Access control is having a red carpet moment. While access control has been part of an integrated platform for many years — particularly in the enterprise world — it assumed a widespread starring role during the first wave of COVID-19 as businesses looked for ways to monitor employee health and promote touchless entry. 
Two years later, as companies continue tweaking the workplace and welcoming employees back into the office, access control is taking its place as a fully integrated element of a business’s security and operational requirements.
“A modern, fully digitized access control and visitor management system enables facility and security managers to track visitors and employees, analyze occupancy rates and traffic patterns, and create reports that can help facility managers create a safer and healthier environment for occupants,” says Sheeladitya Karmakar, global offering leader at Honeywell Commercial Security, Atlanta. “Leveraging frictionless access controls and visitor management to support the well-being of occupants has been a key point of growth to the industry over the last two years.”
Access control is in an interesting and exciting time, says James K. Lantrip, senior vice president, operations, Allied Universal Technology Services, an integrator headquartered in Santa Ana, Calif. While the market still has many mainstay products that are “hardware-centric,” new open market products are changing the dynamic of the field. “We’re making less hardware sales,” he says. “Making it more open architecture will benefit consumers and business as a whole. It’s doing what the video industry did over the past 10 years.”
COVID-19 amplified what access control systems could already do, says Samuel Joseph, co-founder and CEO of Hakimo, Menlo Park, Calif. With COVID-19 came contact tracing, and businesses needing to keep strict logs of who entered a building. Modern access control systems can provide that, and run reports for their COVID task force to determine next steps in pandemic mitigation. “COVID in some sense made enterprises aware of the power of the access control system,” he says.
“We saw higher confidence in ‘reopening’ and going back to normal in 2021 across sectors, and particularly in the private enterprise sector,” says Angie Wong, CEO and founder of Ojo Technology Inc., Fremont, Calif., featured on this month’s cover.
Integrators Rate Their Confidence in the Access Control Market
SDM asked security systems integrators how they would rate the current state of the access control market, including on-premises and cloud/web-based/hosted.
Fifty-two percent of the respondents to the SDM 2022 Forecast (conducted in November 2021) rated their confidence in the access control market as very good or excellent, with only 14 percent believing it was fair/poor. This represents a 5 percentage point bump from last year’s perception. // SOURCE: SDM 2021 AND 2022 INDUSTRY FORECAST STUDIES
During the pandemic, businesses implemented remote or hybrid work practices to reduce onsite staffing, making access control an even more vital tool to secure facilities, says Bruce Stewart, business development manager, Axis Door Solutions, Axis Communications, Chelmsford, Mass. The downside was that many companies also reduced office space or sold off real estate holdings, reducing the need for systems. “That said, many industries require facilities and onsite work, and in retrospect many have also realized the value of in-person work, so some level of balance between remote and onsite work will be restored,” he adds.
The shift to remote work also means employees are using more networks to access facilities, Karmakar says. Couple this with the large staff turnover during the “Great Resignation,” and it translates to many contractors and former employees still having corporate access cards. “With these two factors in mind, it is a priority for facility managers to bolster the security — and remote capabilities — of their building’s access controls.”
The pandemic also pointed out the limitations of outdated access control systems, says Despina Stamatelos, senior commercial manager for access control at Genetec, Montreal. “Many organizations knew their (systems) were old, but just lived with it as long as it worked. But having to work remotely and manage access remotely from home with aged systems posed a lot of security risks,” she says.
Top Tech Trends in Access Control
Like many other industries, electronic security is at a crossroads, with cloud and other technologies leading the way into the future. Here are some of the top tech trends our experts are seeing, for the industry in general and access control specifically.
Access control manufacturers and integrators saw a surge in demand for mobile access products, in direct response to the COVID-19 pandemic. // DEIMAGINE/ISTOCK / GETTY IMAGES PLUS VIA GETTY IMAGES
Cloud
“The security industry is at a crossroads and cloud is going to have a big impact on the market. Systems that were purpose-built to live in the cloud are becoming very mainstream and are attractive to larger corporate clients as well as the SMB market. We’re seeing the need for this as capex budgets have been impacted significantly and clients are looking for solutions that fit into their opex budget. Cloud-based access control eliminates the cost of servers by turning it into an operating expense. Another big trend is accessibility in smaller markets. Cloud technology is becoming predominant in these markets because of the ability to access the system from anywhere in the world, without VPN, using a computer or mobile device.” — Jay Slaughterbeck, Strategic Security Solutions
“Advancements in access control have made it simpler than ever to manage which people and when they can enter a property. With a cloud-based access control system, data is hosted in the cloud, meaning fewer on-site materials. Organizations will experience automatic data backups, software updates, and the ability to manage the system from anywhere at any time.” — Scot Sturges, director of business development, North America, ACRE Operating Group, Las Vegas, Nev.
“We plan to continue to focus on the selling of cloud-based hosted/managed ACS solutions. Ultimately, we feel everything will transition to the cloud at some point in the next three to five years so we are planning to be well ahead of the curve.” — Chris Villarreal, Integrated Security Technologies Inc.
“Cloud systems and mobile credentials are solutions that change how we operate and live our lives. Adding features is no big deal — changing operational procedures and lifestyles is. We focus on the latter as far as our business plan goes. Cloud and mobile credentials go hand in hand, which both are our focus for 2022.” — Angie Wong, Ojo Technology
“Increased use of cloud services provides distinct benefits to our customers and provide us with an additional recurring revenue stream.” — David Sweeney, general manager, Advantech Security, Dover, Del.
Integration
“More and more access control providers are extending their APIs so that their products can integrate with others effortlessly. Devices that integrate and communicate enable data to be shared and interface with third-party systems. Organizations can efficiently streamline their daily operations by selecting access control products that integrate with other platforms.” — Scot Sturges, ACRE
“Video-access control integrations will also drive the market because their combined power offers a significantly more effective solution.” — Bruce Stewart, Axis Communications
Touchless access
“The real broad adoption (of touchless access during COVID-19) has been so a remote presence can have visitor management automated and get through the door without a guard or receptionists.” — Richard Goldsobel, Continental Access
“We feel touchless access and mobile credentials have the potential to leave a large mark on the market.” — Mark Prowten, Nortek
“Touchless reader technology that’s reliable and cost effective continues to be in high demand with no signs of slowing down” — Charles Baker, California Commercial Security
“Touchless access, not only pertaining to mobile credentials, but also as relates to using biometrics as a means of granting access and authentication, will support more convenient, healthier indoor spaces for building occupants.” — Ewa Pigna, LenelS2
Mobile credentials
“Many vendors claim they offer mobile credentials but very few work well like Apple Pay — which works every time!” — Angie Wong, Ojo Technologies
“There was a surge in demand for mobile access products, in direct response to the COVID-19 pandemic.” — Mark Prowten, Nortek Control
AI
“There is no way any human can monitor all these systems manually. Manual monitoring of cameras and access control is not possible; AI was needed because of this shortage (of security personnel). There’s no other choice for enterprises, even if they want to continue manual monitoring; it’s a big driver for us.” — Samuel Joseph, Hakimo
“AI and machine learning will spot trends and drive predictability in overall security system performance, enabling security teams to continuously enhance their effectiveness over time.” — Ewa Pigna, LenelS2
Cybersecurity
“Cybercrime is on the rise with no end in sight. With our security systems all going IP, the devices are IoT and all subject to malicious hacking. Organized crimes like ransomware now have many points of entry in the hacking network. The solutions that can address cybersecurity would be in high demand.” — Angie Wong, Ojo Technology
“Cyber hygiene, which we’ve been heavily engaged in for many years, is becoming a must for all integrators across all verticals.” — Chris Villarreal, ISP
“Cybersecurity investments have only continued to increase and grow in importance. Every year attacks become more sophisticated and more onerous, which further solidifies the need to focus on monitoring and innovating in this area.” — Ewa Pigna, LenelS2
“The first step is to make sure that all upgrades and patches are installed to minimize vulnerabilities. Integrators may have customers who install access control and then forget about it, leaving them with older and potentially vulnerable legacy systems. An integrator’s role is to make user-friendly upgrades that are affordable and easy to deploy.” — Sheeladitya Karmakar, Honeywell Commercial Security
Multi-Factor Authentication
“Two-factor authentication (or 2FA) is a kind of authentication technology that requires users to show two or more types of identity verification, meaning if someone wants to gain access, they must possess at least two forms of credentials that can prove their identity. Access control systems that have multi-factor authentication strengthen security by making it more difficult for unauthorized individuals to gain access and can be used to protect both digital and physical assets.” — Scot Sturges, ACRE
“One of the trends we expect to see in 2022 is the move toward a ‘Zero Trust’ environment. Where each person or device must provide their identity and access rights individually rather than simply having access to a network. “Multi-factor authentication is becoming the new normal with systems, often integrating tools like facial or biometric authentications.” — Sheeladitya Karmakar, Honeywell Commercial Security
“COVID-19 accelerated customer demand for certain access control system capabilities such as remote connectivity and management, touchless access, and more robust occupancy management solutions,” adds Ewa Pigna, chief technology officer at LenelS2, Pittsford, N.Y.
Customer demand for more security, coupled with increased government and manufacturing standards, means more businesses are expanding their access control systems and using them to manage their operations, says John Becker, global vice president of sales, AMAG, Hawthorne, Calif. “In the 1990s, security directors wanted access control for one thing: to lock doors and let people in,” he says. “Now, it’s an operational issue. Whether it’s airline employees, or hospital workers that need to get into a supply room, facilities managers say it’s important to operate their facilities. Access control products have become a mainstay of business, not just for security.”
Beyond Protecting Doors & Buildings
STANLEY Security’s 2022 Industry Trends Report finds that 46 percent of business leaders have already implemented traditional physical security solutions such as access control, and more than three in four (78 percent) say their organization has rapidly adopted new technology due to the pandemic.
In addition, 66 percent of business decision makers are considering redesigning their physical spaces to better accommodate hybrid work environments, according to a recent Microsoft Work Trend Index.
Majority Expect Revenue From Access Control to Increase
SDM asked, “How do you expect revenue from access control systems, including on-premises and cloud/web-based/hosted systems, to change in the next year?”
Of those surveyed for SDM’s Industry Forecast, 46 percent expect revenue from access control systems (on-premise and cloud-based) to increase in 2022, 50 percent expect it to remain the same, and 4 percent expect revenue to decrease. // SOURCE: SDM 2022 INDUSTRY FORECAST STUDY
To deliver on these demands, manufacturers are ramping up integrating access control into video surveillance, smart buildings, artificial intelligence, and other platforms, making it an invaluable part of not only security, but also business operations.
For instance, early in the 2020 lockdown, Brivo introduced four new features specific to enforcing locking and making it safe for employees to enter the workplace, with one being a way for people with mobile credentials to answer a set of health questions before they could get in, says Steve Van Till, founder and CEO of the Bethesda, Md.-based manufacturer.
Before COVID-19, most customers viewed access control as a tool to keep bad people out, so the value proposition was always around security, says Eric Trabold, CEO of Nexkey, San Mateo, Calif. “In the last 18 months, however, access control has become a tool to manage how you can get good people back into the workplace, because it’s more than just something that protects doors and a building.”
Nexkey got the timing right by releasing its Nexkey dashboard in Q2 2020, Trabold says. The dashboard provides intelligent insights on a building’s spaces from data captured from access control, including occupancy rates, flow of people, and which building entrances are used most. This not only proved invaluable during the pandemic, but also offers organizations ways to improve processes, he says.
Popular uses for access control today include not only health monitoring, but full integration with business elements like human resources to provide appropriate access and simplify onboarding new employees; smart building systems to control temperature and lighting; and determining whether to expand or scale back office space based on usage, all tracked by access control, Trabold says.
“Integration on all levels is very important moving forward,” says Spencer Britenstine, director of sales, South U.S., Aiphone, Redmond, Wash. “Customers expect relevant products that fit the current needs of society. Ease of use and functionality are paramount, all while incorporating the latest technology.”
