Leading security companies increase market share


By Oliver Philippou, Senior Analyst, IHS Markit

Bottom Line
• The combined equipment and services market was estimated to be $123.67 billion in 2015.
• As the physical security market continues to consolidate, Tyco International was the largest supplier to the equipment and services market in 2015, comprising 3.8 percent of the market, followed by ADT at 2.9 percent, and the biggest mover, Hikvision at 2.5 percent.
• The equipment market consists of video surveillance, access control, intruder alarms, entrance control, consumer video surveillance, mobile video surveillance and body-worn cameras, and enterprise storage.

The services market consists of access control as a service (ACaaS), video surveillance as a service (VSaaS), remote monitoring services, and security systems integration.

Outlook and Analysis

Supply consolidation
The market share of the top 15 security equipment and services companies accounted for 21.4 percent of the equipment and services market in 2014, growing to 23.1 percent in 2015. According to the latest IHS Markit Physical Security Equipment and Services Report, these leading security companies will further increase their market share in 2016.

It is important to note that this market share estimate does not include mergers and acquisitions that have taken place in 2016, such as the merger of Tyco with Johnson Controls, the acquisition of Diebold’s North American electronics security business by Securitas, the acquisition of ADT by Apollo Global Management and merger with Protection 1 and ASG Security. These three deals will further expand the market share of the top 15 security companies.

However, it is not just large-scale acquisitions that are concentrating supply. Chinese firms like Hikvision and Dahua Technology have continued to grow much faster than the market average, not only in their domestic market but internationally too. Part of their success has been down to offering products at lower prices than their competitors.

In addition, single-product suppliers are increasingly being challenged by solution providers offering pre-integrated products. Integrators are increasingly leveraging single-vendor solutions to reduce installation costs and focus on the more profitable service and maintenance contracts.