International. A new annual report shows that sales of access control products fell to $7.9 billion in 2020. However, the Memoori researchers' report also forecasts that by 2025 the global market should be worth US$10.2 billion with a CAGR of about 5% over the next 5 years.
The consulting firm has charted the performance of the access control business over the past decade, witnessing an expansion in product demand at a CAGR of 8.2%; already in early 2020 reaching sales of US$8.7 billion.
However, analysts say it has been problematic to size the market with confidence in 2020 because the Covid-19 pandemic has yet to be brought under control and many countries around the world are in the midst of a second or third peak in infections and are blocking various aspects of civil society.
Despite everything, the pandemic has created a repressed demand and new applications for access control products now provide a valuable service to control Covid-19 in buildings and, in particular, identity management will play a more important role for the next 5 years.
During 2020, access control played an important role in assisting social distancing by providing information on the location of staff and visitors for occupancy management thresholds. Providers are now looking to go further by also helping with wellness verification and contact tracing.
Over the next five years, Memoori anticipates that demand will be driven by the growth of IP networking products, access control as a service (ACaaS), biometric readers, and integration with identity management. Integration with other physical security systems and building the Internet of Things is becoming an established part of the business and this is generating further growth.
End users who are in the market to replace older systems are increasingly researching ACaaS as an option. In the current economic climate, analysts suggest that a recurring fee for a managed access control service seems more attractive than the option of a large upfront capital expenditure.
Access control is still a much smaller business than video surveillance and today it is less competitive, but consolidation through acquisition has been an important feature in the last 5 years and this has created a much stronger and more competitive environment.
The researcher found that with this has come the confidence to move forward and take on the challenge of adopting new technologies that will deliver better performing products needed to continue to increase demand. In the past, the industry has been reluctant to adopt open standards, but in the last 2 years we are seeing signs that some vendors are taking a more open approach to developing their software and hardware.
Memoori analysts are optimistic about this business as it moves towards IP networks and strengthens its relationship with biometrics and identity management and building occupancy management systems. These trends are important drivers that should maintain growth momentum, albeit at a slower pace over the next two years due to the pandemic.
Winning new business in a deep recession is a daunting prospect because it leaves millions of buyers of physical security products less able to invest in new technology or replace systems that might be "good enough" for now. This means that access control providers will have to focus even more on contributing directly to improving the performance of their customers' businesses.
Source: Memoori.
