malaysia cctv / e-surveillance
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Table of Contents
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33
Malaysia - Market Dynamics, Size & ForecastMalaysia - Market Dynamics, Size & Forecast
Outlooks – Risks & Opportunities and Key Take AwayOutlooks – Risks & Opportunities and Key Take Away
11 Overview: Current Scenario & Global SecurityOverview: Current Scenario & Global Security
3
Table of Contents
11 Overview: Current Scenario & Global SecurityOverview: Current Scenario & Global Security
4
Genesis of Recession: From Financial Sector to Real Sector
Defaults Lack of Trust in Financial Institutions
Tightening Credit Markets
Banks Slow Lending Down
Slower Growth
Financial InstitutionLosses
Lack of Lending forSmall Business
Lack of RetailCredit
Consumers Reduce Spending
Economy Slows Down/Contracts
Sub-Prime Mortgages
$
Lack of Capitalfor Companies
Suspension of Interbank Lending
$
$
$
$
5
How Fear Drove the Recession – Fear is Now Bottoming Out
“The only thing we have to fear is fear
itself.”
-- Franklin Roosevelt
6
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.
7
Security Threat Targets
Source : Frost & Sullivan
• Residential
• Retail Stores
• Banks
• Shopping Malls
• Office Complexes and so on
TARGETS
• Individual Parties
• Localized region
• Organizations or Private Parties
• Localized region
Standard Security Threats
SyndicatedSecurity Threats
GLOBAL THREATS• Large populated areas
• Targets that have global coverage• Terrorist organizations
8
Global Security Market, 2008
EMEA
34%
APAC
16%
LA & ROW
10%
NA
40%
Global Security
Source : Frost & Sullivan
• The global security market includes surveillance, electronic access control systems (keys), intruder alarm, etc
• In 2008 the global security market was approximately over US$16 billion with North America taking the lead in terms of revenue
• Asia Pacific holds approximately 16% of total security market –with surveillance occupying the greater market share.
9
Evolution of digital/e-Surveillance
Source : Frost & Sullivan
• Video surveillance technology - gaining support from numerous governments in Asia Pacific in light of various security threat & protocols required for commercial complexes, public areas, shopping malls and so on.
• Last decade has witnessed significant advances in the field of video surveillance systems • Single stand-alone systems to be fully integrated with network systems • IP - into the world of video surveillance, opens a plethora of new avenues
10
Traditional Security Monitoring Versus IP Video Monitoring
ENHANCED AUDIO CAPABILITYLIMITED TECHNOLOGY
SECURITYRISK OF LOSS
REMOTE ACCESSLIMITED REMOTE ACCESS
WIRELESS CAPABILITYLIMITED MOBILITY
SCALABILITYLIMITED SCALABILITY
RELIABILITYRISK OF HARD DISK CRASHES
CONTROLLACK OF CONTROL
SIMPLICITYCOMPLEXITY
IP Video MonitoringTraditional Security/Analog Monitoring
Vs
11
Traditional Security Monitoring Versus IP Video Monitoring (Contd.)
