Structure and Shape of the Market
Of the three main businesses that make up the physical security market in Russia, Video Surveillance remains the biggest one and takes a share of around 45%. The Fire and Intruder Alarm business is quite close with 35% of market share. By some estimates though, it is likely to equal to 50% due to significant number of government customers and regular fire safety audits conducted by Fire Safety Inspecting Officers, among other reasons. The Access Control business takes 20% of market share.
Fire and Intruder Alarms
In 2017, the fire and intruder alarm market in Russia was likely to stick with the same size as in 2016. Much of that came from fire detectors as even existing installations have to be upgraded to meet the levels required by national codes. The market segment constituted from global fire and intruder vendors shrank more than others. In 2018, the Russian fire and intruder alarm market is expected to show zero growth, yet it is not predicted to end up with a decline as a consistent fire safety strategy is required by national fire codes for all types of businesses. An increase in residential and commercial construction as well as further developments in fire safety legislation will drive the fire and intruder alarms market in Russia.
Video Surveillance
The Russian video surveillance market delivered 5–10% growth in 2017. On the one hand, it has now reached the maturity stage where it just fails to show a faster gain. On the other hand, a growing demand for security systems in general prevents the market from stagnation or going negative. In 2017, much of the growth in the Russian video surveillance business came from IP and AHD solutions.
Sales in the software part of video surveillance business somewhat dropped: the local customer is interested in turnkey solutions fully packaged with software and hardware components. Many IP camera manufacturers provide free of charge VMS and basic video analytic software in their camera offering. The average prices in the market collapsed due to accelerating in sales of low-cost products which is itself a major obstacle to further development on the Russian video surveillance market. Anyway, growth might be driven by going beyond security strategies.
The market for video surveillance software is broken into two areas that are headed in different directions. The segment of low-cost VMS with limited functionality is shrinking due to a continued domination of out-of-the-box NVRs and free-of-charge VMS delivered by camera vendors. At the same time, sales revenues from larger integrated and intelligent video surveillance systems are growing rapidly. There is an increased number of installations with huge amounts of cameras where sophisticated functionality is required. This segment is driven dramatically by the drastic fall in the camera prices as the customer is able to afford more cameras for their installations. The local camera market is gaining faster in installed units rather than in value which is one of the reasons why the VMS business is outpacing the camera business. Murat Altuev, President, AxxonSoft
Access Control
In 2017, the Russian access control market grew by nearly 10% compared to 2016. The reason for the positive performance is put down to improvements in the country's macroeconomic environment. Yet, an access control system can occasionally consist of an electromagnetic or electromechanical lock and a controller, resulting in the meager share of the local security market. The total cost of such a solution is rather low but it sells best. Volume can be obtained by selling software, integrated solutions, IP intercoms, and mechanical barriers like turnstiles and automatic gates in case of new construction.
Penetration of new technology, a rise in new office buildings and shopping capacity as well as policies and regulations aiming at encouraging business will drive further growth of the access control market in Russia. The use of mobile access, biometric identification and integration software platforms are to enhance user experience and help businesses stay competitive against rivals.
Physical access control is logically evolving into universal access that takes in IT systems. Unfortunately, contemporary universal access systems do not cover cybersecurity and access to information assets while IAM solutions would be a natural mediate.
Security management software, IP controllers, readers and ID cards, turnstiles and road barriers helped deliver growth in access control in 2017 in Russia. The market is getting increasingly interested in integrated security systems, and access control often plays a central role in integrated security as a system with most sophisticated logic. Those who hang on to access control solutions based on outdated identification technology are currently struggling due to advanced security requirements to identification methods. Alexey Ginze, PR Director, AAM Systems
- Sizing the Russian Physical Security Business in 2017
- Top Trends That Shaped Physical Security Business in 2017