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

Genetec Takes Aim At 'Untrustworthy' 'Foreign Government-Owned Vendors' on Sep 24, 2018
Genetec is taking aim at 'untrustworthy' 'foreign government-owned vendors'. This is not a new theme for Genetec as nearly 2 years ago, Genetec...
Directory of Video Surveillance Startups on Jul 18, 2018
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known entity...
Hikvision Covers Up Racial Profiling And AI Error on Jun 25, 2018
Faced with global scrutiny, led by the US government-funded Voice of America (VOA), Hikvision has covered up evidence showing their racial...
IFSEC 2018 Final Show Report on Jun 20, 2018
IPVM attended the IFSEC show for the first time this year. The Chinese took over the show, centered on Hikvision, flanked by Dahua, Huawei and a...
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 (now US government banned) Dahua as a...
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...
Bogus 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...

Most Recent Industry Reports

Hikvision Growth Declines Q3 2018 on Oct 22, 2018
Hikvision's growth continues to decline in 2018 going from: Q1 - 33% Q2 - 22% Q3 - 14.6% In this note, we examine Hikvision's newest Q3...
Geutebruck Company Profile on Oct 22, 2018
Geutebrück has been in business for nearly 50 years, but they are not well known within the US surveillance market. In this report, we profile...
Chinese Government Blocks IPVM on Oct 22, 2018
IPVM has been blocked by the Chinese government without any notice or explanation. This means IPVM.com is no longer officially accessible anywhere...
Startup SafePass Profile on Oct 19, 2018
A major problem with visitor management is that the systems mostly require adhesive printed paper labels and paper logs, creating waste and an...
China Is Not A Security Megatrend, Says SIA on Oct 19, 2018
The US Security Industry Association has released its 10 "Security Megatrends" for 2019. SIA declares that these megatrends, such as "Advanced...
Hanwha Dual Imager Dome Camera Tested (PNM-7000VD) on Oct 18, 2018
Hanwha has introduced their first dual-imager model, the PNM-7000VD, a twin 1080p model featuring independently positionable sensors and a snap-in...
Camera Height / Blind Spot Added to IPVM Camera Calculator on Oct 18, 2018
IPVM has added camera height and blind spot estimation to the Camera Calculator. This is especially helpful for those who need to mount cameras up...
Axis Strong US Growth, Flat EMEA - Q3 2018 Financials on Oct 18, 2018
This spring, Axis had its best financials in many years (see Axis Strong Q2 2018 Results). However, over the summer, Axis had many products sold...
Best Alternatives to Banned Dahua and Hikvision on Oct 17, 2018
With the US government ban and a growing number of users banning Dahua and Hikvision, one key question is what to use for low cost? While Dahua and...
Video Quality / Compression Tutorial on Oct 17, 2018
While CODECs, like H.264, H.265, and MJPEG, get a lot of attention, a camera's 'quality' or compression setting has a big impact on overall...

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