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Malaysia CCTV / E-surveillance
 

Malaysia CCTV / E-surveillance

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Frost & Sullivan analyst presentation on E-surveillance.

Frost & Sullivan analyst presentation on E-surveillance.

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    Malaysia CCTV / E-surveillance Malaysia CCTV / E-surveillance Presentation Transcript

    • Malaysia CCTV / E-surveillance Analyst Day Presentation Developed for July 2009 1
    • Table of Contents 1 1 Overview: Current Scenario & Global Security Overview: Current Scenario & Global Security 2 2 Malaysia - Market Dynamics, Size & Forecast Malaysia - Market Dynamics, Size & Forecast 3 3 Outlooks – Risks & Opportunities and Key Take Away Outlooks – Risks & Opportunities and Key Take Away 2
    • Table of Contents 1 1 Overview: Current Scenario & Global Security Overview: Current Scenario & Global Security 3
    • Genesis of Recession: From Financial Sector to Real Sector Defaults Lack of Trust in Financial Institutions Sub-Prime Mortgages Financial Institution Losses Lack of Capital Suspension of for Companies Interbank Lending Tightening Credit Markets $ Banks Slow Lending Down $ $ Lack of Lending for Small Business Slower Growth Lack of Retail Consumers Reduce Spending $ Credit $ Economy Slows Down/Contracts 4
    • How Fear Drove the Recession – Fear is Now Bottoming Out “The only thing we have to fear is fear itself.” -- Franklin Roosevelt 5
    • Global Security Threats • Economic decline in the region has attracted various global threats. • Translated to more potential of cyber crimes, thefts, security threats and so on. 6
    • Security Threat Targets TARGETS • Individual Parties Standard • Residential • Localized region Security Threats • Retail Stores • Banks • Organizations or Private Parties Syndicated • Shopping Malls • Localized region Security Threats • Office Complexes and so on • Large populated areas • Terrorist organizations GLOBAL THREATS • Targets that have global coverage Source : Frost & Sullivan 7
    • Global Security Global Security Market, 2008 LA & ROW 10% NA APAC 40% 16% EMEA Source : Frost & Sullivan 34% • The global security market includes surveillance, electronic access control systems (keys), intruder alarm, etc • In 2008 the global security market was approximately over US$16 billion with North America taking the lead in terms of revenue • Asia Pacific holds approximately 16% of total security market –with surveillance occupying the greater market share. 8
    • Evolution of digital/e-Surveillance Source : Frost & Sullivan • Video surveillance technology - gaining support from numerous governments in Asia Pacific in light of various security threat & protocols required for commercial complexes, public areas, shopping malls and so on. • Last decade has witnessed significant advances in the field of video surveillance systems • Single stand-alone systems to be fully integrated with network systems • IP - into the world of video surveillance, opens a plethora of new avenues 9
    • Traditional Security Monitoring Versus IP Video Monitoring Traditional Security/Analog Monitoring IP Video Monitoring COMPLEXITY SIMPLICITY LACK OF CONTROL CONTROL RISK OF HARD DISK CRASHES RELIABILITY LIMITED SCALABILITY Vs SCALABILITY LIMITED MOBILITY WIRELESS CAPABILITY LIMITED REMOTE ACCESS REMOTE ACCESS RISK OF LOSS SECURITY LIMITED TECHNOLOGY ENHANCED AUDIO CAPABILITY 10
    • Traditional Security Monitoring Versus IP Video Monitoring (Contd.) Video Surveillance Cameras Market: 100.0% Asia Pacific, 2008 80.0% Network Cameras 60.0% 10.8% 40.0% Analog 20.0% Cameras 89.2% 0.0% 07 08 09 10 11 12 13 14 15 16 17 18 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Network camera (%) Analog Camera (%) • Total APAC video surveillance market in 2008 was estimated at over US$ 1 billion. This industry is experiencing a gradual shift from traditional analog systems to networked IP-based surveillance systems • IP video surveillance is likely to gain traction in future. Cross over of technologies of analog to IP is expected to happen by 2014. It is predicted that in the next 10 to 15 years, IP-based systems will account for 51% of the market share. • APAC IP VS is estimated at $238 million in 2008 11
    • Market Drivers –IPVS Market IP Video Surveillance: Market Drivers Rank Driver 1 Development in standards encourage market for IP surveillance solutions 2 Positive growth in internet and broadband subscribers 3 Need for remote accessibility of real-time data expands the market for IP surveillance solutions 4 Improving and maturing technology for IP/network cameras, with existing technology’s drawbacks 5 Increasing Demand for IP Network Cameras, ability to be Interoperable with Other Devices 6 Reduced cost factors driving the market for IP surveillance solutions Source: Frost & Sullivan 12
    • Market Restraints –IPVS Market IP Video Surveillance: Market Restraints Rank Restraint 1 Complexity in installation and implementation of surveillance systems bars the adoption of IP surveillance systems 2 Resistance from the channel members hinders the market growth of IP systems 3 Need to create awareness in order to overcome customer apprehension about the technology with respect to bandwidth 4 Privacy concerns arrest the IP video surveillance market growth Source: Frost & Sullivan 13
    • Table of Contents 2 2 Malaysia - Market Dynamics, Size & Forecast Malaysia - Market Dynamics, Size & Forecast 14