Lucas Ingala, founder and CEO, Watchmen Security Services, Kansas City, Mo., says, “Access control is becoming the fourth utility for a building.” Having technology such as AI, biometrics, video integration, cloud, touchless access, and more on the same platform in an easy-to-use way for the end user will have a big impact on the market, he adds.
Although there has always been an auditability component to access control, “Prior to the pandemic, this primarily meant reviewing who went where,” says Jay Slaughterbeck, CEO of Strategic Security Solutions, a Security-Net member, Raleigh, N.C. “In light of COVID-19, this has facilitated other things such as contact tracing and quarantine time enforcement. It has also been used to evaluate real estate, to determine if a facility has too much or not enough space. These access control solutions have been available for quite some time, but now the data have become increasingly useful to clients need to make significant business decisions.”
The Power of Standards for Access Control
Increased use of standards and protocols in the access control sector will encourage market expansion at much greater rates, says Tim Brooks, vice president of sales at PSA Security Network, Westminster, Colo.
“Standardized credentials and reader technologies increase the interoperability with other systems in facilities, thereby enhancing the user experience,” he says. “A better user experience is key to increasing acceptance of new technologies.”
Edison Shen, director of standards and technology at the Security Industry Association (SIA), Silver Spring, Md., agrees. “Standards are critical to the interoperability and advancement of not only access control, but all products within the security industry,” he says.
For integrators, standards adoption is a requirement for many customers, especially government-related businesses.
“Clients have been handed new requirements that they need their facilities to adhere to, and integrators like us are making new adjustments to address those new requirements to ensure those regulations are met or exceeded,” says Charles Baker, president and CEO of California Commercial Security (CCS), San Diego, Calif.
Standards are particularly important for government clients, says Chris Villarreal of Integrated Security Technologies Inc. “We were and continue to be highly impacted by the federal government’s need to be FICAM compliant,” he says. “We have also expanded our offering with an enterprise account team that provides dedicated and streamlined project management with curb-to-core solutions to definitely secure an enterprise’s assets and people across multiple locations, continents, and time zones.”
Strategic Security Solutions has been advocating for higher security and encryption for a while, Jay Slaughterbeck says. “In 2021, we started to see this stick, which resulted in an increase in access control sales. We’ve been preaching for a while and now the message seems to be resonating with our clients. A number of clients have gone as far as to change their access control system to be compliant.”
Currently some of the most important standards and protocols are:
- Open Supervised Device Protocol (OSDP). OSDP, developed by the Security Industry Association (SIA) to improve interoperability among access control and security products, addresses communication between the control unit and the reader device for physical access control. OSDP is widely used by manufacturers, and is recommended for access control installations in government and other higher-security settings as it meets federal access control requirements like public key infrastructure (PKI) for FICAM. The Electrotechnical Commission (IEC) adopted OSDP in 2020, a significant move in its global acceptance as the primary access control standard, Shen says. SIA published the Wiegand standard in 1996, which was formerly the go-to protocol, but lacks the security and interoperability of OSDP, he adds.
- LEAF. The LEAF Identity Credential is a set of specifications and reference designs that facilitate interoperable, secure, and open choice by security managers and solution architects for access control and identity credentials. “This set of standards for credential protocols and usage is very important,” Brooks says. “They combine best practices and ISO standards to create an environment that fosters development of interoperable solutions, increasing the utilization across all sectors of the market.”
- MIFARE DESFire, Seos. These are secure credential standards similar to LEAF. MIFARE DESFire is typically used in contactless smart cards for high-security applications including access control and biometric identification, cashless vending, public transportation, and ticketing; HID Seos cards and credentials use encryption and a software-based infrastructure that can be used on any form factor.
- Near field communication (NFC) and Bluetooth. These are the main standards for mobile credentials, Brooks says. NFC uses electromagnetic radio fields for wireless credentials, while Bluetooth is most often used on wireless devices such as headphones and audio speakers.
These trends represent a market for access control products that is large and growing. Group 337, a Bethesda, Md.-based consortium of executives focused on growth in the security, access control, and IoT industries, estimates that in 2021, the global access control industry was a $70 billion total addressable market, according to CEO Lee Odess.
