In order to get the most relevant insights into the regional security market, we interviewed our leading and renowned experts. Almost all of them agree on one thing - last year was among the most successful in the past decade. Stable growth has been achieved together with higher investments and the market is increasingly looking for advanced and better integrated solutions
By: Damir Muharemović
Following the economic downturn of 2008 and subsequent long-term recovery, the Adriatic region's security market has recorded steady growth for yet another consecutive year. This is the consequence of the recovery of local economies. All countries in the South-Eastern Europe have continued to record economic growth in 2017, which was accompanied by higher employment rates and poverty reduction. "Over the past few years, the countries of the Western Balkans have made progress in reforming public finances and reviving economic growth, although the citizens may not see benefits from this progress yet," says Linda van Gelder, Country Director for the Western Balkans Region at the World Bank. Still, it is estimated that it will take 60 years for these countries to reach the cumulative level of the European Union.
The reason for this prognosis is rooted in having almost halved growth rate on average, which, prior to the economic downturn, amounted to five to six percent annually. The downturn halved it and cut short the pre-crisis upward tendency to shoot for the EU living standards. This made it obligatory to look for new growth models based on higher productivity and investments, increased exports and the greater role for the private sector. "The growth we witnessed in the region during the pre-crisis years is a testament to the overall economic potential of the Western Balkans," said Harald Waiglein, Director General for Economic Policy and Financial Markets at the Austrian Ministry of Finance. If the growth of the Adriatic region countries is to return to the level it had ten years ago, the estimated time to catch up with the EU would be three times shorter. Higher exports, more investments and jobs and stronger regional integration are priorities for the economic policy makers, it is said in the World Bank's report entitled "Revving Up the Engines of Growth and Prosperity in the Western Balkans".
Security Market Grows
Security market of the Adriatic region countries has already made a step forward in emulating the practices used in more developed European markets. "Entire Adriatic region reacts to the market changes in the manner which is similar to that found in the Western Europe. Great growth is observed following stagnation," says Sergej Pičulin, Regional Sales Account Manager for Central and Eastern Europe, Russia and the CIS at IndigoVision. Grega Grušovnik, CEO of Slovenian Jantar company, agrees with him: "Growth is noticeable, and it has carried over from 2016 to an even greater extent. The growth trend resulting from the end of recession and the general growth in the EU is noticeable in Slovenian and international market, particularly in the Adriatic region." Urška Binter, Sales Director at yet another Slovenian company Prima Sistemi, says that their growth amounted to about five percent, primarily due to increased demands on the part of individual clients, such as hotels, housing owners etc.
One of the Most Successful Years
Miroslav Ćirić, Head of Export Project Sales at Alarm Automatika, notes that the market has even recorded a "double-digit" growth at the regional level. According to Matija Mandić, Head of Technical Security and Passive Network Solutions at KING ICT, the reason for seeing positive trends in terms of technical security growth is "better investment climate and increasing presence of capital from the EU funds". Croatian market is making progress, yet at slightly lower rates, we are told at ECCOS Inženjering and Protekta. Owner of Protekta Duško Bjelotomić explains this: "Croatia, as well as other regional countries, once again record slow but steady growth of investments in the security in the broadest sense. After the crisis caused by general economic downturn which took place ten years ago, now you have slow but steady growth of investments in this sector. Exceptional growth in specific segments occurs only when the state and its regulations or new laws create the uncommon demand for investments in order to ensure compliance with a new law. This practice is common to all countries of the Adriatic region."
Andrej Ćuraković, Head of Sales for Balkans and Central Europe at Avigilon, confirms the existence of the positive growth trend in this country and the Adriatic region. For him, 2017 was one of the better years. "I would rate 2017 as one of the most successful years for Avigilon in this region."
