PSIM to be Worth $2.79 Billion? Tricks Exposed

Author: John Honovich, Published on Jul 15, 2012

A new report projects the Physical Security Information (PSIM) market to be worth $2.79 Billion USD - a shockingly high number for a market that has struggled for so long. In this note, we examine the key tricks used to arrive at such a bullshit bullish number.

Background

Paid awards provider and 'analyst' Frost & Sullivan's new PSIM report estimates that PSIM sales were just $142.9 Million in 2011 but by 2021 will be $2.79 Billion USD. This projects 20 times growth over the period - a huge increase.

Indeed faced with such growth, Frost ominously implores:

"Video and access security system companies should tie up with PSIM players not to be edged out of the market"

The only thing stopping the PSIM market? Evidently IP cameras:

"The security industry is still dealing with its shift to integration/convergence and IP, which is why most enterprises are unaware of PSIM."

Fluff for PSIM Vendors

The claims are laughable and are a shallow attempt by PSIM vendors to pump up their market. Strugglig PSIM players have been bought out on the cheap by large vendors (e.g., Nice / Orsus, Verint / Rontal, ADT / Proximex). Ultimately, it is less an issue of not being aware, than it being too costly and not providing a clear enough value (see our survey results). For background on PSIM market size, see our review of 4 PSIM market projections.

Tricks With Time Frames

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

Using 10 years for projections is unrealistic and uncommon. Typically, analysts use 3 or 5 years as it becomes increasingly difficult to accurately project markets in the far future.

The benefit of using 10 years is that you can create far larger estimates that look much more impressive. Indeed, if they had chosen 5 years with the same implicit growth rate, the total estimate would only be $666 Million USD - 75% less than the huge number trumpeted in the press release.

Annual Growth Rates

Behind all projections is an implied annual growth rate. For this one, the rate is 34.7%, meaning that the PSIM market needs to grow by 34.7% each year for the next ten years to get from today's puny $140 million USD to the future's $2.79 billion USD.

Maintaining such growth rates for such a long period is very hard. Maybe IP cameras have done so over the last decade but that's pretty much the only surveillance industry example.

Dropping the implied growth rate to 'only' 25% and the total PSIM market size in 2021 would then be just half of Frost's projection - ~$1.35 Billion USD. While picking the correct growth rate is difficult and contentious, small changes can massively impact total size, especially over long periods.

The Truth About PSIM

The PSIM market, after the sellouts in the last few years, appears to be growing modestly with unexceptional product development and minimal external investment. All of these things combine for weak growth drivers. Looking ahead, advanced security management functionality will continue to be added by access and video manufacturers, with such capabilities gradually increasing in use. However, multi-billion dollar projections and sustained exceptional growth are unjustifiable.

Comments : PRO Members only. Login. or Join.

Related Reports

IFSEC 2018 Final Show Report on Jun 20, 2018
IPVM attended the IFSEC show for the first time this year. The Chinese have taken over the UK, centered on Hikvision, flanked by Dahua, Huawei and...
Hikvision Corrects False Cybersecurity Announcement on Jun 18, 2018
Hikvision has corrected a false cybersecurity announcement that claimed a British government-sponsored program endorsed the cybersecurity of...
The Dumb Ones: PSA's Bozeman On Cybersecurity on Jun 15, 2018
The smart ones are the hundred people who flew to Denver and spent $500+ on a 1.5-day conference featuring Dahua as a 'cyber responsible partner',...
Dahua's Terrible Cybersecurity, Buys Credibility From PSA And SIA on Jun 04, 2018
Dahua has a terrible cybersecurity track record. But American organizations, like the Security Industry Association (SIA) and the PSA Security...
Amazon's "Dangerous New Face Recognition Technology" Says ACLU on May 23, 2018
The ACLU has caused a stir, with a new report Amazon Teams Up With Law Enforcement to Deploy Dangerous New Face Recognition Technology,...
N3N "Truly Open Visualization Platform For Physical Security" Profile on May 09, 2018
A Cisco-backed startup, N3N, claims to deliver "the world’s first and only truly open visualization platform for physical security." The company...
Bad Research Plus Lazy Reporting - SSI And 'Global Market Insights' Examined on May 07, 2018
If you wonder why there is so much obviously wrong information online (factually, not simply disagreeing on opinions), this is a great example of...
Anixter Acquires 'PSIM Platform Inner Range - "Heart of Our Technology Differentiation" on Apr 30, 2018
Anixter Security has made a bold move, acquiring what it calls a PSIM platform as part of a $150 million deal, with Anixter's CEO Bob...
The Yolo Bro And The Death of Journalism on Apr 24, 2018
There's an old quote: The job of the newspaper is to comfort the afflicted and afflict the comfortable Unfortunately, the opposite is more...
'Best In Show' Fails on Apr 19, 2018
ISC West's "Best In Show" has failed. For more than a decade, it has become increasingly irrelevant as the selections exhibit a cartoon level...

Most Recent Industry Reports

Installation Hardware for Video Surveillance - Indoor Fasteners on Jun 22, 2018
As part of our Installation for Video Surveillance series, in this note, we cover drywall anchors. A key part of installing security hardware is...
Hikvision ColorVu Integrated Visible Light Cameras Examined on Jun 22, 2018
When it comes to low light, infrared light has become the defacto standard in surveillance. But IR is limited to monochrome images, making colors...
Last Chance - Save $50 - July 2018 IP Networking Course on Jun 21, 2018
Today, Thursday the 21st is the last chance to save $50 on registration. Register now and save. This is the only networking course designed...
'Secure Channel' OSDP Access Control Examined on Jun 21, 2018
Despite claiming to be better than Wiegand, OSDP's initial releases did not address the lack of encryption between reader and controller, leaving...
Most Wanted Improvements In Manufacturer Technical Support (Statistics) on Jun 21, 2018
5 key areas of improvement and 1 clear wanted support feature were voiced by 140+ integrator responses to: What improvement in manufacturer...
GDPR / ICO Complaint Filed Against IFSEC Show Facial Recognition on Jun 20, 2018
IPVM has filed a complaint against IFSEC’s parent company UBM based on our concern that the conference violates core GDPR principles on...
IFSEC 2018 Final Show Report on Jun 20, 2018
IPVM attended the IFSEC show for the first time this year. The Chinese have taken over the UK, centered on Hikvision, flanked by Dahua, Huawei and...
Mobotix Releases 'Move' Into 21st Century on Jun 20, 2018
For years, Mobotix stood resolutely against, well, every other manufacturer, selling it as a virtue: MOBOTIX equipment is designed with no...
Cybersecurity Startup VDOO Disclosing 10 Manufacturer Vulnerabilities Starting With Axis And Foscam on Jun 20, 2018
Cybersecurity startup VDOO has uncovered significant vulnerabilities in Axis cameras along with many others not yet disclosed. In this report, we...
Axis Guardian - Cloud VMS And Alarm Monitoring - Released on Jun 19, 2018
Axis has struggled to deliver a cloud-based managed service video platform. Video service providers have utilized AVHS for over a decade, and have...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact