To say COVID accelerated the way end users value access control and video surveillance would be an understatement, as it forced many to change the way they look at their business, work and home office environments. As work-from-home and hybrid work models become more commonplace, the security industry is seeing much more of a visitor management approach to access control. With locks now communicating to a network or other systems, challenges such as interoperability and resistance to new technologies, such as AI and biometrics, come into play, not to mention how this is all changing the sales and subscription models.
One thing is clear: Security is becoming more integrated with all other systems within a building, company, or business, driving interest and sales of these products. For example, the U.S. access control market was valued at $2.1 billion in 2022, up from $1.9 billion in 2021, with the total addressable market estimated to reach $3 billion by 2026, with a compound annual growth rate (CAGR) of 9.6% during the forecast period (2021-2026), according to research from the Proptech Report, conducted on behalf of the Security Industry Association (SIA) Proptech Advisory Board (PTAB), prepared by CreTech.
In addition, the video surveillance market in the U.S. and was valued at $13.3 billion in 2022, up from $12.2 billion in 2021, with the total addressable market estimated to reach $23.3 billion by 2027, growing at a CAGR of 13% during the forecast period (2022–2027).
In the one-on-one interviews that the researchers did with security professionals, 84.6% cited access control and video surveillance equally as the most prominently deployed security solution across interviewees’ real estate portfolios. These surpassed the third highest category, identity/credentialing management, which was deployed by 65.4% of respondents.
“COVID has driven a kind of accelerated version of the digital transformation that had already begun prior to the pandemic,” notes Lee Odess, CEO of Access Control Executive Brief, and chair of SIA’s Proptech Advisory Board. “And the big headliner we'd like to talk about then was convergence from an IT and security standpoint, but what I believe is actually happening is enterprise software has entered into our arena to where it's a software-first mentality.”
Odess continues, “If you look at lock Industries, we went from mechanical to motorized, and then it became connected. And as an industry we would just call that stuff smart because everyone was calling it that. And then even in COVID we took ADA-compliant products and just relabeled them touchless and seamless”
The discussion around identity seems to come back to the continued push into mobile credentials.
As Chris Peckham, COO, Ollivier Corp., says, “I keep reading how the prox cards are going away, yet again,” he says. “Everybody always brings their phone. And, if you lose, or if you forget your card, who cares? You don't forget your phone, so it's the direction that it's moving.”
As Peckham points out, how the security industry can generate revenue will continue to play a huge role in how this all shakes out. “You’ve got the revenue model that comes with this whole thing, right? So, if you used your credential on your phone, there's got to be some little app or widget you could put on your phone. But what is that subscription model because they don't want to give up what the plastic card was giving them. And, you know, on the phone side, you must have some way to get a dollar back out of it.”
And, as Odess adds, the mobile credential is becoming much more than a means to be granted or denied access. “What we should say is, ‘Yes, it's got a key in there, that’s part of it, but then it unlocks not only you getting into the door, but it unlocks all of this additional value of things like commerce, notifications, data, for example,’” he says, noting that the way we interact with our phones is driving this “new revolution around notifications and how our systems interact.”
Odess adds that the industry doesn’t talk enough about mobile computing and the way that you build systems. “I see more of it in Europe. When I look at companies that are built mobile first, they're not talking about cloud computing; they're talking about mobile, like, ‘we're building complete systems that include the full systems’ intended interaction – end user admin, everything is here.’ It's not cloud, right?”
He continues, “As an industry, especially in North America, we like to talk about cloud computing and then mobile credentials when we should be talking about cloud computing, mobile computing and the value that those create, which is a totally different way to look at the business in the way that you build, the way you invest. It's why Apple and Google wallets come into play. Everybody wants to talk about it as a key, I get it, but that's a classic iteration example of our industry trying to take what we've done since 1973 and apply it to 2023 and beyond.”
As Odess points out, somewhere along the line there was a shift in the mindset to letting people in versus keeping people out. “That's where I think visitor management systems had sort of a rebirth through COVID, and will continue to do so,” he says. “Because of this shift, now everybody's a visitor. So, the way that I interact with the space has changed, so the systems need to. I think you're seeing a whole new group of people that are driving specifications and driving the selection process of technology from a software side, which are middleware systems integrators, which is different than security systems integrators. These software systems integrators, they take enterprise software and integrate it together like ServiceNow Salesforce, for example.”
With all the talk about IT convergence in the past, Odess says it’s shifted now to an enterprise software convergence. “And you have a new channel opportunity that didn't exist before,” he adds.
Peckham, agrees, noting that since COVID visitor management has become much more of the topic of the day, with many looking to integrate visitor management with access control and video surveillance. Peckham said he has seen several approaches for visitor management, many involving mobile credentialing of some sort.
