Department of Homeland Security Initiatives Contribute to Security Market Growth

Total market revenues are expected to reach $16 billion in 2009

Total market revenues are expected to reach $16 billion in 2009

Palo Alto, CA — January 5, 2004 — Post September 11, 2001, several U.S. federal government agencies intensified security by installing or evaluating new systems. With the recent establishment of the Department of Homeland Security, these agencies' security budgets will be revised and increased appropriately.

New analysis from international growth consultancy Frost & Sullivan, "U.S. Government End-User Security Markets," revealed that this industry generated revenues totaling $7.49 billion in 2002. Total market revenues are expected to reach $16 billion in 2009.

The upgrades and new installations planned in various agencies will ensure greater revenues for vendors. Although the Department of Homeland Security (DHS) is still a young organization, it is one of the largest end-user markets for security solution and system providers.

New security threats have prompted the government to invest heavily in high-end defense systems such as chemical, biological and explosive detection equipment. Increased security awareness has also generated interest in testing new technologies.

"The DHS will ensure that there is a more streamlined approach toward security and a common security standard could be established," stated Frost & Sullivan Senior Industry Analyst Deepak Shetty.

Shetty said that while the government agencies are looking to ramp up their systems, many legacy systems originally required heavy investments and may not be completely discarded in favor of new technologies. Rather, the agencies may opt for upgrades instead.

Additionally, most government agencies have diverse stand-alone systems at various locations; hence, integration will be a major challenge. The government will desire technologies that can seamlessly assimilate functions of all security systems and make them more robust. "Customers are looking for systems that can incorporate diverse applications such as security, time and attendance, and building controls," noted Shetty.

There is also an increasing focus on combining network and physical security, according to Shetty. Although security budgets for government agencies are high, they are more likely to be pumped into integration of different security devices and less on acquisition of new systems.