a&s International Nov. 2012 (Trial Version)

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Nov 2012

Special Feature

product exploration

induStry report

Vertical Market

Banks are responsible for the security of countless personal, corporate and national assets, making them obvious targets. Conditions in today's economy demand the most up-to-date security products and services available for the banking and financial services industry.

30

26 42 Security 50: Differentiate to Win

14 Contents18 Editor’s Note 20 Corporate News20 Market Observer108 Show Calendar 115 New Products118 Companies in This Issue

Counter Measures Against Fraudsters

Bank on It:

36 Trends that You Can Bank On

104 Networking Technologies Connect Home Automation/Media

Product Trends for 2013

Smart Home Technology Makes Life Simple92

Smart Home Technology Makes Life Simple

44 NOW: A Do-or-Die Moment 48 Manufacturing Excellence in Times of

Uncertainty 58 Security 50 Ranking 62 Security 50 Showcase 81 Tracking Security Industry Leaders for 10

Years ~ The 10th Anniversary of Security 50

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Special Feature


Special Feature


Video SurVeillance Multi-Megapixel

2012 was a fruitful year for multi-megapixel technology providers. In 2013, the market for high-resolution image quality keeps getting stronger. With the market becoming more saturated, there will be a price competition in the 1- to 3-megapixel camera segment. One such vendor is Arecont Vision, which launched an affordable 1.3-megapixel camera for value-conscious buyers. “Certain buyers have certain financial require-ments. So we provide them this cost-effective solution, but which still is a megapixel camera. We are expanding our product portfolios in megapixel solutions,” said Becky Zhou, VP of Sales at Arecont Vision, APAC. Other providers, such as Mobotix, are focused on developing cameras with megapixel counts above 3 megapixels to differentiate their product offerings.

Some early adopters of multi-megapixel technology are confident of its potential for casinos, retails, schools

and commercial buildings in the U.S. “These industries are adopting more high-definition cameras because image detail is critical to their business operations. For casinos being able to read cards and chips gives them the ability to find card cheats or dishonest dealers,” said Keith Marett, VP of Marketing and Communications at Avigilon. “Retail stores can’t depend on low-resolution cameras pointed at a fixed cash register to capture the transaction any longer, as mobile point of sales terminals are becoming more popular.”

“The education market was one of the first to realize the advantages of megapixel technologies as the security and safety of schools for both secondary and higher education is a priority,” said Steve Gorski, GM, Americas, Mobotix. “IP-based surveil-lance systems offer far more benefits than proprietary systems, such as remote access, video analytics, higher image quality and easily scalable systems, for example and the overall return-on-investment is much

greater.”IQinVision produces unique

varifocal lens for a mini dome camera with up to 2-megapixel resolution, which is targeted for health care, government and education sector. IQinVision provides a five-year warranty on all its entire line of dome cameras, which remains a rarity in the security industry.

High-resolution technology is a natural fit for LPR/ANPR applica-tions due to the sufficient amount of pixel density for better analytics. However, the 20- to 400-megapixel or gigapixel cameras are mostly used for niche and high-end applications. They are combined with panoramic viewing, for wide-area monitoring in border control or seaports.

SMart applianceSAll - in-one appl iances make

networking third-party products much easier. The highly fragmented nature of security products makes configuration and integration the biggest headache for system

Product Trends for 2013 a&s examines the latest video surveillance and access control solutions in 2012, which hold great potential in 2013. BY JILL LAI

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27NOV 201222 www.asmag.com 22

integrators as they are dealing with different hardware and software. Jeff Whitney, VP of Marketing and Business, Intransa, said, “Intransa’s clients just need to determine their configuration needs online or with a phone call. Then, Intransa will configure the NVR/server according to our clients’ cameras and VMS. Then, when the appliance goes to our clients, it is ready to use right away.”

“Our NVR will send notification of hard-drive failure to customers,” Whitney said. “System integrators usually won’t check their systems regularly. As soon as the system has problems, they won’t take the action immediately. So we leverage our technologies to ensure the health of the entire video surveillance system.”

Smart appliances provide the ease of use necessary for SMB applications. Access control, IP video and intrusion detection are combined in compact and scalable solutions to simplify and streamline security procedures. A Tyco solution supports remote monitoring, management and control over mobile devices, which is ideal for SMB owners.

therMal caMeraS with Video analyticS

Thermal cameras enable constant s u r v e i l l a n c e , m a k i n g t h e m a long-term staple for critical environ-ments but now also for commercial applications. “Recent advances in

thermal camera image processing have expanded their traditional role as night vision cameras to provide 24-hour outdoor security,” said John Romanowich, President and CEO, SightLogix.

An important development for thermal cameras is thermal WDR, which produces clear video despite challenging imaging conditions, such as when the camera is aimed toward the rising or setting sun. Other imaging challenges are when very hot objects enter the scene such as a fire, or very hot exhaust from a vehicle engine. Foreground and background image detail remain clear with FLIR WDR thermal cameras, which improve the probability of intrusion detection, and enhances the perfor-mance of video analytics.

Thermal cameras combined with video analytics enhance situational awareness, for wide-range detection applications, such as ports and maritime applications. “SightLogix systems can detect intruders despite background water movement or reflections, making them a uniquely capable solution for waterside environments,” Romanowich said.

Thermal cameras are deployed for critical infrastructure. In the U.S., government projects are coming back online, albeit fewer than in previous years. “One rapidly growing vertical market in North America is the electric power distribution

sector,” said Bill Klink, VP, Security and Surveillance of Commercial Systems for Flir Systems. “The Electric Power Grid is considered critical infrastructure. Therefore, many power companies are using thermal cameras for intrusion detection on the perimeters of their electric power substations and power distribution facilities. Government and industry regulations are fueling the growth of this vertical market.”

Klink said commercial market segments are also going to deploy more thermal cameras in the near future. “Over the past three years, many new commercial market segments have adopted the use of thermal security cameras for perimeter intrusion detection, including data centers and munici-palities for citywide surveillance,” he said.

new FaceS oF VMSVMS has become much more

standardized — “openness” is a standard feature for many VMS products. Future innovation for VMS will be in mobility, simple and Intuitive user interface, and PSIM-like features to enhance situational awareness, found IHS (formerly IMS Research) in its 2012 “World Market for CCTV and Video Surveillance Equipment” report.

Milestone maintained its presence in the upper market t ier and continues to expand to the SMB sector. “Milestone launched three user interfaces for the Web, PC and mobile devices — for advanced-to-simplified surveillance needs,” said Lawrence de Guzman, Director of Global Sales Operations at Milestone Systems. “Our entry-level VMS manages up to 26 surveillance cameras, and supports a new add-on feature, video push. It


▲ Becky Zhou, VP of Sales, Arecont Vision, APAC

▲ Keith Marett, VP of Marketing and Communications, Avigilon

▲ Jeff Whitney, VP of Marketing and Business, Intransa

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Product Management for Proximex. “Standards-based interfaces enable information to be more easily shared while PSIM systems enable the relevant information to be combined and correlated for organizations to make more informed security and business decisions.”

Next year, we can also see three tiers of PSIM systems evolving, which can be divided by their complexity. Adlan Hussain, Marketing Manager at CNL Software shared some of his findings toward these PSIM systems as follows:

"At the low end there are smaller easier to install systems for SME applications. These are most likely to be provided as a software service and deployed by traditional security installers. These may be described as PSIM Lite and may well be adaptions of ASC or VMS systems.

The next tier is high end PSIM solutions that deliver real business advantage by integrating to operation activities and adding value through increased use of security systems by other departments, be it facilities or

HR. These solutions a r e l i k e l y t o b e f o r h i g h s e c u r i t y applications, such as critical infrastructure protection or safe city programs.

T h e l a s t t i e r i s specialist vertical PSIM suppliers who have built up a template p ro d u c t a i m e d a t certain vertical markets. These are likely to be in verticals where the security challengs are fairly fixed, for example retail security, where there is requirement for integration of CCTV,

PoS data, RFID tagging and video analytics."

AcceSS controlWIreleSS

Physical access control is dominated by traditional mechanical locks and online management systems. The latter requires a high investment. Access control products are migrating from mechanical to online solutions with wireless technology, which complements existing mechanical and electronic access control systems. It provides a simple, intelligent way of upgrading them to high-level security and creates many innovative opportunities for many access control vendors. Assa Abloy released its new wireless solution to meet this need.

