electronic home security: unlocking the opportunity · electronic home security: unlocking the...

1 Tata Strategic Management Group

Electronic Home Security: Unlocking the Opportunity

The increase in security concerns has led to an increased demand for sophisticated solutions. However

most of the solutions are focused on securing large premises and critical installations. Home security

solutions have grown to be a significant part of the market elsewhere in the world. Similar growth in

India would need collaboration between players having complementary capabilities, say K.Raman

Practice Head – Infocomm, Media & Education, Gunjan Gupta and Mayurpankhi Barooah of

Tata Strategic Management Group

The increase in security concerns has led to an

increase in demand for sophisticated electronic

security solutions. A recent study by Frost &

Sullivan estimates the market size of the

electronic security industry to be around USD

220 Mn in FY08 in India, which is projected to

grow at 40% per annum over the next 3 years.

Our estimates indicate that electronic security

solutions of large premises constitute close to

95% of this market currently. The electronic

security market in the US in 2006 was estimated

to be about $25 bn out of which the electronic

home security market was about $10bn. This

clearly suggests that there is a large potential

for home security solutions to grow rapidly in

India.

CONSUMER: SECURITY NEEDS

For a consumer, prevention is the ideal way to

avert a security breach. However, complete

prevention of all security threats is next to

impossible. This necessitates provision of early

detection of the security breach followed by

transmitting the required information to the

relevant individual / party as early as possible.

This needs to be further complemented with an

appropriate response (damage control) to

minimize the possible damage. Thus a security

solution providing for Prevention, Early

Detection, Quick Transmission and a mechanism

for Appropriate Response delivers high value for

the consumer.

An evaluation of currently available measures to

meet the home security needs reveals that

these address the need for prevention (Refer

Exhibit 1). Traditional measures, like locks and

extra doors by themselves do not address the

facets of detection, transmission and response.

Even newer solutions like video door phone do

not have the capability to address all facets of

the ideal solution.

Hence these conventional measures need to be

augmented by an electronic security solution

that functions like a monitored burglar alarm

system and additionally provides ‘Appropriate

response’.

However, such a solution is currently limited by

two factors. One is the price of the equipment

required to capture images that can be

transmitted over communication networks, eg.

IP cameras / networkable DVRs. The second is

the availability of sufficient bandwidth to

transmit these images over both wired and

wireless networks.

Rapidly evolving technology has ensured that

the IP enabled cameras and DVRs will

progressively get more affordable. Similarly


��

A Burglar Alarm System backed-up by a monitoring station which alerts the pre-decided individual / agency to take instructions and contacts relevant authority (police / fire brigade etc.)

Burglar Alarm System (Monitored)

��

Sensor based system to detect intrusion. Can have additional sensors to detect fire / gas leakage / other emergencies

Burglar Alarm System (Bells only)

��

Device that allows people at home to see and communicate with visitor at the door

Video Door Phone

��Metal grill to provide additional protection against intrusion

Grill

��

Additional door to be able to see & communicate with visitor at the door

Double door

Appropriate Response

Quick Information Transmission

Early Detection

PreventionFunctionalityProduct / Solution

Exhibit 1: Existing Home Security Measures / Devices

© Tata Strategic Management Group

��

A Burglar Alarm System backed-up by a monitoring station which alerts the pre-decided individual / agency to take instructions and contacts relevant authority (police / fire brigade etc.)

Burglar Alarm System (Monitored)

��

Sensor based system to detect intrusion. Can have additional sensors to detect fire / gas leakage / other emergencies

Burglar Alarm System (Bells only)

��

Device that allows people at home to see and communicate with visitor at the door

Video Door Phone

��Metal grill to provide additional protection against intrusion

Grill

��

Additional door to be able to see & communicate with visitor at the door

Double door

Appropriate Response

Quick Information Transmission

Early Detection

PreventionFunctionalityProduct / Solution

Exhibit 1: Existing Home Security Measures / Devices


wireless broadband technology is expected to

be available very soon in the country in the form

of 3G and Wimax. Hence designing a solution

that addresses all facets in the near term looks

increasingly feasible.

However, companies looking to build a large

business in home security need to overcome

several challenges in defining a go-to market

strategy. Some of the significant challenges

would be

1. Design standardized products capable of

communicating over multiple networks,

eg., IP Camera, Digital Video Recorder

2. Identify channels for targeting home

customers, eg., Direct sales channel

capable of demonstration, sales and

installation at homes

3. Set up infrastructure for service, eg.,

After sales support for hardware,

handling false alarms

4. Create necessary tie-ups for appropriate

response, eg., Police Stations, Security

personnel

A single security solutions provider addressing

the above widely varying needs is difficult to

imagine. Companies looking for success in the

home security solutions market need to create

well defined long term collaborations with

service partners like telcos and security

manpower agencies to be able to deliver an end

to end solution.

