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14 companies own 57% share of the market

Memoori identifies 14 companies (Group A Companies, who have revenue over $1Bn) accounting for some $17.95 billion in product revenues in 2018. The inclusion of Hikvision and Dahua and this year Axis Communications has given new impetus to this group and the merger between Thales and Gemalto has produced a new mega Identity Management / Access Control biometrics company. The net effect of this is that this group has significantly increased its contribution and the average sales revenue is $1,282m giving them 57% share of the physical security market.

In the report, Memoori compares the performance of 16 different vertical markets in 2006 with 2018 and this shows there have been some significant changes during the last 10 years. The transport sector has almost doubled its share and at 16% is now the largest vertical. Many new opportunities have opened up, particularly for video surveillance, driven by the threat of terrorism and the need to improve safety and efficiency of traffic movements. Retail is the next largest sector with an 11.5% share. This vertical has shown how convergence with the business enterprise can improve the bottom line and is now regarded as an operational revenue saver by many of the world’s major retail companies.

VSaaS (Video Surveillance as a Service) has at last broken through the $1Bn barrier and is forecast to reach the $1.2Bn sales by the end of this year. Strong growth over the last 12 months has pushed hardware sales up by at least 50% and most forecasts predict demand will grow at a GAGR of 20% to 2023. There are a number of reasons for this. The first is that the supply side has put more effort and investment into providing VSaaS and ACaaS (Access Control as a Service) services and technology has overcome many limitations and reduced service costs. At the same time they are winning over system integrators to adopt cloud services and this has also provided a significant boost to growth.

Access Control is still a much smaller business than Video Surveillance and today is far less competitive, but consolidation is creating a more competitive environment and with it comes the confidence to move forward and take up the challenge of embracing new technologies that will deliver better performing products necessary to continue cranking up demand. If manufactures prefer to continue to be insular and proprietary, it will not be good news for continued growth, for traditional proprietary systems mean limited options for the customer and restricted possibilities for integration and scalability.

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