    • Pest Analysis of the Malaysia Video Surveillance Market • Political : • Government guidelines to install video surveillance cameras in commercial buildings and public areas • Compliance & regulations in the financial services industry • Economic & Social: • With current economic scenario & global terrorist threats are leading to increased video surveillance equipment but with cautious spending on video surveillance equipment/products & services • Technological: • Emergence of IP has helped in driving the growth of the Surveillance Market • Advances in technology has not only led to improved features but also falling prices • High growth & penetration of IT infrastructure is aiding the growth of VS and IPVS market in this country 15
    • Malaysia IPVS 100.0% 80.0% Percentage (%) 60.0% 40.0% 20.0% 0.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year Australia China Hong Kong India Indonesia Japan Malaysia New Zealand Singapore South Korea Taiwan Thailand The Philippines Vietnam 16
    • Market Size and Forecasts – Malaysia IPVS 60.0 30.0 Revenue Growth Rate (%) Revenues (US$ Million) 40.0 20.0 20.0 10.0 0.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan Year • Both residential , large corporate and SMEs are embracing security services in a medium to large scale today. • Malaysia video surveillance market was estimated at over US$ 65 million in 2008 with CAGR of 27% by 2013 • It is still biased toward the analog solution model but is a progressive adopter of IP/network surveillance. In 2008 , the IPVS market in Malaysia stood at approximately over US$10 million, which is approximately 14% of the total video surveillance market. Issues with adoption of IP surveillance are two-fold. The high unit price, as well as installation costs are a huge deterrent. • Need for security, public safety, and cost efficiency during the financial decline will be key drivers for enterprises and institutions to consider the adoption of IP surveillance. High growth and penetration of IT infrastructure is aiding the growth of IP surveillance. Thus there is also growing interest in real time security via various medium such as via mobile phone camera monitoring 17
    • Key Verticals • Banks are the front runner s of IP-based solutions, as they consolidate security networks for central management nationwide • This country’s abundant natural resources, such as oil and gas and the industry being dominated by state-run companies uses sophisticated technology such as IPVS. Given its high commercial value, interest in high-end solutions has also gone up among state and private-owned oil companies • Tourism industry forms a vital source of IP VS revenue in Malaysia too. Implementation of such surveillance system at public gathering spots (e.g. stadiums, genting casino) brings about a more secure environment to the industry • Government stimulus packages ensure large-scale projects. Special allocations for housing construction and rehauling basic amenities provide largely untapped markets. • City surveillance and airports are also upgrading to IP solutions and wireless IP VS, along with health care. • Increasing interest from education sector too – schools and campuses are able to monitor the activities and movement of persons in and out of the school on-site, as well as remotely. This vertical has a very high growth potential. • Numerous number of incidents in parking lots of large building complexes . The Housing and Local Government Minister recently gave a directive that requires commercial buildings and public places with parking lots to install surveillance systems. This directive will lead to fruitful opportunities as many building owners still have not installed security cameras at their premises • Similarly at child and aged care centre. 18
    • Competitive Landscape- of IPVS in Malaysia • The competition is intense and polarized between the high-end Western and Japanese participants and the low-end Taiwanese, South Korean, and Chinese manufacturers • IP video surveillance products in Malaysia rely heavily on imports from China, Taiwan, and South Korea. Taiwanese products still have the upper hand in terms of price and performance. • Panasonic, in addition to Honeywell, also has a significant presence in the network cameras market. • Axis continued to dominate the IP/network camera market, closely followed by Sony & Bosch • Axis’ efforts to educate the market continued to help it stay ahead of the competition • Bosch Security, on the other hand, has had good success in the Malaysian retail sector. Bosch contributes to both cameras and video management software, significantly 19
    • Table of Contents 3 3 Outlooks – Risks & Opportunities and Key Take Away Outlooks – Risks & Opportunities and Key Take Away 20
    • SMEs in Malaysia An enterprise is considered an SME in each of the respective sectors based on the Annual Sales Turnover or Number of Full-Time Employees as shown in the table below. Category Micro- Enterprise Small Enterprise Medium Enterprise Manufacturing and • Sales turnover < • Sales turnover • Sales turnover related services and RM250,000 RM250,000 -RM10M RM10 M- RM25 M Agro- Based • Employees <5 • Employees 5-50 • Employees 51-150 Industries Services, Primary • Sales turnover < • Sales turnover • Sales turnover RM1 Agriculture, and ICT RM200,000 RM200,000- RM1 M M- RM5 M • Employees <5 • Employees 5-19 • Employees 20-50 Main concerns of Small Business owners include: • Burglary • Shoplifting • Robbery • Vandalism • Employee theft • Workplace violence / harassment • Employee productivity • Workers’ compensation issues 21