Public Good Security as an Impetus for Growth in Serbia
"In the past year, Serbian market recorded slight growth, given the technological developments and the tendency of security manufacturers to make their products smarter, i.e. to have them offer as many features as possible in order to seamlessly integrate with the existing systems. The current trend is related to smart features of cameras and software that underlie systems, traffic control and accident prevention, as well as to the introduction of smart city systems in which video surveillance systems are used for monitoring squares and intersections and ensuring quick and appropriate response at any moment, together with the analysis of appropriate project tasks in case of accidents or emergencies," says Branko Rusić, General Sales Manager at Antenall.
Politics as an Obstacle in BiH?
When it comes to Bosnia and Herzegovina, growth is somewhat slower due to complex political situation and administrative complexity. "According to the Global Competitiveness Index of the World Economic Forum, Bosnia and Herzegovina has jumped four places to rank 103rd globally this year, but it is still the lowest ranking European country here. This small progress is commendable but insufficient. The inadequacy of the state administration, complexity of tax regulations and poor access to finances still act as large obstacles both for having better business and market growth. Regarding the private security market, I would reckon that there were no major disruptions in any segment. However, there is a noticeable growth trend with the demand for security systems in case of natural persons or individuals, which is also expected in relation with the general trend of increasing concerns for personal safety," explained Bojan Stanojević, CEO of Sector Security. Daniela Gogić, Marketing and Communication Manager at Securitas BH, agrees with the stable growth assessment, both for this country and entire region. "From our communication with the colleagues from Securitas in the region, we can confirm that the stable growth of the private security market is evident, particularly in the segment of building security. Users of these services are increasingly better informed about features offered by technical security and new technologies and that is why they are asking us to provide that type of security," says Gogić, adding that her company is proud of the fact that it hired 300 new employees last year.
Prices Must Be Higher
Causes of slow progress or even stagnation can be traced down to economic and political situation, says Ivica Brekalo, CEO of AFP, who also blames "business practices of those who deal with security" since they sell cheaper equipment at the expense of quality. "New technologies are entering the market, but few are those in this business who pay sufficient attention to the quality of equipment and services, so it is customers themselves who do not have the opportunity to understand technology or whatever it is they are buying. In most of the cases, they go for the cheapest option, which, ultimately, does not represent the optimal solution for provided equipment or services. The situation in the region is similar, sometimes better or even worse," says Brekalo. Aleksandar Dobnikar, Regional Sales Manager at Sony, argues that the video surveillance market is growing, but its value does not reflect increasing equipment sales. "The reason for this is primarily related to dramatic equipment price drop, which has led to a decline in terms of services. In Eastern Europe, there is a noticeable increase in the sales of cheap equipment, although better and more reliable equipment made by renowned manufacturers still represents an indispensable part of each project in more developed European countries."
Profiling Professional Solutions
Other interviewees do not share this view of the situation. Andrej Ćuraković, Avigilon’s Regional Sales Manager, claims that "one can observe the re-emergence of the trend of preference for quality, reliability and simplicity instead of going for the lowest prices," while Aleš Dejak, Regional Sales Manager at Dahua Technology, points out that the progress has been made precisely because of the high criteria and standards that the market imposes: "The Adriatic region is exhibiting growth trend when it comes to security technology. What is especially pleasing to me is the fact that professional approach to security solutions is increasingly becoming the preferred option throughout the region. High level of expertise offered by the companies and personnel that deal with security allows us to fully meet the high criteria and standards set by the market. It is beyond doubt that the technology is changing on daily basis and that life cycles of products are becoming shorter. Security market players have to invest a lot in order to contribute to the technology development." In order to meet these challenges and set new trends, Dejak claims that Dahua has been investing more than 10% of its annual revenues for research and development of new products for many years.
Stjepan Šurmanović, Sales Manager for Southeastern Europe at Axis Communications, shares his colleagues’ views. "We believe that our region is definitely an emerging market which has great potential and need for high-tech products and solutions we offer. Surely, there is room for improvement and that's why we have decided to strengthen our footprint in the region. As a fully open integration platform, Axis symbolizes the absolute freedom given to both integrators and customers in creating their own personalized solutions which are tailored exactly to their desires. With this technology, the user acquires a stable and robust platform which makes it possible to upgrade a project at later stages," says Šurmanović. Neven Rusković, CEO of Špica Sustavi, adds: "It is established that the market is growing together with the projects which are becoming more complex as the sign of the times we live in. This is specifically aimed at digitization and modern technology. Some of the most prominent trends are those related to video surveillance software that focuses on object recognition. Also, we are seeing increased use of IP cameras with Ethernet communication."
