THE MAGAZINE

Assessing the State of the Security Industry

By Sherry Harowitz

The operational products and equipment market was estimated at $39 billion for 2012, up from about $12 billion in 1990. Current annual growth is projected to be around 6.6 percent—a bit lower than the rate of annual 7.1 percent from a decade ago. Growth will be strongest in basic systems, such as access control, alarms, and especially surveillance—on which 65 percent of organizations surveyed said they would spend more in 2013.

Networked cameras open up other opportunities, such as for remote centralized monitoring, which 38 percent of companies indicated they had done and which one of the analyzed IOFM studies found was the strategy that most outperformed expectations.

Budgets

In terms of organizational budgets, 48 percent of organization polled said that they had increased their operational security budget in 2012 and 45 percent planned increases in 2013; for IT, those numbers were 41 percent and 33 percent, respectively. Operational budgets are rising fastest for businesses in arts, entertainment, and recreation; finance and insurance; and professional, scientific, and technical services. As to how much those budgets are rising, the median budget growth in 2013 for those sectors is expected to exceed 13 percent. Even so, nearly 40 percent of security executives feel that they don’t have the resources they need. Especially beleaguered are those in education, healthcare, and manufacturing organizations. On the plus side, however, the percentage of security executives who say that they do have adequate funding has been trending upward since 2005.

Nearly all organizations planned to spend the same or more on IT security in 2013, but the largest organizations were the least likely to have plans for increased spending.

In terms of the amount spent on private sector security services, one interesting finding was that training and maintenance costs are higher for IT relative to the total size of the budget. The total IT budget is $13 billion, while training is $1.72 billion and repair/maintenance is $7.31 billion. For operational security services, the total budget is $134 billion, while training is $1.65 billion and repair/maintenance is $4.75 billion. Those costs are headed up more than any other service sector—about 58 percent of those polled expected to spend more on maintenance in 2013.

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