In the U.S., more than 40 million phones are expected to be near field communication (NFC)-enabled by the end of 2012, according to a report by Market Research. Nearly half of all mobile phones will be NFC-enabled by 2016. Assa Abloy introduced its commercial ecosystem for issuing,

delivering and revoking digital keys on mobile phones with NFC technology. With this ecosystem, mobile phones can replace mechanical keys and access cards and open doors to homes, hotels, offices, hospitals, universities, and industrial and commercial buildings. Ingersoll Rand Security Technologies also success-fully rolled out NFC-enabled campus credentials at the University of San Francisco’s campuses.

cloud-bASed AcceSS control Cloud-based access control manages

hundreds or even thousands of doors and provides end users with the freedom to remotely control and manage doors from anywhere. Hosted access control solutions are being adopted by large commercial applications, residential buildings and shopping malls. Brivo’s solutions can be tailored to the unique security needs of the end users. Property management and multiple-purpose buildings are new, growing markets suited for cloud-based access control, wrote Brivo in a prepared statement.

MultIfActor AuthentIcAtIonFor higher-level security clearance

in corporate or government buildings, multifactor authentication is a trend. More access control vendors provide more than one single authentication technology for better authentication. Innometriks provides a complete turnkey solution that implements multifactor technologies on next-generation “smart” creden-tials. Strong identity authentication verifies an individual’s identity using biometrics, public key infrastructure and digital signatures, providing greater protection of critical assets and sensitive information.

▲ Brian Lane, D irec tor of Produc t Marketing, 3VR

▲ Lindsay Hiebert, Senior Manager, Solutions Marketing of Emerging Technologies, Cisco Systems

▲ Adlan Hussain, Marketing Manager, CNL Software

▲ Larry Lien, VP of Product Management, Proximex

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Special Feature


allows one to extend mobile capabil-ities and use a mobile device as a video evidence collector. This feature enables one to push live video from a device's camera directly into the system giving immediate awareness of incidents no matter where they occur.”

Avigilon’s latest VMS offering united ideas from IT, Web design and video gaming. Meanwhile, taking inspiration from companies with server farms like Amazon, Google and Facebook, its VMS provides crash-proof enterprise server management. This enables all servers to operate as one unit, so there is no single point of failure.

“Two key markets for 3VR in North America are retail and banking. These verticals tend to want a 'black box' solution with the software pre-configured on the hardware, such as a VMS integrated into an NVR or HVR,” said Brian Lane, Director of Product Marketing at 3VR. "But, as we expand into other markets, customers tend to want more control over their hardware and the ability to expand the system and grow as needed. Therefore, we are releasing our VMS on COTS hardware beginning in early 2013 to allow more options for our customers. Whether a customer purchases a 3VR VMS with a 3VR NVR or to be installed on their own hardware, we offer analytics such as Facial Surveillance, LPR/ANPR, and

Demographics. The latter provides age and gender information of customers and can be integrated with PoS systems to provide valuable business intelligence."

Analysts estimate that by 2013, more than 50 percent of all video surveillance deployments will be managed by the IT department on the IP network to support the deluge of bandwidth-heavy video data. Cisco introduced its latest IP video surveil-lance solution to help IT and security teams to implement large-scale video deployments. “As IT departments are tasked with dealing with increasingly large amounts of data — particu-larly video — the ease of migration of video surveillance to IP continues to accelerate,” said Lindsay Hiebert, Senior Manager, Solutions Marketing of Emerging Technologies at Cisco Systems. “Leveraging Cisco’s strong network base and know-how, this platform can easily manage more than 10,000 cameras with video recording by using Cisco's end-to-end network video surveillance technologies, to manage and optimize bandwidth across network switches, routers, applications and endpoints.”

Genetec, one of the leading VMS providers, has the latest advances in its unified security platform, which blends LPR/ANPR, video surveil-lance and access control into one platform. Genetec's LPR/ANPR offering is a complete solution with

hardware and software for the police sector and parking enforcement. “We have many clients in the police sector. They require more technology for further law enforcement and investigation. With this solution, police can easily recognize the license plates of criminals and illegally parked vehicles. With the back-office management capabilities of the system, in-vehicle users are able to download all the latest hotlists and updates, providing the forensic information and evidence for later investigation to find the suspects,” said Chris Yigit, Product Manager at Genetec.

Honeywell’s latest enterprise-l e v e l V M S i n c o r p o r a t e s n e w features, such as support for wireless readers, new compliance reporting functions, and Web-based alarm and event management capabilities. “Optimizing business by using integrated systems is the new reality for most enterprise-level organiza-tions,” said Vince Lupe, Honeywell’s Enterprise Segment marketing leader.

PSIM With the standardization of security

and the growing need for multina-tional management, PSIM has good penetration for high-end projects incorporating IT network systems. Proximex is now the first PSIM vendor to support and adhere to the new Area Control Management standards specification, created by the Physical Security Interoperability Alliance (PSIA) for companies to effectively integrate multiple physical security systems. “Supporting these new specifications will allow Proximex to quickly and easily integrate with other access control, intrusion and video system vendors that also support these specifications,” said Larry Lien, VP of ▲�Steve�Gorski, GM, Mobotix, Americas ▲�Bill�Klink, VP, Security and Surveillance

of Commercial Systems , Flir Systems▲�Lawrence�de�Guzman, Director of

Global Sales Operations, Milestone Systems

M026-029.indd 28 2012/11/12 下午11:24


Product Management for Proximex. “Standards-based interfaces enable information to be more easily shared while PSIM systems enable the relevant information to be combined and correlated for organizations to make more informed security and business decisions.”

Next year, we can also see three tiers of PSIM systems evolving, which can be divided by their complexity. Adlan Hussain, Marketing Manager at CNL Software shared some of his findings toward these PSIM systems as follows:

"At the low end there are smaller easier to install systems for SME applications. These are most likely to be provided as a software service and deployed by traditional security installers. These may be described as PSIM Lite and may well be adaptions of ASC or VMS systems.

The next tier is high end PSIM solutions that deliver real business advantage by integrating to operation activities and adding value through increased use of security systems by other departments, be it facilities or

HR. These solutions a r e l i k e l y t o b e f o r h i g h s e c u r i t y applications, such as critical infrastructure protection or safe city programs.

T h e l a s t t i e r i s specialist vertical PSIM suppliers who have built up a template p ro d u c t a i m e d a t certain vertical markets. These are likely to be in verticals where the security challengs are fairly fixed, for example retail security, where there is requirement for integration of CCTV,

PoS data, RFID tagging and video analytics."

AcceSS controlWIreleSS

Physical access control is dominated by traditional mechanical locks and online management systems. The latter requires a high investment. Access control products are migrating from mechanical to online solutions with wireless technology, which complements existing mechanical and electronic access control systems. It provides a simple, intelligent way of upgrading them to high-level security and creates many innovative opportunities for many access control vendors. Assa Abloy released its new wireless solution to meet this need.

In the U.S., more than 40 million phones are expected to be near field communication (NFC)-enabled by the end of 2012, according to a report by Market Research. Nearly half of all mobile phones will be NFC-enabled by 2016. Assa Abloy introduced its commercial ecosystem for issuing,

delivering and revoking digital keys on mobile phones with NFC technology. With this ecosystem, mobile phones can replace mechanical keys and access cards and open doors to homes, hotels, offices, hospitals, universities, and industrial and commercial buildings. Ingersoll Rand Security Technologies also success-fully rolled out NFC-enabled campus credentials at the University of San Francisco’s campuses.

cloud-bASed AcceSS control Cloud-based access control manages

hundreds or even thousands of doors and provides end users with the freedom to remotely control and manage doors from anywhere. Hosted access control solutions are being adopted by large commercial applications, residential buildings and shopping malls. Brivo’s solutions can be tailored to the unique security needs of the end users. Property management and multiple-purpose buildings are new, growing markets suited for cloud-based access control, wrote Brivo in a prepared statement.

MultIfActor AuthentIcAtIonFor higher-level security clearance

in corporate or government buildings, multifactor authentication is a trend. More access control vendors provide more than one single authentication technology for better authentication. Innometriks provides a complete turnkey solution that implements multifactor technologies on next-generation “smart” creden-tials. Strong identity authentication verifies an individual’s identity using biometrics, public key infrastructure and digital signatures, providing greater protection of critical assets and sensitive information.

▲�Brian� Lane, D irec tor of Produc t Marketing, 3VR

▲ �Lindsay�Hiebert, Senior Manager, Solutions Marketing of Emerging Technologies, Cisco Systems

▲�Adlan�Hussain,�Marketing Manager, CNL Software

▲�Larry�Lien,�VP of Product Management, Proximex

M026-029.indd 29 2012/11/12 下午11:24

INDUSTRY REPORT

Differentiate to Win


M042-043.indd 42 2012/11/9 上午3:37

2012 sEcuRiTy 50

With Security 50 companies eking out an average profit growth of 9.8 percent, the disappointing statistics reflect a simple yet grim truth — supply outstripped demand. While weaker players were eliminated, prevailing companies prospered by demonstrating efficiency, productivity and innovation. Many corporations also leveraged their resources to acquire other companies, quickly gaining expertise and boosting their international presence. Despite the economic slowdown, a few companies experienced double-digit growth. Overall, 2011 was an eventful year, as companies sought to grow organically or through M&A.