Doing Business in Line With the Users’ Demands
Complexity of the projects, increasing numbers of tech-savvy and demanding customers, accessibility of new technologies and their application outside the traditional scope of security have direct impact on the state of the market. This is closely related to the trends that the leading regional experts focus on, such as integration, video analytics and cyber security. Ivan Špoljarić, Key Account Manager at ECCOS, summarizes these trends in one sentence: "The markets of the Adriatic region are witnessing increasing demand for sophisticated security solutions that include integrated systems, advanced video analytics (automatic number-plate recognition, identification of persons, classification of objects, perimeter protection etc.), advanced alarms and reporting," adding that one of the trends involves reducing the number of security staff and personnel while retaining or raising the level of security through the use of advanced technological solutions. Šurmanović adds: "Generally speaking, we think that entire region offers great potential. We want to start discussing topics such as sustainability, cyber security, integration capabilities, video analytics at the edge, ready-made solutions for individual market verticals, total cost of ownership for systems, support…we would like to show why it is crucial for integrators and end users to develop solutions based on the systems that can address these issues."
Sergej Pičulin shares this view: "Trends that I would surely single out are edge analytics in video surveillance and integration with other systems. These are the added value that almost all of major manufacturers offer today." Integration of safety and security systems as a dominant trend has also been recognized as such at Alarm Automatika whose representatives stress that they have developed their ABSistemDCi software for this reason i.e. to address this issue in the best possible manner. At the same time, representatives of KING ICT emphasize that "security system users are increasingly considering integral and proactive concepts of security systems as an effective response to the rising security challenges of today."
Finally, cyber security has certainly emerged as a trend that security experts are increasingly concerned about in the face of numerous hacker attacks which make them ask themselves what to do in case of security system breach and data theft. "A great deal of attention is focused on protection against hacker attacks, given that this is a major issue for almost all cheap equipment manufacturers, mostly those from China. I think that buyers in our region have not yet been sufficiently informed and educated about this rising threat," says Dobnikar.
After a positive assessment of the state of the market and identification of the main growth factors, we wanted to know which vertical markets invest the most in security systems and services. It is highly important for potential investors in our region to have insight into which sectors drive the region forward, in order to properly develop their business strategies. Carefully selected strategy can lead to even greater investments, which generate capital as the most important incentive for the accelerated growth and development of the economies of the Western Balkans, as well as for better security in our societies. We'll start with the obvious - tourism.
Tourism in Full Swing
There are numerous data on the growth of tourism in the Adriatic region countries. From 1990 to 2010, the average growth rate was higher not only than the European average, but the Western and Northern European average as well. Favorable development trends are expected to continue until 2020, with a somewhat lower growth rate. The World Tourism Organization (WTO) estimates that these figures will be slightly lower than in other South European countries (Spain, Portugal, Greece) with an average annual growth rate of 1.5 to 1.8%. Croatian tourism is certainly at the forefront, with about 15 million tourist arrivals and 85 million overnight stays in the first eight months of 2017, an increase of 14% and 13% respectively compared to the same period in 2016. By the beginning of the current year, record-level revenues could easily exceed last year's 10 billion EUR, said the Croatian Tourism Minister Gari Cappelli in September. Tourists’ safety plays one of key roles in all of this. "Construction industry is in full swing throughout the region and this has positive impact on the demand for security systems, particularly for fire and gas detection and evacuation systems which must be installed in larger facilities. In Croatia, the greatest progress has been made in tourism. For Alarm Automatika, the most important project was implementation of the security system in the accommodation facilities of the Plava Laguna Resort in Poreč, for which we won the third award in the competition for the best regional security project at Adria Security Summit 2017. The main reason for this is the increase in numbers and the total value of investments, as well as high standards of security that are set by foreign investors and tour operators," says Ćirić.