Video Surveillance Cameras Market:
Asia Pacific, 2008
Network
Cameras10.8%
Analog
Cameras89.2% 0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Network camera (%) Analog Camera (%)
• Total APAC video surveillance market in 2008 was estimated at over US$ 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
12
Market Drivers –IPVS Market
Increasing Demand for IP Network Cameras, ability to be Interoperable
with Other Devices
5
Development in standards encourage market for IP surveillance
solutions
1
Positive growth in internet and broadband subscribers2
Need for remote accessibility of real-time data expands the market for
IP surveillance solutions
3
Improving and maturing technology for IP/network cameras, with
existing technology’s drawbacks
4
Reduced cost factors driving the market for IP surveillance solutions6
DriverRank
Source: Frost & Sullivan
IP Video Surveillance: Market Drivers
13
Market Restraints –IPVS Market
Privacy concerns arrest the IP video surveillance market growth4
Need to create awareness in order to overcome customer apprehension
about the technology with respect to bandwidth
3
Resistance from the channel members hinders the market growth of IP
systems
2
Complexity in installation and implementation of surveillance systems
bars the adoption of IP surveillance systems
1
RestraintRank
Source: Frost & Sullivan
IP Video Surveillance: Market Restraints
14
Table of Contents
22 Malaysia - Market Dynamics, Size & ForecastMalaysia - Market Dynamics, Size & Forecast
15
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
16
Malaysia IPVS
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Pe
rce
nta
ge
(%
)
Australia China Hong Kong India Indonesia Japan Malaysia
New Zealand Singapore South Korea Taiwan Thailand The Philippines Vietnam
17
Market Size and Forecasts – Malaysia IPVS
0.0
20.0
40.0
60.0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
Re
ve
nu
es (
US
$ M
illio
n)
0.0
10.0
20.0
30.0
Re
ve
nu
e G
row
th R
ate
(%
)
Note: All figures are rounded; the base year is 2008. Source: Frost & Sullivan
• 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
18
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 andrehauling 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.
19
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
20
Table of Contents
33 Outlooks – Risks & Opportunities and Key Take AwayOutlooks – Risks & Opportunities and Key Take Away
21
SMEs in Malaysia
Main concerns of Small Business owners include:
• Burglary
• Robbery
• Employee theft
• Employee productivity
• Shoplifting
• Vandalism
• Workplace violence / harassment
• Workers’ compensation issues
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 related services and Agro- Based Industries
• Sales turnover < RM250,000
• Employees <5
• Sales turnover RM250,000 -RM10M
• Employees 5-50
• Sales turnover RM10 M- RM25 M
• Employees 51-150
Services, Primary Agriculture, and ICT
• Sales turnover < RM200,000
• Employees <5
• Sales turnover RM200,000- RM1 M
• Employees 5-19
• Sales turnover RM1 M- RM5 M
• Employees 20-50
22
End users selection will be based on what is affordable,functionality and notstandard convention
Telco-main business decliningexciting new products to increase customerretention –e.g. network/mobilesurveillance
Threat from Telco-Traditional securitycompanies need to offercustomers innovativeproducts & services
Road to recoveryOften via SME Centric
Marketing
Increasing internet & Broadband penetration
Rate -Stability & cost of wireless
network connection
Low Medium High
Hig
hM
ed
ium
Lo
w
Opportunities
Ris
k F
acto
rAssessment of Risk Factor and Opportunities
23
Genesis of Recession: From Financial Sector to Real Sector
Defaults Lack of Trust in Financial Institutions
Tightening Credit Markets
Banks Slow Lending Down
Slower Growth
Financial InstitutionLosses
Lack of Lending forSmall Business
Lack of RetailCredit
Consumers Reduce Spending
Economy Slows Down/Contracts
Sub-Prime Mortgages
$
Lack of Capitalfor Companies
Suspension of Interbank Lending
$
$
$
$
24
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
25
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
26
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
27
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
28
1
36
9
5
8
7
4
2
Small Large
Market Size of Vertical Markets
Low(0-5%)
High(>10%)
CAGR for Vertical Markets
Medium
Medium(5-10%)
Sectors with highest total growth potential
Banking and Financial Services1
Education
2 Corrections
3
Gaming and Casinos4
5 Government
6 Healthcare
7
8
Infrastructure
9
Retail and Commercial
Event Security
Where Will The Opportunities Be?Key End-Users in the Physical Security Industry to Focus On
29
What Will Catalyze the Turnaround?Drivers for the Physical Security Industry
Migration from analog to IP technologies
More powerful products and intelligent video surveillance
Reducing the cost of storage while increasing capacity
Integration of security products and building systems
Proving ROI with end-users and gains in price/ performance
Open platforms
30
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
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