Eligibility •Electronic security equipment and systemproviders, includingvideo surveillance, access control, intrusion detection andmultipleproductsegments

•Security companies or puremanufacturerswith their ownproducts,brandsorsolutions

•Publiclylistedandprivatelyownedsecuritycompanies•Ability to provideFY2010andFY2011 financial statements,audited/endorsedbyacertifiedaccountantoraccountingfirm

•Distributors, system integrators, resellers, dealers, installers,guard serviceproviders, information security and fire safetycompaniesorrelatedrevenueswereexcluded

The Security 50 ranking represents the leaders of security, who demonstrated perseverance despite challenging economic situations. We

salute these outstanding professionals for sharing their financial data, time and experience. This knowledge provides useful insights and observations, shedding light on how to succeed. These experts not only set higher expectations for themselves in the upcoming year, but for the security industry as a whole as well.

For a fair comparison, we rank global manufac-turers solely by product sales. Participants range from exclusive manufacturers to end-to-end solution providers, thus making it difficult to compare them side by side. We urge readers not to focus on the ranking of the participants, but to further explore the underlying causes for their success.

For the 2012 Security 50 ranking, we welcomed six fresh faces — Arecont Vision, Optex, Safran, Tiandy, TKH and Tyco. By introducing new products, technol-ogies or strategically acquiring other companies, these newcomers made an impression on the industry.

To qualify for Security 50, all companies were required to provide financial reports. This is not an advertiser index — ranking is based on objective data, as we strive to present impartial analysis to our readers. All non-US figures were converted according to a specific date’s exchange rate.

We break down the ranking into two stories. The first article analyzes the financial figures of the Security 50 in 2011 and what they imply for the industry’s future. The second article focuses on the companies’ strategic plans and how they led the market despite difficult circumstances.

Now, we proudly present the 2012 Security 50 Companies.

Note: a&s bears no responsibility for the financialinformationprovidedbyany individualcompany.For faircomparisions,non-UScurrencieswereconvertedusingmidmarketexchange rate fromXE.comonJuly22nd,2012.Thisisanunbiasedlistbasedonthewillingnessofparticipantstosharetheirsalesperformance.

Acknowledgements


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INDUSTRY REPORT


NOW: A Do-Or-Die MoMent

Even amid sales drops and stunted growth, some of the top 50 companies have gained

momentum from the economic crisis, while others continue their struggle to find the best approach to defying declining revenues. Now, it is a do-or-die moment for many security companies.

Strong EU CompaniESFor European companies, the

average revenue growth in 2011 was around 17.4 percent, which is five percent higher than the year before. And despite major economic problems in southern European countries and the U.S., some Security 50 players such as, Assa Abloy, Axis Communications, Geutebruck, Mobotix, Milestone Systems, Nedap,

Safran, SimonsVoss Technologies, Synectics and TKH Group still exhibited remarkable, double digit revenue growth in 2011 ― averaging a 22.3 percent growth rate.

I t i s worth ment ioning that three German-based companies, SimonsVoss Technologies, Mobotix and Geutebruck enjoyed consistent, uninterrupted growth thanks to strong market share in their domestic market ― averaging a 23.7 percent growth rate.

apaC CompaniES EnCoUntEr roadbloCkS

The average revenue from APAC companies, on the other hand, had lost momentum, dropping from

US$153.3 million to $138.8 million. Over the past three years, Korean and Taiwanese companies, who used to be the security industry’s go-to-factories, have been facing stiff challenges brought on by the economic crisis and the rise of Chinese manufacturers. Hikvision Digital Technology and Dahua Technology, apparent locomo-tives of Chinese manufacturers, have directly influenced their geographi-cally adjacent opponents. Over the past three years, the ten Korean companies were able to hold on and remain in the Security 50 ranking, while two of the nine Taiwanese companies dropped out of the ranking this year.

Interestingly, with a 17.5 percent

The cream of the crop ― based on the best financial performance ― the 50 international companies who made the cut for the annual Security 50 ranking for 2011. In this article, a&s examined those who survived or thrived in 2011 to highlight changes in the global security manufacturing industry and their potential influence in the near future.

SECUrity 50 by prodUCt groUp

multiple

intrusion detection

access Control

Video Surveillance

24%

4%

12%

60%

Top 12 Companies for Profit Growth from Security 50

Number '12 Ranking Company Product Group Profit Growth

2010-20111 32 aVigilon Video Surveillance 89.7%2 38 Hdpro Video Surveillance 76.8%3 25 tiandy digital tECHnology Video Surveillance 60.6%4 5 HikViSion digital tECHnology Video Surveillance 51.1%5 10 daHUa tECHnology Video Surveillance 43.4%6 24 mobotiX Video Surveillance 38.9%7 29 napCo SECUrity SyStEmS Multiple 38.4%8 30 koCom Multiple 32.5%9 49 Win4nEt Video Surveillance 28.6%10 33 SynECtiCS Video Surveillance 22.6%11 36 gEoViSion Video Surveillance 19.9%12 43 milEStonE SyStEmS Video Surveillance 17.3%

average 43.3%

By Tevin Wang & Judy Wang

M044-046.indd 44 2012/11/12 下午11:35

2012 sEcuRiTy 50


increase, Korean manufacturers outperformed the average revenue growth of the Security 50 list (14 percent). ITX Security, with an 11.7 percent drop, is the only Korean company with a weakened revenue growth. On the other hand, HDPRO had an exceptional 83.7 percent growth.

Taiwanese players, in contrast, did not enjoy a fruitful 2011, the average revenue growth was a mere 8.8 percent, and three out of the seven Taiwanese companies faced revenue losses. DynaColor, Yoko Technology and EverFocus reported 16.4 percent, 16 percent and 12.3 percent revenue losses, respectively. VIVOTEK and Geovision, on the contrary, represent a smal l number of Taiwanese companies who did well in 2011, with revenue growths of 62.1 percent and 27 percent, respectively.

Despite the success of Hikvision Digital Technology and Dahua Technology, another prominent Chinese company, RCG, encountered severe revenue decline, 54.2 percent.The average Chinese company’s grow rate also turned lukewarm in 2011. This may be an implication that the domestic market simply cannot support the vast number of manufac-turers. Therefore, in the years to come, Chinese manufacturers will need to figure out how to make their mark in

the international market.

VidEo SUrVEillanCE ContinUES to proSpEr

Video surveillance compared to other product groups had a fairly strong revenue growth with an average of 19.5 percent. Avigilon, who continues to be one of the top financial performers, saw their revenue grow to $59.1 million, up 86 percent from 2010.

Asian manufacturers HDPRO and VIVOTEK have also scaled the ranking ladder. As a matter of fact, nine of the top 10 companies for revenue growth on the list cater to the video surveillance market. Chinese manufacturer, Tiandy Digital Technology, made their debut in this year’s ranking; this company is coming on strong with a 50.1 percent and 35.2 percent growth in revenue and profit, respectively.

Eight of the top 10 financial leaders for profit growth, including IP video providers Avigilon, Synectics and Mobotix. Asia maintains strong, with HDPRO, Tiandy Digital Technology, Hikvision Digital Technology, Dahua Technology, KOCOM and Win4Net.

aCCESS Control Average revenue growth for access

control manufacturers on the Security 50 ranking was a mere 0.5 percent. Access control giant Assa Abloy (The Global Technologies division) clinches the spot as top player again with $826 million in revenue, up 14.8 percent from 2010. According to Assa

Abloy’s financial report, demand for radio frequency identification (RFID) rose sharply in 2011. Assa Abloy upgraded their customers’ previously installed locks, which used a magnetic stripe card locking system, to more secure, flexible and user-friendly locks that employ RFID. SimonsVoss also performed well, growing 18.4 percent in 2011. Korean manufac-turer Suprema attained considerable revenue growth, up 21.9 percent from 2010.

aVEragE profit groWtH by prodUCt groUp

17.8%

13%

-23.3%

multiple

Video S

urveill

ance

access

Control

aVEragE rEVEnUE groWtH by prodUCt groUp

19.5%10%

-2.3%

0.5%multip

le

Video S

urveill

ance

intrusio

n detectio

n

access

Control

aVEragE groSS margin by prodUCt groUp

41.5%

34.5%

27.3%

multiple

Video S

urveill

ance

access

Control

product group average revenueaverage

revenue growthaverage

profit growthaverage

gross marginmultiple $584.1 million 10% 17.8% 27.3%Video Surveillance $136 million 19.5% 13% 34.5%access Control $244.3 million 0.5% -23.3% 41.5%intrusion detection $66.7 million -2.3% * *

M044-046.indd 45 2012/11/9 上午3:37

INDUSTRY REPORT


Among the many changes tha t happened during the course of the year, 2011’s Security 50 ranking welcomes several new faces — Arecont Vision, Optex, Safran, Tiandy, TKH Group and Tyco. Either by strategic acquisition of o ther companies or exerc is ing their technological expertise, these companies made it to Security 50 to represent the industry’s leaders. a&s briefly explores some of the major s t rategies these companies have employed to inc rease the i r 2011 revenue growth.

