If you are a vendor or integrator of PSIM systems, the chances are good that you consider this to be an exciting time in the security industry. And the chances are excellent that, regardless of your expertise and experience, your views on PSIM market trends will be challenged by others, including security professionals, in the field.
PSIM (physical security information management) software and systems are only six or seven years old. That’s young enough to generate the buzz of possibilities yet old enough for some to take a step back for a long, sober assessment of fantasy versus reality, or dreaming versus pragmatism.
“The definition of PSIM shouldn’t be difficult,” said Mark Denari, a former security director who is now senior manager of integrated solutions for SAIC Energy Environment & Infrastructure. “It’s physical security information management software. … Anyone who says it does more than that is either uninformed or uninitiated, or the product is misrepresented.”
Without pointing fingers, Denari said it is clear to him that security industry players can get carried away with the potential for PSIM by inflating revenue projections and potential applications.
“It integrates disparate security systems and applications into one platform,” he said. “The operator uses one work station (instead of five or six). It’s about being effective, efficient and productive. If somebody says their system does more than that and it’s a PSIM, that’s not accurate.”
Frost & Sullivan, the global growth partnership firm, released a much-quoted report in July that projected PSIM industry revenues to climb from $142.9 million in 2011 to $2.79 billion in 2021.
“Throughout the forecast period, there will be [a] shift in revenue generation from verticals,” Frost & Sullivan reported. “Current critical infrastructure is the leader but first responders and commercial entities are picking away at the pie.”
Denari, the former director of operations and security at San Diego International Airport, is not convinced.
“Some people are trying to make PSIM bigger than what it is,” he said. “Within critical infrastructure protection entities, there is tremendous growth in the market. Most of these institutions have security systems that are 10, 15, 20 years old. There’s a real desire to bring them into one platform. I see good, exponential growth. But $3 billion might be a reach, annually. I can see perhaps $1 billion a year by 2015.”
Also voicing skepticism is Bob Banerjee, who has been training security system integrators at NICE Systems since 2010. The F&S projections, he said, “seem a little aggressive to me.”
Other industry experts see those kinds of aggressive projections as completely justifiable. VidSys CTO James Chong says the $2.79 billion projection in 10 years “might be low.”
“Physical hardware infrastructure and IT security is a $200 billion industry,” Chong said. “Can PSIM be 1 percent of that? Absolutely.”
“There are lots of opportunities,” said Chong, whose company is the leading provider of PSIMs. “We are at the tip of the iceberg. The market has progressed, and the exciting part is where we are headed—not only in the United States, but Asia, the Pacific Rim, the Middle East and Europe.”
Ron Oetjen, president of Intelligent Access Systems, sees PSIM as a critical innovation that emerged at the perfect time in the security industry. IAS is an integrator with offices in Raleigh, N.C.; Atlanta; Richmond, Va.; Pittsburgh; and Tampa, Fla.
“I don’t see $2.7 billion by 2021 as unrealistic,” Oetjen said in an email interview. “If your company has 50 intrusion detection systems, three different access control manufacturers, some analog video at certain sites with a different IP video surveillance solution at critical sites, you will need a central way to monitor and manage those systems.
“These solutions aren’t cheap,” Oetjen said. “PSIMs certainly solve a huge problem, but there is a significant price tag associated with them. The regulatory climate is on the rise and that places increased responsibility on our clients. I believe that they will be looking for ways to reduce those burdens and I believe that PSIMs will be one of the options they will look at.”
A telling paradox in this debate is that Oetjen’s reference to high price tags also can be used to argue against sustained high-speed growth. Eric Schaeffer, president of Delaware-based systems integration firm Advantech Inc., and Dave Sweeney, the company’s director of sales, did just that in an email interview with SSN.
“With all the talk of PSIM recently, it is still only even a possibility for 0.1 percent of customers,” Sweeney said. “The complexity and cost will never come down enough to make it a product deployable to the masses or traditional customer. I believe much of the ‘hype’ is an attempt to cover up the extreme cost and extreme complexity to the actual solution of PSIM.”
Added Schaeffer: “I certainly agree that the [$2.79 billion] growth number is not realistic. The best and most cost-efficient approach is to plan properly so an expensive PSIM is not necessary. There are also very sound products that don’t market themselves as PSIMs that may serve end users better.”
At least three common threads emerged during interviews with experts in the PSIM industry. The first is that 9/11 exposed a dormant security mindset in the public and private sectors. The second is that while the market is maturing, aggressive growth in the near future is undeniable, even though it remains open for debate how far, how long and how fast that growth becomes. And the third is that private industry will be catching up to the public sector—or at least trying—in its application of PSIM systems.
Market and revenue projections should include increased private sector buy-in, as well as branding, Chong said.
“This could take off, if you calculate it properly,” he said. “Samsung, Apple and Sony have to protect their brands. … We are working with Fortune 500 companies.”
Adds Oetjen: “Going forward, I think the regulated markets will be the prime targets for PSIM and identity management solutions. Clients that have regulated response times for alarms and requirements for system uptime will be looking for an efficient solution to help their staff in the security operations centers.”
Banerjee is bullish on PSIM, as long as the industry recognizes the concept for what it is and what the ultimate application should be. The industry, he said, still needs to evolve to the point where the people referring to PSIM as “an overpriced sledgehammer” are not taken seriously.
“It’s a means by which we find out what is going on faster and monitor the situation while mapping out solutions, with fewer resources,” he said. “You’ve got situation awareness, situation management and reconstruction of events.
“It does no good to know what happened unless you know who needs to do what, when, and how to behave if it happens again,” Banerjee said.
Consolidation and streamlining of Byzantine security systems appears perfectly logical now, but that wasn’t the case pre-9/11 or for several years afterward.
Denari described a post-9/11 but pre-PSIM security system as having “one platform for video replay, another platform for monitoring cameras, another platform for access to the control system … and a swivel chair. To engage it you had to engage in multiple work station platforms.”
The manner in which PSIM “integrates disparate systems into one platform, with the operator using one work station” has undeniable appeal to large private firms with security issues and needs that could not be imagined 20 or 30 years ago, Denari said.
The potential for PSIM application is easy to project by looking at a simple government list of what constitutes “critical infrastructure,” including facilities for electricity, gas, oil, telecommunications, water, agriculture, heat, transportation, financial services and public safety.
PSIM, however, is not a weapon deployed in an action drama. “We’re not going into the realm of power outages, aircraft accidents or a water main break,” Denari said. “No natural disasters, earthquakes or things of that nature.”
Nonetheless, Chong said, the excitement over PSIM’s growth is understandable. While it didn’t exactly come out of nowhere, PSIM does a nice job of validating the fundamental tenets of supply and demand. Nature abhors a vacuum, necessity is the mother of invention and a free market economy dies without innovation.
“I Googled ‘PSIM’ in 2006 and came up empty,” said Chong, who maintains that his company coined the tag that year. “A lot of PSIMs have emerged since then, and it’s fun.”