International. The World Physical Security Report 2019 that memoori published late last year, forecast an annual growth rate of 15% between 2020 and 2024 for both Access Control as a Service (ACaaS) and Video Surveillance as a Service (VSaaS).
But as of mid-April 2020, the COVID-19 pandemic has caused more than 160,000 deaths worldwide and brought a wrecking ball to the global economy. The International Monetary Fund (IMF) recently announced that the recession will reduce global GDP by 3% in 2020, but its managing director now believes the gloomy outlook could be too positive. And if the pandemic lasted until 2020, the global economy would emerge with modest gains in 2021 in a slow rebound.
This new recession cycle will certainly reduce overall demand for physical security products in 2020. The current best estimate of memoori is that the first quarter of 2020 will show a 5% decline, caused by lower demand in Asia, and specifically in China, which is the world's largest video surveillance market. Further declines are likely to follow in the next 3 quarters of 2020.
However, the COVID-19 outbreak will force suppliers to radically rethink how their businesses operate. And as with every crisis, there will be opportunities for those Physical Security companies that are prepared to adapt to the new reality.
The physical security sector will have a role to play in helping businesses get back to work after this initial phase of closure. Be that through epidemic control technology, thermal imaging technology to identify fevers or other innovations.
In a challenging economy, clients will demand more value from their investments and be less willing to commit to upfront capital expenditures; making cloud services even more attractive than they were 6 months ago. In addition, ACaaS companies such as Brivo, Openpath and Camio (VSaaS) have quickly demonstrated the value of their technology by showing the drop in building occupancy numbers and how to implement social distancing compliance.
Major ACaaS/VSaaS providers have been slowly building their businesses, and in recent years their patience and persistence have been rewarded. They are now in a position to offer a cost-effective service to their customers, now more appropriate than ever.
Source: memoori.