Other representatives of the companies operating on the Croatian market share this view. "Surely, the highest growth of investments in security is recorded in tourism which itself has exceptional growth," says Bjelotomić. "The greatest progress in the market has been made in tourism and retail sectors. The projects we like to boast about are Ireks Aroma, Intercontinental Hotel in Ljubljana, Regent Porto Montenegro and Mastral in Montenegro," claim the representatives of Špica Sustavi. At Prima Sistemi, they say that tourism is currently offering the greatest potential, while their colleagues at ECCOS point out that "the greatest improvement is felt in tourism, transport and healthcare, since these sectors have seen the largest investments". For ECCOS, the most representative projects in these sectors in 2017 were Excelsior Hotel in Dubrovnik, the ferry port of Gaženica in Zadar and the General Hospital in Pula. In neighboring Bosnia and Herzegovina, tourism is also becoming an increasingly important industry, as confirmed by Brekalo who also adds that "tourism and retail offer the greatest potential for our business". The same goes for Serbia, in which these two sectors are joined by education, healthcare and transport as verticals with the highest growth, according to Antenall. "The market has grown considerably in view of the adopted laws which regulate security systems and the obligation to have these systems installed in all facilities in which money and human resources are managed, which includes alarm systems, access control and video surveillance. Major projects have been implemented, such as video surveillance system of the city of Belgrade, projects related to numerous educational, tourist and sports facilities, out of which we can single out Ada Ciganlija and the FC Partizan Stadium," says Branko Rusić.
Investing in Motorways and Railways
Economic growth is closely related to road infrastructure. Construction of highways and railway reconstruction are tasks that await Serbia, Bosnia and Herzegovina and Montenegro, so it is not surprising that our interviewees highlight the transport vertical as one of the most prominent ones in the past year. Aleš Dejak says: "In line with successful examples from 2017, we can identify great potential for the implementation of Dahua’s solutions in the field of transportation, city surveillance, banking and retail. Dahua has implemented successful projects in many verticals, such as banking, state institutions, manufacturing, commerce, sport venues, shopping malls and transport." For Sony, these verticals are transport, state institutions, high risk facilities, banking and retail, while IndigoVision identifies them as transport (airport in Belgrade, Hungarian railways, motorways in Bosnia and Herzegovina), energy (Hungary) and smart and safe city planning in Belgrade. Finally, the most important verticals for Axis are critical infrastructure, smart cities and transport (Croatian Motorways, making Zagreb a smart city, fire detection in the Dalmatian region, equipping Končar locomotives and trains).
The third important sector includes investments in critical infrastructure. In 2017, implementation of security systems at high-risk and energy facilities was, among other things, something that companies such as Axis, Avigilon and Alarm Automatika worked on. "Looking back to 2017, we can say that our solutions for the protection of critical infrastructure and perimeter security, workflow optimization in stores, and smart cities have made the highest impact in our market. We are building a comprehensive video surveillance system for the oil industry in Burgas on the Black Sea coast. We are developing the smart city concept for the city of Novi Sad, while we also have a superb video surveillance installation in the town of Vlora in Albania, etc.", says Šurmanović. "The greatest progress has been made in securing high-risk facilities, banking and transport sectors, while a positive growth trend has also been observed with the state institutions, police and army," says Ćurković. "Although the region has not experienced the direct consequences of terrorist activities so far, advanced solutions for anti-terrorist protection of critical infrastructure facilities are increasingly sought after, which is a field in which we implemented interesting projects in 2017.", emphasizes Ćirić.
