From the editor's desk: Covid consolidation

Issue 6 2020 News

The global security industry has seen quite a few high-profile mergers and acquisitions over the past year or two, with an even greater number of smaller companies that don’t get the headlines also merging, being acquired, or simply vanishing due to various factors.

South Africa has not been immune to these changes, although the ‘action’ over the past year or two has been more the result of a bad economy, which has seen many big players either moving into survival mode, trying new options, or looking to remake their market by creating a level playing field. There are, naturally, many options and plans that were made, but which must be remade now that the down-and-out economy has been kicked in the teeth with COVID-19.

While the industry has seen the impact everywhere, the distribution market has arguably been hardest hit – I realise that is a stretch as only a few companies are still doing well right now. We have already seen one distributor announcing it is changing its approach to business to avoid the 'race to the bottom'. (When we can get a few distributors to talk to us we will be looking at the changing distribution market in more detail.)

Even manufacturers are changing tactic, embracing a broader market, or focusing on the areas where they believe they excel. For example, some industry leaders have quite openly dropped references to the security industry in their marketing and refer to themselves as being IoT providers. The adoption of AI (artificial intelligence) is also reaching new heights and delivering impressive results.

What we are really seeing is the escalation of the move to the clichéd solution sales. If you do only one thing, you must be really good at it, and sometimes even that won’t be enough. Ideally, companies are focusing on offering solutions, solving problems, and increasingly joining forces to offer a one-stop-shop (of sorts) in their field.

Andrew Seldon.

One thing is sure, it’s going to be an interesting year or two as the industry goes through various changes and challenges to recover.

I wonder if the financial constraints people find themselves under will lead to them looking for more automation and self-management when it comes to consumer security (and automation) technology around homes and small businesses. There are certainly many solutions available that are manageable from a smartphone – which may be cheaper options – but the privacy and cybersecurity issues in that area are worrying? Alternatively, perhaps the security service providers will come up with innovative solutions to provide better security in a different way than before?

If you have any thoughts about the industry and where it’s going, or where it should be going, feel free to share them with me at Perhaps we can get some forward-looking editorial discussions going?


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