In the beginning of 2011, TKH Group acquired Optelecom-NKF, a global supplier of advanced video surveil-lance solutions and now operating under the name Siqura. TKH Group can now set themselves apart in the field of video analysis, detection systems and integrated secur i ty solut ions. This business transaction helped the company secure larger, international contracts. As a result of broadened business opportunit ies, this newly acquired business unit contributed much of TKH’s 2011 revenue growth. L ikewise, in Ju ly of 2011, Safran finalized the acquisition of L-1, a leading identity management provider in the United States. L-1 brought extensive knowledge in biometrics and enterprise access solutions, secure credentialing solutions and enrollment services to Safran’s security sector. Renamed Morpho Trus t , th is bus iness un i t significantly enhanced Safran’s identity management capabilities, generating a huge portion of Safran’s 2011 revenue.

Amid various events within Tyco’s business in 2011, Tyco bought Visonic, a leader in developing advanced wireless technology. Visonic strongly improved Tyco’s presence in Europe, the Middle East and Africa and broadened Tyco’s wireless intrusion products sales. Even though the ADT North America residential security business generated a lot of growth for Tyco, ADT will operate as an independent, publicly-traded company beginning at the end of 2012. Tyco's remaining commercial security business will be combined with the current fire protection segment to form a separate commercial fire and security company.

In late 2010, Optex acquired Fiber SenSys, who has major operations in North America, Asia, Europe and the Middle East, to facilitate Optex’s growth as an international brand. Fiber SenSys specializes in fiber optics intrusion detection sensors, and have assisted Optex in reaching global markets. At the same time, Fiber SenSys was able to accelerate its innovative applica-tions by leveraging Optex’s financial resources. To further expand their business, they acquired Raytec, a manufacturer and supplier of LED illumi-nation for high security system cameras, in the beginning of 2012. By acquiring this company, Optex strengthened its presence in Europe and diversified its product lines.

Arecont Vision achieved recognition by its continued focus on developing megapixel imaging solutions. Their products are being used in every major

vertical market, and they keenly promote thei r products a l l over the wor ld, including regions such as the Americas, Europe, the Middle East, Africa and Asia Pacific.

Last but not least, Tiandy Digital Technology, the only newcomer from China who made it to Security 50 this year. With their expertise, they have become a prominent video surveillance manufacturer. Tiandy Digital Technology offers a broad range of innovative CCTV products to enhance the effectiveness of video surveillance applications. With China’s manufacturing market on the rise, Tiandy Digital Technology takes this opportunity to seek out international opportunities to expand their brand as well as their product offerings.

New Faces in Security 50 2012

loW profit loW marginWhile no Security 50 manufacturer

lowered their profit goals, the average profit growth was a stingy 9.8 percent in 2011; the average profit growth in 2010 was 12 percent. This implies the world security industry meets

the challenges of low profit for more supplies than actual demands in the market. How to achieve high profit margins will become a key tactic in the near future.

In spite of low profits and margins, 2011 was a prosperous year for

Mobotix, whose gross margin increased to 76.8 percent to lead the Top 10 Companies in terms of gross margin. For Milestone Systems, their gross margin fell slightly to 76.8 percent for 2011, they rank second behind Mobotix.

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INDUSTRY REPORT


Manufacturing ExcEllEncE in Times of UncerTainTy

The global security industry h a s w e a t h e re d t h e p a s t f i v e y e a r s o f e c o n o m i c

recess ion. Major government projects remain delayed until now. The same message was highlighted in Flir Systems’s financial report, indicating a decline in its surveillance backlog due to the reduction of US government procurement in 2011. The global market forecast is still full of uncertainty, especially in the U.S. and Europe. In these trying times, despite fierce competition in the global market and currency devalu-ation from foreign exchange rates, some companies stand out from the crowd.

EfficiEncy and Productivity

According to our findings on the top 50 companies over the years, 2011 was a significant year, as average profit growth dropped to around 9 percent. It indicates that the age of low profits has crept in for the entire security industry. Manufacturers should continue to source commod-

ities, manufacture products in places with competitive labor costs and keep investing in R&D for new technol-ogies and products.

To increase business efficiency, Tyco International officially split into three independent companies this year. “The development of Tyco's business is now more stream-lined operationally between our commercial businesses to gain additional business efficiency,” said Ranae Leary, Senior Director, Global Accounts, Tyco International. “The fire and security businesses, for example, were siloed previously. Now, with the divisions under one roof, we are able to integrate p ro c e s s e s , t e c h n o l o g i e s a n d operations to better serve our customer base.”

Assa Abloy relocated p r o d u c t i o n t o low-cost countr ies b y o u t s o u r c i n g component production to high-quality local suppliers. It successfully transferred all production and purchasing to low-cost

countries — primarily China. In 2012, Assa Abloy is working to streamline production and product development at its new production plant in Shanghai, China. As a major multinational corporation, Assa Abloy achieved double-digital growth in 2011 and ranked No. 3 in Security 50.

“The security industry remains unique with low quantities but a high degree of customization. With the focus on different application demands, we are expected to have a higher degree of customization in our products. However, it has a negative impact on us, since the small volume of different products

d o e s n o t help

In this time of uncertainty, Security 50 provides a role model for strengthening competitiveness. Efficiency, innovation and global presence are three cornerstones for growth. Swiftly identifying customer needs and delivering the right solution to the market determines whether a company will succeed or fail. This year, a&s talked to Security 50 leaders to find out how they retooled their businesses to lead in the market through tough times. By Jill lai & alyssa Fann

Wireless locking and access

control systems are still in the early introduction stage of their product life cycle. In view of this, we are expecting continued excellent growth potential of our products.

Hans-Gernot Illig, President and CEO of SimonsVoss Technologies

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expand market share. Meanwhile, it is hard to reduce our manufacturing costs either. That is why we adopted the product strategy of ‘high-level modularization’ to all of our product lines. We hope to find a balance of customization and market expansion. We diversify our products by consoli-dating the variety of our modules. Then, we can develop different products more efficiently at lower cost, which is the strength of our company,” said William Ku, Director of Branding Business of VIVOTEK.

ProPriEtary tEchnologiEs

For a technology company, it is important to hold core proprietary technology to maintain a competitive edge. Gert van Iperen, President of Bosch Security Systems, said at a press conference this year, “What will the significant growth factors be in the coming years? I think we can say that our innovations, product portfolio

and strategic partner-ships will be the major

factors. With a high level of expenditure i n R & D , B o s c h invested around 1 0 p e r c e n t o f sales to bring new

i n n o v a t i v e

products and solutions.” Innovation also applies to Axis

Communications. “We invested US$70 million in R&D last year and we will add up to $85 million this year, which is 13 to 15 percent of our total revenue. We have a strong team in R&D, providing 500 references of products in our categories — from entry-level to high-end and low temperature to high temperature, such as 75 degree Celsius, the extreme temperature technology,” said Bodil Sonesson Gallon, VP of Global Sales, Axis Communications. “When you start to enter a mature market situation, it is important to be big to have the muscle to invest in R&D. We have our own chipset technology and ASIC technology. Both are quite beneficial in providing our cameras more space for advanced perfor-mance. We can use these spaces to add video intelligence to our cameras.”

From the specific technologies point of view, Nice Systems has developed analytics that enable organizations to correlate and analyze large amounts of data generated by multiple sensors and channels. It remains a leading IP surveillance solution provider.

Mobotix leverages its own software capability to design a de-centralized product platform — a high-speed computer with a built-in

s t o r a g e .

Without using other expensive VMS, all the Mobotix cameras are integrated with a large amount of processing power and professional control center software, as used in soccer stadiums, for example.

SimonsVoss Technologies has used digital technology to revolu-tionize classic mechanical locking systems and integrate access control functions. By introducing professional wireless and keyless technology to physical access control, SimonsVoss has achieved high growth over the years. "Wireless locking and access control systems are still in the early introduction stage of their product life cycle. In view of this, we are expecting continued excellent growth potential of our products," said Hans-Gernot Illig, President and CEO of SimonsVoss Technologies.

