Physical Security Market

Updated on : April 15, 2024

Physical Security Market Size

The Physical Security Market was valued at $106.5 billion. Over the course of the projection period, the Physical Security Industry is anticipated to increase at a CAGR of 4.4%, rising from $110.2 billion in 2023 to $136.9 billion in 2028. The expansion of the physical security market can be attributed to a rise in malicious activities and security breaches to physical systems.

Moreover, the physical security market is experiencing growth due to the introduction of AI/ML-powered solutions and the digital transformation enabled by video security systems. These factors contribute to the market’s promising growth potential, providing organizations with enhanced physical security capabilities and proactive security measures.

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Physical Security Market Dynamics

Driver: Rise in instances of malicious activities and security breaches to physical systems

The rising terrorist activities and the growing crime rates have increased concerns over the safety and security of people, assets, and processes. These increasing attacks have led to the loss of several human lives and severe damage to infrastructure, highlighting the need for physical security solutions. High-profile terrorist assaults in public places, including stadiums, retail malls, and transit hubs, have brought attention to the significance of preserving public safety. More physical security measures are implemented in certain areas to safeguard locals and tourists. Terrorists now frequently attack critical infrastructure, including power plants, communication networks, and transportation systems. As a result, there has been a big focus on protecting these crucial facilities, which has led to the development of all-encompassing physical security systems. The necessity to combat evolving terrorist methods has pushed technological development in the physical security sector. Smart security systems, biometrics, and artificial intelligence have increased security protocols and enhanced threat detection skills. To prevent terrorist threats, governments all across the world have enacted stringent security laws and compliance standards. Owing to the standards that must be met by organizations, physical security measures are frequently employed.

Restraint: Considerable false alarm rates

False alarm rates have become a restraining factor for the growth of the physical security market. These alarms reduce the effectiveness of incident and emergency management solutions, making users lose confidence. False alarms can have various sources, including the environment, technological issues, or human mistakes. Security systems should be appropriately calibrated and routinely maintained to reduce the number of false alarms. Modern analytics and artificial intelligence can help minimize false positives by separating real security risks from non-threatening events. It can lead to the ignoring of real alarms. Physical security systems may maintain a low false alarm rate by combining technology solutions and suitable processes, ensuring that true security threats are discovered and efficiently countered.

Opportunity: Integration of technologies, such as AI, ML, and analytics, in physical security

Combining AI, ML, and analytics with surveillance offers unrealized possibilities, ranging from predictive crime to real-time identification of an ongoing crime or attack. How businesses safeguard their resources, employees, and infrastructure can be completely transformed by incorporating AI/ML and blockchain technologies into physical security systems. Advanced video analytics capabilities provided by AI and ML algorithms can automate and improve video monitoring. Facial recognition, object detection, and anomaly detection algorithms enable real-time identification of threats and suspicious activities, reducing response times and improving overall security. Based on past data, AI-powered predictive analytics may also foresee upcoming security problems, assisting security staff in proactively addressing weaknesses.

Challenge:High installation and maintenance costs for SMEs

The implementation of physical security solutions enhances business profitability in the long run. It is costly to deploy and maintain, which impacts the adoption rate of standardized incident and emergency management solutions. Physical security systems' high installation and maintenance expenses present substantial financial difficulties for small and medium-sized businesses (SMEs). Implementing a thorough physical security infrastructure requires several parts, including monitoring stations, access control systems, alarm systems, and surveillance cameras. The initial cost of buying and installing these systems and the required equipment and cabling can be high and may be out of reach for SMEs. The requirement for skilled employees to handle and monitor the security systems, routine maintenance, software upgrades, and other factors adds to the overall cost. Small and medium-sized enterprises (SMEs) frequently lack the resources, specialized security teams, and internal capability to manage sophisticated security operations.

Physical security Market Ecosystem

By vertical, retail, and eCommerce are expected to grow at the highest CAGR during the forecast period.

