U.S. Government End-User Security Markets

Frost & Sullivan
November 19, 2003
SKU: MC941580
License type:
Countries covered: United States

U.S. Government End-User Security Markets

 

Establishment of Department of Homeland Security Helps Set Defense Budgets

Government agencies have expedited the review of their defense arrangements with the establishment of the Department of Homeland Security (DHS). Its creation is expected to streamline the approach toward security requirements. Apart from reorganizing departments, the DHS has also formed new ones including the Transportation Security Administration. The DHS will help fix security budgets for various U.S. federal government agencies and establish security standards, but it will be a while before a working plan is set up. However, despite being only in its early stages, the DHS is one of the most active drivers for security solution and system providers.

This research examines the U.S. Government end-user security markets. It provides key market challenges, drivers, and restraints affecting growth, and offers a detailed competitive market analysis. This study breaks the market into two segments: end users (government buildings, transportation, department of defense (DOD), energy and utilities, and other critical infrastructure) and security (hardware, software, and services).

Increased Spending by Government Agencies Boosts Market Revenues

The amplified security concerns of almost every government agency post-September 11, 2001, attacks have lead to tremendous hikes in security budgets. The DHS was established to revise security funding since the government felt that the budget allotted to the DOD was too small to cater to the revised security needs. Upgrades and installations in several departments are expected to bring in additional revenues for security system providers.

In the wake of new threats, DOD agencies have begun to improve their network security and integrate it with physical security. "This has resulted in them spending a lot on high-end security systems such as chemical, biological, and explosive detection equipment," states the analyst. Different government agencies have also evinced interest in testing new security technologies. Apart from the increasing security conciousness of the government, its setting of deadlines for securtity upgrades and technological advances will also help create further revenue opportunities.

Recent Market Trends Point to Large Revenue Potential

Industry growth is likely to be sustained by government spending, integration of security systems, as well as introduction of new bundled systems and services by the manufacturers. The drop in equipment prices is also set to make the systems more affordable and increase the adoption rate. Market demand is expected to continue to be high due to greater security awareness and the corresponding increase in spending by government agencies. These funds and grants attract even small and niche participants, thus helping to expand the market.

The different DOD agencies are seeking to integrate their security networks so that the defense systems become more robust. "Emerging markets such as intelligent surveillance software and integration of IT with physical security are also likely to enhance growth and revenues," notes the analyst.



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