The fourth vertical that our interviewees have pointed out are government projects. This is confirmed by Grušovnik from Jantar, while his colleague Mandić stresses that "the greatest progress can be seen in projects related to national security, especially in the area of compliance with the EU security regulations, such as the Schengen Agreement and the Schengen Information System, which represents an international database for the exchange of data about various categories of persons (asylum seekers, criminals...) among signatory countries, as well as about stolen or lost things, etc. One of the biggest projects implemented by KING ICT in this field is the implementation of the Schengen Information System (SIS II)." When it comes to Securitas' business, Daniela Gogić observes that: "given that public sector was less represented in our portfolio in the previous period, there was an increase in its share in the sales made by Securitas in 2017." However, she points out that the largest increase in the services this company provided took place in the private sector, that is in the small and medium-sized enterprise segment as well as home and apartment security. Its largest project was investing in security solution for Addiko banks across Bosnia and Herzegovina, which has increased the number of the finance sector facilities that are protected by Securitas by more than a hundred.
It is important to point out that after tourism, transport, critical infrastructure and national security projects, it is the banking sector which always requires sophisticated security solutions. The same goes for the healthcare, in which the investments in security are often put on the backburner. In the past few years, smart city vertical has become a characteristic trend for technologically advanced countries of the Asia-Pacific region, the United States and Europe. All of these are now being put to the forefront. This points to the maturing of the general market and the demand for advanced security in all walks of life.
According to the majority of participants in our survey, three great technological trends have left their mark on our region in 2017. These are IP video surveillance, complete solutions and advanced video analytics. This is the indicator that the security market in the Western Balkans follows in the wake of global developments, because these are the trends which characterize the global security industry. Let’s start from the beginning.
IP Video Surveillance
Although we expected our markets to focus on technologies for HD signal transmission via coaxial cable, which successfully corrects the deficiencies of an analog system, most of our interviewees still point to the IP transition as one of the dominant trends in the past year. "IP recorders/video management systems and IP cameras were best selling products, but in 75% of cases this was related to the integration with other security systems. Surely, in at least half of the cases there was (additional) benefit for the user, with 25% of them relating to the integration and the rest to the prices," says IndigoVision’s Pičulin. Sony also sells only IP-based equipment. According to Dobnikar, the reason for this are better features, integration and flexibility, which are "much better than with those using coaxial cable". The company also focuses on advanced technology, which is reflected in the quality and reliability of equipment, while the emphasis is placed on ultra-sensitive cameras that allow for showing color images in real time in conditions in which the light is almost non-existent.
Axis focused on ensuring simplified connection to the IP network for multiple types of devices with advanced technology. "The idea is always the same - to connect all of these devices with advanced technology to the IP network in the simplest possible manner. Such a vision is still topical and an increased number of our products will be found in IP audio systems, IP network door stations, IP access control and other devices in the future. This will allow our partners to build a complete solution," says Šurmanović, adding that they are working full time on a complete solution, which is why they invested a lot in the acquisition of complementary companies. "There were numerous acquisitions in the past year (we bought 2N, Citilog, Cognimatics) which means that we are developing our portfolio both on the hardware and software fronts. For example, we offer fully open IP, PoE controller for access control systems (A1001), network door stations (A8004-VE and A8105-E) and network audio systems (C1004-E and C2005, 2N SIP microphone fully equipped with Axis integration logic)", concludes Šurmanović.
Duško Bjelotomić shares this view and describes two additional trends related to IP technology migration: intelligent video analysis and integrated solutions. "Technologies are becoming increasingly wireless and IP-based. You have high resolution cameras with intelligent analytics, hotel system management and integrated security systems in all segments of society. The market will increasingly differentiate between service providers based on prices, level of integration and quality of equipment and services offered to the users. Ivan Špoljarić agrees with this: "Users are increasingly opting for introducing IP video surveillance systems with advanced video analytics capabilities. These solutions are of great benefit to the end-users because they offer increased level of safety for employees, visitors and property, as well as long-term savings resulting from reduced number of needed guards and security personnel." He points out that ECCOS has for many years offered such an advanced solution in form of Epsimax as its program application for the integration of security systems. In addition to its internally manufactured access control system that puts focus on BLE and mobile keys, Neven Rusković points out that IP cameras with Ethernet were among the most sought-after products, and the main reason for this market demand are technological capabilities such innovations can offer.
