U.S. DoD Physical Security Market

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1 U.S. DoD Physical Security Market Technologies Used for DoD Applications June 2011

2 Table of Contents Executive Summary 7 Introduction 8 Definitions and Scope 9-11 Percentage of FY 2010 Total Budget Request by Service Branch 12 U.S. DoD Physical Security Market Dynamics 13 Market Overview 14 Market Engineering Measurements 15 Industry Challenges 16 Industry Challenges Impact and Duration 17 Industry Challenges Discussion 18 Market Drivers and Restraints 19 Market Drivers Impact and Duration 20 Market Drivers Discussion 21 Market Restraints Impact and Duration 22 Market Restraints Discussion 23 Market and Technology Trends U.S. DoD Physical Security Market Analysis 26 Market Revenue Forecasts Competitive Overview 30 Market Competitive Structure 31 Top 10 Contracts By Expenditure FY About Frost & Sullivan 33 4

3 List of Figures List of Figures DoD Physical Security Market: Impact of Top Four Industry Challenges (United States), DoD Physical Security Market: Market Drivers Ranked in Order of Impact (United States), DoD Physical Security Market: Market Restraints Ranked in Order of Impact (United States), DoD Physical Security Market: Revenue Forecasts (United States), DoD Physical Security Market: Company Market Share Analysis of Top Five Participants (United States), DoD Physical Security Market: Competitive Structure (United States), DoD Physical Security Market: Top 10 Contracts By Expenditure (United States), FY

4 List of Charts List of Charts DoD Physical Security Market: Department of Defense Segmentation (United States), DoD Physical Security Market: Security System Components (United States), DoD Physical Security Market: Service Segments (United States), FY 2010 Budget Request 12 DoD Physical Security Market: Market Engineering Measurements (United States), DoD Physical Security Market: Top Four Industry Challenges (United States), DoD Physical Security Market: Market Drivers and Restraints (United States), Total DoD Physical Security Market: Revenue Forecasts (United States),

5 Executive Summary 7

6 Introduction The Frost & Sullivan Research Service examines the U.S. Department of Defense (DoD) physical security market and the key technologies in this field: video surveillance, access control, and intrusion detection. Market dynamics addressed include drivers, restraints, industry challenges, technology trends, competitive analysis, growth opportunities, and key strategies. Security concerns such as terrorists attacks and other pertinent issues have forced increased spending by the U.S. government across various segments, including video surveillance, access control, and intrusion and perimeter detection systems. After the 11 September 2001 attacks, security efforts have surged to combat issues within the United States and military installations around the globe. Incidents such as terrorists attacks, vandalism, theft, and videotaping/photography of premises within government premises threaten the nation and U.S.-related territories globally. Also, technology innovation and the increase of weapons of mass destruction (WMD) further provide challenges to the DoD physical security market. As the U.S. government continues to impose regulations to enhance security through regulations, security providers including system integrators and hardware manufacturers are able to customize their service offerings in accordance with government requirements. 8

7 Definitions and Scope This Research Service is focused on assessing and detailing the DoD s spending behavior on physical security resources. As such, this market is defined as a segment of resources included under the DoD and is used among other components to share information across the DoD and its mission partners. DoD is in the process of assessing its physical security resources, domestically as well as overseas. The base year for the financial data included in the research is 2010, and the market forecast period is from 2011 to For the purposes of this Research Service, spending is the actual amount that has been awarded to companies through government contracts. Every possible attempt has been made to only include amounts that have been paid (i.e., possible modifications in the future are not used). FY 2010 is the last complete year for spending/contract information and will be the reporting year for spending and competitive information as well as being the study s base year. In terms of obtaining and reporting accurate information on funding and spending, Frost & Sullivan has used the following segmentation: DoD Physical Security Market: Department of Defense Segmentation (United States), 2010 Department of Defense Other Defense Agencies Military Service Branches DISA DARPA DIA U.S. Army U.S. Air Force U.S. Navy/Marine Corps U.S. Joint Forces Command Source: Frost & Sullivan Analysis 9

8 Definitions and Scope (continued) For a physical security system at any DoD-related installation to be cohesive and successful, it most likely will incorporate the pertinent deter, detect, delay, and response components for full functionality. Using these DoD components assists commanders with planning for contingencies such as national emergencies, disasters, and terrorists threats to improve the overall security level at installations domestically and worldwide. DoD Physical Security Market: Security System Components (United States), 2010 Security System Components Deter Detect Delay Respond Source: Frost & Sullivan Analysis 10

9 Definitions and Scope (continued) According to the DoD physical security program regulation, the market is concerned with two areas: implementing measures and safeguarding against violence. Implementing involves active and passive measures to prevent unauthorized access to personnel, equipment, installations, and information. Safeguarding is designed to prevent espionage, sabotage, terrorism, damage, and criminal activity. Physical security programs are designed to counter threats when preventive measures are ignored or bypassed. Physical security resources used to protect DoD personnel and assets include: Military police (MP) Military working dogs Physical barriers Electronic or mechanical access control systems Video surveillance systems Protective lighting Secure locking systems, containers, vaults These resources coupled with the understanding of a potential threat, proper planning, and proper execution can be used effectively to mitigate and manage risks to provide a secure environment. 11

10 Percentage of FY 2010 Total Budget Request by Service Branch Army services accounted for xx.x percent of the DoD physical security market for FY 2010 budget request. Navy/Marine Corps services followed with xx.x percent, and the Air Force and joint service branches followed with xx.x percent and x.x percent, respectively. Air Force services headlined procurement activity with support for security and tactical vehicles. Significant Army service activity came from mainly research, development and test evaluation (RDT&E), and operations and maintenance (O&M) programs. These programs include special operations forces (SOF) global video surveillance, and equipment support for physical security systems. As the forecast period proceeds, Army service activity is expected to maintain the forefront position throughout the FY 2010 FY 2016 budget request. DoD Physical Security Market: Service Segments (United States), FY 2010 Budget Request xx.x% x.x% xx.x% Army Navy/Marine Corps Air Force Joint xx.x% Note: All figures are rounded; the base year is Source: Frost & Sullivan Analysis 12

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