State of the Market: Access Control 2018

The following is an excerpt to an article published in SDM regarding the State of the Access Control Market, including quotes by ASG's President Phil Aronson, and ADT's VP of Operations Ken Shafenberg. 

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There is a frequently used analogy when it comes to the access control space, particularly at the larger, enterprise level: Big ships don’t turn around quickly or easily. For the last several years access control manufacturers have continued to innovate and promote new solutions and technologies (from wireless readers to big data, mobile credentials to cloud solutions, and more). But unless they were interested in being early adopters or living life on the “bleeding edge,” cautious end users seemed to adopt a wait-and-see attitude, for the most part remaining happy with their existing systems.

But this year, for the first time, manufacturers and security integrators that work in that space reported a refreshing change in attitude, and an increased interest in hearing about and actually buying and implementing new solutions to solve their pain points.

Jimmy Dearing, lead analyst for electronic access control for the research firm IHS Markit, London, U.K., says his company measures the access control market performance at a steady but modest 6 percent growth between 2016 and 2021. And SDM’s own research, the 2018 Industry Forecast Study (conducted in November 2017) also shows a relatively steady impression of the access control market with 75 percent of respondents describing it at the time as good to excellent, and 74 percent predicting the same for this year.

If responses from more than 30 manufacturers, integrators and other industry practitioners are any indication, share-of-revenue from access control may be picking up. Many reported business to be well above single-digit average, and some even noted access sales eclipsing video.

While a few did report a slowdown in construction, particularly in the office sector (something Dearing says IHS is also seeing), much of the market at the top end is based on retrofit or expansion; so those that were able to convince enterprise customers that it was time to move off the dime saw healthy growth.

“Business was definitely up in 2017 over 2016,” says Brian Thomas, president and CEO of Irmo, S.C.-based A3 Communications, an integrator that primarily focuses on the enterprise space. “We increased top-line overall revenue by almost 20 percent. As far as access control growth, that probably grew at a faster pace than even video surveillance.”

Bill Bozeman, CPP, president and CEO, PSA Security Network, Westminster, Colo. (featured on this month’s cover), saw similar indications from PSA members, who make up one of the largest security and audio-visual systems integrator cooperatives in the world. “Our percentage of growth was better than the industry norm, which is good for us and for our integrators,” Bozeman says. “As far as percentage growth it is real interesting. According to the big statistics, video is growing faster than access control and we have had that as well; but I will say that our access control percentage (last year) was high compared to video …. High-end integrators are doing well with access control, which has been a change for the better.”

Derek Arcuri, product manager for access control, Genetec, Montreal, also reported strong sales in the access control space. “We had another record year at over 40 percent growth in our access control product line,” he says. “Some of the reasons why are the confidence from larger sites that share our vision. More and more, customers are starting to see the value in distributed architecture with cost-effective appliances.”

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Another approach that has gained traction in recent years is that of non-proprietary systems. This was helpful for open-source hardware manufacturer Mercury Security, whose growth significantly outpaced the industry average, according Matt Barnette, vice president of Mercury Security and HID global accounts, Long Beach, Calif. “The economy is certainly a big driver. Most companies that are big users of security equipment are doing well; and when they are having good economic times they tend to invest. But specifically in the security industry, there is a trend to open systems,” he says.

The market didn’t just move at the top end, however. The bulk of the access control market is the small and medium businesses or enterprises (SMB/SME). Recent years have seen more options for these customers than in the past, from more affordable wireless online and offline locks, to cloud solutions that make it easier on the end user while offering RMR for the security integrator.

SDM asked, “How would you rate the current (2017) state of the market and the potential for sales (2018) in the access control market?”

More than three-fourths of respondents expect the access control market to be “good” or “excellent” in 2018.
In fact, Dearing says, according to IHS the access-as-a-service market is experiencing double-digit growth. “Access control as a service will grow the penetration of electronic access control in those smaller installations,” he predicts. Those who offer it are already seeing that.

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