This, of course, does not mean that there are no opposing views which hold that HD analog technology still enjoys market supremacy, primarily because of its affordable prices, easier installation and utilization of existing analogue systems. When it comes to video surveillance, as the segment with the largest share in AFP's operations, Brekalo, says that "by far the highest sales in the market are those of analogue HD systems," while Branko Rusić from Antenall claims that their sales go in both directions: "For HDTVI technology and POC (powering HD cameras and transmitting megapixel signals over coaxial cable), which significantly reduces required cabling for the installation of video surveillance systems. We also offer H265+ encoding technology which significantly reduces the HDD storage requirements for high resolution videos that are in fashion with the new IP systems." As for individual products, cameras with motorized zoom and varifocal lenses are highly popular, according to Dahua. "Our customers demand innovative video surveillance products and solutions and they expect to be offered knowledge, technical expertise and experience with large projects. Users also demand personalized service and support. That's precisely what Dahua provides to its customers in addition to the excellent ratio between the prices and product quality," says Dejak.
As the market is becoming increasingly sophisticated, supply has to go hand in hand with demand. This is best seen in case of surveillance with advanced video analytics, which offers numerous useful features to its users. Andrej Ćuraković comments on this: "Majority of sales are based on highly sophisticated solutions, which include cameras with integrated video analytics. The reason for choosing this solution lies in the ability to prevent certain events and ensure timely response for the same purpose. This comes in package with high detection reliability and minimized programming and installation time, all thanks to the unique technology which uses pattern-based detection and self-learning algorithms". He stresses that it is precisely the ease of use, reliability and efficiency of detection that constitute the main reason for opting for such products, in addition to previously described features. "With regard to the application of new technologies, great progress has been made with the implementation of video analytics technologies and increased application of advanced security standards for data storage and transmission in response to higher threats in the domain of logical and information security," says Matija Mandić. Increasing adoption of video analytics has prompted Axis to acquire Citilog in 2016, with the latter being one of the world's leading providers of video analytics for traffic analysis and AID (Automatic Incident Detection) systems. "That's how we have completed our traffic and smart city solution. Of course, as it has been the case before, these analytics are handled directly on the Axis camera itself," says Šurmanović. We were told the same at Alarm Automatika whose representatives say that "the greatest demand is that for smart video surveillance systems, i.e. for the systems that support basic video analytics features."
Ćirić continues: "There is a growing interest for both integrated and fully customized security solutions. At Alarm Automatika we responded to these market demands by developing specialist integration software, such as software used for visitor counting, ticketing, access management, access control, categorization and vehicle identification for parking fee payment." He says that the main reason for this course of action is related to the multiple benefits for the end user, stressing that, based on their observations, they plan to expand their product and service offer and develop competences for these solutions throughout the region.
Smart Home Solutions
Stanojević from Sector Security explains what these multiple benefits are: "When it comes to companies, the primary goal of our clients is to optimize costs and make work processes more efficient. Thus, the highest demand had to do with the combination of products for video surveillance, access control and alarm systems as integrated security solutions." He adds that this year has seen smart solutions making up a larger share in sales, which is an indicator that the market is gaining momentum in this segment as well. "This was a great year for us in terms of marketing end-to-end and smart solutions. The demand in BiH market is no different from that in any other global market, be it for individuals or companies. Individuals want smart solutions in their homes, security for their family and property and the easiest possible access to all of these. Smart home is definitely our best-selling product this year, and I believe that this trend will be carried over to the next year." Finally, Špoljarić also believes that integrated solutions are in the highest demand, adding that "last year, the most used software solutions were those which enabled the integration of all security systems (video surveillance, anti-burglary, key storage, etc.), fire protection systems (fire alarm and extinguishing, gas detection and others), as well as individual building management systems (lighting, distribution boxes, air conditioning, etc.).