    • Assessment of Risk Factor and Opportunities High End users selection will be based on what is affordable, functionality and not standard convention Threat from Telco- Telco-main business declining Medium Traditional security exciting new products to companies need to offer increase customer customers innovative retention –e.g. network/mobile products & services surveillance Risk Factor Increasing internet & Broadband penetration Road to recovery Low Rate Often via SME Centric -Stability & cost of wireless Marketing network connection Low Medium High Opportunities 22
    • Genesis of Recession: From Financial Sector to Real Sector Defaults Lack of Trust in Financial Institutions Sub-Prime Mortgages Financial Institution Losses Lack of Capital Suspension of for Companies Interbank Lending Tightening Credit Markets $ Banks Slow Lending Down $ $ Lack of Lending for Small Business Slower Growth Lack of Retail Consumers Reduce Spending $ Credit $ Economy Slows Down/Contracts 23
    • What Does this Mean for Your Market? Economic Impact Analysis of the Physical Security (EACS & Surveillance) Industry • Fall in growth rates for security technology • Reduced growth outlook from 25-30 percent to 18-20 percent in 2008 and 2009 • Network-based technology to grow fastest at close to 15 percent • Decline in the size of traditional systems • Increasing migration towards future-proofing technology (megapixel cameras, NVRs, storage technologies like SAN, NAS, etc.) • Fall in demand for security products (must have vs. nice to have) • Reduced demand for video analytics • Delay in migration towards network-based access control • Delay in technology development for wireless applications 24
    • What Does this Mean for Your Market? (cont.) Economic Impact Analysis of the Physical Security Industry • Fall in prices of security technology • Industry Consolidation – Large vendors buying out small startups to boost product/service portfolio • Reduced investment in emerging technology – Lower number of initial public offerings (IPO’s) – Reduced venture capital funding for security startups – Increased number of bankruptcy filings in the market 25
    • What Can We Do About It? How to Grow in a Bottoming Market • Build security systems that clearly demonstrate cost benefits: – Using high-definition cameras to obtain the best images for evidentiary purposes – Reducing the number of cameras and hence reducing the capital expenditure on surveillance systems – Increasing the use of common platforms to build products to ensure interoperability and integration of various systems – Network-based systems have traditionally lower operating expenditure and this will help reduce the total cost of ownership – Reducing the operating costs for end users by investing in requisite technologies – Developing tools to demonstrate ROI of different systems – Educating channels and end users on the benefits and pitfalls of various systems 26
    • What Can We Do About It? (Cont.) How to Grow in a Bottoming Market • Increase migration towards network-based security systems – Migrate towards network-based technology to increase end user ROI – Use of video surveillance systems as evidence against lawsuits – Improving reaction times to threats with complete situational awareness – Use of pre-defined policies to manage threats and incidents – Use of security systems to predict/prepare for future events • Identify opportunities in service offerings • Forge alliances/partnerships to leverage strengths • Uncover Op-ex budgets that can fund Cap-ex expenses via leasing/rental, etc. • Developing payment plans to spread the cost of systems over the life of products • Increasing the use of warranties and after-sales services to reduce capital expenses over the life of security systems 27
    • Where Will The Opportunities Be? Key End-Users in the Physical Security Industry to Focus On Sectors with highest total growth potential 1 Banking and Financial Services High 7 2 Corrections CAGR for Vertical Markets (>10%) 3 5 6 3 Education 2 4 Gaming and Casinos 9 Medium 5 Government (5-10%) 4 6 Healthcare 7 Infrastructure 1 Low Retail and Commercial 8 8 (0-5%) 9 Event Security Small Medium Large Market Size of Vertical Markets 28
    • What Will Catalyze the Turnaround? Drivers for the Physical Security Industry More powerful products and intelligent video surveillance Open platforms Migration from analog to IP technologies Integration of security products and building systems Proving ROI with end-users and gains in price/ performance Reducing the cost of storage while increasing capacity 29
    • How Can We Get in Front of the Turnaround? Best Practices the Physical Security Market • Invest in Technology – Technology Development – Product development to ease end user challenges – Integration of disparate products into a complete solution • Maintain constant communication with existing end users regarding upgrades • Maintenance contracts and deferring expensive upgrades • Establish partnerships with other vendors • Ensuring interoperability of products • Building product portfolio to provide customized comprehensive solutions • Build the brand through targeted efforts by Marketing and Sales • Communicating the brand message • Company positioning as a partner to help end users through this tough economic time 30
    • Thank You • Prepared by: Jafizwaty Ishahak (Research Manager, Electronics & Security & Smart Cards, APAC) • email ID: jishahak@frost.com 31