This is great news for the electronic security industry, which stands to gain from the growth of new access control products and services. More than half (52 percent) of respondents to SDM’s Industry Forecast 2022 Study ranked the state of the access control systems market in 2021 — including on-premises and cloud/web-based/hosted systems — as very good to excellent.
This is an upswing from last year’s study, when 47 percent rated the access control space as good/excellent. Overall, the access control space fared well, even during the initial stages of the pandemic, only falling 7 percentage points in the SDM Forecast last year, and rebounding this year to near pre-pandemic optimism.
According to the 2022 Industry Forecast, 73 percent of respondents currently provide access control services to their customers, and an additional 15 percent plan to offer it within the next one to five years.
Nexkey’s dashboard, introduced in 2020, provides intelligent insights on a building’s spaces from data captured from access control, including occupancy rates, flow of people, and which building entrances are used most. // IMAGE COURTESY NEXKEY
Rebounding From the Worst of the Pandemic
While there were definitely drawbacks — primarily in supply chain challenges and hiring — most sources we spoke with grew their access control sales in 2021, especially compared with the uncertainty and cancelled installations of the year before.
“Access control sales remained strong throughout 2021, despite a few projects getting ‘paused’ by clients due to shifting priorities, which caused us to shift completion dates into the new year and adjust revenue goals,” says Charles Baker, president/CEO of California Commercial Security (CCS), San Diego, Calif. “After having such a phenomenal year in 2020, it was going to be difficult to match those results. 2021 was not as good, but lessons were learned and the company is putting our best foot forward for 2022.”
Richard Goldsobel, vice president of Continental Access, a division of Napco Security Technologies, Amityville, N.Y., credits continued growth of cloud and wireless connectivity as a major contributor to Napco’s growth in 2021, as well as a wider breadth of video VMS integration and APIs. “We performed very well. 2021 was an improvement over 2020, and we saw nice growth that we fully expect to continue going forward,” he says.
Wong of Ojo Technology agrees. “We did significantly better in 2021 in all aspects: top revenue, bottom-line profit, and bookings,” she says. “Also, the average order dollar amount was much higher than in 2020.”
Alex Housten president, dormakaba Americas, Indianapolis, says, “The market in 2021 showed steady progress from the prior year. While commercial new construction activity remains impacted due to lower project starts in the prior year, aftermarket and renovation activity has strengthened with the rebound in building traffic, public events, and travel. Owner interest in enhancing trust and confidence with building occupants increased interest in access solutions broadly — especially in dormakaba’s entrance and access control solutions. Of course, labor availability, a couple of pandemic waves, and an often tight supply chain presented challenges to overcome.”
The Rise of the Smart Building
Customer demand for “smart building” integration will drive future growth for access control integrators and manufacturers.
Fortune Business Insights projects that the global smart building market will grow from $67 billion in 2021 to $265 billion in 2028, at a CAGR of 21.6 percent. // METAMORWORKS/ISTOCK / GETTY IMAGES PLUS VIA GETTY IMAGES
Fortune Business Insights projects that the global smart building market will grow from $67 billion in 2021 to $265 billion in 2028, at a CAGR of 21.6 percent.
“Complete building automation and frictionless flow of traffic from entry points to parking to tenant spaces in a consolidated technology approach for the end user is something the market is asking for,” says Lucas Ingala of integrator Watchmen Security.
The ability to control lighting, video interaction, HVAC, and other building functions through access control is a growing trend, says Richard Goldsobel of Continental Access. This can include tasks like automatically shutting off lights and controlling temperatures in rooms that are not currently in use; directing approved building visitors to the appropriate elevator to get to their floor; arming and disarming control from access control readers and software; and using the sensors that are part of intrusion alarms to determine and report problems like water leakage.
“We see acceleration in advancement of integrations and partnerships in our industry, with the aim of creating smart spaces,” says Alex Housten, president, dormakaba Americas, Indianapolis. “Access control is the necessary core of today’s intelligent building, and efforts to enhance safety, security, efficiency, utilization, and convenience, generally rely on the fundamentals of access control: who is going where and when. To support this trend, we are focused on excellence as a provider of core access solutions product lines and as an enabler of smart spaces through robust integrations.”