A Monitored Alarm system consists of an Alarm

panel which is connected to various sensors that

can detect intrusion, fire, gas leakage etc (Refer

Exhibit 2). On occurrence of an alarm, the

Monitoring Station is alerted through a

telephone line which then ensures adequate

response by either alerting authorities or a

private manned guarding agency.

The remote monitoring system consists of an IP

camera which captures images of the

household. These images can be remotely

viewed through a wired broadband or cellular

network on a laptop or mobile phone by the

subscriber. Video monitoring can also be

undertaken by the Home Alarm Monitoring

Station through a broadband connection, if the

subscriber so desires, and can therefore provide

adequate response in an emergency.

While these are indicative examples of the

services and solutions that can be provided for

home security, there would be the need for


involvement of multiple players in delivery of

any home security solution that provides

prevention, early detection, quick information

transmission and adequate response.

Internationally, successful home security

companies have used alliances to deliver their

services seamlessly. Securitas Direct, the home

security arm of the USD 9.5 Bn Securitas, has

established multiple tie-ups to effectively

penetrate the home segment. Apart from using

its own sales force and local franchisees to build

its sales channel across countries in Europe, it

has tied up with construction, telecom and

insurance providers to target customers. It has

also used partners and franchisees to support

its installation and service network. Recently,

Securitas has tied up with Nokia to introduce

Securitas Safe-2-Go, a personal security service

that provides users with help in an exposed

situation and also gives increased security

through information regarding the location of

friends and family. It is backed up by the

Securitas alarm central which has information

about who is connecting, where this person is

located and which people related to the person

need to be contacted. Apart from providing

security features, it also helps locate and keep

in touch with friends and family.

Alarm companies in the US, such as Brink’s

Home Security, have also built their sales and

services networks through local franchisees. In

order to provide response to customers on

occurrence of alarms, they have been directing

emergency alarms to the police, fire and

ambulance services as need be. However, in

states where the Police do not respond to

alarms automatically without verification of the

emergency, Brink’s has tied up with private

security companies to provide the required

response. The customer is given the option to

avail of the services of private guard companies

on an additional monthly payment.

In the Indian scenario as well, alliances will

enable companies to leverage existing sales and

service infrastructure for home security

solutions. It is such value adding alliances that

can transform this niche opportunity into a large

and attractive one. Companies that collaborate

and provide the complete security solution will

emerge leaders in unlocking the home security

opportunity. © Tata Strategic Management Group

Self Remote Video Monitoring

IP Camera

Alarm Panel

Police / Fire Brigade /

Ambulance / Security guards

GPRS / 3G

Sensors

Home Alarm Monitoring Station

Telephone line

Broadband (for Images / Video)

Optional

Exhibit 2: Home Security Systems



IP Camera

Alarm Panel



GPRS / 3G

Sensors


Telephone line


Optional


IP Camera

Alarm Panel



GPRS / 3G

Sensors


Telephone line


Optional

Exhibit 2: Home Security Systems


Business

Optimization

Business Portfolio Review

Competitive & Growth Strategy, Country/India Entry Strategy

Strategy

Formulation

Business Due Diligence for M&A; Turnaround Strategy

Organization

Effectiveness

Performance & Talent Management

Design of Organization Structure & Roles

Capability Assessment & Development

Performance

Improvement

Integrated Cost Reduction, Profit enhancement

Business Process Improvement; Rightsizing

Logistics, Channel & Supply Chain Design

Business Risk Management

Input Cost Optimization

Market Share improvement, Spend Optimization

Business

Optimization

Business Portfolio Review

Competitive & Growth Strategy, Country/India Entry Strategy

Strategy

Formulation

Business Due Diligence for M&A; Turnaround Strategy

Organization

Effectiveness

Performance & Talent Management

Design of Organization Structure & Roles

Capability Assessment & Development

Performance

Improvement

Integrated Cost Reduction, Profit enhancement

Business Process Improvement; Rightsizing

Logistics, Channel & Supply Chain Design

Business Risk Management

Input Cost Optimization

Market Share improvement, Spend Optimization

Tata Strategic Management Group is a leading management consulting firm in South Asia. Set up in 1991, Tata

Strategic has completed over 500 engagements with more than 100 Clients across countries and industry sectors,

addressing the business concerns of the top management. We enhance client value by providing creative strategy

advice, developing innovative solutions and partnering effective implementation.

Nirmal, 18th Floor, Nariman Point, Mumbai 400021, India

Tel 91-22-66376712 Fax 91-22-66376600

Url: www.tsmg.com email: [email protected]

Nirmal, 18th Floor, Nariman Point, Mumbai 400021, India

Tel 91-22-66376712 Fax 91-22-66376600

Url: www.tsmg.com email: [email protected]

electronic home security: unlocking the opportunity · electronic home security: unlocking the...

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