Companies Must Diversify to take Advantage of Integrated Contracts

Growing competition and maturity in the European industrial and commercial security market is resulting in a shift towards integrated systems and services and increased market consolidation. In order to benefit from the lucrative growth opportunities in this sector, companies of all sizes need to establish a strong and diverse product and service portfolio. Capabilities to provide comprehensive facility management services, including customised requirements at affordable prices are likely to offer companies a distinct competitive advantage. Another key strategy is to develop a customer segmented business model that offers service and installation packages based on the specific needs of individual commercial segments.

This Frost & Sullivan research service examines the European industrial and commercial electronic security market. It discusses the various market trends and opportunities while providing market share analysis, revenue forecasts, and market drivers and restraints. The study enables companies to align their positioning strategies to benefit from the changing market conditions and obtain maximum return on investment.

Insurance and Legislative Demands Continue to Drive Security Markets

Meeting insurance requirements is expected to be one of the most significant drivers for the electronic security industry. "In some cases commercial and industrial end users must have a security system as an insurance prerequisite," observes the analyst of this research service. "Insurance premiums may also be significantly discounted to the point where installing security systems offer obvious financial benefits."

New European standards is another positive trend, especially for the upgrade and replacement market as end users seek compliant security systems. It also makes pan-European equipment sales cheaper as manufacturers no longer have to seek individual product approvals for each country.

Services and CCTV Markets Offer the Most Exciting Growth Prospects

Despite high sales volumes and declining growth rates in mature markets such as intrusion and detection equipment, companies are compelled to focus more on high growth markets such as closed-circuit TV (CCTV) and services to stabilise overall profits. "A decrease in the share of the product segments such as fire detection and access control does not necessarily mean falling demand, but indicates the strength of the services market and how the industry is targeting recurring revenue at the expense of some of the other segments," observes the analyst.

Apart from the CCTV market, all the product segments and the installation market are losing some share of revenue to the exponential growth in the services market. The growth in the CCTV market can be primarily attributed to recurring revenue from monitoring contracts and the undeveloped nature of the continental CCTV sector. Companies looking for exciting growth also need to explore new regions such as eastern Europe, new product/service ranges, such as digital recording equipment or the untapped residential markets.