Did the Security Spending Boom Never Happen?By: John Honovich, Published on Sep 08, 2009
Almost a decade after 9/11, the questions and doubts on the security spending boom continue to increase. Did the boom never happen? And, even if it did, why is there such questions arising now.
The Mercury News, Silicon Valley's hometown newspaper is the latest to raise this question. The columnist specifically cites the quiet sale of GE Security's homeland defense business and contrasts that to expectations immediately after 9/11. This is similar to a thread from VentureBeat, another Silicon Valley related publication, who also questioned the financial performance of security companies.
To the contrary, most American security professionals have personally benefitted from post 9/11 security spending. India is almost certainly experiencing the same growth.
Analyzing this is difficult because the post 9/11 expectations were vague. However, there are a few trends that can be discerned:
- Video surveillance grew the fastest of any security segment (by many accounts a CAGR of 10-15% for the decade). However, this growth was significantly driven by mainstream technological advances (in the first half, the move from VCRs to DVRs, in the second from DVRs to IP video). Even without terrorism, video surveillance growth would have been likely strong due to poor technological advances.
- The public priority for security in the US and Western Europe has faded. In the US, not only has the economy overtaken security but it could be argued that green initiatives and health care may also have gained greater prominence. Whatever driver terrorism was in 2002-2008 is unlikely to be matched in 2009-2015 (barring a significant terrorist event).
- In that respect, the assumption by many that the terrorism fueled spending would become semi-permanent (like a new 'Cold War') is not proving to be true (simply because of the issues mentioned above.