A n o t h e r G e r m a n c o m p a n y, Geutebruck, emphasized its strength in developing its own technology. “We are a solution provider and system designer rather than a products supplier,” said Carmen Lahr, Communications Director, Geutebruck. “Our philosophy is to offer perfectly matched hardware and software with a very deep level of integration w h i c h e n a b l e s

This year, Hikvision

has been recognized as the world’s No.1 video surveil-

lance equipment provider as per IMS Research 2012 report, which is

an affirmation of our ongoing business model. Looking forward, we will continue

to produce innovative surveillance products and solutions in order to bring

greater value and versatility to our customers.

Keen Yao, Product Marketing Management Director, International Business

Center, Hikvision

49

Milestone tunes in to

customers’ real needs. They asked for video on

smartphones, we delivered video on smartphones. That’s

why we lead the industry.

Lars Thinggaard, CEO and President of Milestone

Systems

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our customers to achieve optimum system performance. We cover the full range of video system products, both hardware and software and all our products are developed by us for full integration into our system world. Bought-in products nearly always come with integration limitations and that’s what we’re determined to avoid.”

customEr-valuE ProPositionslEarning from it

Some of the thoughts from the Security 50 companies actually trickled down from trends in the IT industry. Several companies talked about the “platform” concept in different ways, which interestingly fit well for security industry and made high margins. “We create a product platform. System integrators can use the same products for different verticals," said Magnus Ekerot, CEO of Mobotix. "Other vendors probably provide different products for different verticals. But here comes another problem — so many product models are produced. Think about how many products

distributors should put in stock. Even for

the resellers, with this strategy, it is easy to learn the

products and to get the knowledge of the products. To compete in the market, we need to be independent and do something on our own,”

“The strategy for all of Tyco’s brands is integration,” said Eli Wil l iams, Sales Director West Europe of Tyco Security Products, EMEA. “Manufacturers realize the importance of integration and work together to build standards to ease integration. Because there are usually many manufacturers wanting to integrate with each other, there has been a focus on standards such as ONVIF. However, unification of multiple technologies is unique and is another step. We are integrating different technologies to create a single unified platform which is designed from the bottom up. A single system is no longer just performing access control but also video recording, integrated search functions, and functional integration with intrusion, fire detection, asset tracking and personal safety devices.”

“Axis also works at the platform standpoint,” Gallon said. “That means we will have more possibilities and new applications in our products. But we won’t develop any applica-tions by ourselves but work with our ADP partners. It is like the iPhone, which carries different apps on it. In the future, each edge device will bring

different values and functions and eventually, it will

become more s c a l a b l e

and more powerful.”

smB/affordaBlE solutions The Security 50 companies are

providing more affordable solutions. These companies are no longer focusing only on high-end sectors. SMB solutions hold high potential during these volatile years. “Some markets have grown in size and breadth as prices have declined, volumes have increased and new applications have emerged,” Flir said in a prepared statement. “While these markets are broad and growing rapidly, many of these markets exhibit low penetration rates for infrared technology. Our strategies in this business are to continue to develop products for high-end applications while introducing new products at lower price points, and to capitalize on highly price-elastic demand in numerous emerging markets.”

“The majority of network cameras nowadays are stil l adopted in high-end projects where the system supports more than 16 cameras,” Gallon said. “Now, it is good timing to penetrate markets for small systems in SMB projects, supporting one to 16 cameras. This market brings big potential. Axis just launched a v ideo surve i l lance solution for small systems, supporting up to 16 cameras, this April

2 0 1 2 .

VIVOTEK’s dedication to and

persistence on developing solutions that best fulfill

user requirements are clearly palpated by our partners and

clients worldwide, and the resulting growth in market share as of late has been

phenomenal.

Owen Chen, Chairman of VIVOTEK

50

Dahua never stops thinking about how to improve

ourselves and explore new technologies. With our strong

R&D capacity and professional teams, we are super confident to keep this strong momentum

and go beyond.

Liquan Fu, President of Dahua Technology


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Each network camera has local (edge) storage. It is a self-contained system. VMS can also be downloaded for free. It targets retail stores, offices and hotels and started to roll out in some mature markets first, such as the U.S. and Europe, along with Japan and Korea in Asia. Being the global leader in network cameras, Axis always see our roles in driving the convergence [of security and IP]. Axis makes a significant move in driving the convergence down to the small system market.”

Two other giants — Bosch and Honeywell — have also developed specific solutions for SMB applica-tions by launching their respective “Advantage Line” and “BLACK” brands.

innovationWhen i t comes to the la tes t

innovation, it is interesting to

see some

security makers learn from other industries, such as video games. Some gaming features can be observed in Aviligon and TKH management software, such as using motion-capture of gestures like the Microsoft Kinect gaming console.

Another example is Nedap, which used to emphasize software-based access control; now, it has become an integrated system provider for the top segments in banking and airports. “In a traditional security system there are different controllers for each functionality, such as video management, access control, intercom and fire alarm,” said Erica Mejier, at Marketing Dept. of Nedap Security Management. “We integrate these functionalities all together by combining them on one single security controller. The functionality of the controller is determined by software. That is why the system is highly scalable and companies can

always configure the system to their needs. When a company

gets bigger, they can eas i ly extend and

scale up functions on the controller. We build the software o u r s e l v e s ,

which is our strength.” IndigoVision

r e l e a s e d a s e g m e n t e d d a t a b a s e

s t ruc ture for mul t ina -

tional corporations. “IndigoVision’s distributed architecture protects customers from the greatest danger of centralized server systems — the single point of failure,” said Marcus Keen, CEO of IndigoVision. “Central servers are perhaps the most vulnerable component and biggest risk to any security system. It amazes me that other network video developers have inherited the same architecture as analog CCTV using a centralized server, when this single point of failure is widely known as a major problem and limits scalability.”

To keep innovating, Milestone Systems accelerated its development by creating a new business unit. “The Incubation and Ventures business unit will work with ground-breaking innovations that can extend Milestone’s leadership in the industry and accelerate our growth,” said Lars Thinggaard, CEO and President of Milestone Systems. “The team will work with a portfolio process that covers new business areas where we see high potential and integrate these into our main business as they mature. This requires taking a broad view across new technologies and business segments that will continue to build the Milestone vision to enable business optimi-zation through open platform IP video surveillance.”

Dali is devoted to

developing thermal imaging sensors

and producing related products for security

applications.

Huimin Pang, CEO, Dali Technologies

The security industry remains unique with low quantities but a high degree of customization. With the focus on different application demands, we are expected to have a higher degree of customization. We diversify our products by consolidating the variety of our modules to stay competitive.

We made big progress this year by growing

50 percent compared to 2011, but it is still not enough.

Next, we will focus more on how to increase the customers’

demands and speed up our service.

Lin Dai, CEO, Tiandy


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utilizing WorldWidE rEsourcEs

For several multinational companies, it is important for them to leverage their global presence to acquire assets around the world and compensate for declining markets. “In 2011, growth in the world market for security technology amounted to a little more three percent,” said van Iperen. “China, the ASEAN states, Russia and Latin American in particular, made outstanding contributions towards this trend. In Europe however, the financial crisis prevented several countries from achieving higher levels of growth.”

"In southern Europe, it indeed grew a little slower and yes, our business has been affected,” Illig said. “However, our healthy growth in DACH markets — Germany, Austria and Switzerland — Middle East and Asia compen-sated for the average growth rate for these two years. We also moved to Scandinavian regions, where we experienced good demand for our products and solutions.”

“We are very strong in our domestic market in Germany,” Lahr said. “Germany is a very good mature market, very well structured in terms of sales and partner networks. It is

our role model. We are trying to roll this out to other countries where we already have a presence and hope to get more market share. Our strategy is to strengthen companies in countries where we already have an existing presence rather than going in search of new markets. This means focusing on the E.U., Russia, South Africa, the U.S. and APAC.”