As part of its advancement in the smart building space, dormakaba recently partnered with Vanderlane, and Rhode & Schwarz to deploy the latest smart flow technology in the development of a self-screening security checkpoint of the future at U.S. airports.
Manufacturers are also considering more non-tradition applications for card readers and interior door locks, including cabinets, lockers, and drawers that are critical to a facility’s security, such as at a healthcare facility, where stringent compliance requirements like HIPAA require secure storage of patient records, pharmaceuticals and other supplies, says Angelo Faenza of ASSA ABLOY. “Having the same access control that manages the rest of the facility connected to cabinets tightens security to those sensitive areas,” he says. “Intelligent locks on server cabinets and remote traffic control cabinets are also integral to protecting the physical security of the network.”
Integrated Security Technologies Inc., an integrator based in Herndon, Va., exceeded its target by more than 30 percent and had a record year of sales and growth, says Chris Villarreal, director of enterprise accounts. “Demand for access control continued to grow in 2021, especially in regulated industries,” he says. While IST’s education market vertical was slower than anticipated, its federal government business drastically exceeded expectations, driven by Federal Identity, Credential, and Access Management (FICAM) physical access control compliance, he says.
Steve Van Till, founder and CEO of Brivo, Bethesda, Md., attributes his company’s 25 percent growth from 2020 to 2021 to the pandemic, which shifted business focus from on-premise to cloud-based access control solutions. Organizations with older access control structures found it difficult to manage systems and people, while those with cloud-based systems could issue mobile credentials from literally anywhere in the country. “The reason we grew is because we have a broad customer base: commercial real estate, enterprise, and multifamily,” he says.
Increased use of the cloud, mobile, and web-based systems for access is supported by the 2022 SDM Industry Forecast results as well. Among companies that offer managed/cloud-based services, managed access control is the top service currently offered (72 percent, up from 64 percent in the 2021 study), followed by remote video monitoring, VSaaS, and ACaaS, with 46 percent planning to offer it in the future.
Managed Access Control Tops the Service-Based Offerings
SDM asked, “Which of the following managed/cloud-based services does your company currently offer/sell/install?” and “Which of the following does you company plan to offer in the next 12 months?”
Seventy-two percent of security professionals currently offer managed access control systems, up 8 percentage points from the 2021 survey. Access Control as a Service is currently offered by over half of those responding, up 12 percentage points from last year. Among companies who offer managed/cloud-based services, managed access control is the top service currently offered, followed by remote video monitoring, VSaaS, and ACaaS. // SOURCE: SDM 2022 INDUSTRY FORECAST STUDY
Access control providers were especially busy in the third and fourth quarters of 2021, as overall demand increased when customers began returning to their facilities and focused on completing a large backlog of security and infrastructure projects, says Brian Thomas, president, security integration solutions and acting president at A3 Communications, an Irmo, S.C.-based wholly owned integrator partner of Cook and Boardman. It also helped sales when A3’s staff could once again interact in person with its customer base. “The simplicity and efficiency of face-to-face interaction is not coincidental to our performance in the back half of ’21,” he adds.
Workplace changes wrought by the global pandemic are spurring much of the demand for access control. “Back-to-work is our main driver in growth,” says John Nemerofsky, CEO, SAGE Integration, Kent, Ohio. He described how one of SAGE’s large Atlanta clients currently has 4,000 people coming back to work, another 4,000 in the following month, and an additional 8,000 in May. “Capital projects are back on now that people are back to work with the builds they didn’t do during COVID,” he says.
While restricting certain people from certain places at certain times is the primary purpose of access control, leveraging the data from those activities helps with other tasks like contact tracing, which was critical during the worst of the pandemic and continues today, Slaughterbeck says. “Health monitoring has been a big trend in 2021 and we expect that to continue in 2022,” he says. “Another growing trend is that building managers are using data to measure corporate environments and evaluate if they have too much real estate or not enough based on in-person versus remote work changes.”
