Growing at more than double the global average of 5.5 percent, the Middle East has evolved into the fastest and the biggest market for security solutions, and it will contribute 10 percent to the global physical security market in 2020. Figures provided by global analysts Frost and Sullivan show that the Middle East physical security market is expected to be worth USD 10.9 billion by 2020, up from its 2014 level of USD 3 billion, growing by a very high 23.7 percent.
IHS technology “CCTV and Video Surveillance Equipment – Middle East – 2014” report stated that video surveillance has proved a strong industry in the Middle Eastern region, reaching over USD 390 million in spending in 2013 for the first time. Just in the UAE, video surveillance market is projected to reach USD 293.1 mn by 2021.
“Video surveillance was estimated to account for 55 percent of the Middle East’s USD 3 billion physical security market in 2014 with many end-users upgrading from analogue to IP-based systems.
The IP-based video surveillance started in the UAE and is slowly penetrating other parts of the GCC with multi-megapixel and intelligent video analytics. VSaaS – where video footage is captured by surveillance and stored on to the cloud – is another trend we anticipate will catch on fast in the Gulf region.
VSaaS is a powerful tool for shopping malls, multiplexes, automated teller machines, hotels, banks, airports, stadiums and so on, where a large amount of video surveillance can be stored and retrieved at any time,” explains Andreas Rex, senior show manager of Intersec, the world’s largest trade fair for the security, safety and fire protection industries.
Josh Woodhouse, senior market analyst for video surveillance from US-based global market research company IHS Technology expects the security industry in the GCC to continue its double-digit growth.
“For video surveillance we see demand for the latest high resolution cameras and high end management solutions. In large channel count installations in particular, high-end flexible server based data storage is the norm. In terms of the use of the data we see some of the longest retention times globally in the GCC region.
Typically in this region we see video surveillance footage captured at full resolution, full frame rates and stored often for six months or more. The GCC region is one of the fastest growing regions in EMEA for video surveillance equipment and this is expected to continue over the next five years at least.
The region was an early adopter of network technology for video surveillance and the high prevalence of this equipment in the region will continue to drive growth in video surveillance technology,” he says.
GCC at the forefront
Based on the pipeline of new and planned projects, MEED Insight estimates that spending on surveillance solutions, inclusive of equipment, software, design and installation services, across the GCC states’ core project sectors between 2014 and 2017 could reach USD 4.2 billion or an average of USD 1.04 billion annually.
These estimates exclude retrofit investments such as the multi-million dollar project being initiated by Saudi Arabia‘s GACA (the General Authority of Civil Aviation) to upgrade the security and surveillance infrastructure at the kingdom’s airports.
It also excludes city surveillance projects and operations and maintenance spending for existing infrastructure, says MEED. The paper also stated the capital investments in the form of equipment and software account for roughly 40 percent of the estimated spending, while services account for the remainder.
When it comes to segmented forecasts for various physical security markets, IHS predicts that the Middle East and African access control market will have a CAGR of 14 percent over next few years, while the data provided by Frost and Sullivan show the MEA access control market’s last year’s value was USD 200 million, and it is expected to reach close to USD 500 million in 2018.
The smart home is a mega trend for the security industry today: KippReport reveals that Middle East accounts for approximately 10 percent of the expected smart home market, which is expected to grow to more than USD 55.8 billion by 2020.
Technological advances have enabled smart cities, and the GCC member states have big plans: smart industries, smart government and smart cities all running on smart infrastructure. Market value of critical infrastructure protection (seaports, airports, metros, oil and gas facilities and petrochemical and industrial manufacturing, as well as the cultural and commercial buildings) in the Middle East is expected to reach USD 13.07 billion by 2018, while 21 percent of smart buildings will embed face recognition technology in surveillance and access control systems by 2018.
In Saudi Arabia, which is expected to become the largest market by revenue, homeland security market is forecasted to grow to USD 97 billion by 2018 making it the world’s second largest market after the United States. MEED’s research paper “Smart Surveillance in the GCC: Key trends and outlook” reveals that one of the most advanced non-military surveillance installations in the region is used to monitor the density of pilgrims during the annual Hajj in Mecca, Saudi Arabia. The system is designed to prevent accidents and stampedes when pilgrims cross over the Jamaraat bridge, where fatal crashes frequently occur.
The global homeland security and emergency management market is anticipated to reach USD 546 billion by 2022, with UAE, Kuwait, Saudi Arabia and China as the fastest growing homeland security and public safety markets in the world. Homeland Security is a top priority in the region, and the market for homeland security in the UAE will continue to grow as the government doubles its budget from USD 5.5 billion to USD 10 billion during the next decade.
“The large-scale homeland security and city surveillance projects are expected to contribute a major share in future spending on smart surveillance. In the UAE alone, the government has disclosed plans to spend USD 1 billion a year on homeland security over a 10-year period starting in 2015. A significant proportion of this planned investment will mostly likely be accounted for by integrated surveillance solutions,” MEED notes.
Looking into the future of the physical security industry in the GCC, Woodhouse says the key to success for the physical security companies in the region is to be able to leverage best of breed components to meet design objectives. “There are very few one-size fits all solutions in the security industry and taking the time and investment to tailor solutions for purpose provides the greatest success,” he said.
“Although the market is highly competitive, the GCC offers great opportunities for the global security, safety, and fire protection industries. By increasing awareness and understanding of enhanced productivity through technology integration, the GCC security market can continue on its high growth curve for many years to come,” adds Rex.