“We’ve got customers, two different ones actually, both of them relatively large that are looking at QR codes for visitors,” he explains. “We’ve got another one that's still doing prox cards when the visitor comes up, or they have something with another one of the vendors that they'll do mobile credentials for the visitors. We have a large real estate portfolio customer that is going full on the Bluetooth side really, and they’ve got a couple of different things that they're piloting. So, you’ve got the big names involved and then there's a bunch of smaller ones that are playing around in the space, so they're trying some things in one building and something else in another building.”
While many are dipping their toes into mobile credentialing of some kind, there are challenges, such as a lag time because “there's 4,000 things that have to integrate with one another,” notes Peckham, who describes a common occurrence in this world of mobile authentication where everything doesn’t always work as quickly as wanted. “You’ve got your visitor system that's got to talk to that, and then that's got to push back down to your access control system, and sometimes it doesn't work at the snap of the finger, so it causes a little bit of grief, right?”
Peckham adds, “The interoperability between them is not really there.”
Odess agrees, noting, “For our proptech advisory, we had a developer come on and say that he's basically given up on the idea that we're going to have true interoperability, and what he's actually looking for now are just good clean, well-documented and understood APIs.”
Not surprisingly, in the Proptech Report, 83% of respondents believe that the current levels of interoperability between different security solutions is either fair (38%), poor (22%) or doesn’t exist (22%). Similarly, integrations are cited as a pain point (about one-third of respondents), and “the industry needs to do a better job on both fronts, as customers want and are demanding change,” researchers noted.
Video is the Key
Both Odess and Peckham say video may be the key to how the industry achieves a truly seamless, or frictionless access control solution.
“Where you want a high-level of convenience and a high level of security, the only way we're going to get that is with video,” says Odess. “The future in my opinion of seamless and frictionless access control is actually a very deeply embedded integration between video and access control.”
Odess believes there should be video component at the card reader level, and it goes beyond just verification to intent and tracking and data. “You're seeing a lot of companies embedding cameras into readers and I think every reader should have a camera,” he explains, noting that the card reader these days should be like a Swiss Army Knife, so to speak. This also opens the value proposition when you can start to talk about the valuable data that can be generated and mined, he adds.
“I believe when you bring software and the data, we are looking at something like a $70 billion market in enterprise software that's verticalized around commercial real estate,” says Odess. “In multifamily, those verticals in hospitality are looking for unique solutions that can only be delivered by software that sits on top of hardware that supports the software solution.”
Historically, Odess points out, we've used cards and fobs. “But we don't know who the people are on the other end – they're typically stick figures because they're just like a card number in the system,” he explains. “Now [with video] there's more meat on the bones and we have an interaction with them – it's depressing to me to think about how little of investment our companies are making in the user experience, or to understand how people interact with space, how they work and live.”
The value that can be generated from all this data can be “transformational,” says Odess.
With more powerful cameras and chips that are able to do much more on the edge, the rise of the cloud and Influences such as AI, quantum computing and inference engines, companies are able to do so much more on the analytics and predictive side.
“You can do a lot of data mining because you have so much data you can play with,” says Peckham. “You can't necessarily do that on a building level because you don't have enough transactions that are coming in a smaller building – it's worthless because you only have a few transactions in an hour or whatever it may be.”
He continues, “If you get someplace where you can aggregate all that together, you can start getting some very interesting usage things out of that, right? We’ve got some customers that are playing in this space that have been doing things on the building automation side, and they are now going in and looking at the access control side because they already have a relationship. You know, so again, you talk about disruption in the market – they already have a relationship with the building from one point of view from where they're talking to the property managers. And if you have some issue with your mobile credentials, or it's a royal pain with your maintenance fees and something like that, you start adding that up on a larger environment of how much it costs to run that stuff. You look at what some of these new players are doing, they're coming in with a different model. They already know from another point of view; it's a cleaner interface and they're in a position to do some interesting disruption.”
The Biometric Debate
One technology that inevitably comes up during any conversation about access is biometrics.
“They've got a long way to go, and the reason why is there's a dystopian mainstream message around biometrics, especially in North America,” says Odess. “In Europe and other areas where there's a different level of trust or acceptance, or in some markets where they have no choice. So, in North America, I believe biometrics will win or be a viable solution when it's tied to commerce, when you pay for things, like buying things at the grocery stores, but also to get into a place, like getting into a movie theater on demand, getting into an office, for example.”
While Peckham is also seeing some resistance to biometrics, he believes it is being pushed as the technology of the future.
“In the private sector, I think there's some concerns of some users would push back pretty hard,” he says. “We are seeing facial recognition at some airports, which are already doing it and you don't have a choice because you're walking into their sphere of influence, so to speak. But if the advantage is there, who knows where it goes in the next five years.”
Odess isn’t sure how long it will take for biometrics to gain more traction, but he does see it happening once the concept of smart cities becomes more widely accepted. “I actually think it has more to with building automation and looking at these entire structures as cities, so the interaction will grow as the more things get connected and the more things are about workflow optimization versus access control.”