However, some reported challenges in 2021, especially around supply chain and hiring.
Ojo Technologies, an integrator headquartered in Fremont, Calif., has started selling door locking hardware beyond the typical door controllers and readers, a decision that helped its business grow top revenue, bottom profit, and bookings in 2021, says CEO and Founder Angie Wong. // IMAGE COURTESY OJO TECHNOLOGIES
For Strategic Security Solutions, 2021 sales were very good, with clients looking for innovative solutions to business challenges arising from the pandemic, Slaughterbeck says. “However, execution was very challenging in 2021 with supply chain interruptions and labor shortages causing major strains on project execution,” he adds. He predicts that the biggest challenge for integrators going forward will be the ability to get equipment. “To combat this, we are holding a lot more inventory than we usually would.”
Access control companies in the industry don’t typically make their own hardware, so the supply chain issue has hit everybody, Goldsobel says. However, he notes that Napco supplies many brands of card readers to customers, so this has had less of an impact than if they relied on a single line. “We have a great manufacturing group and good communication,” he says. “We let integrators know what’s happening and adapt where we can, and put good processes in place to communicate that.”
Access Control Systems Rank No. 5 Among the Most Commonly Offered Security Product
SDM asked, “Which products and services do you currently offer or plan on offering?”
Access control systems rank fifth in product/service offerings, behind video surveillance, perimeter security, intrusion alarms, and monitoring. // SOURCE: SDM 2022 INDUSTRY FORECAST STUDY
Access control and door hardware are experiencing extremely long lead times, says Wong of Ojo Technology. “Access control is a very hardware/equipment dependent industry. Without the hardware, you can’t do access control. We have been trying to be creative to bring in other revenues that are not installation driven, such as system design and engineering, repair, and support services.”
Responding to market demand for smarter access control, Ojo started selling door locking hardware beyond the typical door controllers and readers, which has been successful in bringing in new revenue, Wong says. However, “The learning curve on door locking hardware is deep because it’s complicated and the smallest error can be very costly and halt the installation,” Wong says. “Door locking hardware typically is custom ordered, with restocking fees on all returns, even brand-new unopened product, and reordering has long lead times. Being able to lock the doors, especially exterior doors, is extremely critical for any facilities. We are pursuing this new business with a great emphasis on staff training and bill of materials accuracy.”
Allied Universal’s Lantrip says his company was at plan in 2021, while the access control industry as a whole was down slightly. “It was a weird year,” he says. “We were expecting COVID to be behind us, but it was up and down, depending on the market you’re in. … But it was still much better than 2020.”
COVID-19 caused access control integrators and manufacturers to shift focus from commercial office space to other verticals, including multi-family homes, industrial, medical spaces, and federal government business. Allied, for example, specializes in several verticals, including critical infrastructure, data centers, the medical space, education, and commercial office buildings, Lantrip says. Some of sectors pursued installations in 2021, while others put it on hold, so it was “all over the board,” he adds.
Additionally, the nature of the access control sell cycle possibly skewed 2021 revenue results, AMAG’s John Becker says. “The sell cycle in access control doesn’t happen over a couple of months — more like 18 months,” he says. “We just did an installation) last year that was from 2014.”
More Growth & Challenges in Sight
When asked about the main challenges they face in 2022, access control integrators cited two above all: supply chain uncertainty, and a dearth of talent.
In fact, it was listed by nearly half of SDM Industry Forecast respondents as their biggest challenge (47 percent), followed by “finding/retaining employees” at 39 percent and general ongoing pandemic impacts (32 percent).
“Integrators must be aware and prepared for the inevitable, potential supply chain delays and cost increases,” says Mark Prowten, director of product management at Nortek Control, Carlsbad, Calif. “With this, setting customer expectations, building into their quotes that prices could change on short notice, and the availability of certain systems could push back estimated installation dates are important and key in business right now.”
Britenstine adds, “While interest and activity are high, Aiphone continues to navigate the pandemic’s deceleration of the supply chain and uptick in chip shortages through decades of experience and resources. By offering a variety of both new and established products, Aiphone will do its best to fulfill customers’ needs in 2022.”