Finally, Axis is growing its corporate resources all over the world. “We will put more resources in Asia in a long run,” Gallon said. “Axis has about 88 percent sales revenue outside of Asia. Asia is taking up more market

Last year was quite significant for Avigilon, Arecont Vision and Mobotix. Avigilon achieved 86 percent growth, the highest growth in the Security 50 ranking. Mobotix grew 35.9 percent and Arecont Vision rose 25 percent. All these three are pioneers in multimega-pixel network cameras and are starting to enjoy the growth phase of megapixel cameras, due to increasing demand for high-resolution video quality.

avigilon“In November, we went public on

the Toronto Stock Exchange,” said Keith Marett, VP of Marketing and Communications at Avigilon. “In less than a year we doubled our initial public offering price. In this day and age that’s a significant achievement to be able to deliver those kinds of results to shareholders. In 2011, Avigilon was named the fastest growing software company in North America by Deloitte’s Fast 500 ranking. This year, the BC Technology Industry Association named Avigilon the Company of the Year.”

arecont vision “When it comes to surveillance,

pixels (resolution) are all that matters,” said Becky Zhou, VP of Sales at

Arecont Vision, APAC. ”Think about how much area can be covered by a camera. For a VGA resolut ion camera, you get about 1500 pixels per dollar. For a 10-megapixel camera, it is about 1800 pixels per dollar. So, literally, it is more cost-efficient solution to buy a higher-resolution camera than a low-resolution one. That is why the market is growing. This is more cost-effective and the return on investment (ROI) is better. The megapixel camera is right in the initial high-growth phase of its product life cycle. We are expecting more growth in the near future.”

mobotix “Mobotix is like Apple,” Magnus

Ekerot, CEO of Mobotix said. ”Being like Apple let us have full control of what we want to be. Putting the standards aside, we should think about the end users. With the products, they should have the freedom with installations and no extra fees for buying managing software. Why we do something different is for the sake of the end users. We think about a system that they can really depend on and the amount of money they do save and how we can help system integrators and distributors make the money and keep the margin they should have.”

fast groWing comPaniEs

Top 12 Companies for Revenue Growth from Security 50

No. Company Product Group Revenue Growth 2010 - 2011

1 avigilon Video Surveillance 86.0%2 hdPro Video Surveillance 83.7%3 vivotEK Video Surveillance 62.1%4 tiandy digital tEchnology Video Surveillance 50.1%5 dahua tEchnology Video Surveillance 45.4%6 hiKvision digital tEchnology Video Surveillance 45.1%7 moBotiX Video Surveillance 35.9%8 Win4nEt Video Surveillance 34.3%9 tKh grouP (sEcurity systEms only) Multiple 30.6%10 gEovision Video Surveillance 27.0%11 safran (sEcurity Products only) Multiple 26.3%12 arEcont vision Video Surveillance 25.5%

average 46%

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share … We will keep investing more in Asia relatively, compared to other markets.”

Flir stated its international business was already successful in the Middle East and intend to expand in countries such as India and China.

Key VerticalsSecurity 50 companies are focusing

on specific vertical markets for IP technologies.

GaminG Aviligon sees high-growth potential

in gaming.“To improve security and reduce security-related costs, the gaming market has begun a rapid transition to high-definition surveil-lance solutions — a transition that is

forecasted to accelerate over the next two years,” the company said in a prepared statement. Aviligon also appointed a security gaming expert to its staff.

education and HealtH care"Education and health care market

sectors are the most tangible to SimonsVoss. These two markets are driven by higher-level security demands and the need for an increased flexibility for their organi-zation management of the access control system,” Illig said.

Assa Abloy has expanded its customer base beyond hotels and cruises. It has tapped into other segments, such as retirement and student accommodation.

otHer Verticals “We have two approaches [to

different vertical markets] ,“ Gallon said. “Centrally, we have resources for five market segments — banking, retail, transportation, city surveil-lance and critical infrastructure. They are specialized in what they are doing, which makes them capable of building specialized knowledge easily. Also, we locate them to different regions in the globe. So, in Asia, they can get global support and resources quite easily.”

IndigoVision focuses on the high-end industry verticals including cities, police and prisons, casinos, airports, rail, oil and gas, retail and education.

Secur i t y i ndus t ry p layers have traditionally focused on the technological aspect of their products. In the process of producing innovative products with reliable performance and quality, however, they have neglected end users. A new concept is now emerging in the industry, and that is to start putting end users first. Top Security 50 players share the concept behind this “user-centric” mindset.

No longer is the focus of security product designs centered on the developer’s concept. Instead, product designs start with the concept of knowing what the end users need before they do. Technology, performance and reliability are at the heart of all security products and solutions. They are also a prerequisite for their success in the security market. However, in the market today, possessing the above qualities no longer guarantees success.

Companies must be closer to end users, which is exactly what top Security 50 companies are starting to do. For example, Tyco has established a global service platform ― Global Center of

Excellence ― to support and fulfill their promises to global customers. On a similar note, Honeywell has set up Honeywell Integrated Security (HIS) End Users Committee, a peer-to-peer group, to allow end users to share experiences and for the company to gather input for its product roadmap.

A crucial driver behind reaching out globally to end users is to ensure that the companies meet the vertical and regional specific requirements of end users. “The Global Center of Excellence is led by a talented team of highly trained engineers and program management experts who speak 14 languages. Each member of the team is trained in the legal, business and cultural standards required to effectively conduct business in a variety of countries. This expertise is critical as many times the global strategy has to be modified to adhere to local laws and regulations, compliance standards and the cultural landscape,” said Ranae Leary, Senior Director of Global Accounts, Tyco International.

Listening to end users will also ensure that the company is heading in the right direction. “The HIS End Users Committee plays a crucial role in advancing our technology. The Committee consists of a group directors and chief security officers who provide input that influences the direction of the company’s product roadmap,” said Tony Foglia, Director of Global Accounts, Honeywell.

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The array of security products displayed here are the most in-demand products from some of the Security 50 companies. Read on to find out what keeps their customers coming back for more.

Milestone XProtect Corporate 5Enhance the manageability of large, multi-site instal-

lations with XProtect Corporate, a powerful IP video management software designed for large-scale, high risk security deployments. With support for an unlimited number of cameras, users and sites, XProtect Corporate is a flexible software with virtually no limits. For systems demanding complete si tuat ional awareness and immediate response, this VMS offers interactive, multi-layered maps linked to alarms. The XProtect VMS also encompasses built-in support for video wall functionality. The XProtect Smart Wall, which gives a comprehensive overview of installations and seamless command center control.

XProtect Corporate provides the ultimate peace of mind for high security installations. Its edge storage option combined with failover recording servers and redundant management servers ensure video recordings are never interrupted and access to the system is always maintained. XProtect Corporate also features Milestone Federated Architecture, a solution that interconnects multiple independent sites.

MFA turns a large-scale surveillance system into manageable parts. Users can have individual local site administration or manage all of the sites as one large system. With support for third-party integrations, Milestone’s premium VMS XProtect C o r p o r a t e r i s e s t o m e e t t h e n e e d s o f a n y s u r v e i l -lance chal lenge. With sophisticated features, XProtect Corporate is the preferred IP surveil-lance solution for l a r g e , h i g h - r i s k installations and for deployments that require effective live monitoring.

Milestone Systems/DenmarkEmail: [email protected]

SimonsVoss Digital Locking Cylinder 3061

The digital locking cylinder 3061 is an easy retrof i t to replace mechanical cylinders with a battery p o w e r e d e l e c t r o n i c l o c k i n g c y l i n d e r , wh ich a lso incorpo-rates access control funct ions. The la test version offers a stand-by time of up to seven years or up to 150,000 activations with one battery set. First introduced in 1998, there are now more than one million digital cylinders in installations all over the world. They are the standards for almost all popular cylinders available to date. Another of its key feature is the easy upgradeability to its wireless online versions.

SimonsVoss/GermanyEmail: [email protected]

Dali S660N Series Thermal Imaging Camera

Newly released by Dali, S660N series is a network thermal imaging camera that uses 384x288 un-cooled infrared detectors. It can be used fo r secu r i t y su rve i l l ance in a var ie ty o f adverse weather conditions and complex environments

to assist users to detect safety problems and

avo id acc i den t s . I t also provides day and night real- t ime onl ine monitoring.

Dali Technology/ChinaEmail: [email protected]

Best-Selling Products

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2012 sEcuRiTy 50

This section showcases a few of the most impressive products seen in the industry from some of the Security 50 companies.

VIVOTEK IP8362 Full HD Outdoor Bullet Network Camera

VIVOTEK IP8362 is a best-in-class 1,080p outdoor bullet network camera designed for diverse outdoor applications. With full HD resolution in 16:9 aspect ratio and WDR enhancement, users can identify image details in extremely bright as well as dark environments.

The IP8362 supports high-performance H.264/MPEG-4/MJPEG compression technology and offers extra smooth video quality with up to 30 fps at 1,080p full HD. Furthermore, the IP8362 boasts a number of innovative technologies, including video cropping and activity adaptive streaming, to give users utmost efficiency in bandwidth and storage.

In order to adapt to constantly changing lighting conditions, the IP8362 comes with a removable IR-cut filter and built-in IR illuminators for both day and night applications. Its IP67-rated housing protects the camera against rain and dust, and ensures consistent operation under extreme weather conditions. For complete installation and prevention of tampering and vandalism, the IP8362 is also packaged with a mounting bracket that conceals all cabling.

With other advanced features such as tamper detection, 802.3af compliant PoE, MicroSD/SDHC card slot for on-board storage and full HD video quality, the IP8362 is the best choice for even the most demanding outdoor surveillance applications such as parking lots, entrances, communities and much more.