The retail and eCommerce verticals are a part of the country’s economy and deal with selling goods to customers through various shops, small grocery stores, supermarkets, large department stores, or the internet. Earlier, CCTV surveillance was a significant security measure in retail stores, which was used only for video surveillance to prevent theft. But now, the surveillance system is being combined with strong video analytics systems. Modern video analytics can count people and create heat maps. These maps will help to show which parts of the store generate the most foot traffic.

The industry processes a huge number of monetary transactions made via VISA, MasterCard, and other payment processing networks, which is also of the utmost value to cybercriminals. Any attack on the industry can lead to a huge monetary loss for individuals and organizations which leads to the adoption of comprehensive security systems and services.

By deployment mode, the large enterprises segment is expected to account for the highest market size during the forecast period.

Large businesses rely heavily on physical security solutions to safeguard their extremely important data. Large organizations are fast adopting physical security measures to safeguard their critical information against cyberattacks, data thefts, and unauthorized access. Large organizations and governments are being forced to improve their security systems on a regular basis due to the complexity of threats and the growth of sophisticated assaults. The risk of being a target of a cyberattack is greatest for large businesses that handle a lot of sensitive and private data. These dangers might cause significant monetary losses, information security events, and data breaches, which would increase the use of physical security services and systems.

By region, North America accounts for the highest market size during the forecast period.

North America Regarding the adoption of security infrastructure and technological development, North America is the most sophisticated and flexible area. The overall security of the regional infrastructures is governed by a number of security-related regulatory compliances. The National Institute of Standards and Technology (NIST) offers regulatory standards to safeguard organisations' critical infrastructures and supports US organisations. The PCI-DSS, HIPAA, GLBA, SOX, and other legal requirements aid organizations in safeguarding their clients' sensitive data. Additionally, it is anticipated that the region's physical security market will be driven by the presence of significant physical security market vendors.

Key Market Players

The key players in the physical security market are Johnson Controls (Ireland), Bosch Building Technology (Germany), Honeywell (US), ADT (US), Cisco (US), Telus (Canada), Wesco (US), Genetec (Canada), HID Global (US) and others.

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Scope of the Report

The study categorizes the physical security market by component, system, service, organization size, verticals, and regions.

By Component:

• System
• Service

By System:

• Physical Access Control System
• Video Surveillance System
• Perimeter Intrusion Detection and Prevention
• Physical Security Information Management
• Physical Identity and Access Management
• Security Scanning, Imaging and Metal Detection
• Fire and Life Safety

By Services:

• Professional services
• Managed services

By Organization size:

• SMEs
• Large Enterprises

By Vertical:

• BFSI
• Healthcare
• Government
• Retail & eCommerce
• Transportation & Logistics
• Residential
• Education
• Aerospace & Defense
• IT & ITeS
• Other Verticals

By Region:

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• Latin America

Recent Developments

• In February 2023, Johnson Controls announced a strategic partnership with Willow. Willow is a  leading provider of digital twin solutions for critical infrastructure and real estate. This partnership will digitally transform buildings and facilities into safer, healthier, and more sustainable environments for their customers and occupants.
• In June 2022, Honeywell Connected Life Safety Services (CLSS) partnered with Simpro to boost fire safety processes. To assist fire protection businesses in increasing productivity, compliance, and customer service, Simpro and Honeywell CLSS have integrated to automate essential defect quotation operations.
• In October 2021, ADT acquired Edward Electronic Systems. With the acquisition, ADT will expand its integration capabilities and fire and life safety expertise in new regions such as Carolinas.
• In April 2021, Bosch introduced the FLEXIDOME multi 7000i camera family offering. The offering is supported with built-in AI technology to support predictive solutions across application areas, such as public spaces and retail facilities. The intelligent video analytics capability based on AI/ML supports users to garner deep insights from the captured video footage.
• In February 2021, Cisco announced a strategic partnership with Openpath. This partnership includes a new Video Management System (VMS) integration with Cisco Meraki.

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