IPfocus - IP UserGroup

IPfocus
IP UserGroup
Looks East for
New Opportunities
Following the success of the IP UserGroup operations
in the UK, USA and Latin America and in view of the
comments made by Memoori concerning the
opportunities in the BRIC countries (Brazil, Russia, India
and China) the IP UserGroup is now looking East.
IP UserGroup
International is
looking to expand its
offering East to the
Middle East and on to
India over the coming
months. As you will
be aware the
organisation is
already very strong in
Latin America with a
hub based in Quito Ecuador and has strong ties in
Brazil with an IP-in-Action LIVE event scheduled for
November in Sao Paulo.
We also have strong relationships with Russia via our
media partners Groteck and the ALL-over-IP event in
Moscow in the past.
India and the Middle East
Over the past months the IP UserGroup has been
looking very carefully at these regions and it is clear
that although there is considerable scope for the
deployment of IP Networked Security and Surveillance
technologies there is still a considerable need to
educate the Physical Security maket and the end-user
customers as to the benefits of such technologies -
Where have we heard this before?
Although we are investigating the opportunities in the
Middle East seeking partners in the six major countries
of Abu Dabi, Bahrain, Dubai, Quatar, Saudi Arabia and the
UAE, we are concentrating on India as our top priority.
Why IP UserGroup India?
A recent SIA India Security Market Report concludes
that the Indian Market for electronic security
technology is huge and revealed considerable
opportunities for investment and expansion. The
market size and growth rate are important indicators
of the development and sustainability of an emerging
market. The size of the Indian electronic physical
security market was $256 million in 2007 and with the
recent growth of some 30% year on year is projected
to exceed $750 million in 2012. This being led by a rapid
growth in CCTV, the largest product segment.
IP UserGroup’s Remit in India
Our role is to Facilitate, Communicate, Educate and
Influence, presenting the very latest in network centric
security and safety technology to this eager
technologically aware audience.
If you share our vision and wish to become involved in
the exciting IP UserGroup India project please contact
Paul Hennings on +44 (0) 870 7870 546, email
paul.hennings@ipusergroup.com or skype phennings
Physical Security Industry Delivered A
Stellar Performance in 2011 - Can It
Continue to Defy Gravity in 2012?
Physical security business in 2012 will look to emerging
markets, new technologies and M&A activity. In the last
two years, the physical security industry has given nothing
short of a stellar performance. While it will continue to
defy gravity in 2012, its performance will decline in some
important measures.
Future Growth From Bric Countries
The aftershock from the 2008 financial meltdown resulted
in sovereign debt problems in Europe that are now
receiving corrective actions. These will dampen future
demand for physical security equipment right across
Europe, particularly in the public sector.
However, the industry was faced with an even more dire
economic situation in 2008, but innovative companies did
not cut R&D. Instead, they applied new technologies and
developed more attractive products for clients. The
industry is stronger and we are optimistic that demand will
edge forward at a CAGR of 3.7 percent over the next five
years. This will depend upon the emerging markets,
particularly China and Asia, delivering higher growth rates.
Penetration of physical security systems in China and Asia
is more than one order of magnitude smaller, while
economic growth is at least three times faster than the
developed economies of North America and Europe. The
BRIC countries - Brazil, India Russia and China - will play a
major role in keeping demand growing and increase their
market share.
New Technologies
Five emerging technologies have created new business
opportunities. They are wireless communicat ions , IP
networking technology, video surveillance as a service
(VSaaS), managed video, analytics software and security
management software, including physical security
information management (PSIM) and physical identity and
access management (PIAM). The opportunity for these
technologies to create new business opportunities is
enormous, led by IP networking technology. There is a
good number of medium-sized companies, particularly in
video, that have developed cutting-edge products and
gained market share.
Consolidation And Organic Growth
M&A activity has grown at a compound annual rate of 12.5
percent over the last 10 years. During this time it has
peaked and declined twice, doubling value during the last
three years to reach its historic peak in 2011 of US$9.847
billion. We forecast the value of deals will decline by 2.5
percent in 2012, despite the fact that the security market
will grow by a similar amount, thanks to buoyant markets
in the BRIC countries.
In the last three years, the volume of deals has only
increased by 7 percent but the value has more than
doubled, thanks to a few large deals worth more than $1
billion combined. The two trends in the exit valuation
figures is that software and biometric suppliers, together
with alarm monitoring companies, have achieved the
highest valuations in 2011.
The Majors Review Future Strategies
The major multinational leaders have used merger and
acquisition as an important part of growing their business.
It is therefore
surprising that they
have almost
abandoned this
policy in the last two
years. There are a
number of reasons
why, but current exit
valuations is not one
of them, because
they are still well
below 2006-07 levels.
Most have positioned themselves toward the systems
business. This has not required major investment and
feeds off their heritage estate business, integrating from
other parts of their organization such as fire detection,
evacuation, mass notification and energy management. We
expect them to extend their interest in PSIM and PIAM
software to deliver system differentiation in the
integration business. One potential market is outsourcing
security services, as a result of reduced budgets in the
public sector. Through PSIM, PIAM and MVaaS, they would
have the ultimate service to offer, with little competition
from the smart innovative product manufacturers.
Investment Business And Security
At the start of 2011, the investment business expected to
return to normal. By September, confidence had drained. If
the current volatility in world stock markets is short-lived,
then the backlog of IPOs will go ahead. A repeat of 2008
when the IPO window closed down completely would have
serious consequences for the venture capital industry and
their recipients in security. In the first eight months of 2011,
only seven announcements of capital injections were made
in security, amounting to $85 million. Most of these
involved investment in US companies by US venture
capitalists.
Financing is available but there are plenty of high-tech
businesses chasing it. In the present climate, it is unlikely
the security industry will receive more than it did in the
last two years. However, established companies
renegotiated debt financing in 2010. This continued in the
first seven months of 2011, with five lines of credit
negotiated for $1.4 billion. All have been secured by alarm
and home automation installation and monitoring
companies in the U.S. Two confirmed the funds will be used
for acquisition purposes. Goldman Sachs Specialty Lending
Group made a $565 million line of credit to APX Alarm, now
renamed Vivint.
Few venture capital companies specialize in physical
security, as it is not the most attractive technology sector.
However there are segments that are particularly
attractive: information security, identity and security
solutions, and analytical software.
Despite economic problems, the market will continue to
grow in 2012. Growth will depend on geographic regions
and IP networking. Financing will become harder to obtain,
causing hardships to small- and medium-sized companies
unable to deliver ROI that clients demand.