IMS finds end users boosting budgets for physical security gear

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Wednesday, June 12, 2013

WELLINGBOROUGH, England—Budgets for physical security equipment continue to defy the sluggish economic recovery, with 45 percent of end users reporting that their security funding increased during 2012, according to a survey conducted by IMS Research, now part of IHS Inc.

The survey involved more than 200 responses from readers of Security Director News, primarily security managers, CIOs and risk managers representing end users from across North America. Forty-four percent said their budget for physical security equipment now exceeded $100,000 a year, with 20 percent reporting an annual budget of more than $500,000.

Niall Jenkins, manager of video surveillance and security services research at IHS, said the results show that end users continue to feel their facilities could be vulnerable and are willing to take steps to improve security. That offers “plenty of opportunity” for manufacturers.

“Budgets either stayed the same or increased last year for those that spent approximately $200,000 and also for 85 percent of the overall market,” he said. “I wouldn’t say that the security boom is over just yet.”

Jenkins said a perceived change in risk was the most influential factor when it came to installing or upgrading physical security equipment. The least influential factors were transitioning to more-open protocols and new product innovations, he told Security Systems News.

“Just having a budget available was actually one of the top two reasons for end users paying to replace or upgrade their systems,” he said.

IMS found that end users were split when it came to the time frame for security product upgrades and installations. One-third of the respondents said their company changes equipment every three years or less, one-third said between three and seven years, and one-third said more than eight years or on an ad-hoc basis.

Getting the funding to flow for physical security equipment while also satisfying end users isn’t without its hurdles for manufacturers, IMS reported. One important concern noted by researchers was that technological advances meant that the equipment purchased by consumers became unsupported too soon by manufacturers.

The survey also found that ineffective communication with installers and integrators could restrict further increases in security budgets for some end users.

“According to the survey, 85 percent of respondents felt that the security industry understood their specific requirements,” Jenkins told SSN. “However, this was not the case across all end-user industries, with over half of the transportation end users stating that the security industry did not understand their needs. One suggested response from the end users surveyed was to provide solutions more tailored to the specific requirements of the customer.”

Jenkins said the survey solidified trends seen in many IHS studies conducted during the past 12 months.

“We’ve been interviewing physical security equipment manufacturers since 2003, and while growth slowed [during the recession], they are still seeing growth across the different physical security markets,” he said.