PSIM to be Worth $2.79 Billion? Tricks Exposed

By: 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

Vidsys New President Interviewed on May 31, 2019
A decade ago, PSIM was hot with projections then of a billion dollar market by now. This has not come close to happening. However, Vidsys, one of...
LifeSafety Power NetLink Vulnerabilities And Problematic Response on May 20, 2019
'Power supplies' are not devices that many think about when considering vulnerabilities but as more and more devices go 'online', the risks for...
Inside Look Into Scam Market Research on May 17, 2019
Scam market research has exploded over the last few years becoming the most commonly cited 'statistics' for most industries, despite there clearly...
Verkada False Allegations Against Avigilon Exposed on May 08, 2019
Verkada has leveled false allegations against Avigilon, as part of their aggressive marketing tactics against the 'dinosaurs' in the 'ancient'...
Verkada Salesman: IPVM "Stuck In A The Stone Age" on Apr 25, 2019
Verkada is 'tackling dinosaurs' and battling those, like IPVM, who are 'stuck in a the stone age'. Verkada's recent sales recruiting promotion...
The Embarrassing Story of ISC West's Best New IP Camera on Apr 24, 2019
A sad but simple situation: Only 2 companies paid SIA the thousands of dollars required to compete for the best new 'cameras IP' The judges...
Securadyne CEO: IPVM 'Entertaining For An Ignorant Few' on Apr 16, 2019
Securadyne's CEO Carey Boethel is unhappy with IPVM's report - Failed Integrator Rollup, Securadyne Sells to Guard Giant Allied. Indeed, he...
Prysm PSIM Profile on Mar 05, 2019
A decade ago, PSIM promised significant potential but has always suffered from significant problems. Now, a number of PSIMs have either gone out of...
ADT And 'The Defenders' Silent About Massive Complaints on Feb 14, 2019
ADT's largest dealer, "The Defenders" has been the subject of a massive number of complaints over many years and many forums, most recently a CBS...
Scam Research And The $86 Billion IP Camera Market on Dec 19, 2018
Scam. The most widely cited research numbers in many, if not most, industries come from a growing number of Indian 'market research firms'. We...

Most Recent Industry Reports

Repositionable Multi-Imager Camera Shootout - Avigilon, Axis, Dahua, Hanwha, Hikvision, Panasonic, Vivotek on Jun 19, 2019
Repositionable multi-imager cameras are one of the fastest growing segments in video surveillance, with a slew of new offerings being recently...
Genetec Synergis Cloud Link - Complex, Costly and Confusing on Jun 18, 2019
Genetec's Synergis Cloud Link is complex, costly and confusing compared to competitor access control architectures. Inside this note, we examine...
Startup Vaion Launching End-to-End AI Solution Backed with $20 Million Funding on Jun 17, 2019
An EU / USA video surveillance startup, Vaion, founded by ex-Cisco Senior Directors is launching an end-to-end VSaaS platform with $20 million in...
Biometrics Usage Statistics 2019 on Jun 17, 2019
While face and fingerprint recognition are used regularly for smartphones, it is not as common in physical security. In this note, we examine...
The Scheme Hikvision and China Importers Use To Avoid Tariffs on Jun 17, 2019
Hikvision and numerous China importers are avoiding 25% tariffs by including an SD card slot in their IP cameras to claim they are 'digital still...
Sighthound Transforms Into Enterprise AI Provider Profile on Jun 14, 2019
Sighthound is now rapidly expanding its R&D team, building an enterprise AI service. This may come as a surprise given their origins 6 years...
ADT Eliminating Acquired Brands, Unifying Under 'Commercial' Brand on Jun 14, 2019
ADT is eliminating the brands of the many integrators it has acquired over the past few years, including Red Hawk, Aronson Security Group (ASG),...
NSA Director Keynoting Dahua and Hikvision Sponsored Cybersecurity Conference [Canceled] on Jun 13, 2019
The technical director for the NSA’s Cybersecurity Threat Operations Center will be keynoting a physical security cybersecurity conference that is...
Farpointe Data Conekt Mobile Access Reader Tested on Jun 13, 2019
California based Farpointe Data has been a significant OEM supplier of conventional access readers for years to companies including DMP, RS2, DSX,...
Embattled $400 Million China Funded Philippines Surveillance System Proceeds on Jun 13, 2019
An embattled 12,000 camera surveillance system project that will cost ~$400 million will proceed.  The project contract was awarded, had its...

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