Critical infrastructure security booming in the EU

New analysis from Frost & Sullivan finds that market growth is fueled by government funds and private investments. EU security regulation compliance requirements and the need for a common security strategy are other contributing factors.

“The construction of new power plants in Poland, the Czech Republic and Bulgaria as well as upgrades of security systems for airports in Poland, Romania, the Czech Republic, Bulgaria and Slovakia are expected to gain momentum,” says Frost & Sullivan Consulting Analyst, Abdallah Binmadhi. “New surveillance systems and perimeter detection technology will be necessary to comply with EU regulations.”

However, the economic downturn has sapped budgets for critical infrastructure security, so technology spending will be constrained by the delay of key infrastructure projects. In addition, there is a lack of state incentives encouraging foreign company ventures. Because the procurement process is highly complex, especially for new competitors, local or well-established companies are preferred during the tender.

“Tenders can become complex and entangled in the bureaucratic process,” says Binmadhi. “Savvy participants can manage the tenders with the help of local experts familiar with the language and regulations.”

Although the market is highly fragmented, with a few dominant players in some areas but not in others, numerous interesting opportunities do exist. To gain a competitive edge, companies should emphasize accelerated output in their existing product line. Also, upon entering new markets, companies must thoroughly analyse the distribution chain and create partnerships between local participants and system integrators.

“Companies seeking to penetrate challenging foreign markets should consider the acquisition of local companies,” says Binmadhi. “Tier 1 companies are already consolidated in the market, but Tier 2 and Tier 3 companies can outsource many of their products to companies that already operate and have a better understanding of market dynamics.”

Focus should be placed on aftermarket services like maintenance, replacements and upgrades. Also, long-term contracts will be more favorable than ad hoc contracts thanks to increased revenues on the service side.




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