VIVOTEK/TaiwanEmail: [email protected]

Tiandy TC-D3600-EWI Speed Dome Camera

The Tiandy TC-D3600-EWI i s t h e c o m p a n y ’ s b e s t s e l l i n g p r o d u c t f o r a r e a s o n . T h e h i g h speed dome camera is easily installed into infrastructures via an user-friendly design. The camera possesses a high resolution of 650 TV lines for color images and up to 700 TV lines for black and white images. The camera is able to pan at 600 degrees-per-second, with 360 degree continuous pan rotation and auto-flip to ensure there are no blind spots.

This user-friendly camera also allows up to 220 presets, eight auto-scans, eight tours and four patterns.

It is IP66-rated, ensuring its durability in all types of environments. The camera is thunder-proof to withstand up to 4,000 volts and has an anti-fog function for clear images during bad weather. The camera is also able to capture clear images in the night time or dark areas, with minimal illumination for both color and black and white

images.

Tiandy Digital Technology/ChinaEmail: [email protected]

Iconic Products

SimonsVoss Transponder 3064The SimonsVoss Transponder 3064 is used as the means of identification for the

System 3060, in order to activate digital cylinders and smart relays. The smoothly rounded transponder 3064 will open the doors, cupboards, gates and barriers of all kinds from both inside and outside. If a transponder is lost, it can be blocked immediately. Changes in access authorization can be done quickly since the program is extremely flexible. It requires practically no servicing or maintenance: the high-performance battery lasts between eight to 10 years, or around a million operations, before it needs to be replaced.

SimonsVoss/GermanyEmail: [email protected]

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Milestone XProtect Go 2.1XProtect Go is a free version of Milestone's market-leading

video management software designed for small business installations and video surveillance in private residences. It is an easy-to-use software that supports up to eight cameras and one user. It also retains video for up to five days. XProtect Go is compatible with more than 1,000 cameras, including most USB and web cameras.

XProtect Go lets users experience the true benefits of IP video with Milestone's open platform for free. It features XProtect Smart Client, the same intuitive user interface embedded in all XProtect VMS products. Seamless upgrade options make XProtect Go a risk-free entry into a reliable and secure IP video surveillance solution. XProtect Go can be downloaded for free from the Milestone website. To ensure optimal, continuous system funct ional i ty, user registration is required after 30 days and re-registration is required on a yearly basis.

Milestone Systems/DenmarkEmail: [email protected]

VIVOTEK FD8134 Compact Fixed Dome Network Camera

VIVOTEK FD8134 is an easy-to-use fixed dome network camera specifically designed for indoor security applica-tions with a compact, stylish exterior. The camera has a 1-megapixel sensor to enable a viewing resolution of 1,280x800 at 30 fps. Users need to look no further for an all-in-one camera capable of capturing high quality, high resolution video.

This camera is aimed at providing 24-hour surveillance for indoor applications, and features true day and night functionality with a removable IR-cut filter and built-in IR illuminators. Also included are a number of advanced features, which are a standard for VIVOTEK cameras, including tamper detection, MicroSD/SDHC card slot, 802.3af compliant PoE and VIVOTEK's 32-channel recording software. With all of these capabilities, the FD8134 provides the best value in IP surveillance for indoor applications such as offices, banks, ATMs and retail stores.

VIVOTEK lent a hand to dramatic rescue of miners in Chile in 2010. The FD8134 was chosen as the "eye" for the Phoenix rescue capsules not only due to its admirable video performance in monitoring the miners’ living environment, but also because the extremely compact camera met the capsule’s necessarily strict bulk and weight constraints.

VIVOTEK/TaiwanEmail: [email protected]

Tiandy TC-D3600-IR PTZ Camera

The Tiandy IR camera has powerful day/night capabilities and a high resolution of up to 650 TV lines in color and 700 TV lines in black and white mode. Its powerful zooming capability helps users zoom in on any suspicious activities they may notice. The IR rays can cover a distance of 80 to 100 meters, allowing a wider range of protection. The camera allows up to eight privacy masking areas, so end-users will have more control over what they want and don’t want to be seen in certain areas.

The camera has WDR functions and allows users to configure up to 220 presets, eight auto scans, eight tours and four patterns. The camera is IP-66 rated to withstand and endure harsh outdoor environments, whether rain or shine.

Tiandy Digital Technology/ChinaEmail: [email protected]

Dali DLS-S040-Y25X-PM2 Thermal Imaging System

The thermal imaging system from Dali consists of a thermal imager and a visual camera. It is able to perform continuous 24-hour, real-time monitoring. The system also has several different user-defined configuration modes. With its digital image enhancement function, users will have an easier time trying to make out blurry objects displayed on the monitor. Not only that, the system has a scalable network transmission and in te l l igent a larm funct ion, so users are instantly alerted if something out of the ordinary occurs.

Dali Technology/ChinaEmail: [email protected]

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2012 security 50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

The introduction of DVRs Rise and boom of

network cameras

■ In 2007, 31 of Security 50 companies were dedicated to IP

surveillance

Less construction and tighter security

budgets than before

DVRs outstripped VCRs

Introduction of network cameras

In face of the global belt-tightening, how

do you stand out?

■ The global financial crisis ■ International events in

China presented new opportunities in China

Tracking SecuriTy induSTry LeaderS for 10 yearS ~ The 10th AnniversAry of securiTy 50

From AnAlog to DigitAl: 2003

When a&s launched our very first Security 50 ranking in 2003, we witnessed the digitalization phase of security with the introduction of DVRs. It was a new era, with DVRs linking all analog inputs, recording them digi ta l ly and rendering videotape obsolete. Hitron, which ranked No. 12 in 2003, took

advantage of the DVR’s potential, bringing in 30 percent of its revenue during 2002 to 2003 from DVRs. The number of DVR manufacturers in the Security 50 ranking increased from 12 to 18 companies from 2002 to 2003. DynaColor, which achieved the highest profit growth in our 2003 ranking, increased 623.6 percent and attributed its robust performance

to DVRs. EverFocus, who focused two-thirds of its R&D resource on software development, got its reward with 19.2 percent of revenue growth in 2003.

Next, 2003 to 2004 was when DVRs outstripped VCRs and DVRs were becoming “standard” in video systems. Interestingly enough, when the analog market was maturing

Technology is changing rapidly. Over the past 10 years, the security industry went through a phase of digitalization and migration to IP. The world has changed drastically as well. In the past five years, North America and Southern Europe suffered the brunt of the economic crisis and the security industry was far from immunisation. a&s faithfully and honorably recorded these changes over the decade. By the editorial team

INDUSTRY rePOrt

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INDUSTRY rePOrt

with increasing digitalization, the competition among DVR players heated up. Korean companies such as Wooju were in the 2002 ranking, but wernt out of business in 2003.

The compet i t ion grew even more intense in 2005. The number of DVR manufacturers in our ranking increased to 22 companies. While DVR sales ensured a few good years of remarkable growth, they did not guarantee longevity. Some companies did not develop a technical edge and were soon forced out of the market. A price war emerged, shaking up the industry. The price of DVRs dropped an average of 50 percent.

network CAmerAs Bring revolutionAry ChAnges: 2004-2005

Only 10 percent of participating companies in the first Security 50 ranking in 2003 focused on IP technology. That year, Axis Communications ranked No. 44 with a 27.4 revenue loss, as video products were not its major sales generator. The total number of IP surveillance companies remained the same in 2004, with slightly higher average revenue growth rate of 26.2 percent compared to analog companies at 16.5 percent.

Axis Communications’s revenue growth reached 33.1 percent in 2004 and rose to 54.5 percent in 2005. That year was even more exciting for players in IP surveillance. Half of the participating companies were undergoing a transformation to become more network-oriented. Making its first appearance in our 2006 Security 50 ranking, VIVOTEK made a star debut, growing 79 percent in revenue and 83.5 percent in profit as well.

Boom oF network CAmerAs: 2007 to 2009

Discussions surrounding conver-gence and IP were hot topics from 2005 to 2006. As pioneers in IP surveillance, Axis Communications, Nice Security, Verint Systems and VIVOTEK enjoyed double-digit growth. Axis Communications averaged 44.5 percent growth from 2004 to 2007.

The prosperous potential of IP surveillance attracted a great deal of attention. In our 2007 ranking, 31 of our participating companies were video surveillance manufac-turers. Of those 31 companies, most were dedicated to IP surveillance, reflecting the boom in network camera demand worldwide. This demand reached its climax in 2009.

Promising Future? However, from 2009 to 2011, we

found the growth rate for major IP video companies started to slow down compared to the past five years. The economic climate is a factor, but the fierce competition between a vast number of IP video providers and a shrinking market further compounded the problem. With supply higher than actual demand, it caused a slump in profits, margins and revenue growth. On the product life cycle curve of “standard” network cameras and VMS, both are approaching the final maturation phase of the growth. As the early adopters of IP video, the next technology breakthrough in the coming three to five years are crucial for them to survive.

