Over a period of time, security has gained global importance due to numerous threats like global terrorism, arson, burglary etc., faced by countries worldwide. Initially, manned security was considered more reliable. However, with emerging trends, the demand for electronic security systems (ESS) has gained prominence. The global electronic security systems industry is growing at nine percent annually and its current value is estimated at USD 60 billion. The Global ESS industry is expected to witness buoyant growth with huge changes in the industry scenario due to M&A activities and in technology innovations like video analytics, in the year 2008. During the current year and in near future, major trends are expected to take place in the industry, some of which are:
(a) IP video surveillance: IP has been a revolutionary technology innovation which has aided the growth of the internet and its uses across sectors. Electronic surveillance systems are also utilising the IP benefits of cost effectiveness, high quality and encryption. Further, video compression technologies are facilitating less storage requirements and bandwidth. IP video is the innovation that leverages a company's IT infrastructure for video control, transport, storage and retrieval. It can be centrally managed from anywhere in the world - even through a web browser in a Kathmandu Internet cafe. It can serve security and other business purposes such as process or traffic controls. IP video can also provide data for business analytics like emerging retail applications that are starting to help optimise store layouts based on analysis of store traffic around merchandise.
(b) Data Analytics: With powerful software tools, companies can mine both security and business data for hidden patterns that can help uncover both - risks and opportunities. Any variance can indicate security violations or insecure environments vulnerable to violations. Video analytics assists storage, archiving and retrieval of data with the usage of intelligent data mining. Currently, this trend is expected to be one of the major modification drivers in the electronic security industry.
(c) Globalisation: In the past three decades, globalisation has exploded due to the opening up of economies along with improvement of human capital. Countries like China and India, along with other developing nations, have joined international agreements to lower or eliminate barriers to trade. Further, the global approach adopted by multinational corporations to control their risk profile better, improve safety, security and business efficiencies through greater consistency and simplicity has made the scenario more lucrative. This has also led to mergers and acquisitions and companies venturing into new foreign markets.
In India, the electronic security systems industry is on the trajectory path due to the economic development and the escalating need for security by government, commercial, industrial and educational segments. The Indian electronic security system is following the global trend. The following are a couple of news articles giving an indication of the same:
Zicom is a Mumbai-based company and has been a leader in introducing electronic security systems to the Indian market in a big way. The company is setting the trend of increasing its market reach through the acquisition mode. Recently the company has planned to acquire a local Chennai-based company and a UK-based company. These acquisitions are expected to almost double the company's turnover in the current year over the previous financial year. The estimated value of the deals is around USD 50 million and the deals are expected to be completed by September, 2008. On the other hand, Axis Communications, a Sweden-based company offering network video solutions for the commercial segment, has acknowledged the potential in the Indian market and has initiated distribution and reseller partnerships to enter into the Indian Tier - I and Tier - II cities.
The consolidation in the Indian as well as global market has been initiated by the above transactions. The road ahead is expected to see more of M&A activities as well partnerships along with technology innovations impacting the electronic security systems positively.
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