After supply chain issues, finding talent is the No. 2 challenge in the industry now, Nemerofsky says. To help alleviate the problem, SAGE focuses on striking a balance between training promising recruits for production certification, and hiring experienced people. “It’s not cost efficient to have a $100,000-a-year tech running cable when we can hire a contractor to do it for $40 an hour,” he says.
Villarreal of ISP agrees. “Finding and maintaining highly technical and experienced personnel will be a key to success and something that will not be easily attained,” he says.
At Strategic Security Solutions, the HR team has implemented an apprenticeship program, recruiting promising employees from other industries to graduate into security industry professions, Slaughterbeck says.
Another challenge for security integrators is the threat of commoditization, which Wong says is, “an inevitable evolution of all industries. Access control is still a good margin business, but when the manufacturers make things simpler and plug and play, labor will be reduced and margins will be eroded,” she says. “With the cloud headend, it always takes away a lot of professional services in both system installation and commissioning, as well as post installation system management services. But it’s the future. We as integrators must continue to reinvent ourselves and examine our solution offerings to look for new businesses and new services to make up for the lost revenue. Staying stagnant is complacency, which will eventually leave you behind.”
Mark K. Duato, senior vice president of strategic integration solutions for Cook and Boardman Group, Winston-Salem, N.C., believes the biggest challenge integrators face is increased competition across all markets. “When projects are put out to bid, usually more companies are focused on winning than in the past,” he says. “Integrators need to continue to be exceptional at what they do well because companies will invest in expertise. Don’t try to be too many things to too many people. … You have to decide what you want to be and what to focus in on.”
Other issues involve simply staying abreast of the many changes in the market, says Stamatelos of Genetec. While access control is changing rapidly, the change isn’t as evident as with a visual market like video. ”But there’s a lot going on in the back end that can help customers, so it’s important to be aware so they can better position themselves to educate end users.”
In spite of the challenges, however, most were optimistic about what’s ahead for access control in 2022.
“We are very bullish for 2022,” says Angelo Faenza, head of digital access solutions, ASSA ABLOY Opening Solutions, New Haven, Conn. “We went into January with orders that were beyond anything we had ever seen before. All signs are that they will continue to come in at a record pace, even with the supply chain challenges that everyone is facing.”
Ingala of Watchmen Security agrees. “Expectations for 2022 are high. Interest rates are still fairly low, new construction is still developing, multi-family and industrial developments don’t seem to be slowing down. With the coronavirus, more people are using touchless technology to control spaces.”
Brivo is forecasting more than 50 percent growth in 2022, and significant growth for the access control industry in general, Van Till says. “Access control has come to be regarded as a fourth utility for real estate and the workplace,” he says. “After water, electrical and HVAC, you have to have access control to operate an office, building, factory — you can’t run a modern building without it. The entire industry will do well for that reason.”
Baker of CCS confirms that his company’s sales forecasting year-over-year is looking stable, with an increase of requests for quotes on the horizon. “COVID continues to challenge closing sales as well as a moderate level of volatility in securing government contracts,” he adds.
Integrators that have expanded their services beyond traditional access control during the pandemic are especially well positioned to succeed this year and beyond.
“We have been fortunate to have diversified our business in the past several years by not being just ‘card readers and cameras,’” says Jim DeStefano, senior vice president, Unlimited Technology Inc., Chester Springs, Pa. (SDM’s 2021 Systems Integrator of the Year) “Our health-based monitoring solutions, along with our cyber and IT and physical security managed services, have continued to be invaluable to our customers looking for that one hand to shake. Being able to take on physical security, IP device health monitoring, cyber, IT system implementation and management, as well as other project requirements not normally associated with system integrators, has been key to our success.”
Lantrip adds, “We’re seeing price increases all over the place with inflation, and that’s going to drive its own set of challenges we have to work through. But work is picking up in almost every sector, looking at how to secure businesses, how to bring people back to work, how to look at security differently to make it part of safety and not just security. We’re optimistic about a good year in 2022.”