Clear product differentiation

separates the leaders from the followers. Some companies, such as Mobotix, entered the market with a proprietary codec and the concept of a “complete camera system.” Avigilon and Arecont Vision latched onto multimegapixel cameras. In access control, SimonsVoss used digital technology to revolutionize mechanical locks and integrated access control functions. Their distinct approach has paid off, as they experienced high growth from IP solutions.

onviF AnD PsiA stAnDArDs: 2007 to Present

Around 2007, IP standardization was first introduced and showed the security industry had come a long way. Though most discus-sions speculate whether ONVIF or PSIA will “win,” the two standards are quite different. So far, ONVIF only focuses on physical IP-based security products. On the other hand, PSIA takes on an overall system approach to interoperability, supporting specifications for video, access, intrusion, VMS, storage and more. The comparison between ONVIF and PSIA is hardly apples-to-apples, meaning there is really not an ultimate standard in security. Users should carefully differentiate the specifications of both standards and decide which best services their needs.

Early in 2012, ONVIF introduced profiles, which allow end users to easily identify interoperable solutions. In other words, the profile

Clear product differentiation separates the leaders from the followers.

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INDUSTRY rePOrt

concept enables users to determine features that are supported by a profile without extensive technical knowledge of the specific version of the ONVIF specification. For instance, users will no longer need to specify devices running ONVIF version 2.0 versus products that conform to ONVIF version 1.0. Users can opt for the appropriate profile that offers interoperability at a specific functional level between units and software that fits their needs. With this new concept, users and system integrators will simply determine the compatibility between conformant products or feature sets when building IP-based security systems.

In September, PSIA introduced area control version 1.0, providing a comprehensive way to harmonize and share data between access control, intrusion and other systems. This holistic interoperability is a significant breakthrough, allowing traditionally disparate systems to integrate and share data across platforms easily. The “plug and

play” feature allows for flexibility, integrating technologies across d i fferent manufacturers . The freedom to choose among sourcing options will ultimately drive greater price competition in the market.

All players in the security industry can take advantage of open systems. End users will need to evaluate their needs and applications, and then decide which standard best fits their needs. Regardless of the standard adopted, end users enjoy the benefits of future-proof security products and systems.

Hopefully in the near future, security products can conform to just one specification. End users will be able to buy any security product and expect seamless integration with their existing system. However, the two standards are still far from this ideal. Both standards are still on a learning curve to better service all players within the industry. In this regard, ONVIF and PSIA will continue working toward new interoperability specifications.

turBulent times: 2008 to 2009

The tsunami of global financial crisis peaked in 2008 and 2009. In 2008, nearly half of our participants’ revenues declined. Companies such as Hunt Electronic, Yoko Technology and Aiphone suffered respective losses of 20.5 percent, 18.4 percent and 14.4 percent in revenue. Projects and installations were slowed or stalled in North America.

It was under such circumstances that companies moved out of their comfort zones. Bosch Security Systems and Axis Communications started to establish themselves in new geographical markets such as Russia, South America, Eastern Europe and parts of Asia. Emerging markets were penetrated with redoubled efforts.

2009 saw even softer markets, less construction and tighter security budgets than before. Average revenue growth for the Security 50 cohort was negative 1.9 percent, with the average profit growth falling 4.2 percent. North America-based

▲In 2008, nearly half of our Security 50 companies' revenue declined.

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INDUSTRY rePOrt

companies suffered a 4.3 percent loss in average revenue growth. APAC companies were influenced as well, with an average revenue loss of 3 percent. Hitron Systems, Tamron and Geovision fell 21.9 percent, 20.2 percent and 18.6 percent loss.

The Eurozone debt crisis further weighed on security. Many countries in southern Europe suffered severe financial problems. In 2010, Italian Promelit fell 11.2 percent in revenue and dropped 20.5 percent in profit. Other European companies faced challenges, but maintained slow and steady growth.

FlAt growth oF iP The economic crisis directly

affected IP solution providers. Revenue growth rates for companies with high-end customers nearly plateaued, as profits grew no more than 5 percent. As many projects were delayed in the U.S . and European countries, it left little opportunity for business growth. Europe’s 2011 economic slowdown shrank security business, which ultimately affected Magal’s operation and performance in the region. Responding to this economic turmoil and budget deficit, many of Magal’s customers cut back or delayed their purchasing activities. As a result, Magal’s sales in Europe suffered during this financial instability during 2011.

However, despite all obstacles, some companies stood out with exceptional revenue performance. Nice’s expertise and foresight in IP solutions contributed to double-digital revenue growth in 2011. “The market is increasingly seeing the value of integrated solutions that are meaningful to security, safety and operational domains,” said Karen Krivaa, Director of Global

Marketing, Surveillance Division, Security Group of NICE Systems. “Additionally, we see increased demand for appl icat ions and analytics that enable organizations to correlate and analyze big data generated by multiple sensors and channels.”

mADe in AnD For ChinA: 2007 to Present

While the largest security markets faced economic instability, emerging countries became storm shelters. The BRIC nations offered unprecedented support and energy. International events in China, such as the 2008 Summer Olympics in Beijing and the World Expo 2010 in Shanghai, presented new opportunities in China. Two local brands — Hikvision Digital Technology and Dahua Technology — rose to the surface and made an international impact as well.

Since the debut of Hikvision in the 2007 Security 50 ranking and Dahua in 2008, along with other Chinese manufacturers such as RCG, CSST and Dali Technology, they have seen good results. The average revenue

growth for these Chinese companies over the years was 37.5 percent, as they are seemingly immune to the global economic crisis.

hikvision Founded in 2001, Hikvis ion

developed its first codec card in 2002 for security. Debuting in our Security 50 2007, the Chinese brand hit record growth over the years, averaging 50.7 percent revenue growth since 2006.

Over the decade, Hikvision has grown from a company with 28 people into a global enterprise with more than 8,000 employees. It has regional branch offices in the U.S., the Netherlands, Italy and Dubai, along with joint ventures in India and Russia and a maintenance center in Hong Kong. It was ranked No. 1 for DVR market share, according to IMS Research (now an IHS company).

Renowned for its DVRs, Hikvision has put extra effort into cameras and VCA to ease its reliance on back-end products. While Asian companies often depended on OEM or ODM contracts, Hikvision will focus more

▲While the largest security markets faced economic crisis, emerging countries became storm shelters.

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INDUSTRY rePOrt

on branding. In order to ride with the IP migration wind, Hikvision will also focus on NVR ranging from entry-level to enterprise-level product line.

The industry is heading from SD to HD. Image demands have changed from mere pictures to crystal-clear images. Along with expanding their product portfolio, Hikvision will offer system solutions as well to be flexible and customer-driven.

wAy ForwArDAs 2012 draws to a close, security

companies a re prepar ing for the year ahead. The past decade has seen several changes in the security industry, such as the shift from analog to digital DVRs, the introduction of network cameras, the global economic recession and the rise of Chinese manufac-t u r i n g . S o m e companies

have benefited from the changes, while others have not been so lucky. Ultimately, it is the security companies that are able to success-fully adapt to these changes with continued innovation that will survive.

At the same time, taking into account security trends, it is clear that it will not be a one-approach-fits-all scenario, as companies differ in size and market positioning. Hence, some companies have launched affordable solutions in face of the global belt-tightening, while others have launched their own brands or diversified product lines.

First, for large multinational companies such as Honeywell, Bosch, Tyco and Assa Abloy, the challenge is how to effectively utilize their global resources, take

advantage of emerging m a r k e t s a n d

introduce new products in

response to market demands in order to maintain stable growth. On the other hand, for companies manufac-turing a single line of products, the challenge is to stay ahead of technological change so that they can continue to experience high growth.

Secondly, Asia has well established itself as the global manufacturing hub, particularly China. This is hardly surprising as China boasts lower production costs with reasonable product quality, thereby lowering expenses. Not only does China produce the majority of the world’s security products, but Chinese companies continue to surprise the world with their innovative ability. Overall, China has proven itself to be a reliable manufacturer for the security industry and the rise of Chinese manufacturing is definitely a force to be reckoned with.

Ultimately, it is the market strategy of a company that will determine its fate in the security industry. The current transition from analog to IP is taking place in a market where supply exceeds demand and price competition has greatly lowered prof i ts . Open standards have

also removed barriers to entry, thereby saturating the market

with manufacturers. In this competitive market, the key to survival is differentiation.

In other words, companies that are able to successfully establish themselves as different or unique

— whether through innovative products, superior customer service

or close customization for the markets they serve — will be able to survive in the security world. With this in mind, industry players can face the year ahead prepared and ready to win.

▲ In this competitive market, the key to survival is differentiation through innovation.

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