Access Control Trends
When it comes to access control, three main trends were identified by Jantar: complex access control systems with enhanced protection and security (encrypted cards), upgrades of existing large systems (replacing outdated 125 kHz technology) and ERV (systems of all sizes) for improving organization and optimization, while at Špica Sustavi they focus on internally produced access and movement control systems focused on BLE and mobile keys. Another Slovenian provider of access control systems, Prima Systems, sees IP technology as the most important trend in this segment in 2017, together with electronic locks and handles and cloud solutions as an alternative. Finally, the essence of opting for certain piece of equipment is ultimately related to its quality. No matter how prominent a trend may be, it will not have impact on sales in the long run, if they are not approached by offering a quality product and professional service. Daniela Gogić concludes: "When choosing equipment, the focus is primarily on its quality, because it is only quality which will earn you a satisfied client. Furthermore, additional support from suppliers as well as warranty periods are extremely important to us. Prices are least important in the grand scheme of things."
After identifying trends that left their mark on the previous year, we wanted to know what we can expect from 2018. From individual profiling by introducing new services and expanding the offer to general market developments, all companies are committed to a single goal - working on offering better quality and more complex systems in this year. This is certainly a positive trend, which will further strengthen regional security industry and pave the way towards the European approach to business based on compliance with standards.
Going for Better quality and Higher Service Prices
"In the next year, our priority is to ensure safer environment and protection for citizens around the world and in the Adriatic region. We’ll continue to improve quality and reliability by continuously investing in human resources, manufacturing processes and research and development of new products and solutions," says Dahua’s Dejak. As one of the regional leaders in the field of physical security Securitas also intends to invest additional efforts in improving the quality of its services. They expect to see the market growing together with resulting higher prices as a necessary prerequisite for this. "In the field of economy, we look at 2018 with optimism. Therefore, we at Securitas hope to expand our portfolio. In addition to new sales, our sales department will focus on upholding existing contracts and raising the quality of our services. Improving service elements and quality of the deliverables are the prerequisites for raising the prices which are extremely low on the local market," says Gogić.
Similar situation with low prices of products and services has also been recognized at Alarm Automatika, but they stress that, at the same time, there emerges a market segment that demands more expensive and more reliable solutions: "It is already evident that there is a growing demand for cheaper (but easily available) solutions whose shortcomings are compensated for by lower prices offered by security installers, as well as demand for renowned brands by users for whom it is important that the security systems they use are primarily reliable. We expect to see a sort of division among the products that will be grouped into cheap and professional solutions." When it comes to professional solutions, Dobnikar believes that "the emphasis should be placed on educating users and clearly explaining the value of the system that was recommended/purchased", that is on explaining the total cost of ownership of a quality security solution. Unfortunately, the consequence of having low prices and, consequently, low-paid qualified workforce is the increasing number of professional personnel that leaves for more developed European countries, which impedes faster overall growth of the market.
EU Funds and Enforcement of New Regulations as Requirements for Growth
At AFP, they link the expected growth in Bosnia and Herzegovina with the coming election year in which the politicians will "start new projects in order to secure investments and persuade the voters that they are doing something." At Sony, however, they believe that "the enforcement of new regulations will improve the business prospects for companies that deal with equipment sale and installation," while the representatives of Antenall link the expected growth to the pre-accession EU funds which will give real impetus to new investments. "In 2018, we expect to see growth in the security equipment and system market, as the path to the EU accession gives us access to funds and investments for the modernization and automation of transport, cities and other institutions, while we also expect to see the trend involving analysis and processing of data for achieving better business results in the private sector," says Rusić.
