAGR) of approximately 3.5%. IA/PP has become a much more important issue in critical infrastructures such as utilities, transportation, government, and defense establishments because of the increasing number of threats which could disrupt operations and also lead to huge losses across economies.

Parks: 2021 will continue to bring opportunities in video solutions and services; attaching video devices and services to residential customer accounts. Retaining and upgrading customers impacted by the 3G sunset will also be an opportunity but also a challenge for the industry. Consumer expectations for wider integration of device types, brands and models will continue as they seek a unified experience for the devices they love. Smart access control in the hospitality and MDU (Multi-Dwelling Unit) segments will continue to accelerate and touchless access control increases interest among consumers and property owners due to COVID-19.

SIW: What is the overall condition of the market and what do companies need to do to adapt?

Odess: To adapt, I suggest the stakeholders of access control manufacturers and dealers of these systems do the following:

  • Access control software manufacturers: If you are not already set up for this next phase, you are in trouble, and you are late (see above). But let's assume you are, and in that case, your architecture supports the cloud, has mobile, can utilize data, and is not dependent on hardware sales to survive. Based on those assumptions, I would do the following first: Focus on talent and hire someone who understands content and digital marketing. Get really good at it and invest in it. Build your voice in the industry and channel, but more importantly, to the general public. The way end-users discover and buy has changed. Not that you should sell direct (that said, I would understand your options), but you should 100% start to control your message and get deeper into the sales process. Then, I would take a hard look at your solution and verticalize the offering. Get really deep into areas you want to win. I would continue to support a horizontal platform approach to your access control offering but go deep when it comes to user interfaces and experiences. End-users nowadays are looking for solutions that speak their language and are customized for their market. Those that do this will drive deeper engagement, win more business, and own verticals. This builds moats.
  • Access control integrators, dealers, and installers: I would take a hard look at two things: 1) Reassess your product and solutions and look for deeper partnerships. Find out who will invest in you, and you should invest in them. Set clear expectations on how you are going to grow the business and do it together. Stop collecting lines because you are afraid you may lose an opportunity that walks through your front doors. It makes sense to keep that one line on the shelf because of that project from that one customer you like, and you want to service them when needed but make a clear distinction between your champion business building lines that you are going to ask for participating in market making versus the others. The access control manufacturers leading the market as we move into this next phase want to build the market with you creatively. Just ask. 2) Prioritize training and certification outside of the security industry. Start to become a system integrator; this builds value an optionality for your business. Become Cisco certified. Become a Salesforce Trailblazer. Expand your capabilities beyond the security industry. Being an integrator means more nowadays than specializing in just security.

Harris: The market is strong and at the same time, extremely vulnerable to disruption. The risk environment is at an all-time high - social and political unrest, climate change, supply chain disruption, concerns with law enforcement response, cybersecurity, domestic terrorism, and employee safety/security are all on the mind of the public. These are all data points that provide solvable problems for the security industry. These issues have been thrusted to the forefront of society and while security technology is iterating the traditional approaches, there are start-ups and technology giants who are primed to capitalize on the opportunity.

For 2021, I do not anticipate too much movement up or down. I would expect the mergers and acquisition (M&A) market to remain lively, with some of the aforementioned start-ups being pulled into the legacy security industry stalwarts. The time horizon for true disruption is probably closer to five years, when one of the tech giants finally decides to enter the fray, with the name recognition, innovation in their DNA, and investment capital to make immediate impact.

To adapt, companies must redefine the type of organization they want to be - they should aspire to be technology companies that solve security problems. This subtle mindset shift can change the culture of the organization to drive innovation and recruit diverse talent that may not otherwise consider the security industry as a good fit. If a company told me that they leverage advanced, bleeding-edge technology to solve tough problems, and make the world a better place I would ask them where to sign up.

McHale: Companies are taking a more active role in this industry offering new solutions and this will certainly bring about a more competitive business which will expand the market. For example, Axis Communications has their Axis Perimeter Defender product, an analytics application for intrusion detection. It forms a comprehensive, video-based solution for perimeter protection.

At the same time, radar technology has increased its penetration of perimeter security and advances in sensor technologies, (microwave, active infrared, passive infrared, fiber optics and acoustic sensors) are driving the market forward. Radar tech is now also being used within smart buildings to support organizations as they explore options for moving staff safely back into their buildings post-COVID.

Several companies, including Infineon, have been developing indoor radar technology which measures room occupancy to maintain social distancing.

Parks: Consumer interest in self-installable devices and systems will expand the lower end of the market with more dealers including DIY options in their solution set and larger players selling DIY systems direct to consumer online. As value creation requires more advanced technology, we may see more hardware consolidation among those who are getting left behind and more M&A activity of enabling technologies, such as video/audio analytics and machine learning assets.

SIW: In looking at the prospects for growth or decline, taking all the factors above into consideration, are companies in the market poised to thrive or see their business slow?

Odess: It comes down to how you are setup and what part of the market you serve. For instance, if you are in the restaurant or entertainment business, it will be tough. From what I am reading, this part of the economy has a long road to recovery, and I do not think the investments will start in 2021.

New construction in the later part of 2021 will be slow as the commercial office space still works out of the new normal. The office is not dead. We are reimagining it (side note: opportunity for our industry to start speaking up and leading here). Buildings that were already out of the ground or approved will continue, but the new projects that would have been specified in Q3 and Q4 of 2020 that did not happen, we will not see in the second half of 2021.

I believe the retrofit and aftermarket will be white-hot as companies and communities look to outfit technology into their offices, multi-family and smart apartments, places of worship, gyms, medical facilities, and schools that project trust, wellness, and safety. Also, I think governments will inject money into these sectors—primarily commercial offices in major cities. The industry is too vital to the economy, and just like we saw after 9/11, we will see subsidies and grants given to prop up this sector.

And lastly, as the technology and markets open up to the small to medium and enterprise (businesses), we will see a greater demand for access control. This, in turn, will fill in the gaps where more traditional markets are slow. The question is: Am I setup correctly with the partners to capture the new normal?

Harris: Companies that embrace innovation to solve problems will thrive. Conversely, those that keep trying to find a slightly different way to open a door or identify a red backpack on a stream of video will be passed by. Organizations must look at the talent acquisition process and seek out those who can help them unleash the value of the new technologies.

As mentioned, the world continues to be fraught with risk and with that, becomes an opportunity for market expansion. Our industry has a great opportunity to shine and those who step forward can make the world a safer and more secure place, adding value to humanity. I urge the industry to rise to this occasion and show that we can do amazing things.

Parks: With COVID-19 still affecting the way most Americans live, work, play and go to school, the security industry is faced with a variety of opportunities and challenges. Companies must find innovative and fresh programs as we enter the new year. We predict 2021 will be a year of further expansion for the industry, with consumers adopting and experimenting with innovative and useful solutions.

Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].