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

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 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...

Most Recent Industry Reports

Cut Milestone Licensing Costs 80% By Using Hikvision and Dahua NVRs (Tested) on Aug 13, 2018
Enterprise VMS licensing can be quite expensive, with $200 or more per channel common, meaning a 100 camera system can cost $20,000 in VMS...
Nortek Sues SDS, Battle Over Unpaid Bill and Cancelled Lines on Aug 13, 2018
Nortek and SDS legal battle continues. As IPVM reported, SDS sued Nortek alleging bribery and antitrust violation. However, Wave fired back at SDS,...
Uniview Intrusion Analytics and VMD Tested on Aug 13, 2018
IPVM's IP Camera Analytics Shootout featuring Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision created some ill will with a Uniview distributor who...
ADT Employees Protest ADT CEO on Aug 10, 2018
So many ADT employees were so upset with ADT's CEO speech reported on by IPVM, that ADT's CEO was forced to send a mass email to employees to...
Axis / Avigilon Legal Battle Rises on Aug 09, 2018
In what is shaping up to be high-powered, will-not-back-down battle, Axis and Avigilon are squaring off in multiple legal contests. In 2017, IPVM...
Camera Focusing Tutorial on Aug 09, 2018
A camera's focus is fundamental to quality imaging. Mistakes can cause important problems. In this guide, we explain focus issues and proper...
Dahua Ban Response: NOT Chinese Government Owned on Aug 08, 2018
Dahua has responded to the US Congress passing a US government ban on Dahua and Hikvision's products. While Dahua offered the now standard...
Bad Move: ADT Markets Rival Amazon on Aug 08, 2018
Amazon may be lining up ADT as its next victim but ADT is happy to promote Amazon. Amazon has made major moves recently, including acquiring...
Hikvision PanoVu Mini Tested (Multi-imager + PTZ For ~$500) on Aug 07, 2018
Hikvision has released their first PanoVu Mini multi imager, the PanoVu DS-2PT3326IZ-DE3, with four 1080p imagers, including a PTZ and integrated...

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