Unifying Physical and Logical Security
Continuation of positive growth trends in the security market in 2018 is also expected at Avigilon and KING ICT, with the representatives of these companies stressing that we are facing increasing risks and threats, not only of the physical nature, but which are predominantly coming from the cybernetic space. "This requires significant shift in the approach to the issues related to security and the manner of action," says Mandić. Everyone in the supply chain will have to devote more attention to this issue, because one’s business credibility can depend on a potential cyber attack in the future. At Sector Security, they confirm that the activities aimed at facing up to his challenge are already under way. "Our company’s experts have singled out the coming year as a year of technical and technological innovations. We believe that it is important to introduce new technologies, new solutions and higher level of security and efficiency by using innovative methods and new approach to addressing not only everyday but strategic challenges as well. Sector Security will offer novelties that will aim to improve the perception of security and protection, especially among the most vulnerable segment of our society - children and young people. There are also new solutions for corporate security related to cyber security," says Stanojević.
IoT, Cloud, Metadata...
When it comes to technological trends that await us, our experts are up to date with what is happening at the global level and they foresee faster implementation of the state-of-the-art systems in our region as well. These are artificial intelligence, Internet of things, cloud storage, better integration, advanced video analytics, processing of large volumes of data and cyber security. "The future surely belongs to IoT and cloud technology and the speed of their implementation depends on the environment in which a project is being implemented. In short term, I think that the following parameters will be essential for the selection of equipment: integration with other security systems, video analytics, cyber security and GDPR certification, turnkey delivery of equipment and ultra low light cameras," they say at Sony. Their colleagues at Špica share this view: "The expectations for 2018 include continuing market growth. We are discovering that the region follows global trends. The focus is on further advancements in technology, IoT, and cloud solutions."
Artificial Intelligence in the World of Security
Market expects faster development of video analytics and artificial intelligence, which made a major step forward in the security industry in 2017, according to our interviewees. They also add that the demand for integrated systems will continue to be in focus. "In my opinion, more work will be done on the integration and more complex systems. Also, AI comes with security because you have new hardware that will familiarize our region and users with AI better," says Pičulin. Špoljarić adds: "In 2018, we expect for the positive trends to continue, as well as to see novelties in the field of video analytics and processing of large volumes of data." Šurmanović explains the added value of having a complete solution which includes cameras with video analytical capabilities: "Axis manufactures its own processor platform which enables us to process video analytics on the camera itself. The server is relieved of the burden and it is no longer used for video stream processing and analyzing, but rather for collecting pre-processed data from the camera, as it practically only displays them now, which consumes incomparably less resources. We offer our own line of S10 and S20 servers, including Axis Camera Station video surveillance system, operating system and licenses. We have outlined the direction we want to go in - we want to become provider of a complete solution and we will continue to work towards achieving this goal." Although our region has not faced major terrorist incidents, societies across the Europe and the globe are increasingly facing this phenomenon, so it is highly likely that "integrated security systems will be focused on protection against terrorism," according to Bjelotomić.
Access Control in the Mobile World
As far as access control is concerned, its development at the global and regional level is clearly marked by mobile device migration, interconnectedness with other systems, as well as stronger impact of the smart home market. Urška Binter from Prima Sistemi expects to see seven to ten percent growth in the international markets, with the focus on offering Software as a Service (SaaS) solution, while Grušovnik from Jantar says: "I hope for continued growth, stronger role for new technologies (access control and time and attendance with NFC, Bluetooth, mobile phones), development of mobile applications, linking access control with online booking portals such as Booking.com, development of smart home devices, automation, energy efficiency." It is clear that access control, like other segments of this industry, will follow in the footsteps of global developments, so we can expect increased early adoption of mobile device credentials, integration with other systems, etc.
Instead of Conclusion
In the end, the fact that the Adriatic region's security market is making progress in all of its segments and countries is surely a reason for optimism. The views presented by our interviewees, all sixteen of them coming from the leading regional or global companies operating in this region, are a relevant indicator of the situation since they base and develop their business on feeling the pulse of the market and staying up to date with the technological trends in the field. The region is following in the footsteps of innovations which are taking place in developed countries. Unfortunately, the overall economic growth is not at the level that can make such progress go even further, but the security market certainly stays ahead of many other industries in the Western Balkans, which is ultimately of crucial importance for our societies. In 2018, we can join our interviewees in hoping for even better situation of which we will continue to regularly inform you as a regional publication.